The rollout of energy storage stations across the US slowed in the first three months of 2023 even as the pipeline of future projects expanded, highlighting the variable pace of the transition to emission-free electricity.

First-quarter capacity additions plunged 55% from a year ago to 422 MW at 22 sites, making it the slowest quarter for new battery storage additions in two years, according to S&P Global Market Intelligence data. Energy storage deployments in the first quarter of 2023 were down nearly 60% from the fourth quarter of 2022.

That marked the second consecutive quarter of declining large-scale energy storage additions in the US, Market Intelligence data indicates. The slowdown coincides with ongoing widespread delays for energy storage and renewable energy projects — which often are combined at the same site — driven by policy uncertainties, grid interconnection bottlenecks, unpredictable lithium-ion battery supply chains, local permitting and other factors, according to industry sources.

Stand-alone projects proliferate

The largest projects completed in the first quarter were the Madero Grid Battery Storage Project and Ignacio Grid Battery Storage Project, two roughly 100-MW stand-alone projects in Mission, Texas, owned by Eolian LP, a portfolio company of Global Infrastructure Management Participation LLC.

The neighboring fully merchant battery stations, touted as the first to use a new federal 30% investment tax credit for stand-alone storage, have a combined energy capacity of over 500 MWh.

Other projects completed in the quarter include Invenergy LLC's 50-MW/200-MWh El Sol Battery Storage Project in Maricopa County, Ariz., and Sempra subsidiary San Diego Gas & Electric Co.'s 40-MW/160-MWh Fallbrook Battery Storage Project in San Diego County, Calif., according to Market Intelligence data.

The 36-MW/144-MWh Waiawa Solar Battery Storage project in Honolulu County, Hawaii, jointly owned by TotalEnergies SE and Global Infrastructure Management and next to the Waiawa Solar Project, reached commercial operation in the first quarter. It was the largest solar-plus-battery system completed in the quarter.

Big plans

Despite the overall slower pace of project completions, some energy storage companies started the year with a bang. Technology specialist Fluence Energy Inc., for instance, which serves markets globally, recorded record revenues and adjusted gross profits in the first three months of the year.

But several of its US customers were holding off signing contracts until finalization of rules on tax credits approved in the Inflation Reduction Act, including an adder for domestic content, according to Fluence President and CEO Julian Nebreda.

"We encourage our policymakers to act swiftly," Nebreda said on an earnings call in May.

Roughly 8.3 GW are currently under construction or in advanced stages of development in the US, Market Intelligence data shows, suggesting the potential for strong growth in 2023 compared with the 4.45 GW of power storage capacity added last year.

About 21 GW of planned additions have 2023 completion dates. But if completion rates follow the same trajectory as in 2022, less than half of that will come online this year.

Several major projects are advancing. Vistra Corp. plans to add 350 MW/1,400 MWh this year at its expanding Moss Landing Battery Storage Facility next to its natural gas-fired Moss Landing CC plant in Monterey County, Calif. That builds on 400 MW/1,600 MWh of energy storage resources already operating at the site. Vistra has plans for up to 1,500 MW/6,000 MWh of battery storage at Moss Landing.

In another 2023 expansion project, AES Corp. is adding 200 MW/800 MWh in two tranches at its AES Alamitos Energy Battery Storage Array in Long Beach, Calif., next to its gas-fired Alamitos facility, which has 100 MW/400 MWh of existing energy storage.

California dreaming

Roughly 92 GW of energy storage resources, not including pumped storage hydro, are planned across the US between 2023 and 2027, according to Market Intelligence data. That compares with 10.7 GW operating through this year's first quarter.

The five-year pipeline has grown by approximately 30 GW since mid-February, fueled largely by ambitions in California, which leads the US in planned and operational energy storage resources. As of May 25, Market Intelligence data shows California had 5.2 GW of non-hydro energy storage operating and 40 GW planned, followed by Texas, with nearly 2.6 GW operating and almost 31 GW planned.

Additional multi-gigawatt volumes are planned in Nevada, Arizona and New York.

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