Large-scale battery storage resources were added to the grid in unprecedented volumes across the U.S. in 2022 and appear poised for rapid growth in 2023, driven by lucrative federal tax incentives, grid reliability concerns and competitive prices.

Project developers energized a record 4,221 MW of large-scale battery power storage capacity last year, up 29% from 2021, according to S&P Global Market Intelligence data. Stand-alone storage accounted for 54% of that capacity, while 46% was colocated with new and existing power plants, mostly solar.

California and Texas dominated the market in 2022, where one- to four-hour lithium-ion battery systems have become critical contributors to keeping the lights on amid extreme weather, conventional resource retirements and rising shares of variable renewable energy. However, only about 42% of the 10.1 GW of power storage previously planned for completion in 2022 came online last year, S&P Global Market Intelligence data indicates.

Delays, uncertainties

Widespread project delays, largely attributed to supply chain issues, pushed multiple gigawatts of planned capacity into future years, highlighting uncertainties over the pace of future installations. Over the next five years, planned projects total nearly 62 GW, including almost 22 GW in each of the next two years, according to Market Intelligence data.

Market observers last year also pointed to the possibility of postponements to take advantage of higher tax credits starting in 2023. Whatever the reasons, the market took a dive in the final quarter of 2022.

Fourth-quarter additions fell 41.5% from a year earlier to 895 MW, Market Intelligence data shows. That was also a nearly 43% drop from the third quarter of 2022.

California, Texas dominate

Despite the weak finish, 2022 featured some major accomplishments, led by the 350-MW/1,400-MWh Crimson Battery Storage Project in Riverside County, Calif. Owned by private equity firm Axium Infrastructure Inc. and Recurrent Energy LLC, a project development affiliate of Canadian Solar Inc., the facility is under contract with Edison International utility subsidiary Southern California Edison Co. and PG&E Corp. operating arm Pacific Gas and Electric Co.

Crimson is among a host of battery storage projects commissioned last year in California and Texas with at least 100 MW of power storage capacity or 400 MWh of energy storage capacity, adding to an emerging fleet of battery peaker plants.

Others include NextEra Energy Inc.'s 230-MW/920-MWh system at its Desert Sunlight 300 solar farm in Riverside County, Calif., as well as 132-MW/528-MWh and 110-MW/440-MWh phases at NextEra's Arlington solar and battery complex, also in Riverside County.

In Texas, Vistra Corp. added a 260-MW/260-MWh battery array at its Decordova CT natural gas-fired plant in Hood County, while Jupiter Power LLC commissioned its 200-MW/200-MWh Crossett Power Battery Storage in Crane County.

Entering 2023, California leads the U.S. with 5,071 MW of installed large-scale power storage capacity, followed by Texas with 2,185 MW and Florida with 546 MW, according to Market Intelligence data.

But the pipeline of planned capacity in Texas, at 28,516 MW, is double developers' plans in California. Another nearly 6,000 MW are planned in Nevada, followed by roughly 3,000 MW in Arizona.