The proliferation of large-scale battery storage stations on the US power grid surged to new heights in 2023 during a busy third quarter, even as widespread development delays remain.

Developers added 2,309 MW of battery power storage resources at 31 projects or phases across 10 states during the period, mostly consisting of one- to four-hour lithium-ion systems in California, Texas and the greater Southwest, according to S&P Global Market Intelligence data.

That pushed front-of-the-meter battery additions in 2023 to 4,448 MW entering the fourth quarter, exceeding newly installed storage capacity in all of 2022 and resulting in 14.3 GW of cumulative US non-hydroelectric energy storage resources, the data show.

'Case study'

California was the epicenter of growth in the third quarter, accounting for almost half of big battery additions in the US and bolstering reliability in the state's primary wholesale market, managed by the California ISO.

NextEra Energy Inc.'s Desert Peak Energy Storage I Project and Desert Peak Battery Storage II Project in Riverside County, Calif., combined for 400 MW/1,600 MWh of new capacity in the period. Of that, 325 MW of four-hour storage is under contract with Edison International utility affiliate Southern California Edison Co. and 75 MW is under contract with Sempra subsidiary San Diego Gas & Electric Co.

The project, in a renewable energy industrial zone on the outskirts of Palm Springs, Calif., could grow larger, given its permit for up to 700 MW of storage.

Also in the third quarter, Intersect Power LLC completed 250 MW/1,000 MWh across two phases of its Oberon solar-plus-storage complex in Riverside County, Calif., which includes 500 MW of photovoltaics (PVs). The project has several customers, including San Diego Community Power, Microsoft Corp. and Calpine Energy Solutions LLC, an affiliate of Calpine Corp.

The union labor-built project that features Tesla Inc. battery systems assembled in California, First Solar Inc. PV panels made in Ohio and US-manufactured structural steel is a "case study" for the US energy transition, Intersect Power CEO Sheldon Kimber said in a statement in November.

Such workforce and domestic content characteristics enable project owners to qualify for greater tax incentives under the Inflation Reduction Act of 2022.

California crosses 7 GW

NextEra completed eight battery systems or major project phases in the third quarter, according to Market Intelligence data, leading all developers. That included the 260-MW Sonoran Battery Storage Project and 88-MW Storey Energy Center Battery Storage Plant in Arizona, both under contract with Salt River Project as part of solar-storage hybrid arrays.

Other big completions included D.E. Shaw & Co. LP's 150-MW/600-MWh Arroyo Battery Storage Project in New Mexico, contracted with PNM Resources Inc.'s operating utility arm Public Service Co. of New Mexico, and the 155.5-MW/173-MWh Wolf Tank Battery Storage Project in Texas, a merchant plant developed by Blackstone Inc. portfolio company Aypa Power LLC.

In July, Clearway Energy Inc. completed its 144-MW/576-MWh Daggett 3 Battery Storage Project in California under a resource adequacy contract with Pacific Gas and Electric Co. It is part of a multiphase solar and storage installation in San Bernardino County. Clearway followed up by bringing online its 133-MW/524-MWh Daggett 2 Battery Storage Project in October, also serving the PG&E Corp. subsidiary, Market Intelligence data show.

California has more than 7 GW of non-hydro storage capacity in operation, most of which has come online since 2021, with an additional 35.8 GW planned, according to data compiled Nov. 17. Batteries are also multiplying quickly in the Texas wholesale market, managed by the Electric Reliability Council of Texas Inc., where roughly 3.4 GW is in operation and another 36.4 GW is planned.

California and Texas remain the only two states with more than 1 GW of installed utility-scale battery capacity. Arizona has 858 MW in operation, while Nevada has 538 MW, followed by New Mexico with 240 MW and New York with 205 MW.

Ambition versus reality

Including operating and planned systems, developers could add 7,737 MW of new battery power storage capacity to the US grid in 2023, Market Intelligence data indicate. That would equal over 80% growth from 2022.

However, developers had previously planned significantly higher capacity additions for 2023. Entering the year, Market Intelligence showed almost 22 GW of planned additions in 2023. Most of that has been delayed to future years, reflecting the limits of the industry's annual growth.

Market Intelligence data include about 89 GW of battery power storage capacity planned to come online between 2024 and 2026, heavily concentrated in Texas and California.

S&P Global Commodity Insights produces content for distribution on S&P Capital IQ Pro.