Published: March 7, 2025
By Concentric Staff Writer
Key takeaways
- Historic amounts of energy storage, primarily lithium-ion battery systems, are being added to the U.S. grid, driven by a need to balance renewable generation and to meet load growth, including from data centers.
- A series of fires at lithium-ion facilities, particularly in California and New York, have led to more scrutiny and resistance from the public to new facilities.
- Issues with lithium-ion safety and sourcing are leading to more research into other types of energy storage, based on a variety of technologies.
Battery energy storage systems (BESS) are growing rapidly on the U.S. grid, but the technology has faced some headwinds. The primary technology being installed, lithium-ion storage facilities, have experienced fires that have some localities beginning to question the safety of living nearby.
BESS soared on the grid over the past few years, although the election of President Donald Trump could affect that total as he froze Inflation Reduction Act (IRA) funding that was driving new resource additions. The IRA included a 30 percent investment tax credit for standalone energy systems and solar/storage projects, if construction began in 2024.
The U.S. added 5 GW of new BESS in the first seven months of 2024, according to the U.S. Energy Information Administration (EIA). This compares to just 4 MW that was added back in 2010.
“Battery energy storage systems provide electricity to the power grid and offer a range of services to support electric power grids,” EIA said. “Among these services are balancing supply and demand, moving electricity from periods of low prices to periods of high prices (a strategy known as arbitrage), and allowing electricity from renewable sources, such as wind and solar, to be stored until needed instead of curtailing those sources at times when they produce more electricity than is consumed.”
At the beginning of 2024, EIA estimated battery storage would make up 23 percent of new resource additions over the year (14.3 GW) nation-wide, second only to solar additions which were projected to be 58 percent of new resources (36.4 GW). This compares with just 4 percent for natural gas (2.5 GW) and 13 percent for wind (8.2 GW).
EIA estimated battery energy storage to about double in 2024, with developers reporting plans to develop 14.3 GW storage to the existing 15.5 GW. In 2023, battery storage rose by 70 percent, with 6.4 GW of new additions, EIA said.
About 82 percent of new storage in 2024 was expected in Texas (6.4 GW) and California (5.2 GW).
Texas set a new record for solar/BESS additions in 2024, helping to manage the critical evening peak, according to research from the Federal Reserve Bank of Texas. But researchers noted cold winter conditions can hamper the availability of solar/BESS as peak demand in Texas shifts to morning hours, creating a “growing risk that the solar-battery pairing may be inadequate to meet demand, particularly if thermal (natural gas and coal) power plant outages exceed estimates.”
In the evening hours from 6 p.m.–9 p.m., discharge from BESS averaged 714 MW in 2024 in Texas. But batteries were important on certain days such as August 20, 2024, when a new peak demand record was set and BESS set its own record of 3,927 MW of output at 7:35 p.m.
Wholesale prices can also affect the growth of BESS, as real-time wholesale prices in the Electric Reliability Council of Texas averaged $28 in 2024, compared with $97 the year before. In the 6 p.m.–9 p.m. slot, wholesale prices averaged $80 in 2024 compared with $332 in 2023.
“While these prices are unquestionably better for consumers, this development has potentially negative implications for continued growth of battery storage and other forms of dispatchable generation,” the Federal Reserve said.
New York Governor Kathy Hochul in June announced plans for 6 gigawatts of energy storage in the state by 2030, part of the state’s roadmap of having 70 percent of the state’s electricity provided by renewables by 2030 and 100 percent zero-emission electricity by 2040. The plan implements the Climate Leadership and Community Protection Act, clean-energy legislation passed in 2019.
However, the projects are already receiving public resistance. On Staten Island, local residents created a petition against NineDot Energy’s 5 MW/20 MWh battery storage project, which is already under construction. Residents say they were taken by surprise by the new facility.
“This petition is personal to all of us who call this community our home because we understand the potential dangers associated with such a facility located so close to our residences. The community was not made aware of this site being built until last minute and we do not approve,” the petition says.
In Duanesberg, New York, town officials in January 2025 passed a resolution banning the construction of new energy storage facilities in the town.
In the Golden State, the California Public Utilities Commission (CPUC) on Jan. 27 proposed new standards for BESS. The proposed rules, due for implementation in March, adopt General Order 167-C (GO 167-C) “Enforcement of Maintenance and Operation Standards for Electric Generating Facilities and Energy Storage Systems.”
The proposed rules implement Senate Bill 1383 by Ben Hueso (D-San Diego County), then a state senator, which mandated standards for the maintenance and operation of energy storage systems and applies emergency response and action plan requirements to BESS facilities.
GO 167-C also would require BESS facility owners to coordinate with local authorities in developing their emergency plans and established “logbook standards,” to ensure consistency and auditing of safety protocols for energy storage and renewable energy facilities. It also adds provisions to increase safety for storage and generating assets and updates to certain procedures, references, and definitions.
The original GO 167 was originally adopted more than 20 years ago in 2004 to establish standards for power generation facilities. The order flowed from Senate Bill X2-39, which had been drafted in reaction to the California energy crisis of 2000-2001. As new renewable mandates took effect in California due to legislation like Senate Bill 100, there has been a large increase in renewable generation.
“California Air Resources Board (CARB) recognizes that energy storage systems play a key role in meeting SB 100 goals by balancing intermittent renewable energy and managing grid reliability and stability via ancillary services and capacity,” the CPUC said in the proposed order.
Along with the growth in renewable energy, energy storage has surged in the state from 500 MW in 2019 to 13,300 MW in 2024. About 11,600 MW of this is utility-scale storage capacity, representing a level equal to 22 percent of the state’s peak electric demand. The need for energy storage in California is estimated at 52,000 MW by 2045, the CPUC said. As defined in state standards, an energy storage facility is any technology capable of absorbing energy and storing it over time for later dispatch.
However, since the original GO 167 was written before the widespread adoption of renewable generation and BESS, a comprehensive view of the rule is needed for operation, maintenance and safety oversight of non-thermal generation technology, the state agency said.
There have been 10 safety incidents at BESS facilities in California since 2021 according to CPUC records.
But there are currently no provisions in GO 167 requiring BESS owners to report safety incidents such as injuries, fatalities, thermal runaways, fires, or other system failures. This has created a need for increased regulatory oversight of the technology, the CPUC said.
The CPUC held three workshops with industry stakeholders in 2024, where staff suggested changes to GO 167 and took comment, which was received from 12 organizations such as Calpine Corporation, California Energy Storage Alliance, and utilities and companies that operate BESS facilities.
Four days before Trump took office, DOE on January 16, 2025 announced $23 billion in loans for eight projects, including energy storage, transmission, clean generation, grid modernization, and natural gas pipeline investments. The loans allow lower-cost debt and financing costs compared to traditional financial markets, according to the federal agency. Among the projects was $3 billion to Alliant Energy subsidiaries for 2,000 MW of clean energy and storage in Iowa and Wisconsin, to be developed over the next years.
In San Luis Obispo County, Caballero CA Storage, LLC’s project is receiving some pushback from the local community, which has appeared at the county’s board of supervisors meetings to express concerns. The 100 MW/400 MWh facility in Nipomo was acquired by Alpha Omega Power in December 2024. The stored energy would be sold in the California Independent System Operator market.
Given some of the issues surrounding lithium-ion, it is likely that research in other types of energy storage batteries will increase, hopefully proving fewer challenges for developers and less concern to communities that sit near BESS facilities.
Background information and cited sources
U.S. EIA Today in Energy report
New York Gov. Kathy Hochul news release
New York Climate Leadership and Community Protection Act
Change.org petition against new BESS project
U.S. DOE Loan Programs Office news release
— All views expressed by the author are solely the author’s current views and do not reflect the views of Concentric Energy Advisors, Inc., its affiliates, subsidiaries, related companies, or clients. The author’s views are based upon information the author considers reliable at the time of publication. However, neither Concentric Energy Advisors, Inc., nor its affiliates, subsidiaries, and related companies warrant the information’s completeness or accuracy, and it should not be relied upon as such.