Readers of a certain age may recall idling in long lines at the gas station during the OPEC oil embargo of 1973. Over time, technological breakthroughs drastically improved energy efficiency and unlocked a flood of domestic petroleum production, alleviating the biggest extant threat to continued American growth and prosperity. Yet we also know that future prosperity depends upon migrating away from hydrocarbon-based energy as surely as we needed to leave OPEC behind. The New Year may mark another major pivot point in our energy evolution.
Next year could be the year of the big battery. Thanks to another confluence of technological developments, expect this year to mark the beginning of a major ramp-up of large-scale electric battery storage installations by electric utilities that was once thought to be impossible or impractical, clearing the way for renewable energy sources to surpass fossil fuels for the production of electricity in the United States by 2035.
Even as utilities have increased investment in alternatives like wind and solar, the major obstacle to wider adoption has remained the inconsistency of generation. Unlike gas or coal-fired generating plants, most renewable sources are at the mercy of the elements. The missing piece has been the ability to store up the energy produced in large quantities for distribution as needed when the wind don’t blow and the sun don’t shine. That is about to change.
So-called utility-scale or grid-scale batteries are here, and you will likely hear much more about them in the coming year. These are typically lithium-ion storage batteries similar to what powers your cell phone, laptop or electric vehicle, but arrayed on a massive scale to provide power into the electrical grid for distribution to homes and businesses as needed. Deployment of these utility-scale batteries is growing exponentially.
New installations of grid-scale or front-of-the-meter storage systems soared in the third quarter of 2021, exceeding all of 2020. The U.S. Energy Information Agency predicts that over 10,000 megawatts (MW) of new capacity will come online between 2021 and 2023, 10 times the total in operation in 2019. The space has attracted a massive surge in investment by utility operators as the cost of battery storage has fallen by over 80% over the past six years.