Texas and California will account for the majority of new battery storage installations as North American battery supply chains secure billions in new commitments – with investment soaring, asset owners must protect against fire risk.
US battery storage capacity could grow by 89 per cent in 2024, according to projections from the US Energy Information Administration (EIA). Planned and currently operational US utility-scale battery capacity totaled around 16 GW at the end of 2023, but developers plan to add another 14.3GW in 2024.
Two states with rapidly growing wind and solar generating fleets have been responsible for the bulk of recent capacity additions. California has the most installed battery storage capacity of any state, with 7.3 GW as of November 2023, followed by Texas with 3.2 GW. Arizona is in third place with 803MW. Florida is fourth with 561MW, with Massachusetts fifth with 258MW [1].
The five largest new U.S. battery storage projects that are scheduled to be deployed in California and Texas in 2024 or 2025 are:
Much of the new battery storage capacity will be co-located with solar. According to the EIA, solar and battery storage will constitute 81 per cent of new electricity generating capacity in the US in 2024 [2]. The vast majority of new US battery storage capacity added this year will be located in Texas (which is expected to add 6.4GW) and California (which is forecast to make additions totaling 5.2GW) [2]. The two states will account for around 82 per cent of new capacity added in 2024.
Most new storage deployment is focused on the Western US, which is home to the best solar resources in the country. For example, of the ten sunniest cities in the US – all of which have sunshine more than 78 per cent of the time from sunrise to sunset – nine are located in the states of Arizona, California or Nevada, all of which are in the CAISO and WECC regions [3].
The solar fleet in the western US offers potentially lucrative returns for battery storage projects in the form of solar arbitrage, that is, storing solar-produced energy when the price is low and selling when the price is high. As S&P has highlighted, “most planned storage in the west is co-located with another generation source, specifically solar” [4]. Data from Berkeley Lab – a US Department of Energy Office of Science national laboratory managed by the University of California – show that, of planned US storage projects currently in interconnection queues, the majority (52 per cent, or 358GW) is in a hybrid configuration, that is co-located, most often with solar [5].
The EIA has said that, with the rise of solar and wind capacity in the US, the demand for battery storage is continuing to increase. In addition, the Inflation Reduction Act (IRA) has also accelerated the development of energy storage by introducing investment tax credits (ITCs) for stand-alone storage, the EIA said. Prior to the IRA, batteries qualified for federal tax credits only if they were co-located with solar.
Consequently, billions of dollars are being spent on increasing the deployment of battery storage in the US. Figures from BloombergNEF showed that, following the introduction of the US Inflation Reduction Act, “battery manufacturers raced to identify investment opportunities”, with the North American battery supply chain reaching almost $17 billion in new commitments by the end of 2022 [6].
With energy storage deployment in the US growing rapidly, and billions of dollars being spent in the process, it’s vital that storage manufacturers, developers and owners take steps to protect energy storage assets against fire risk. Fire suppression systems are fundamental to storage fire protection strategies. It is highly encouraged to stay up to date on industry practices and standards, and contacting a fire suppression expert for more information.