Energy Storage Industry Exceeds 2025 Goals

The Rapid Growth of Energy Storage in the U.S.

Almost ten years ago, when the energy storage sector was still developing, an industry group established an ambitious target. They predicted that by the close of 2025, the United States would have 35 gigawatts of batteries integrated with the power grid.

How has the storage industry performed against this benchmark? During the third quarter, 4.7 gigawatts of battery capacity was added. Currently, over 40 gigawatts have been deployed, and the year is not yet finished, as reported by Canary Media.

From Niche to Major Player

In just eight years, energy storage has transitioned from a minor component to a significant contributor of new power generation on the U.S. grid. This represents a substantial shift in the energy landscape.

Notably, this new capacity accounts for nearly half of all new renewable power added to the grid between July and September. Renewable sources have been the primary driver of new capacity additions throughout the year, according to data from the Federal Energy Regulatory Commission.

Regional Deployment and Emerging Trends

A significant portion of this new storage capacity is concentrated in Arizona, California, and Texas. These states have experienced increased strain on their grids in recent years.

Industry analysts believe that the insights gained from these deployments can be valuable for other regions. This includes the Midwest and East Coast, which are facing challenges due to the increasing demand from new data center construction.

Startup Innovation in Energy Storage

Several startups are actively responding to the growing demand for energy storage solutions.

Redwood Materials, founded by former Tesla executive JB Straubel, launched a new division in June dedicated to repurposing used electric vehicle (EV) batteries for large-scale grid storage. The company identified a convergence of factors: EV batteries retaining considerable lifespan and the rapid expansion of the battery storage market.

Redwood Materials aims to deploy 20 gigawatt-hours of battery storage by 2028. This expansion is supported by $350 million in new investment.

Base Power is pursuing a different approach, offering battery leasing to homeowners and combining these systems into a virtual power plant. The Austin-based company secured $1 billion in October to construct a battery manufacturing facility and broaden its operations beyond Texas. They have already deployed over 100 megawatt-hours of batteries within Texas.

Beyond Lithium-Ion: Exploring Alternative Technologies

While lithium-ion batteries currently dominate new installations, other companies are investigating alternative technologies to reduce storage costs.

Sizable Energy is developing a unique method of storing energy using flexible reservoirs positioned in the ocean. Fourth Power is utilizing carbon blocks to store heat at extremely high temperatures, with plans for deployment in 2028 at a cost competitive with lithium-ion and natural gas plants.

XL Batteries is implementing its flow-battery technology at petrochemical storage facilities, enabling the storage of hundreds of megawatt-hours using existing infrastructure. Cache Energy has created inexpensive calcium hydroxide pellets capable of storing energy for months with minimal loss.

A Future Powered by Storage

Collectively, these developments indicate an industry experiencing exponential growth. When combined with solar and wind power – which remain the most affordable sources of new electricity – energy storage has the potential to fundamentally reshape global energy markets and the U.S. power grid.