With declining technology costs and increasing renewable deployment, energy storage is poised to be a valuable resource on future power grids — but what is the total market potential for storage technologies, and what are the key drivers of cost-optimal deployment?
In the latest report from the Storage Futures Study (SFS), Economic Potential of Diurnal Storage in the U.S. Power Sector, NREL analysts Will Frazier, Wesley Cole, Paul Denholm, Scott Machen, and Nate Blair, describe significant market potential for utility-scale diurnal storage (up to 12 hours) in the U.S. power system through 2050. They found storage adds the most value to the grid and deployment increases when the power system allows storage to simultaneously provide multiple grid services and when there is greater solar photovoltaic (PV) penetration.
“We find significant market potential for diurnal energy storage across a variety of modeled scenarios, mostly occurring by 2030,” said Will Frazier, National Renewable Energy Laboratory (NREL) analyst and lead author of the report. “To realize cost-optimal storage deployment, the power system will need to allow storage to provide capacity and energy time-shifting grid services.”
The SFS — led by NREL and supported by the U.S. Department of Energy’s (DOE’s) Energy Storage Grand Challenge — is a multiyear research project to explore how advancing energy storage technologies could impact the deployment of utility-scale storage and adoption of distributed storage, including impacts to future power system infrastructure investment and operations.
Expanded Capabilities to Model Storage Potential
For this work, researchers added new capabilities to NREL’s Regional Energy Deployment System (ReEDS) capacity expansion model to accurately represent the value of diurnal battery energy storage when it is allowed to provide grid services — an inherently complex modeling challenge. Cost and performance metrics focus on Li-ion batteries because the technology has more market maturity than other emerging technologies. Because the value of storage depends greatly on timing, ReEDS simulated system operations every hour.
NREL researchers used ReEDS to model two sets of scenarios — one that allows storage to provide multiple grid services and one that restricts the services that storage can provide. All the scenarios use different cost and performance assumptions for storage, wind, solar PV, and natural gas to determine the key drivers of energy storage deployment.
Installed Storage Capacity Could Increase Five-Fold by 2050
Across all scenarios in the study, utility-scale diurnal energy storage deployment grows significantly through 2050, totaling over 125 gigawatts of installed capacity in the modest cost and performance assumptions — a more than five-fold increase from today’s total. Depending on cost and other variables, deployment could total as much as 680 gigawatts by 2050.
Chart courtesy of NREL — grid-scale U.S. storage capacity could grow five-fold by 2050.
Chart courtesy of NREL — grid-scale U.S. storage capacity could grow five-fold by 2050.
“These are game-changing numbers,” Frazier said. “Today we have 23 gigawatts of storage capacity, all of which is pumped-hydro.”
Initially, the new storage deployment is mostly shorter duration (up to 4 hours) and then progresses to longer durations (up to 12 hours) as deployment increases, mostly because longer-duration storage is currently more expensive. In 2030, annual deployment of battery storage ranges from 1 to 30 gigawatts across the scenarios. By 2050, annual deployment ranges from 7 to 77 gigawatts.
System Flexibility Key to Storage Deployment
To understand what could drive future grid-scale storage deployment, NREL modeled the techno-economic potential of storage when it is allowed to independently provide three grid services: capacity, energy time-shifting, and operating reserves.
Blue — Energy Time-Shifting & Operating Reserves (No Firm Capacity From Storage)
Black — Firm Capacity & Energy Time-Shifting (No Operating Reserves From Storage)
Green — Firm Capacity & Operating Reserves (No Energy Time-Shifting From Storage)
NREL found not allowing storage to provide firm capacity impacts future deployment the most, although not allowing firm capacity or energy time-shifting services can also substantially decrease potential deployment. Operating reserves, on the hand, do not drive the deployment of storage within the study because they find limited overall market potential for this service.
Storage and Solar Symbiosis
Multiple NREL studies have pointed to the symbiotic nature of solar and storage, and this study reinforces that relationship. More PV generation makes peak demand periods shorter and decreases how much energy capacity is needed from storage — thereby increasing the value of storage capacity and effectively decreasing the cost of storage by allowing shorter-duration batteries to be a competitive source of peaking capacity. NREL found over time the value of energy storage in providing peaking capacity increases as load grows and existing generators retire.
Solar PV generation also has a strong relationship with time-shifting services. More PV generation creates more volatile energy price profiles, increasing the potential of storage energy time-shifting. Like peaking capacity, the value of energy time-shifting grows over time with increased PV penetration.
Next Up in the Storage Futures Study
The SFS will continue to explore topics from the foundational report that outlines a visionary framework for the possible evolution of the stationary energy storage industry — and the power system as a whole.
The next report in the series will assess customer adoption potential of distributed diurnal storage for several future scenarios. The study will also include the larger impacts of storage deployment on power system evolution and operations.
Join a webinar from 9 to 10 a.m. MT on Tuesday, June 22, to learn more about SFS results with Will Frazier and Nate Blair and hear from SFS analyst Paul Denholm on the visionary framework for the possible evolution of the stationary energy storage industry, outlined in the first report in the series. Register to attend.
Tesla has launched its new Oasis Supercharger, the long-promised EV charging station of the future, with a solar farm and off-grid batteries.
Early in the deployment of the Supercharger network, Tesla promised to add solar arrays and batteries to the Supercharger stations, and CEO Elon Musk even said that most stations would be able to operate off-grid.
While Tesla did add solar and batteries to a few stations, the vast majority of them don’t have their own power system or have only minimal solar canopies.
Back in 2016, I asked Musk about this, and he said that it would now happen as Tesla had the “pieces now in place” with Supercharger V3, Powerpack V2, and SolarCity:
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All of these pieces have been in place for years, and Tesla has now discontinued the Powerpack in favor of the Megapack. The Supercharger network is also transitioning to V4 stations.
Yet, solar and battery deployment haven’t accelerated much in the decade since Musk made that comment, but it is finally happening.
Tesla has now unveiled the project and turned on most of the Supercharger stalls:
The project consists of 168 chargers, with half of them currently operational, making it one of the largest Supercharger stations in the world. However, that’s not even the most notable aspect of it.
The station is equipped with 11 MW of ground-mounted solar panels and canopies, spanning 30 acres of land, and 10 Tesla Megapacks with a total energy storage capacity of 39 MWh.
It can be operated off-grid, which is the case right now, according to Tesla.
With off-grid operations, Tesla was about to bring 84 stalls online just in time for the Fourth of July travel weekend. The rest of the stalls and a lounge are going to open later this year.
Electrek’s Take
This is awesome. A bit late, but awesome. This is what charging stations should be like: fully powered by renewable energy.
Unfortunately, it will be much harder to open those stations in the future due to legislation that Trump and the Republican Party have just passed, which removes incentives for solar and energy storage, adds taxes on them, and removes incentives to build batteries – all things that have helped Tesla considerably over the last few years.
The US is likely going to have a few tough years for EV adoption and renewable energy deployment.
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President Donald Trump’s One Big Beautiful Bill Act ends long-standing federal support for solar and wind power, while creating a friendly environment for oil, gas and coal production.
The House of Representatives passed Trump’s megabill Thursday ahead of a White House-imposed deadline, after the Senate narrowly approved the controversial legislation Tuesday.
Trump has made his priorities on energy production clear. The U.S. will rely on oil, gas, coal and nuclear to meet its growing energy needs, the president said last weekend, bashing wind and solar power.
“I don’t want windmills destroying our place,” Trump told Fox News in an interview that aired June 29. “I don’t want these solar things where they go for miles and they cover up a half a mountain that are ugly as hell.”
The president’s embrace of fossil fuels and hostility to renewable energy is reflected in his signature domestic policy law. It delivers most of the oil and gas sector’s top priorities, according to the industry’s lobby group, while ending tax credits that have played a crucial role in the growth of solar and wind power.
Oil, gas and coal are winners
The law opens up federal lands and waters to oil and gas drilling after the Biden administration enacted curbs, mandating 30 lease sales in the Gulf of Mexico over 15 years, more than 30 every year on lands across nine states and giving the industry access to Alaska.
The law also slashes the royalties that producers pay the government for pumping oil and gas on federal lands, encouraging higher output.
“This bill will be the most transformational legislation that we’ve seen in decades in terms of access to both federal lands and federal waters,” Mike Sommers, president of the American Petroleum Institute, n industry lobbying group, told CNBC. “It includes almost all of our priorities.”
The law also spurs oil companies to use a carbon capture tax credit to produce more crude. The tax credit was designed to support nascent technology that captures carbon emissions and stores them underground. Under Trump’s bill, producers would receive an increased tax benefit for injecting those emissions into wells to produce more oil.
The law ends the hydrogen tax credit in 2028, later than previous versions of the bill. Chevron, Exxon and others are investing in projects to produce hydrogen fuel.
“I have a number of members who plan on investing significantly in hydrogen and so the extension to the end of 2028 was a welcome priority that was fulfilled,” Sommers said.
The coal industry is also a big winner from the law, which mandates at least 4 million additional acres of federal land be made available for mining. The law also cuts the royalties that coal companies pay the government for mining on federal land, and allows the use of an advanced manufacturing tax credit for mining metallurgical coal used to make steel.
Solar and wind are losers
The law phases out clean electricity investment and production tax credits for wind and solar that have played a crucial role in the growth of the renewable energy industry. The investment credit has been in place since 2005 and the production credit since 1992. The Inflation Reduction Act extended the life of both until at least 2032.
Solar and wind farms that enter service after 2027 would no longer be eligible for the credits. There is an exception, however, for projects that start construction within 12 months of the bill becoming law.
The phaseout is more gradual than previous versions of the legislation, which had a hard deadline of December 31, 2027. That gave all solar and wind projects just 2.5 years to come online in order to take advantage of the credits.
“Despite limited improvements, this legislation undermines the very foundation of America’s manufacturing comeback and global energy leadership,” Abigail Ross Hopper, CEO of the Solar Energy Industries Association, said in a statement when the bill passed the Senate.
A related tax credit for using U.S.-made components in solar and wind farms ends for projects that enter service after 2027. A carveout allows projects that start construction within one year of the law’s enactment to claim the credit. The credit was designed to spur demand at U.S. factories in order to break the nation’s dependence on equipment from China.
“If nothing changes, factories start to close,” Michael Carr, executive director of the Solar Energy Manufacturers Association, told CNBC. “Factories that are on the drawing board that probably penciled [favorably] two weeks ago, maybe don’t pencil now. We’ll see investment slow down in the sector going forward.”
Congressional republicans have passed the republican tax bill that kills a slew of tax credits to help working families become more energy efficient, improve US air quality, and boost US manufacturing – instead channeling that money to wealthy elites, increasing the deficit by $3.3 trillion dollars along the way.
(Update, July 3 – this article has been updated to reflect the House passage of the reconciliation bill)
The bill as passed retains much of the draft language killing off energy efficiency credits and credits responsible for green manufacturing growth in the US.
The credits were largely established under President Biden as part of the Inflation Reduction Act, which raised hundreds of billions of dollars through tax enforcement on wealthy individuals and corporations and channeled that into energy efficiency credits for American families. It was also the most significant single climate action by any country in the history of the world, in terms of the amount of investment it put towards energy efficiency.
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We’ve covered how families could save thousands of dollars on upgrades to lower their energy costs through these credits.
But these credits aren’t just money-saving for Americans, they also work to boost American manufacturing, due to various provisions in the bill, particularly around the $7,500 EV tax credit which was limited to cars that undergo final assembly in North America.
So of course, republicans want to repeal this good thing. The republican tax plan that just passed Congress repeals most of the credits established in the IRA which were responsible for this boom in investment. It also attempts to make fuel economy standards unenforceable, which will further increase fuel costs for Americans (by at least $23 billion).
Republicans in the House narrowly passed their version of the bill in May, which then went to the Senate and was modified. The Senate mostly kept the job-killing language of the House bill, eliminating consumer and business tax credits that helped to spur investment in US manufacturing – specifically the 30D and 25E credits for new & used clean vehicles, the commercial clean vehicle credit, the EV charger credit, and funding to reduce pollution from heavy duty vehicles. Many of these credits have domestic sourcing provisions which encouraged companies to establish US manufacturing facilities.
It’s estimated that the elimination of these credits will kill 2 million jobs by nipping a nascent US EV manufacturing boom in the bud before it really gets started. Many of those jobs will be lost in states whose Senators voted for the bill, like Tennessee and South Carolina which will lose 140k and 135k jobs respectively. All four Senators from those states – Marsha Blackburn, Bill Hagerty, Lindsey Graham, and Tim Scott – voted to put their constituents out on the street.
All told, every Democrat in both houses voted against the job-killing, deficit-increasing measure – which is also estimated to increase the average home’s energy costs by $400 annually. Just the bill’s repeal of the home solar credit will account for $110 worth of increased electricity costs for all Americans, and it also threatens US AI/Energy dominance that republicans claim to care about but are actively working against.
Only three Senate republicans had the good sense to oppose the bill – or, perhaps more accurately, were allowed to vote against it in order to maintain the illusion of their independence from this anti-American party which they continue to consider themselves a member of. But it managed to pass with a 50-50 vote with tiebreaker from J.D. Vance, the runningmate of the convicted felon currently squatting in the White House.
In the House, the original version of the bill passed by the slimmest of margins, 215-214 (with one abstention… which meant it got exactly 50% of the cast votes), again with only a few republican dissenters. The reconciliation bill ended up passing with a vote of 218-214, with only 2 republican dissenters, Fitzpatrick (R-PA) and Massie (R-KY), gaining votes even though some republicans had claimed to regret voting for it (or didn’t read it) the first time it hit the House.
Originally, there were additional measures in the bill that seemed to have been included just out of spite. For example, republicans wanted to sell off USPS’ awesome new EVs for scrap, losing billions of dollars in the process and killing the American jobs building them. And republicans wanted to add a punitive tax on EVs while subsidizing gas vehicles even more, increasing the budget shortfall for highways.
Thankfully, neither the USPS or registration tax measures seem to have made it into the final reconciliation bill, but the main measures killing American jobs have remained.
But the reconciliation bill is, in some ways, worse than the original House bill. For example, it eliminates the consumer EV credit 3 months earlier, thus increasing inflation faster for one of the most costly items that a consumer owns – their car. And that won’t just affect EVs – by making EVs $7,500 more expensive, competing gas vehicles will feel less downward pressure on price from the competition of cleaner, cheaper-to-own EVs, and manufacturers could well increase prices.
Domestic EV sales in China have ballooned in recent years. China got a slower start than some countries, having low EV penetration until around 2020, but has gone exponential in recent years. In 2023, ICE car values began to plummet and these cars became unsellable in China, acting as a canary in the coal mine for what will happen to the global auto industry if other automaking countries don’t take EVs seriously.
It’s estimated that this year, China will sell more EVs than the US sells cars overall.
But China is not just the number one EV maker, it’s also the number one car maker. As of last year, China is the top auto exporter in the world, eclipsing Japan which had been the primary holder of that title for decades.
Japan came to international prominence in automotive manufacturing in the 1970s, led primarily by the adoption of technologies that better confronted the environmental challenges of the day, while Western automakers continued to try to sell unpopular, inefficient gas guzzlers. Western governments failed to recognize the threat of growing overseas competition, and responded fecklessly with tariffs that didn’t work. Sound familiar?
And so, this republican budget bill, which would strangle the attempt to catch US EV manufacturing up to China’s long-planned dominance of the field, will only serve to reduce potential international competition to the rise of China. China is taking EVs seriously, and the US could have, if it weren’t for the spiteful actions of the republicans.
They’re trying to kill off these manufacturing investments likely to snub one of President Biden’s biggest accomplishments, with the largest positive effect on America, and as a giveaway to the fossil fuel industry that bribes them disproportionately.
But all this will do is harm US manufacturing and make Americans sicker and poorer – and help the US’ geopolitical rivals step into the vacuum left by America’s abdication of the auto industry.
The bill now moves to the White House, where it will be placed on the desk of a convicted felon who is Constitutionally barred from holding office in the US. It will inevitably be signed, as the bill is bad for America, and the felon in question has repeatedly proven that he is an enemy of America. Thus killing millions of American jobs, which will inevitably be shifted to China, as that country does not have a similar political faction actively trying to kill its own global competitiveness.
So, enjoy your higher costs, America – on energy, vehicles, and healthcare due to increased pollution (and the healthcare cuts the bill also includes). You voted for inflation, and you’re getting inflation.
Republicans also killed a number of home energy efficiency credits today, including the rooftop solar credit. That means you could have only until the end of this year to upgrade your home before republicans raise the cost of doing so by an average of ~$10,000. So if you want to go solar, get started TODAY, because these things take time and the system needs to be active before you file for the credit.
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