This story was originally published by Canary Media.
California and Texas have a new clean energy superlative to compete over: who’s got the most grid batteries.
Last year, Texas overtook California in large-scale solar power capacity. When huge amounts of solar power rush onto the grid, batteries tend to follow. Now, Texas is building more grid batteries than California, the longtime undisputed leader in clean energy storage.
Developers are expected to complete 6.4 gigawatts of new grid battery capacity in Texas this year, according to the federal Energy Information Administration. That’s more than double the 5.6 gigawatts of battery capacity it ended 2023 with. It’s also as much battery capacity as the entire United States built last year, which was a record year for the energy storage industry. The projection outpaces the 5.2 gigawatts set to come online in California.
The surge of batteries in these states underscores the fact that energy storage is an increasingly major part of the country’s transitioning electricity system. The U.S. is slated to add 14.3 gigawatts of battery storage overall this year; that represents 23 percent of all new power plant capacity. Climate analysts have long called for massive storage expansion to facilitate a shift to low-carbon energy — now it’s finally starting to happen.
California is still forecast to end the year with more battery capacity than Texas, but if the current pace continues, Texas could surpass the Golden State as soon as next year. That would be a remarkable upset for California’s leadership in deploying clean energy. It’s yet more evidence that Texas has become a leader in building clean power plants, not due to enthusiastic climate policy, but because the technologies compete so well in the state’s energy marketplace.
California built up its nation-leading battery fleet through years of diligent policies and subsidies designed to jump-start the adoption of this pivotal clean energy technology. The state finalized a mandate in 2013 for its utilities to start acquiring energy storage and allocated funding for households and businesses that wanted to buy small-scale batteries. Utilities began awarding capacity contracts (known as “resource adequacy” in the state’s regulatory jargon) to battery developers, providing the financial certainty needed to build gigawatts of storage.
These policy measures paid dividends when batteries helped Southern California’s grid survive gas shortages after the 2015 Aliso Canyon gas storage leak. Over the years, the technology has helped solar development continue after the sunny hours became saturated with renewable energy; the batteries shift solar generation into more valuable nighttime hours. They also deliver vital capacity when heat waves push the state’s grid to the brink of collapse.
Texas got into the game much more recently, but for different reasons. When battery costs fell, private developers started seeing opportunities to make money in the competitive ERCOT wholesale markets. Unlike California, Texas does not award specific contracts to ensure sufficient grid capacity; instead, the price spikes from moments of scarce supply are meant to incentivize private developers to build power plants and make money.
Developers have found that acquiring land, obtaining permits, and connecting to the grid is easier in Texas than in California’s regulatory regime. The payoffs can be huge, both for developers and residents. For developers, rapidly responding batteries are well suited to making money off the sudden swings in ERCOT’s increasingly renewables-inflected markets. But more batteries help the broader community, too, as they keep the grid functional in dicey situations, like during a string of heat waves last summer.
Battery construction picked up in Texas around 2020, when firms like Plus Power, Broad Reach Power, and Key Capture Energy moved forward with 100-megawatt projects, which were unheard of in that market at the time. Now Plus Power, for instance, lists multiple Texas energy storage projects in construction with capacity in the hundreds of megawatts. Key Capture lists 580 megawatts in operation or construction in Texas. Broad Reach has more than 300 megawatts operating, with another 800 megawatts in the design-and-build phase.
And as these early movers on Texas grid batteries keep doubling down, new entrants are rushing in to compete. The entrepreneurial influx has made Texas in 2024 the liveliest grid storage market the U.S. has ever seen.
