Calif. sprints to install batteries but can’t find parts
California is racing to add batteries to its electric grid in an attempt to prevent blackouts, cut greenhouse gas emissions and prepare for the closure of the state’s only nuclear power plant in 2025.
A plan finalized by state regulators last month calls for almost quintupling California’s storage capacity over the next four years.
But the Golden State faces significant hurdles that could scramble its plans. Shipping bottlenecks have delayed construction of new projects. Demand for raw materials used in lithium-ion batteries, which account for the vast majority of utility-scale projects, outstrips supply. And permitting and connecting all those new batteries to the grid is a difficult puzzle itself.
How California navigates those challenges could determine the trajectory of the U.S. electric sector’s transformation, analysts said.
“California is effectively a proof of concept for an accelerated energy transition that many are advocating for nationwide and worldwide,” said Dan Finn-Foley, an analyst who tracks the storage industry for PA Consulting. “If there are supply chain efforts that hold that back, it raises the stakes for transitions in other areas.”
Batteries represent the next chapter in California’s energy transformation. The state has long focused on boosting wind and solar generation to curb emissions. In 2020, renewables accounted for a third of the state’s power generation.
California nevertheless remains highly reliant on natural gas, particularly when the sun goes down, and it has faced a series of reliability crises. The state experienced rolling blackouts during the summer of 2020, when the combination of climate-charged heat waves and a lack of generation saw electricity demand exceed supply.
Those challenges have been compounded by the scheduled shutdown of the Diablo Canyon Power Plant, a 2.2-gigawatt nuclear facility slated to close in 2025. As part of the decision to shutter the plant, state regulators directed power companies to identify clean power sources that could meet demand without sending greenhouse gas emissions soaring.
Enter energy storage. The vast majority of storage systems use lithium-ion batteries, which generally can dispatch power for up to four hours. These systems are increasingly paired with solar, storing excess electricity generated during the day to be used during the evening or times of peak demand. Advocates hope batteries can address the state’s reliability issues while facilitating an expanded build-out of renewables.
“The case is set for storage. We know that is what we want. Now, how do we make sure we’re successful?” said Alex Morris, who leads the California Energy Storage Association.
Hurry, hurry, wait
In February, the California Public Utilities Commission provided an initial answer by finalizing a plan that directs utilities to install 14.7 GW of battery storage by 2032. The plan calls for a rapid scale-up of batteries in the short term, increasing from 2.5 GW this year to 4.6 GW in 2023, 10.6 GW in 2024 and 12.5 GW in 2025.
Many analysts expect California will meet its long-term goal, but they say the state will need to overcome supply chain constraints to satisfy its near-term targets.
