The Energy Storage Boom Has Arrived

After years of build up, a giant battery storage project is online in Moss Landing, California, and a huge one is on the way in Florida.

By Dan Gearino January 7, 2021

Just five years ago, a 20 megawatt battery storage project was considered big.

Now a 300 megawatt project, the largest in the world, has gone online in California, and even bigger battery projects are coming in 2021.

Battery storage has entered a new phase of rapid growth, brought on by falling prices for lithium-ion batteries and rising demand for electricity sources that can fill in the gaps in a grid that is increasingly fueled by wind and solar. High demand is leading to a boom in investment in battery companies, and fevered speculation about new kinds of batteries.

Battery storage is a crucial part of the transition to clean energy because of the way it can store power from intermittent sources for use at other times, providing a cleaner and less expensive alternative to natural gas power plants.

And 2021 is shaping up to be the year in which battery storage takes a big step toward being an essential part of the grid, rather than operating at the edges.

To help make sense of it, I reached out to Eric Gimon, a policy adviser for the think tank Energy Innovation.

“I feel like we have crossed a threshold,” he said, about the completion of a new wave of big battery projects. “That’s important, a signpost that we’re moving into a new era.”

We are living, he said, in a period when batteries “have arrived.”

To understand the size of the new battery storage projects, it helps to grasp the two key measures: megawatts, which show how much power a battery storage system can produce at one moment, and megawatt-hours, which indicate a battery’s duration by showing how many units of electricity a system can produce before needing to be recharged.

Here are the two largest projects:

• Vistra Moss Landing Energy Storage in Moss Landing, California, went online last month with capacity of 300 megawatts, making it the largest battery storage system in the world. The system runs for four hours and produces up to 1,200 megawatt-hours before needing to be recharged. A second phase of 100 megawatts is under construction and will likely be complete in August, according to the developer, Vistra Energy.
• Manatee Energy Storage Center near Parrish, Florida, will have capacity of 409 megawatts, which will be the largest capacity of any facility now under construction. The system has a duration of slightly more than two hours, producing up to 900 megawatt-hours on single charge. The developer, NextEra Energy, says the project is on track to go online near the end of 2021.

So Manatee is the largest in terms of megawatts of capacity, while Vistra Moss Landing is the largest in terms of the amount of electricity it can generate before a recharge. The differences come down to design choices made by the developers, which are based on the size and duration that the local grid needs, among many other considerations.

Gimon said grid operators and regulators are still getting used to the growing presence of battery storage and figuring out how this rapid change will affect electricity prices and the way that various power producers work together.

They are going to need to work quickly, considering the pace of growth. The U.S. has gone from 0.3 gigawatts (0.7 gigawatt-hours) of new battery storage in 2019, to 1.1 gigawatts (3 gigawatt-hours) in 2020, and a projected 2.4 gigawatts (7.6 gigawatt-hours) in 2021, according to BloombergNEF.

Rapid growth is leading to innovation. Companies are working to find more efficient ways to build lithium-ion battery systems, and are working to develop batteries that use different materials. The results may be useful across a battery economy that includes energy storage and electric vehicles.

As the industry develops, many entrepreneurs are stepping into this space.

Eos Energy Services of New Jersey is attracting attention from investors with a battery that uses a zinc-based design instead of lithium-ion. The company says its battery has the advantage of using widely available components, as opposed to lithium-ion, whose components, like lithium and cobalt, are limited or may become limited. Eon also emphasizes the safety of its batteries in contrast to the flammability of lithium-ion. The company this week announced that it had received a $20 million order from a customer, the largest in the company’s history.

Form Energy of Massachusetts is developing long-duration batteries that use a sulfur-based design instead of lithium-ion, an approach that allows the battery to discharge electricity for days at a time as opposed to short bursts. Last year, the company announced a pilot project in Minnesota for a 1-megawatt battery that can run for up to 150 hours on a charge.

Quantumscape of California, which is focusing on the EV market, has seen some wild ups and downs in its share price, as investors try to get a handle on whether the company’s much-touted advancements in lithium technology will actually work. Quantumscape uses a solid material, as opposed to a liquid, to conduct electricity between electrodes. The company says its design can lead to longer battery range, quicker charging and less flammability. Volkswagen is among the major investors that see vast potential in Quantumscape’s designs.

The larger point is that we are in a highly speculative period, with scientists and corporate executives making the case for why their approach will be the next big thing.

Gimon sees parallels with the photovoltaic solar boom of the late 2000s, when many companies developed alternatives to silicon-based solar panels, but most of those businesses didn’t last. He said he doesn’t dismiss any particular battery company or technology, but he expects that the industry is entering a period when, for many of the new players, the results will not live up to the hype. 

“There is just going to be a lot of red ink,” he said. “It’s the nature of that kind of technological change.”

But let’s not end on that note, since the lithium-ion technology being used in most projects is already proven, and the boom is underway.

Instead, let’s look at the victory lap that Vistra was taking this week, with the announcement that the first phase of the Moss Landing project was now running and connected to the grid. Vistra has said it is considering future phases of this project that would lead to a total of 1,500 megawatts and 6,000 megawatt-hours.

“A battery system of this size and scale has never been built before,” said Curt Morgan, the company’s CEO, about the completion of the first phase. “As our country transitions to a clean energy future, batteries will play a pivotal role and the Vistra Moss Landing project will serve as the model for utility-scale battery storage for years to come.”