Not Enough Energy Storage

Global grid storage deployments are nowhere near on track to meet clean-energy goals

If the world is going to transition from fossil fuels to intermittent renewable energy (wind + solar), we’re going to need a lot of energy storage to balance the electrical grid.

How much more?

Bloomberg NEF predicts over a terawatt-hour of stationary battery energy storage will exist by 2030.

IRENA estimates that, if the share of renewable energy is to double by 2030, the total stock of stationary energy capacity (not just batteries, but pumped hydro storage, or any other kind of energy storage) will have to rise to 11.79-15.72 terawatts-hours by 2030.

Actual solar and wind energy generation trends over the past several decades are actually on track to more than double the share of electricity from renewables by 2030, so the demand for energy storage in 2030 might actually be higher than IRENA’s targets. My back-of-the-envelope estimate was 27 terawatt-hours globally.

Global stationary energy storage capacity is at 4.67 terawatt-hours as of 2017, so to hit those 2030 targets we’d need to add 7 terawatt-hours at a minimum over this decade.

Are we on track to do so?

Not even close.

I found Energy Storage News to be a really useful dataset of announcements about new grid-scale energy storage projects, and I made a spreadsheet of all reported energy storage projects since January 1, 2020.

My dataset has a total of 340 projects worldwide, with estimated completion dates ranging from 2020 to 2031. Projects generally take multiple years to complete (between securing a permit to build, signing contracts, and actually constructing the facility.)

And we have a total of 977 Gwh, or not quite one terawatt-hour, in global existing or planned projects over the next decade.

Even if you assume that projects launched in the 2020-2022 range are going to have expected completion dates weighted towards the beginning of the decade, i.e. that most of our energy storage by 2030 will come from projects not yet begun, the current yearly rates of deployment are well under what we’d need to get to 7 terawatt-hours of new storage.

We’re not building fast enough.

Now, of course, there’s cause to be skeptical of this data. Not every energy storage construction project necessarily puts out a press release.

But other data sources on worldwide energy storage deployment are consistent with this picture.

Wood Mackenzie estimated 28 GWh were added in 2021 worldwide, “nearly triple” the energy storage added in 2020. That same report projects that total energy storage worldwide will reach a terawatt by 2030; which is very close to the estimate from my Energy Storage News dataset.

So that suggests that the Energy Storage News data is capturing most of the planned and current energy storage projects worldwide. The 1 TWh by 2030 figure is unlikely to be a vast underestimate.

So we’re not building enough energy storage.

If we want to go through an “energy transformation” and wean off fossil fuels this century, we need to dramatically accelerate how much grid-scale energy storage gets built, or we need a similarly dramatic increase in the production of non-intermittent clean energy sources like nuclear, hydroelectric, or geothermal energy.

What Stops Us From Building Bigger Batteries?

There is not, as far as I can tell, an inherent technological barrier to building enough batteries to power the world on solar + wind. Even when it comes to lithium-ion batteries, we are not going to run out of raw materials.

But there can easily be other obstacles to building enough battery capacity.

One thing that US energy storage companies bring up a lot is the interconnection process; if you build a battery energy storage system (BESS) next to a solar farm, you have to connect the batteries to the grid, which is a heavily regulated process, described as “sluggish, complex, and unclear due to lack of clarity in relevant policies.” The “interconnect queue” of projects waiting for permission to connect to the electric grid is growing faster than it can be cleared. A lot of US storage projects are blocked on connecting to the grid, and wait times are growing. It now takes 3.5 years to get connected, up from 1.9 in the 2010s.

In the EU, the key regulatory hurdle, according to industry groups, seems to be “double charging” — charging battery systems both when they draw power from the grid and when they put power back in. This obviously disincentivizes building more battery storage.

In the UK, they straight-up capped battery storage at 50 MW until 2020, and deployment has markedly accelerated since they lifted the cap. In fact, lifting the cap has been so effective that the UK is now the third leading producer of new energy storage since 2020:

I’m not going to make specific policy proposals here, but I do think that energy-storage-friendly regulatory reform could make a very large difference in how much energy storage gets built worldwide.

(Thanks to Daniel Bachler for feedback.)