Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Climate

A Big Week for Batteries

Texas and California offered intriguing, opposing examples of what batteries can do for the grid.

A battery.
Heatmap Illustration/Getty Images

While cold winters in the south and hot summers across the country are the most dramatic times for electricity usage — with air conditioners blasting as weary workers return home or inefficient electric heaters strain to keep toes warm from Chattanooga to El Paso before the sun is up — it may be early spring that gives us the most insight into the lower-emitting grid of the future.

In California, America’s longtime leader in clean energy deployment, the combination of mild temperatures and longer days means that solar power can do most of the heavy lifting. And in Texas — whose uniquely isolated, market-based and permissive grid is fast becoming the source of much of the country’s clean power growth — regulators allow the state’s vast fleet of natural gas power (and some coal) power plants to shut down for maintenance during the mild weather, giving renewables time to shine.

And not just renewables: Both Texas and California saw remarkable usage of batteries on the grid this week. If the whole country’s grid is ever going to be decarbonized, other grids will have to start looking at what's happening in America’s two largest states.

At 7:30 p.m. Central Time on Tuesday, with 20,000 megawatts of power unavailable due to planned outages of thermal power plants, batteries were providing 1.7 gigawatts of power to the Texas grid, slightly more than solar, while wind was providing 5.5 gigawatts. Four hours earlier, solar and wind combined for almost 25 gigawatts. Real-time prices Tuesday evening topped out at over $4,000 per megawatt hour, getting close to the $5,000 cap imposed after blackouts and price spikes of Winter Storm Uri in 2021.

“There was a substantial amount of physical capacity available still,” Connor Waldoch, co-founder of the electricity monitoring company Grid Status, told me, referring to generation that was capable of selling power to the grid but was being kept off in case of an emergency. “ERCOT,” the organization that governs the Texas grid, “has been operating conservatively for the last few years,” he said. Temperatures were also high late in the day, with temperatures in the 80s in the evening parts of Texas, leading ERCOT to ask some plants to delay their scheduled maintenance.

According to Grid Status, there was more battery storage on the Texas grid Tuesday than at any point since high temperatures tested its stability last September. That combined with high prices in the real-time energy market meant a huge payday for battery storage operators. When there are more planned outages for natural gas, Waldoch explained, batteries are bidding “at the very tippity top” and likely earning huge revenues in just a few a hours.

But all those batteries are not necessarily helping decarbonize Texas’ electricity system by charging when there’s a lot of cheap solar and discharging when renewables are scarce and prices are high.

That’s because battery systems in Texas make the lion’s share of their revenues by providing what’s known in Texas as “ancillary services.” ERCOT pays battery operators to be available if the grid needs power quickly — and then they get paid again for the power they provide when called upon.

The spike in prices and battery operators' response be a sign that the battery market is maturing. In 2023, according to the battery storage data service Modo Energy, Texas battery operators earned around 85% of their revenue from providing ancillary services. For battery developers, earning money this way is ideal because it means less wear and tear on battery systems as they charge and discharge.

That said, the portion of revenue that battery systems earn from selling actual energy almost tripled from 2022 to 2023; Brandt Vermillion, Modo’s ERCOT lead, estimated that installed battery capacity would double in ERCOT in 2024, while the amount of ancillary services would stay “more or less fixed.” As the supply of battery capacity gets closer to and possibly exceeds demand for ancillary services, those prices will fall, Vermillion said. Over time, “energy arbitrage” — charging when prices are low and discharging when prices are high — will become a more and more attractive way to earn revenue.

To get a sense of what that will look like, Texas battery storage operators should look west.

In California this week, conditions were more, well, pacific. At 8 p.m. Pacific Time on Tuesday night, there were around 6 gigawatts of battery storage discharging onto the grid, more than the 5 gigawatts of natural gas or the 4.5 gigawatts of hydro power at the time. Batteries were the largest source of power on the grid.

This was a signal moment for California, which has been procuring and deploying grid batteries at a breakneck pace, and even retooled its residential solar program to encourage home battery storage. California’s grid has over 7 gigawatts of installed battery storage, according to the Energy Information Administration, the most of any state, while Texas, in second place, has just over 3 gigawatts. (There are another 300 utility-scale battery projects in the pipeline for 2024, according to the EIA, with about half of them planned for Texas.)

In California, the so-called “saturation” of ancillary services by batteries is far more advanced, and the portion of revenues earned by battery systems by providing them has decreased.

“Ancillary services have gone from taking up the majority of battery capacity to only a small fraction,” according to a report by the California Independent System Operator. By the end of 2022, the majority of battery revenue came from the energy markets, not ancillary services, the report said.

Thanks to the magnitude of solar in California, Grid Status’ Waldoch explained, “almost every day there’s a long negative- or low-price period” — an ideal time for carbon-abating energy arbitrage.

Batteries that are most carbon-abating tend to power themselves when transmission is congested, which essentially “strands” renewables on the grid, or when they would otherwise be curtailed, when there’s too much renewable power available compared to demand, explained Emma Konet, co-founder of Tierra Climate, which is working to set up a voluntary carbon market to encourage carbon-abating battery usage. When the company examined Texas’ battery market in 2022, it found that only about a fifth of batteries were actually abating carbon.

In fact, the most carbon-intensive battery system in Texas that Tierra Climate looked at was also its most profitable, making the lion’s share of its revenue in the ancillary services markets; the most carbon-abating didn’t participate in the ancillary services markets at all, and was paired directly with a solar project.

Texas's energy market is simply not structured in a way such that there's a good correlation between low prices and low emissions for charging and high prices and high emissions when batteries discharge, Konet told me. (The best way to align batteries with lower emissions, she added, would be a carbon tax of at least $50 a ton.) While Tierra Climate hasn’t looked in detail at California, Konet said California’s battery systems are more likely to be carbon-abating because of the prevalence of storage projects paired with renewable generation.

There’s probably no worse way to encourage Texas to do something than by pointing to California as a positive example. Still, if Texas’ battery storage industry is ever going to turn into something more than an adjuster pedal for its existing grid mix, it’s going to have to get a little more Left Coast — or at least move a little closer to those solar panels.

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Climate 101

Welcome to Climate 101

Your guide to the key technologies of the energy transition.

Welcome to Climate 101
Heatmap illustration/Getty images

Here at Heatmap, we write a lot about decarbonization — that is, the process of transitioning the global economy away from fossil fuels and toward long-term sustainable technologies for generating energy. What we don’t usually write about is what those technologies actually do. Sure, solar panels convert energy from the sun into electricity — but how, exactly? Why do wind turbines have to be that tall? What’s the difference between carbon capture, carbon offsets, and carbon removal, and why does it matter?

So today, we’re bringing you Climate 101, a primer on some of the key technologies of the energy transition. In this series, we’ll cover everything from what makes silicon a perfect material for solar panels (and computer chips), to what’s going on inside a lithium-ion battery, to the difference between advanced and enhanced geothermal.

There’s something here for everyone, whether you’re already an industry expert or merely climate curious. For instance, did you know that contemporary 17th century readers might have understood Don Quixote’s famous “tilting at windmills” to be an expression of NIMYBism? I sure didn’t! But I do now that I’ve read Jeva Lange’s 101 guide to wind energy.

That said, I’d like to extend an especial welcome to those who’ve come here feeling lost in the climate conversation and looking for a way to make sense of it. All of us at Heatmap have been there at some point or another, and we know how confusing — even scary — it can be. The constant drumbeat of news about heatwaves and floods and net-zero this and parts per million that is a lot to take in. We hope this information will help you start to see the bigger picture — because the sooner you do, the sooner you can join the transition, yourself.

Keep reading...Show less
Green
Climate 101

What Goes on Inside a Solar Panel?

The basics on the world’s fastest-growing source of renewable energy.

What Goes on Inside a Solar Panel?
Heatmap illustration/Getty Images

Solar power is already the backbone of the energy transition. But while the basic technology has been around for decades, in more recent years, installations have proceeded at a record pace. In the United States, solar capacity has grown at an average annual rate of 28% over the past decade. Over a longer timeline, the growth is even more extraordinary — from an stalled capacity base of under 1 gigawatt with virtually no utility-scale solar in 2010, to over 60 gigawatts of utility-scale solar in 2020, and almost 175 gigawatts today. Solar is the fastest-growing source of renewable energy in both the U.S. and the world.

Keep reading...Show less
Yellow
Climate 101

The Ins and Outs of Wind Energy

The country’s largest source of renewable energy has a long history.

The Ins and Outs of Wind Energy
Heatmap illustration/Getty Images

Was Don Quixote a NIMBY?

Keep reading...Show less
Green