What are the energy storage trends in 2024?

In-brief analysis

Updated 1/9/2023 to correct ownership of the Moss Landing Energy Storage Facility.

Data source: U.S. Energy Information Administration,

U.S. Energy Information Administration, Preliminary Monthly Electric Generator Inventory , based on Form EIA-860M

U.S. battery storage capacity has been growing since 2021 and could increase by 89% by the end of 2024 if developers bring all of the energy storage systems they have planned on line by their intended commercial operation dates. Developers currently plan to expand U.S. battery capacity to more than 30 gigawatts (GW) by the end of 2024, a capacity that would exceed those of petroleum liquids, geothermal, wood and wood waste, or landfill gas.

Two states with rapidly growing wind and solar generating fleets account for the bulk of the capacity additions. California has the most installed battery storage capacity of any state, with 7.3 GW, followed by Texas with 3.2 GW. The rapid growth of variable solar and wind capacity in states such as California and Texas supports growth in battery storage, which works by storing excess power in periods of low electricity demand and releasing power when electricity demand is high. The remaining states have a total of around of 3.5 GW of installed battery storage capacity.

Planned and currently operational U.S. utility-scale battery capacity totaled around 16 GW at the end of 2023. Developers plan to add another 15 GW in 2024 and around 9 GW in 2025, according to our latest Preliminary Monthly Electric Generator Inventory.

Data source: U.S. Energy Information Administration,

U.S. Energy Information Administration, Preliminary Monthly Electric Generator Inventory , based on Form EIA-860M

Battery storage projects are getting larger in the United States. The battery storage facility owned by Vistra and located at Moss Landing in California is currently the largest in operation in the country, with 750 megawatts (MW).

Developers expect to bring more than 300 utility-scale battery storage projects on line in the United States by 2025, and around 50% of the planned capacity installations will be in Texas. The five largest new U.S. battery storage projects that are scheduled to be deployed in California and Texas in 2024 or 2025 are:

• Lunis Creek BESS SLF (Texas, 621 MW)
• Clear Fork Creek BESS SLF (Texas, 600 MW)
• Hecate Energy Ramsey Storage (Texas, 500 MW)
• Bellefield Solar and Energy Storage Farm (California, 500 MW)
• Dogwood Creek Solar and BESS (Texas, 443 MW)

Principal contributors: Katherine Antonio, Alex Mey

By Yayoi Sekine, Head of Energy Storage, BloombergNEF

Battery overproduction and overcapacity will shape market dynamics of the energy storage sector in 2024, pressuring prices and providing headwinds for stationary energy storage deployments. This report highlights the most noteworthy developments we expect in the energy storage industry this year.

• Prices: Both lithium-ion battery pack and energy storage system prices are expected to fall again in 2024. Rapid growth of battery manufacturing has outpaced demand, which is leading to significant downward pricing pressure as battery makers try to recoup investment and reduce losses tied to underutilization of their plants.
• Markets: Lower prices are good for EVs and stationary storage markets. Stationary storage additions should reach another record, at 57 gigawatts (136 gigawatt-hours) in 2024, up 40% relative to 2023 in gigawatt terms. We expect stationary storage project durations to grow as use-cases evolve to deliver more energy, and more homes to add batteries to their new solar installations. EV sales are headed for another record year in 2024 (though there is some caution with US and Europe market slowdown).
• Battery improvements to watch include the uptake of larger cells at a record pace, catalyzed by intense competition to drive costs down. Both prismatic LFP cells in stationary storage and large cylindrical cells for EVs are gaining traction, taking away market share from pouch cells.
• Beyond lithium-ion batteries, other long-duration energy storage (LDES) technologies have a critical year ahead. China has forged ahead with its LDES development and will remain the frontrunner this year, even as US, UK, Australia and other markets support LDES growth.
• Battery recycling heads for an interesting year, as new material availability does not keep up with recycling capacity scale-up. BNEF expects projects delays and even cancellations.
• How we did in 2023: Our predictions came out looking good: we were mostly right on the impact of policies like IRA on other markets such as China and Europe, and on technologies like sodium-ion batteries, solid-state batteries and pumped hydro storage. Our biggest miss was on battery prices.

 

BNEF clients can access the full report here.