Growing U.S. Battery Storage Capacity Drives Industry Expansion

by | May 31, 2023

Battery storage

(Credit: Canva Pro)

The United States battery storage capacity continues to surge in with a 52% year-on-year increase, which was noted at the end of the first quarter of 2023. Expectations remain high, with approximately 3.2 GW anticipated to be added in the second quarter. These figures, compiled by S&P Global Commodity Insights through various government filings, indicate growth for battery storage in the country.

During the first quarter, a substantial 710 gigawatts of capacity was added, representing a 7% increase from the end of 2022. The California Independent System Operator (CAISO) maintains its position as the nation’s leader in battery storage capacity, accounting for nearly 5.2 GW, or 48% of the total capacity in the U.S. The Electric Reliability Council of Texas (ERCOT) wasn’t far behind CAISO, amounting to 30.5% of the U.S. capacity.

Lithium Prices and Q1 Additions

The prices of lithium, a crucial metal used in battery components, have experienced a decline throughout 2023, according to the report. After reaching record highs in 2022, prices have cooled, although a slight increase has been observed in the past two weeks. 

According to S&P Global Commodity Insights data, as of May 24, seaborne lithium prices on a CIF North Asia basis stood at $38,000 per metric ton for carbonate and $45,000 per metric ton for hydroxide. Last year, carbonate and hydroxide reached highs of $78,000 a metric ton and $84,700 a metric ton, respectively. The top additions during the first quarter were predominantly located in ERCOT and the Western Electricity Coordinating Council regions. 

U.S. Battery Storage Projected Growth

NextEra Energy Resources currently holds the largest operating battery storage capacity in the U.S. with 1.421 GW, followed by Axium Infrastructure with 733 MW and Vistra Energy with 673 MW. 

Despite a fraction of the proposed additions being realized in the first quarter, expectations for the second quarter remain high, the report finds. The continuous growth of battery storage capacity in the U.S. signifies the potential for continued battery storage expansion throughout the country. 

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