Supply Chain Issues Delaying US Grid Batteries' Installation
Falling prices have made grid-scale storage batteries more attractive, reports Bloomberg. But after decades of stagnant investment, America's grids "are racing to make the upgrades needed to plug them in," with supplies straining for the necessary equipment. Demand for batteries has skyrocketed as electricity use across the U.S. swells, driven by data centers' booming energy needs and increasing…
The installation of grid-scale storage batteries in the United States is facing significant delays, according to Bloomberg reports. America's grids are struggling to make the necessary upgrades to accommodate the surge in battery demand, driven by increasing electricity use for data centers and greater electrification. However, the supply chain for equipment is not keeping pace with this demand, exacerbating the issue.
As a result, battery storage projects are piling up in interconnection queues across the country, causing construction delays and increasing costs.
Utilities such as Consolidated Edison in New York have reported a surge in unconnected battery storage projects, with volumes up by 300% in the past two years. Joseph Rand, an energy policy researcher, attributes the bottleneck to the log-jammed process of interconnecting power plants. Nationwide, there are approximately 750 gigawatts of energy storage projects awaiting grid connections, equivalent to the generating capacity of over 700 nuclear reactors. However, many developers have abandoned the queue due to the delays.
The increase in battery projects is expected to continue, with the Wood Mackenzie energy consultancy predicting a quadrupling of the U.S. energy storage market in the next six years. However, this surge is accompanied by shortages in key equipment, driving up construction costs and timelines. Utilities are struggling to keep up with the demand, with some reporting a 300% increase in interconnection workload.
California's Pacific Gas & Electric (PG&E) has cited long lead times for specialized equipment as a major factor in delays, with procuring certain breakers taking nearly four years. A specific example is the substation in Solano County, where delays to circuit breaker upgrades have put two battery projects worth a combined 450 megawatts at risk. Transmission line work in the Bay Area has also put 800 megawatts of energy storage at risk.
The situation in New York is similar, with Con Edison requiring developers to help pay for upgrades if their projects will strain infrastructure. This policy has raised costs by an average of $21 million per project, a 14-fold increase according to a survey by the New York Battery and Energy Storage Technology Consortium (NY-BEST). As a result, at least 25 projects have been canceled. Battery advocates have appealed to state regulators to abandon this policy.
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