The Eye-opening Need for Energy Storage

Mike Leslie
May 29, 2024

According to Reuters, solar power has grown to account for about 6% of total U.S. electric power generation after surging by 155% between 2018 and 2023.

Inputs that matter: Meanwhile, Toyota has made its latest statements, doubling down on plans to develop new vehicles with internal combustion engines (ICE) and continuing to focus on part-hydrogen-powered options.

  • "In an era when the development of battery electric vehicle technology is accelerating, there is a new role we can pursue for the internal combustion engine as well," said Koji Sato, Toyota CEO, adding that these ICE engines will use electric vehicle (EV) batteries.
  • The company also expects the new ICE vehicles to enter production around the end of 2026 when the European Union (EU) will begin phasing in new emissions regulations.

The opportunity: While solar power has made the U.S. power-generating system greener, it has also made it more volatile, especially in the top solar market, California.

  • Peak solar power generation coincides with the lowest residential electricity demand during the midday.
  • When power demand begins to surge after 6 p.m., solar output begins to fade.

Zoom in: To cope with the natural and weather-dependent solar power, the grid needs much more battery storage than currently available to smooth out the difference in peak output and demand and the significant power price variations.

  • Power systems and grid operators must often manage negative prices when solar output peaks during the day.

Between the lines: Earlier this year, the EIA estimated that solar and battery storage would make up 81% of new U.S. electric-generating capacity in 2024.

  • Developers and power plant owners plan to add 62.8 GW of new utility-scale electric-generating capacity this year, up 55% from the 40.4 GW added last year.
  • According to EIA forecasts, solar will account for the largest share of new capacity in 2024, at 58%, followed by battery storage, at 23%.

Follow the money: Battery storage additions are also expected to shatter records this year. U.S. battery storage capacity is set to nearly double in 2024 as developers plan to add 14.3 GW to the existing 15.5 GW this year.

  • California and Texas are leading the way in battery storage additions due to the rapid growth of variable solar and wind capacity in these two states.

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