By Kennedy Maize
As renewable electricity generation – primarily solar and wind power – continues to boom, energy storage, primarily battery storage of electricity, has also soared. Is that inevitable?
The need for storage is clear: wind and solar are not dispatchable as the sun does not shine at night and wind is not predictable. Some way to match their production with the demand for the product makes economic and social sense.
A recent study by the Morgan Lewis law firm takes a close look at the renewable energy and energy storage (almost entirely battery storage) pas de deux. It concludes that “uncertainty looms due to two primary factors. First, potential trade policy impacts may increase short-term costs and dampen demand in the United States. Second, new battery safety requirements in response to battery fires may lead to additional permitting requirements that could slow down the pace of development.”
In large part due to the Biden administration’s Inflation Reduction Act, which offers significant tax and financial subsidies for energy storage projects, 2024 was a record year for battery storage. The study said last year saw 11.9 GW of storage capacity added, with 3.8 GW in the fourth quarter alone, an 80% increase. Between 2024 and 2028, the Morgan Lewis analysis predicts installation of some 74 GW of storage.
Conventional economics also boosted the storage market in recent years. The study notes that “declining lithium-ion battery costs—hitting a record low of $115/ kWh in 2024—have fueled deployment thanks to increased manufacturing capacity, lower raw material prices, and softened demand from the EV sector.”
Tiptoeing around the current uncertain state of Washington energy politics, the law firm says some factors could becalm energy storage: “Application of tariffs and supply chain integrity are two major areas of international trade that will remain causes of concern for energy storage projects.” The report notes existing 24% tariffs on “some Chinese-origin lithium-ion EV batteries and non-lithium-ion battery parts” imposed in September at the end of the Biden administration.
Also, “Tariffs on Chinese-origin lithium-ion non-EV batteries are scheduled to increase to 25% effective January 1, 2026…. There have also been indications that the US administration may consider other tariff proposals impacting energy storage, such as a 10–20% universal tariff, tariffs of up to 60% across the board on Chinese-origin goods, and tariffs of 25% on Mexican and Canadian origin goods.”
The apparently inherent threat of lithium-ion battery fires could also be a wild card for storage projects. Fires in California, where battery storage is most advanced, have prompted the state legislature to take a close look at regulating battery storage.
Assembly Bill 303, introduced after a nasty January battery fire at the giant Moss Landing power plant site, the second largest lithium ion battery storage project in the world, would limit sites for the projects and increase oversight, according to the National Law Review. The Moss Landing fire followed a 250-MW lithium-ion battery storage fire last May near San Diego that lasted 11 days, causing local evacuations and road closures.
The Morgan Lewis report concludes, “Ultimately, we believe that this will lead to the adoption of new requirements that will become industry standard safety procedures. However, until those standards are developed, developers could face potential cost increases and delays associated with these requirements.”
How does the Trump administration view energy storage? At last week’s S&P annual CERAWeek in Houston, Energy Secretary Chris Wright largely ignored and downplayed renewable electricity and energy storage, focusing instead on fossil fuels and, primarily, natural gas. Here is his only storage reference: “Beyond the obvious scale and cost problems, there is simply no physical way that wind, solar and batteries could replace the myriad uses of natural gas. I haven’t even mentioned oil or coal yet. I spent my whole career as an entrepreneur and student of energy.”
In Texas, where gas remains king despite its dismal performance in recent weather challenges, the legislature is considering the frequent weather assaults on the state’s autarkic electric grid, the Electric Reliability Council of Texas. The Times Record News reported, “ERCOT predicts that Texas’ energy demand will nearly double by 2030, with power supply projected to fall short of peak demand in a worst-case scenario beginning in summer 2026.”
Republican state Sen. Phil King, vice chairman of the Senate Business and Commerce Committee, introduced a bill aimed against policies advancing wind and solar generation and battery storage. His legislation (Senate Bill 388), which passed the committee, would require that 50% of new electric generation in the Lone Star State be “dispatchable,” defined as a way to would exclude wind and solar, crediting only natural gas and coal.
Texas energy journalist Doug Lewin, who follows the state electricity system with dogged attention in his Texas Energy and Power Newsletter, commented last week (Mar. 13), “We’ll need those batteries today! 26,000 megawatts of thermal plants won’t be dispatched today. They’re offline while temperatures are in the high 80s/low 90s in much of Texas today, March peak demand record could fall.”
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