The U.S. is using more electricity than ever and showing no signs of slowing down.
According to the Energy Information Administration, electricity demand is projected to grow 1.7% annually through 2026. But what’s causing electricity use to spike?
The threats are coming from several directions, including commercial operations, data centers, and the industrial manufacturing space. Computing is especially electricity-heavy, comprising nearly 8% of commercial electricity use in 2024, and could balloon to 20% by 2050.
But businesses aren’t the only ones hogging up electricity these days. People are using more energy than ever.
Think about the average American home today. Everything is packed with “smart” technology, connecting stoves, fridges, thermostats, and even toasters to the internet. Electric vehicles, e-bikes, and electronics all require charging. Meanwhile, severe weather with hotter summers forces air conditioners into overtime.
“Our lives are becoming more complex, and we’re increasingly dependent on energy-consuming tech,” Lisa Napelitano explained. “As we keep adding new tech to our homes, it’s harder for traditional electrical setups to keep up. We’re beginning to see new construction projects use larger gauge wire with higher amp ratings to meet daily demand.”
The United States has a classic supply and demand problem. People are using more electricity, but utilities struggle to keep up.
On one hand, the country is moving away from dirty fossil fuels like coal for cleaner options. The problem is that those sources, including solar and wind, can’t always fill the gaps left behind by coal plant retirements.
Solar forms the vast majority of new energy capacity added to the grid these days, with wind and natural gas filling the remainder. However, despite a flurry of new solar and wind projects coming online, they’re still inconsistent producers.
This is where rapidly advancing storage technologies come in handy. Thanks to battery energy storage systems (BESS), the clean energy industry has a way to store all the power it generates. Over time, BESS can improve energy storage across the board, lower energy prices, reduce strains on power plants, and bolster the aging grid.
It may sound like a lot to ask of a battery, but unlocking its potential has far-reaching ramifications.
Battery energy storage systems aren’t new but have increasingly found their home alongside utility-scale renewable energy plants.
The massive batteries collect excess power generated by power plants and store it for later. They can work with any power source, but BESS has proven successful with variable producers, including solar and wind.
Deploying battery technology impacts how we approach electricity generation and distribution. With more batteries in use, the U.S. and the world can transition from fossil fuels to cleaner renewable sources. The systems also address ongoing electrical grid resilience issues, serving as backup power for critical infrastructures.
BESS can also help stabilize the grid by reducing peaks and valleys. When electricity use is lower during the day, the batteries collect and store energy. During the evening when demand rises, the batteries discharge, to help peak shave.
BESS operates similarly to the rechargeable batteries we use at home, but on a massive scale.
You can typically find BESS installations near load centers, alongside solar and wind operations, and within transmission networks. Most feature lithium-ion battery banks, though you can find sodium-ion and lead-acid versions, too.
They work by storing electricity as chemical energy, then converting it back into electricity when needed. At the time, an inverter connected to the battery activates, converting stored DC electricity into AC power.
BESS has been a great partner for community- and utility-scale solar and wind projects. These farms typically produce a lot of power when the sun shines and wind blows, but don’t generate constant power. BESS helps wind and solar even out their production by storing energy to meet future demand.
BESS might be the new exciting thing in energy storage, but it borrows from some Second Industrial Revolution technology.
In the early days of electricity, one method of storing power was a hydropower energy storage system. These mechanical setups used dams to hold back water until the plant needed power. At that point, workers released water from the dam to flow over a turbine.
As the water flowed, the turbine generated power for transmission and distribution. Water was later pumped back into the reservoir for reuse when electricity rates were cheaper.
Surprisingly, this old-school system is the most common type of ESS with many installations still in use today.
A BESS’ role often extends far beyond the solar or wind project. From critical infrastructure and communities to the larger electrical grid, BESS use creates and maintains stability.
During an emergency, BESS provides short-term support to keep power flowing. In essence, the battery system forms a microgrid serving critical infrastructure and neighborhoods during repairs.
For long-term needs, battery systems can meet peak demand by slowly releasing power to the grid over several hours. As storage systems spin up and add electricity to the grid, power plants rely less on fossil fuel production.
BESS can also help with transmission system upgrades by acting as both a load center while charging and as a generator when discharging. This dual-purpose usage supports local demand issues and reduces congestion through load leveling. Grid-forming BESS (GFM) promotes grid stabilization while helping utilities avoid costly upgrades to transmission lines and other infrastructure.
Load leveling also promotes renewable sources, where BESS acts as a liaison. The systems connect new solar and wind projects to the larger grid, adding vital resources to meet rising demand.
Daily energy demand is fairly cyclical, no matter where you live in the United States.
On an average day, energy use is low during the overnight hours before ramping up later in the morning. It remains steady until the evening when demand soars, before dropping late at night.
All is fine when demand is low because electricity costs less and doesn’t strain the grid as much. However, the scene changes as demand rises and people start testing the grid. When demand spikes, peaking facilities fire up to generate additional power. However, those facilities rely on fossil fuels like gas to quickly produce electricity, which can be costly and polluting.
BESS reduces our need for fossil fuel peaking facilities by releasing stored power during a process called peak shaving. The batteries store power when demand is low and electricity is less costly, then release it during the evening hours. Thanks to the stored energy, consumers and utilities save money. Consumers pay less overall for power because utilities are paying less to generate and distribute it.
And for those who need their own dedicated power source? BESS is an excellent option for data centers, hospitals, factories, and other locations that need steady sustained power. Combined with renewable energy sources like solar, these facilities can largely operate with minimal grid support.
Speaking of renewables, BESS is a perfect partner for community- and utility-scale solar and energy solutions.
Renewables have grown by leaps and bounds to generate more electricity than coal and nuclear power, but they’re inconsistent. Known as variable renewable energy, or VREs, they rely on sunlight and wind to create power. If neither of those is happening, they sit dormant.
Pairing VREs with BESS turns them into 24/7 power facilities, just like their fossil fuel counterparts. Solar and wind projects can generate and store power on sunny and windy days, then BESS can release it later.
Additionally, battery storage solutions could address the rising use of electric vehicles (EVs) in the U.S. Although they’re a cleaner alternative to standard gas-powered cars, they can add strain to the grid. Level 3 fast chargers, commonly found along the highway, draw a lot of power, but BESS could serve as a buffer.
Although the upfront cost of a BESS is daunting, it’s possible to reduce costs overall through arbitrage.
Arbitrage occurs when batteries charge while electricity prices are low, then discharge when prices spike during peak electricity consumption. For energy developers, the process helps reduce curtailing and increase the value of generated power.
Though battery banks are critical to our future energy goals, there are still a few kinks to work out.
Data from Lazard shows battery system costs are dropping for several reasons, including slowing EV demand and advancing technology. Still, even with better capacity and technology, utility-scale systems cost hundreds of thousands of dollars.
The NREL offers some hope for costs, especially those with longer durations. All battery costs are falling, but the price for batteries with longer output durations tends to decline faster than shorter ones.
For utilities tasked with protecting the larger grid, investing in BESS can be hard. However, once installed, the batteries play a crucial role in grid stability and reliability.
Although BESS can help stabilize unstable clean energy production, it still relies on inconsistent power generators.
Solar and wind are great for the environment, but their power supply is largely unstable. As a result, they’re harder to plan around than traditional fossil fuels.
Like the rechargeable batteries in your TV remote and laptop, BESS can store power and discharge it at will. And just like our standard household batteries, BESS has a usable lifespan.
Battery systems have a lifespan of up to 20 years depending on usage, but then utilities must recycle them. Another option is reusing or repurposing batteries, though a 2023 Department of Energy (DoE) study noted the volume is too small to be viable for businesses.
As technology improves, so can BESS lifespans and reuse and recycling initiatives.
Like utility and community-scale solar energy projects, BESS systems often require support from the municipalities they serve before breaking ground.
One potential cause for concern is the fire risk batteries pose. To combat the danger, local fire departments must be trained to effectively fight fires for each battery type, including lithium-ion.
The biggest point of contention from a safety standpoint is thermal runaway, which occurs when a battery cell generates too much heat. As the temperature rises, other nearby cells enter thermal runaway, triggering a further chain reaction. In the case of a lithium-ion battery, the process also creates hydrogen and carbon monoxide buildup, which can lead to a fire or explosion.
Recent reports suggest it’ll take trillions of dollars to upgrade the grid while we slowly divorce from fossil fuels. Meanwhile, renewable energy could be the future, but it currently lacks 24/7 generation.
BESS can help on both fronts, transforming our energy portfolio. But to do so, the U.S. must invest time, money, and manpower into developing a reliable grid. Additionally, the government can’t be the only one shouldering the job – utilities and private investment must do their part.
Energy storage systems offer a boost toward achieving our goals, but only if we use them efficiently. As technology improves, so will our application and investment.