When it comes to solar and wind power, renewable energy has always had a caveat: it can only run when the wind blows or the sun shines.The idea of a battery was floated around to make renewables available 24/7. For years, it existed as an expensive, little-used technology. Then in 2021, it took off.In this episode, we explore how this new energy market works in two states: California and Texas.In California, there is now enough grid-scale battery storage to power millions of homes — at least for a few hours — and it's growing fast. What does this success mean for the grid, and how did the state support it?Then, we visit Texas, whose approach is more free-market rodeo. The state has the second-most battery storage capacity in the U.S. And in Texas, their system was recently put to the test. So, can these large-scale batteries can help prevent blackouts?These two stories come from our sister show The Indicator, which recently reported a series about the electric battery market.Today's show was hosted by Cooper Katz McKim, Darian Woods and Wailin Wong. The original Indicator episodes were produced by Cooper Katz McKim and Corey Bridges, and edited by Kate Concannon. It was fact-checked by Sierra Juarez and engineered by Jimmy Keeley and Neil Tevault. Alex Goldmark is Planet Money's executive producer.Help support Planet Money and hear our bonus episodes by subscribing to Planet Money+ in Apple Podcasts or at plus.npr.org/planetmoney.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy
Chapter 1: What is the significance of battery storage in California?
This is Planet Money from NPR.
In 2008, Nancy Skinner was elected to the California state legislature.
So technically, my term began in 2009.
Nancy has witnessed the state's vision for clean energy firsthand. Soon after she was elected, a bill was being considered to get more of their electricity than ever from renewables. But there was a problem.
When the sun doesn't shine or the wind doesn't blow, there's no power. Several people approached Nancy to raise this issue.
We're going to have to figure out how to store it.
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Chapter 2: How did Nancy Skinner champion battery storage legislation?
And one way to store energy? A battery. Extra solar and wind electrons that aren't needed on the grid could flow into a battery. The problem was, though, grid-scale storage wasn't really a thing.
Nonetheless, Nancy was optimistic that eventually it would happen if you created a market signal. So she introduced a bill requiring utilities to purchase a certain percentage of battery storage when they bought electricity. Nancy remembers pushback.
That this was just pie in the sky. This is not real. Like another California pipe dream.
Still, in 2010, the bill passed, although nothing really happened. Grid-scale batteries remained a pie-in-the-sky concept for years. And then all of a sudden, in 2021, batteries took off. Hello, and welcome to Planet Money. I'm Cooper Katzmachan.
Chapter 3: What challenges did grid-scale battery storage face initially?
And I'm Darian Woods. After years of nothing, grid-scale batteries are now widely used and growing fast. Basically, the same tech that's in your phone is now helping power millions of homes across America. How did that happen, and what does the newfound success mean for the grid?
Today on the show, we go on a kind of road trip for electric battery storage. Two stories from two states. We'll begin in California, where battery storage first took off in the U.S., to see how the state supported its wind and solar energy markets. And then we'll look at how battery storage was put to the test in Texas.
These stories come from Planet Money's sister show, The Indicator, where we just ran a mini-series on batteries and energy.
Chapter 4: How did California's battery storage market evolve?
Cooper Katz for Kim, producer extraordinaire with The Indicator. You're back from your travels west. We sent you on a journey to see these batteries firsthand.
I am back indeed from the very sunny California where there are enough batteries to power 13 million homes. I wanted to go because I have no idea how batteries actually work. And I hope you learned this on the trip. I did. I connected with a battery storage facility that's connected to a solar farm spread across 2,900 acres.
That is huge.
It's the equivalent of more than 2,000 football fields. It really did feel huge. It took a long time to drive through. The whole operation is called Cal Flats. It's owned by an independent power producer called Erevon. Justin Johnson is the chief operating officer there.
Let me grab my hard hat back there on. Yeah.
Justin gave me a tour of the facility along with Anand Narayanan, Erivan's Senior VP of Asset Management.
I lost a couple of hard hats.
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Chapter 5: What is the role of battery storage in renewable energy?
At the battery storage facility itself, there are rows of white containers not much taller than a person. I learned this is where it all happens.
It's like a series of shelves. Like imagine server racks, right? So it's a bunch of server racks. Like you have all your PCs and a bunch of like PCs stacked together, which have the batteries in them, the in-water inside them. There's three per door.
So they're stacked. If you open up one of these doors. Could we open one of them up? No.
Yeah, we don't have the keys, unfortunately. That was a pretty fast no-go there. I just wanted to open the door. I don't see the problem here. The do not press button was so tempting. If I see a button, I want to press it. Either way, they told me that each one of these cabinets holds the batteries themselves. They're about the size of a large briefcase and are manufactured by Tesla.
The batteries are similar to what would go in a Tesla car, which is also made up of lithium-ion.
And this site is packed with energy, right? I heard that Cal Flats has enough storage capacity to power 60,000 homes over an afternoon.
I know, yeah. It is wild.
Justin told me how this all works. There's excess solar in the middle of the day, so the power price can be low. So we can take the extra solar that's produced in the day from the arrays and store it for use later in the evening when it's needed most, when the sun is going down.
That hum you're hearing behind Justin is the HVAC system keeping the batteries cool because they're charging from that solar energy and probably also the heat just from how hot it is outside. The sun was very strong when I visited. Yeah, let's move to the shade.
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Chapter 6: How is battery storage being utilized in Texas?
Sounds like you might have got a bit of a California tan, Cooper. Yeah, the sun is not my friend as a redheaded man. So it sounds like you'll be happier when the sun goes down, which is when Arrivon sells the power when prices are high. Arrivon then moves the renewable electrons onto underground cables to transmission lines to the grid.
For this power specifically, Arrivon has two customers that buy this power, Apple and PG&E, California's biggest electricity provider.
It's such a big facility. There's so much power generated that... It's hard to find one buyer to take it all, so we ended up splitting the output to two different buyers of electricity.
That means that somebody's home, say in Fresno, they turn on their lights, or literally anyone who takes PG&E. Exactly.
Yeah, this power is kind of... I mean, an electron's an electron. It's hard to tell where it actually came from once it hits a transmission line, but...
All right. So how did we actually get here? Remember that utility providers were saying to Nancy Skinner that this was some kind of pie in the sky, California dreaming concept.
Yeah, we put that question to Justin.
Right. So like all the scale and advancements that went in the manufacturing to make it to bring the scale up. And then to drive the cost down, just weren't there yet to do it economically.
So we're at that really nice intersection where the technology's improved enough, the cost has come down at that intersection where you're meeting the demand at the price they need to be successful, where it allows us to build these sorts of plants to serve that need.
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Chapter 7: What impact does battery storage have on electricity pricing?
And so what we're left with is a totally new way for renewables to interact with the electricity grid. The power created by the sun or wind can go further now, tapped into whenever a customer like Apple or PG&E wants it.
Yeah, so that was one of the big knock on renewables, always has been, it's intermittent. But that hurt us financially as well because we were paid less for our power because we were intermittent. So when you pair storage with solar, now the people we sell power to, it's more valuable to them because we can provide them power when they want it most.
We can provide them a fixed shape, meaning tell us how much power you want in any given hour of the day. And we'll design a plant to meet your needs exactly.
This new reliability in renewables is very attractive to tech companies like Google, Microsoft, Amazon. They already use solar and wind power, but they have power-hungry data centers to feed things like artificial intelligence. So they're buying up battery storage, too.
Tech companies aren't alone. Electricity demand is spiking worldwide due to data centers, but also electric cars, trains, cryptocurrency mining. Demand is also coming from grid services, like serving as a backup power if there's ever a blackout due to maybe an overworked grid.
I think if you have a solar plant... or a battery plant or a combination anywhere in the U.S. that's ready to be built these days, you can find an offtaker, you know, someone to sell the power. There's just tremendous demand, tremendous demand for it.
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Chapter 8: What future trends can we expect in battery storage technology?
In 2019, California had limited battery storage capacity. In April of last year, batteries could power 10 million homes for a period of time. Just six months later, that number grew to 13 million homes.
California has a long history of expanding its alternative energy sources. Historically, the Golden State has been way ahead of the curve on renewables, going all the way back to the 1980s with support and subsidies from both Republican and Democratic governors. But when it comes to the ongoing battery expansion, Justin Johnson says things are just getting started.
But this phenomenon you've seen in California, it's going to occur elsewhere in the US. It's just because California has the highest penetration level of renewables anywhere in the US and it created the demand for storage. As penetration levels increase throughout the US, as they have in Texas and elsewhere, the storage market is going to follow in those areas too. And everyone's ready for that.
Justin's company, Arrivon, believes in grid-scale battery storage so much it's invested $2 billion in the space. They already have five facilities in California, including Cal Flats, and it's looking at six more.
California got where it was because of planning from politicians like Nancy Skinner. But in Texas, they take a bit more of a hands-off, free market rodeo type way of doing things.
So let's go to Texas. I'm going to hop out here and Darian, let you and Indicator co-host Waylon Wong pick it up after the break.
On a hot September day in 2023, the operators of Texas's power grid were getting nervous. The warmth from an unusually hot summer was pushing later into the year. That meant more air conditioners, more fans, and more staying inside.
But keeping up with that thirst for electricity was a scramble. The sun was setting earlier as the summer gave way to fall, and that meant less solar power in the evening. That day the wind was forecast to be low, so not much wind power just when people got home and turned on their ACs and TVs and ovens. Also, a few power plants were out of commission.
Watching all of this was Stephanie Smith. She's the chief operating officer of Eolian, which is a company that, among other things, builds battery plants in Texas.
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