A report from Berkeley Lab reveals a significant expansion of solar-plus-storage facilities in the U.S. power plant market, highlighting an evolution from frequency to arbitrage and curtailment mitigation markets. The best is yet to come, as ongoing price decreases are still being absorbed by the market and are already being used to fill the interconnection queues with terrawatts of capacity.
Within the United States, data from the U.S. Department of Energy’s (DOE) Lawrence Berkeley National Laboratory Energy Market & Policy team (EMP) indicates that there are currently 469 hybrid power plants in operation.
Notably, 61% of these, totaling 288, are solar photovoltaic plus storage (solar-plus-storage) facilities. These plants account for the majority of energy storage capacity at 7.8 GW and energy at 24.2 GWh that is currently deployed across the nation. In 2023 alone, 66 of the 80 hybrids added were PV+Storage.
The report, Hybrid Power Plants: Status of Operating and Proposed Plants 2024 Edition, draws on data from the U.S. DOE’s Energy Information Administration (EIA) as well as annual reports on the nation’s interconnection queues.
The expansion of solar-plus-storage facilities gained momentum in 2020, initially driven by smaller projects in Massachusetts. This trend has been amplified by California, Texas and Florida, where the introduction of larger-scale facilities has significantly boosted overall capacity. Notably, Massachusetts hosts 89 of the nation’s 288 solar-plus-storage facilities, each with less than 7 MW of capacity. These installations are encouraged by the state’s SMART program, which promotes energy storage with advantageous DC to AC ratios and battery integration.
California follows as the state with the second-highest number of solar-plus-storage facilities, totaling 72. Unlike Massachusetts, nearly half of these West Coast facilities exceed 100 MW of solar capacity. Arizona and California are leading in the number of new solar-plus-storage hybrid plants, with 15 and 16 new facilities coming online, respectively.
The usage of plants is evolving, both overall and sometimes individually. There has been a national shift from primarily using energy storage for frequency regulation to increasingly using it for arbitrage, accompanied by growing curtailment of solar facilities. This is particularly significant in solar power plants where storage helps capture energy that might otherwise be curtailed and stabilizes the generation profile of the solar facilities.
The EMP report also includes case studies of individual power plants, such as Blythe Solar II and Meyersdale Windpower, with detailed performance data illustrated in the graphs below. Blythe Solar II, a 131 MWac PV plus 115 MW/528 MWh storage, added its storage in 2021 to the solar infrastructure built in 2016. The plant cycles its batteries less than once daily, timing this with peak solar hours and evening demand, indicating a use for energy arbitrage that matches CAISO wholesale pricing and solar shifting. However, the EIA categorizes the primary function as frequency regulation, with arbitrage as a secondary function.
Meyersdale Windpower, a 30 MW wind facility with an 18 MW/12.1 MWh battery added in 2015, contrasts with Blythe as its battery cycles an average of six times per day, and up to twelve times under certain conditions. The EIA notes that frequency regulation is both the primary and sole function of Meyersdale’s battery, aligning with the frequent cycling.
Going forward, the capacity is clean and coupled with storage.
In California, the utility scale solar market has effectively transformed into a solar-plus-storage market, with almost all new projects featuring hybrid systems. The residential sector is also catching up, with a 60% storage attachment rate.
The report clarifies that although the national interconnection queues have not yet matched California’s high proportion of hybrid power plants, they are progressing towards this model. Currently, 47% of all future capacity is planned as hybrid power plants, with 92% of these being solar-plus-storage facilities. Notably, of the 2.5 TW total in the interconnection queue, 2 TW consists of solar and storage configurations, whether standalone or hybrid, indicating a future dominated by these technologies.
These interconnection queue submissions are being driven by future energy storage pricing trends, which have seen significant declines that are expected to continue. In 2024, investments in solar PV are projected to surpass $500 billion, practically guaranteeing the viability and expansion of solar-plus-storage facilities through reduced hardware costs and enhanced solar module efficiency.
However, in the short term, pricing for solar-plus-storage facilities has experienced a slight increase.
The EMP team surveyed pricing data from 105 solar-plus-storage power purchase agreements covering projects totaling 13 GW of solar and 7.8 GW/30.9 GWh of energy storage. Since 2020, pricing for hybrid systems has begun to rise. The team attributes some of the price increases to higher battery storage capacities, primarily driven by the cost of additional hours of lithium storage. Variations in battery usage complicate the analysis, but supply chain driven inflation is also believed to have contributed to the price increases.
Despite the rising costs, the surge in new energy storage projects indicates that the market remains robust, with capacity continuing to expand.
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