Grid-scale energy storage has been presented as a panacea, capable of solving the woes of intermittent power provided by wind and solar generation. While the latter generation sources have been growing with dramatic (and sometimes alarming) speed, grid-scale storage capacity has not kept up.

According to the Wood Mackenzie Power & Renewables research report, 2,339 megawatt-hours (MWh) of grid-scale energy storage were deployed during quarter one of 2022, which was a record-setting amount for installations for any previous first quarter. Although notable compared to previous years’ first quarters, the amount of deployment was lower than overall historical production, such as the 4,727MWh produced in the fourth quarter of 2021. This drop has been attributed to procurement obstacles faced by the industry.

The Supply Chain Issue

With the growing popularity of lithium-ion battery types for grid-scale storage projects, a global choke point is becoming apparent. This battery type is already heavily used in electric vehicles and other portable electronics, As a result, the materials shortfall is predicted to continue for the next few years.

With raw materials in high demand, prices have also been driven up, influencing shorter and shorter-term pricing for contracts. Caspar Rawles, chief data officer at Benchmark Mineral Intelligence, says, “Historically, it was possible to do off-take agreements at a fixed price; that’s no longer the case. Certainly now, all new agreements use index-referenced pricing. You’re not going to be effectively getting a stable price. Fixed price contracts, very common up until this year in lithium, don’t really exist anymore.”

This limitation has already affected energy storage projects and is predicted to stunt European ventures to a plateaued rate between 2024 and 2027.

Companies suspected this issue would eventually arise and have worked hard to proactively remediate it and improve the supply chain production. Lindsay Gorrill, CEO of KORE Power, began brainstorming on this issue six years ago and determined that the only solution to the anticipated supply chain issues was to create upstream and downstream capabilities in and near the United States.

This prompted the construction of 2-gigawatt hours (GWh) of manufacturing in China, which is expected to expand to 6GWh in 2023. Also, the company plans a plant in Arizona that will deploy 12GWh of capacity.

Limitation of Raw Materials

Another area of limitation that has widely affected the market is the supply of raw materials. As coined by Benchmark Mineral Intelligence as “the great raw material disconnect,” the extraction of materials takes much longer than battery building.

A battery factory can be built in 2-3 years, whereas the mining for raw materials takes closer to 5 or 6. It is expected that supply chain issues will begin to ease in 2024 and a few extra years from then will bring a balance between demand and material extraction.

Solar PV Anti-Dumping and Countervailing Duties Tariffs

Originally put in place to ensure that product assembly was not happening in Southeast Asian countries to avoid import rules, solar PV anti-dumping and countervailing duties (AD/CVD) tariffs were put in place. With the extra costs added, development projects pairing solar with storage began to slow.

However, President Biden recently made the decision to pause these tariffs until the year 2024. John Hensey, VP of the American Clean Power Association says that this decision “restores predictability to both the solar and energy storage markets. With well over 50% of utility storage projects being paired with solar farms, this important executive action will help the energy storage market continue to accelerate.”

Expectations for Grid-Scale Storage

As shown in the chart below, the leading energy research company, Wood Mackenzie, has predicted that there will be 500GW in total global energy storage deployment by 2031, with the United States and China representing 75% of the total.

It is expected that 83% of the 27GW annual energy storage market of the United States will be utility-scale storage by 2031, overtaking residential and commercial projects.

Source: pv magazine

The company also predicts that the European market will increase five times over the next ten years, focusing more on distributed (residential and commercial) energy storage than on grid-scale projects.

Current Projects in the United States

Many projects are already on the rise. Recently, NextEra Energy Resources completed a 230 MW battery energy storage system in California. This project is housed on a 94-acre plot of land in Riverside County. The plan is for the energy storage system to be coupled with an existing solar farm to capture the energy that will be generated during peak demand hours.

On a smaller yet still notable scale, Duke Energy completed two utility-scale battery energy storage systems in Florida that deploy 14MW of power. The Micanopy battery site in Alachua County is an 8.25MW system; the second is in Hamilton County and totals 5.5MW. The Micanopy unit can discharge energy for longer than one hour, a duration that is not common. These two new systems and three other projects brought online in March 2022 combine for a total of 50MW. Duke Energy’s future goal is to deploy between 3,700MW and 5,900MW of energy storage in core markets of North and South Carolina by 2035.

Another recently developed grid-scale storage system is in Pascoag, Rhode Island. This system was developed by Agilitas Energy and stores 3MW/9MWh.

Although still in the planning stage, SUSI Partners and SMT Energy have partnered to build 10 projects in South Texas, each with a capacity of 10MW. Operations are expected to start in early 2023.

Jupiter Power currently has 654MWh of battery storage projects across Texas and 11GW in projects scattered from California to Maine. Recently, they awarded Energy Vault Holdings a contract to create two battery storage projects, one in Texas and the other in California. These projects are expected to total to 220MWh.

A few projects are being developed in New York. The Gunther Project, a storage site located in the Bronx and developed by NineDot Energy, is a 3.08 MW/12.32 MWh Tesla Megapack battery system. The goal is to provide 400 MW of clean energy systems by 2026. Another project, Key Capture Energy’s KCE NY 6, is located in Buffalo and holds a capacity of 20MW/40MWh. This storage system and others produced by Key Capture are anticipated to store 6,000MW of energy by 2030.


In summary, grid-scale energy storage appears poised for very high relative growth from a low base in 2022 and 2023. Installed capacity rose from 1.4 GW to 4.6 GW from 2020 to 2021. This expansion has highlighted issues with raw material shortage and supply chain complications which have slowed development in some areas. It remains to be seen whether broader materials supply issues can be alleviated to open a pathway for more projects to be developed soon.

For consulting or media inquiries, please contact  To learn more about Schaper Energy Consulting, visit our website here.

The owner of this website has made a commitment to accessibility and inclusion, please report any problems that you encounter using the contact form on this website. This site uses the WP ADA Compliance Check plugin to enhance accessibility.