Across Texas, fenced lots of shipping-like containers are popping up amid the oil derricks and wind turbines that have defined the landscape.
Building blocks of a new energy ecosystem, these grey boxes are packed full of batteries, already revolutionizing the way power is produced and distributed to consumers.
“We’ve got 50 megawatts of energy storage spread out across three small locations,” said Tim Nelson, senior vice-president of operations at multinational energy company RWE, pointing to a collection of storage containers behind a chain link fence in Scurry County, Texas.
“That’s enough to charge about 1,000 mid-sized vehicles.”
It’s only one of several sites the German company has invested in building in the United States, on a quest to grow its U.S. portfolio to 20 gigawatts of storage by 2030, which could power approximately six million American homes.
Battery energy storage systems (BESS) store and hold energy until it’s needed, but they are proving to be key to solving grid capacity and resilience issues, as energy demand skyrockets and old infrastructure lags behind.
“Whether it is general inefficiency in the grid, aging power plants, lack of transmission capabilities, the need for more capacity — those have all been drivers in the market for the deployment of energy storage, which has a truly unique capability to address all of those challenges,” said Noah Roberts, vice-president of storage at the American Clean Power Association.
The technology has scaled up especially quickly in Texas — partly because of the nimbleness of the state’s independent grid, and the free market that allows consumers to choose who they buy their energy from.
“A few years ago, you had a handful of really visionary companies coming in and putting storage into the Texas market,” said Stephanie Smith of Eolian Energy, which operates several facilities in the state. “In the last couple of years, and especially from 2023 to 2024, we have just had massive numbers of batteries coming online in Texas.”
Batteries tackle multiple challenges
Roberts calls this not only a transition but a transformation, pointing out that battery storage helps keep lights on in cases where climate change-induced extreme weather threatens to strain or push legacy grids to failure.
Batteries also help keep costs low, when they might traditionally spike. A report by Aurora Energy Research calculated that existing battery storage infrastructure saved Texans $750 million US during peak demand days this past winter.
“There are lessons to be learned throughout the country about what goes on in Texas,” said Roberts.
WATCH | How Texas is using battery storage to strengthen the electrical grid:
Global quest to increase battery storage 6-fold by 2030
The value of the Texas case study is sure to extend beyond American borders, especially after this month’s climate negotiations in Baku, Azerbaijan, where battery storage is expected to be a key topic.
The annual Conference of the Parties (COP29) kicks off Monday, and countries have been challenged to pledge to increase global energy storage capacity to six times 2022 levels by 2030.
This builds on a promise made at last year’s COP28, where parties committed to tripling renewable capacity globally in the same timeframe.
According to the International Energy Agency, the dual pledges are critical to the successful transition away from planet-warming fossil fuels.
RWE has a focus in what’s known as co-located sites, where battery storage directly serves wind and solar farms, another key part of the company’s portfolio.
“They’re one of the most cost-effective ways that we can produce power. And energy storage is coming along to help fill the gaps in renewables,” Nelson said, addressing concerns about what happens to solar or wind when the sun doesn’t shine or the wind doesn’t blow.
He doesn’t view the growth of renewables and storage as a threat to the state’s traditional energy sources. In fact, oil-rich Texas has led the U.S. in wind power generation for nearly two decades.
“Oil and gas and wind aren’t one or the other,” Nelson said. “We’ve got customers who want the clean energy and they want the low-cost energy. So I think it all comes together to form one ecosystem.”
While Texas politicians are committed to protecting the state’s oil and gas industry, Nelson says the application of the technology to energy storage is somewhat politics-proof.
“It’s not necessarily the politics itself that’s going to drive how this goes forward. It’s the demand,” he said.
“We’re continuing to see [energy] demand increase. And I think that demand is going to drive the market. And so as long as we continue building out toward what the demand tells us, we don’t see this as a gold rush or a one-time opportunity,” said Nelson.
The necessity for more energy of all kinds is largely driven by the bitcoin and AI boom. One Texas utility reported a 700 per cent increase in requests from data centres for its Houston-area utility in the last six months, and projections by the Electric Reliability Council of Texas show the state’s grid will need to double its current capacity by 2030, largely because of data centre expansion.
Smith at Eolian Energy says battery storage will be a key part of the equation.
“We have a situation with unbelievable amounts of demand at this time,’ she says. “And so I think that the zero-sum-game sort of aspect and thinking that you might have seen in the past is not as applicable now. We need all the solutions.”
