This piece originally was published by RealClear Energy on January 23, 2025 and can be accessed here.
In Conservative Texas, Energy Storage Systems Deliver Major Cost Savings to Consumers
By Greg Brophy
January 23, 2025
America’s power grid has been described as the largest machine ever built. It consists of more than 7,000 power plants, close to 160,000 miles of high-voltage power lines, and millions of miles of low-voltage lines that bring electricity to homes and businesses.
In many ways, the U.S. power grid is the greatest engineering accomplishment of our age. But since the earliest days of the grid, there’s been a nagging problem – at any given moment, the amount of electricity that’ s being generated across thousands of power plants must be equal to the amount of electricity that’s being consumed by tens of millions of residential, commercial and industrial customers.
This difficult balancing act is necessary because historically we have lacked the technologies, other than pumped hydro with it’s limitations, to store large amounts of electricity for hours or days after it’s generated by a power plant. The challenge is even more daunting during severe weather events, and it can produce massive spikes in the price of electricity.
But things are changing. Market forces are bringing new electricity storage technologies to market, and those technologies are making the grid more reliable and preventing costly price spikes.
The best example can be found in Texas, a conservative state that has adopted market-based regulation of its power grid. In recent years, electricity demand in Texas has set new records, and at the same time, the state has been hit hard by cold snaps, heat waves and other severe weather events.
In 2023, for example, power grid operators issued 11 separate appeals to consumers to limit their electricity use. These actions were needed to make sure the amount of electricity being consumed by homes and businesses did not exceed the generating capacity of power plants on the Texas grid.
But in 2024, even as electricity demand reached a new record, grid operators only issued 2 conservation appeals. What changed to make the grid so much more stable?
According to a new report, one of the biggest changes was the addition of 5 gigawatts of energy storage technologies across the Texas grid. For scale, a typical nuclear power plant has 1 gigawatt of generating capacity, so the build-out of energy storage technologies in Texas in just one year has been prodigious to say the least.
Energy storage facilities currently use very similar battery technology as cell phones or laptop computers, just on a much larger scale. The batteries are charged with surplus electricity during periods of low demand, and then send electricity back to the grid during periods of high demand, which helps keep the grid stable.
But grid stability isn’t the only benefit of these giant batteries. The report also found that increased availability of energy storage also reduced the cost of electricity by $750 million, as the price spikes that accompany instability on the power grid were avoided.
The reason? According to the report, “batteries are largely charging during the middle of the night and early morning when demand and electricity prices are low,” and they send this low-cost electricity back to the grid in the late afternoon and early evening “when demand and prices [are] greatest.”
The rapid pace of energy-storage construction in Texas has been supported by major safety improvements in battery technologies
For example, standards have changed to increase the distance between battery storage units, which look like large shipping containers. This greatly reduces the risk of a fire in one unit spreading to others.
Likewise, fire-suppression requirements, first responder training, and other strategies have improved as power companies, regulators and public safety officials have gained more experience with large-scale battery technologies.
These and other developments have reduced the failure rate of large-scale batteries by 97% between 2018 and 2023, and battery manufacturers “continues to engage in [research and development] activities to improve prevention and mitigation measures,” according to the Electric Power Research Institute.
In short, grid-scale batteries are not only saving Texans money, but they are also keeping the lights on during periods of high demand. There are clear lessons from this experience for other states, if they are willing to listen.
Greg Brophy is a farmer and former State Senator from Wray, Colorado. He is the Colorado Director of The Western Way.