The Potential for Battery Energy Storage to Provide Peaking Capacity in the United States

Providing peaking capacity could be a significant U.S. market for energy storage. Of particular focus are batteries with 4-hour duration due to rules in several regions along with these batteries potential to achieve life-cycle cost parity with combustion turbines compared to longer-duration batteries. However, whether 4-hour energy storage can provide peak capacity depends largely on the shape of electricity demand and under historical grid conditions, beyond about 28 GW nationally, the ability of 4-hour batteries to provide peak capacity begins to fall. We find that the addition of renewable generation can significantly increase storage potential by changing the shape of net demand patterns; for example, beyond about 10% penetration of solar photovoltaics, the national practical potential for 4-hour storage to provide peak capacity doubles. The impact of wind generation is less clear and likely requires more detailed study considering the exchange of wind power across multiple regions.