Big batteries meant to stabilize the grid are stuck in limbo
Demand for battery storage has surged due to increasing electricity use, particularly from data centers, but grid upgrades needed to connect these batteries are severely delayed nationwide. Utilities like Consolidated Edison, PG&E, and Southern California Edison are experiencing significant backlogs and implementing new policies, leading to project cancellations and rising costs. This situation strains the power grid and hinders the clean energy transition.
Demand for large-scale energy storage batteries has skyrocketed across the U.S., primarily driven by the booming energy needs of data centers and increasing electrification. However, connecting these batteries to the power grid has become significantly harder due to decades of stagnant investment in grid infrastructure, leading to severe delays in upgrades and straining supplies of essential equipment like transformers and circuit breakers.
According to Joseph Rand, an energy policy researcher at the Lawrence Berkeley National Laboratory, the interconnection process has become "log-jammed and bottlenecked," with a median waiting time of five years for projects in 2025. Approximately 750 gigawatts of energy storage projects are currently awaiting grid connections nationwide. In California, regulators anticipate widespread holdups, with PG&E Corp., the state's largest utility, reporting a 300% increase in interconnection workload and delays for 450 megawatts of battery projects in Solano County due to circuit breaker upgrade issues. Southern California Edison has also seen 13 gigawatts of new generation and storage delayed by unfinished upgrades.
In New York, Consolidated Edison Inc. (Con Ed) has seen a 300% increase in battery storage projects in its queue over the past two years. In response, Con Ed implemented a new policy requiring developers to help pay for upgrades if their projects would strain local infrastructure, particularly in areas with lenient zoning. The New York Battery and Energy Storage Technology Consortium (NY-BEST) reports that this policy has raised costs by an average of $21 million per project, resulting in at least 25 project cancellations. William Acker, executive director of NY-BEST, stated that this is preventing the development of a needed asset in New York City.
State and federal regulators are attempting to streamline the process by prioritizing more advanced projects and penalizing withdrawals to discourage speculative applications. While batteries are critical for decarbonizing electricity and reducing grid strain, particularly during peak demand, the current challenges involving infrastructure, equipment shortages, and skilled labor are significantly impeding their deployment, prompting a reevaluation of regulatory frameworks and utility policies.