Big Batteries to Bolster the Grid Are Stuck Waiting to Plug In
(Bloomberg) -- Demand for batteries has skyrocketed as electricity use across the US swells, driven by data centers’ booming energy needs and increasing electrification. It’s also getting harder to get them connected to power grids.
Falling prices have made batteries more attractive. But after decades of stagnant investment, grids are racing to make the upgrades needed to plug them in, straining supplies of transformers, circuit breakers and other equipment. As those upgrades get delayed, storage projects are piling up in interconnection queues from coast to coast.
Consolidated Edison Inc., a major utility in New York state, for example, says over the past two years the volume of battery storage projects waiting to be connected has grown by 300%. In California, regulators are expecting that holdups to grid upgrades will stall energy projects up and down the state.
“The whole process of interconnecting these new power plants got really log-jammed and bottlenecked,” said Joseph Rand, an energy policy researcher at the Lawrence Berkeley National Laboratory. “It in some ways broke this historic process of the way transmission grid operators have been operating for almost 20 years.”
Nationwide, some 750 gigawatts of energy storage projects — roughly equivalent to the generating capacity of more than 700 nuclear reactors — are in line to get grid connections, according to the lab’s research. Not all of these projects will get built. Many developers have already abandoned the queue due to delays. Still, the waiting time is increasing; the median was five years in 2025, up from a year and a half in 2015.
The flood of battery projects is expected to continue. Wood Mackenzie, an energy consultancy, projects the US energy storage market will quadruple in the next six years.
By storing electricity when prices are low and renewables are abundant, and discharging it when demand rises, batteries can help reduce consumer power bills, decarbonize electricity use and reduce strain on the grid. That makes them especially useful on hot summer days when consumers blast their air conditioners.
“We’ve definitely seen a lot of value from having more batteries on the grid and their ability to help meet the evening peak,” said Danielle Mills, director of infrastructure policy development at California Independent System Operator, which manages the state’s energy market.
Adding new batteries to the grid, however, isn’t simple. Grid operators often need to build new infrastructure, like transmission lines or substations, to handle power flowing in both directions.
Shortages in key equipment, meanwhile, have driven up construction costs and timelines for grid upgrades, leaving utilities struggling to build fast enough. A drought of skilled workers is further slowing them down. “A combination of cost and limited manpower are at the core of what the issue is,” said Allison Feeney, a research analyst at Wood Mackenzie.
In California, PG&E Corp., the state’s largest utility, told regulators in January that a key driver of delays was long lead times for specialized equipment. Procuring certain breakers could take nearly four years, according to the utility, which reported a 300% increase in its interconnection workload compared to prior years.
In Northern California, for example, holdups to circuit breaker upgrades to a substation in Solano County led to projected delays for two battery projects worth a combined 450 megawatts. Transmission line work in the Bay Area has put another 800 megawatts of energy storage at risk of delay, according to PG&E.
“There are some factors beyond PG&E’s control that can impact interconnection times, such as global supply chain constraints and delays on the customer side with permitting and contractors,” Paul Doherty, a PG&E spokesperson, said in a statement.
At another major power provider, Southern California Edison, unfinished upgrades have delayed 13 gigawatts of new generation and storage, according to state officials.
State and federal regulators are trying to shorten queues, for example, by prioritizing projects in more advanced stages rather than on a first-come first-served basis, and penalizing queue withdrawals to disincentivize speculative projects.
“We’ve seen the queue volume go down, which I think is an indicator of things moving in the right direction,” said Rand, the Lawrence Berkeley Lab researcher.
In New York, Con Ed has raised the bar on storage proposals. Starting last year, developers must help pay for upgrades if their projects would push power demand past local peaks and strain infrastructure. The utility said the changes were necessary because it was receiving too many applications in areas with lenient zoning, which would have overwhelmed its equipment there if approved.
“Storage is critical for the clean energy transition, but we believe that storage in the right scale, in the right location, coming in at the right time and having the right charging and discharging windows is really what benefits the system,” said Raghu Sudhakara, an executive at Con Ed.
According to a survey conducted by the trade group New York Battery and Energy Storage Technology Consortium (NY-BEST), the new methodology raised costs by an average of $21 million per project, a 14-fold increase. At least 25 projects have been canceled as a result, according to the group. Battery advocates have appealed to state regulators to get Con Ed to abandon the new policy.
“It’s taken a number of energy storage projects that were viable and has made them not viable,” said William Acker, executive director of NY-BEST. “And so it’s really stopping the development of a needed asset in New York City.”
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