The expansion of energy storage in the United States experienced a slowdown in the first quarter of 2023, despite an increase in the pipeline of future projects.

According to an S&P Global Market Intelligence report, capacity additions for battery storage fell by 55% compared to the previous year, reaching only 422 MW across 22 sites. This represents the slowest quarter for new battery storage additions in two years and a nearly 60% drop from the fourth quarter of 2022.

One of the primary factors affecting the energy storage market is the high demand for lithium-ion batteries, which has resulted in shortages of essential commodities like lithium, copper, aluminum, nickel, and cobalt. The rising prices of these materials, particularly lithium carbonate, have contributed to pricing uncertainties and extended lead times for large-scale battery energy storage systems (BESS) projects. Manufacturers have begun using indexed pricing strategies to manage the risk.

Although there is a robust pipeline of approximately 8.3 GW of capacity under construction or in advanced stages of development, completion rates may not meet expectations. The S&P market report suggests that less than half of the 21 GW of planned additions with 2023 completion dates are likely to come online this year. However, the five-year pipeline for energy storage resources, excluding pumped storage hydro, has grown significantly, with approximately 92 GW planned between 2023 and 2027, indicating potential strong growth in the sector.

Source: renewableenergyworld.com