How batteries are already changing the grid

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0:11In 2008, Nancy Skinner was elected to the California State Legislature. So technically, my term began in 2009. Nancy has witnessed the state's vision for clean energy firsthand. Soon after she was elected, a bill was being considered to get more of their electricity than ever from renewables. But there was a problem. When the sun doesn't shine or the wind doesn't blow, there's no power. Several people approached Nancy to raise this issue. We're going to have to figure out how to store it. And one way to store energy? A battery. Extra solar and wind electrons that aren't needed on the grid could flow into a battery.

0:50The problem was, though, grid-scale storage wasn't really a thing. Nonetheless, Nancy was optimistic that eventually it would happen if you created a market signal. So she introduced a bill requiring utilities to purchase a certain percentage of battery storage when they bought electricity. Nancy remembers pushback. That this was just pie in the sky, this is not real, like another California pipe dream. Still, in 2010, the bill passed, although nothing really happened. Grid scale batteries remained a pie-in-the-sky concept for years, and then all of a sudden, in 2021, batteries took off. This is The Indicator from Planet Money.

1:28I'm Cooper Katzmackim. And I'm Darian Woods. After years of nothing, grid scale batteries are now widely used and growing fast. Basically, the same tech that's in your phone is now helping power millions of homes across America. How did that happen, and what does the newfound success mean for the grid? This week, we're bringing you three stories about battery storage. And we'll begin in California, where batteries took off in the U.S. This message comes from NPR sponsor Adobe. Introducing the all-new Adobe Acrobat Studio, now with AI-powered PDF spaces. Need to turn 100 pages of market research into five insights with a click?

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2:53That's the Zendesk AI effect. Find out more at zendesk.com. Kuba Katsver Kim, producer extraordinaire with The Indicator. You're back from your travels west. We sent you on a journey to see these batteries firsthand. I am back indeed from the very sunny California where there are enough batteries to power 13 million homes. I wanted to go because I have no idea how batteries actually work. And I hope you learned this on the trip. I did. I connected with a battery storage facility that's connected to a solar farm, spread across 2 ,900 acres. That is huge. It's the equivalent of more than 2 ,000 football fields.

3:31It really did feel huge. It took a long time to drive through. The whole operation is called Cal Flats. It's owned by an independent power producer called Erivon. Justin Johnson is the chief operating officer there. Can we grab my hard hat back there, Anand? Yeah. Justin gave me a tour of the facility along with Anand Narayanan, Erivon's senior VP of asset management. I lost for a couple of hard hats. At the battery storage facility itself, there are rows of white containers not much taller than a person. I learned this is where it all happens. It's like a series of shelves. Like imagine server racks, right?

4:08So it's a bunch of server racks. Like you have all your PCs and the bunch of like PCs stacked together, which have the batteries in them, the inverter inside them. There's three per door. So they're stacked. If you open up one of these doors. Could we open one of them up? No. Yeah, we don't have the keys, unfortunately. Yeah, they're operating. Yeah, that was a pretty fast no, Cooper. I just wanted to open the door. I don't see the problem here. The do not press button was so tempting. If I see a button, I want to press it. Either way, they told me that each one of these cabinets holds the batteries themselves.

4:41They're about the size of a large briefcase and are manufactured by Tesla. The batteries are similar to what would go in a Tesla car, which is also made up of lithium-ion. And the site is packed with energy, right? I heard that Carl Flats has enough storage capacity to power 60 ,000 homes over an afternoon. I know, yeah. It is wild. Justin told me how this all works. There's excess solar in the middle of the day, so the power price can be low. So we can take the extra solar that's produced in the day from the arrays and store it for use later in the evening when it's needed most, when the sun is going down.

5:18That hum you're hearing behind Justin is the HVAC system, keeping the batteries cool because they're charging from that solar energy, and probably also the heat just from how hot it is outside. The sun was very strong when I visited. Yeah, let's move to the shade.

5:36That's like rule number one in solar is don't visit in the summer either. Sounds like you might have got a bit of a California tan, Cooper. Yeah, the sun is not my friend as a redheaded man. So it sounds like you'll be happier when the sun goes down, which is when Erivon sells the power when prices are high. Ravon then moves the renewable electrons onto underground cables to transmission lines to the grid. For this power specifically, Ravon has two customers that buy this power, Apple and PG &E, California's biggest electricity provider. It's such a big facility. There's so much power generated that it's hard to find one buyer to take it all.

6:16So we ended up splitting the output to two different buyers of electricity. That means that somebody's home, say, in Fresno, they turn on their lights and we're literally anyone who takes PG &E. Exactly. Yeah, this power is kind of... I mean, an electron's an electron. It's hard to tell where it actually came from once it hits a transmission line, but... All right, so how did we actually get here? Remember that utility providers were saying to Nancy Skinner that this was some kind of pie-in-the-sky, California-dreaming concept. Yeah, we put that question to Justin. Right. So like all the scale and advancements that went in the manufacturing to make it to bring the scale up and then to drive the cost down just weren't there yet to do it economically.

7:00So we're at that really nice intersection where the technology has improved enough. The cost has come down at that intersection where you're meeting the demand at the price they need to be successful, where it allows us to build these sorts of plants to serve that need. And so what we're left with is a totally new way for renewables to interact with the electricity grid. The power created by the sun or wind can go further now, tapped into whenever a customer like Apple or PG &E wants it. Yeah, so that was one of the big knock on renewables, always has been, it's intermittent. But that hurt us financially as well because we were paid less for our power because we were intermittent.

7:41So when you pair storage with solar, now the people we sell power to, it's more valuable to them because we can provide them power when they want it most. We can provide them a fixed shape, meaning tell us how much power you want in any given hour of the day, and we'll design a plant to meet your needs exactly. This new reliability in renewables is very attractive to tech companies like Google, Microsoft, Amazon. They already use solar and wind power, but they have power-hungry data centers to feed things like artificial intelligence. So they're buying up battery storage, too. Tech companies aren't alone.

8:15Electricity demand is spiking worldwide due to data centers, but also electric cars, trains, cryptocurrency mining. Demand is also coming from grid services, like serving as a backup power if there's ever a blackout due to maybe an overworked grid. I think if you have a solar plant or a battery plant or a combination anywhere in the U.S. that's ready to be built these days, you can find an offtaker, you know, someone to sell the power. There's just tremendous demand, tremendous demand for it. In 2019, California had limited battery storage capacity. In April of last year, batteries could power 10 million homes for a period of time.

8:55Just six months later, that number grew to 13 million homes. California has a long history of expanding its alternative energy sources. Historically, the Golden State has been way ahead of the curve on renewables, going all the way back to the 1980s with support and subsidies from both Republican and Democratic governors. But when it comes to the ongoing battery expansion, Justin Johnson says things are just getting started. But this phenomenon you've seen in California, it's going to occur elsewhere in the U.S. It's just because California has the highest penetration level of renewables anywhere in the U.S.

9:30and it created the demand for storage. As penetration levels increase throughout the U.S. as they have in Texas and elsewhere, the storage market is going to follow in those areas too. And everyone's ready for that. Justin's company, Erivon, believes in grid-scale battery storage so much, it's invested$2 billion in the space. They already have five facilities in California, including Cal Flats, and it's looking at six more. California got where it was because of planning from politicians like Nancy Skinner. But in Texas, they take a bit more of a hands-off, free-market rodeo-type way of doing things.

10:07We'll look into that on our next episode. This episode was produced by Corey Bridges with engineering by Neil Tivolt. It was fact-checked by Sarah Juarez. Cake & Cannon edits the show, and The Indicator is a production of NPR.