The Indicator from Planet Money

Episode•January 13, 2025•9 min

How batteries are already changing the grid

Renewable energy, when it comes to solar and wind power, has always had a caveat: it can only run when the wind blows or the sun shines. The idea of a battery was floated around to make renewables available 24/7. For years, it existed as an expensive, little-used technology. And then in 2021, it took off. In California, there is now enough grid-scale battery storage to power millions of homes, at least for a few hours, and it's growing fast. How did that happen, and what does the newfound success mean for the grid? This week, we dig into three stories about grid-scale battery storage. Today, we go on-the-ground to California, where batteries first took off in the U.S. Related episodes: Rooftop solar's dark side (Apple (https://podcasts.apple.com/us/podcast/rooftop-solars-dark-side/id290783428?i=1000662071057) / Spotify (https://open.spotify.com/episode/2yyte6eSNWEeqA4k7Q6rQO?si=26a7e8416d454778)) How EV batteries tore apart Michigan (Update) (Apple (https://podcasts.apple.com/us/podcast/the-indicator-from-planet-money/id1320118593?i=1000629435652) / Spotify (https://open.spotify.com/episode/11o3i84P3GzNcYsSViK6ee?si=2fb911aee7ea4425)) How China became solar royalty (Apple (https://podcasts.apple.com/us/podcast/the-indicator-from-planet-money/id1320118593?i=1000666816364) / Spotify (https://open.spotify.com/episode/5uc80u98FNTuk8AbsZZLqD?si=7f6808b118fd4c1c)) Wind boom, wind bust (Two windicators) (Apple (https://podcasts.apple.com/at/podcast/wind-boom-wind-bust-two-windicators/id290783428?i=1000649112957) / Spotify (https://open.spotify.com/episode/7rIEXwIEE3SoEMdCnU9LdX?si=43e6b50aa1984f4e)) For sponsor-free episodes of The Indicator from Planet Money, subscribe to Planet Money+ via Apple Podcasts or at plus.npr.org (http://plus.npr.org/). Fact-checking by Sierra Juarez (https://www.npr.org/people/g-s1-26724/sierra-juarez#:~:text=for%20Planet%20Money-,Sierra%20Juarez%20is%20a%20researcher%20and%20fact%20checker%20at%20the,and%20fact%20checking%20in%20Mexico.). Music by Drop Electric (https://dropelectric.bandcamp.com/). Find us: TikTok (https://www.tiktok.com/@planetmoney), Instagram (https://www.instagram.com/planetmoney/), Facebook (https://www.facebook.com/planetmoney), Newsletter (https://www.npr.org/newsletter/money). To manage podcast ad preferences, review the links below: See pcm.adswizz.com (https://pcm.adswizz.com) for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences. Learn more about sponsor message choices: podcastchoices.com/adchoices (https://podcastchoices.com/adchoices) NPR Privacy Policy (https://www.npr.org/about-npr/179878450/privacy-policy)

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Transcript

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Npr.

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In 2008, Nancy Skinner was elected to the California State legislature.

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So technically, my term began in 2009.

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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 that there was a problem.

0:32

When the sun doesn't shine or the wind doesn't blow, there's no power. Several people approached Nancy to raise this issue.

0:38

We're going to have to figure out how to store it.

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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. The problem was, though, grid scale storage wasn't really a thing.

0:55

Nonetheless, Nancy was optimistic that 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

1:09

pie in the sky. This is not real. Like another California pipe dream.

1:14

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. I'm Cooper Katz McKim.

1:29

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?

1:48

This week, we're bringing you three stories about battery storage. And we'll begin in California, where batteries took off in the US

1:57

Kuva Kats for Kim, producer extraordinaire with the indicator. You're back from your travels west. We sent you on a journey to see these batteries firsthand.

2:06

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.

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And I hope you learned this on the trip.

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I did. I connected with a battery storage facility that's connected to a solar farm spread across 2,900 acres.

2:26

That is huge. It's the equivalent of more than 2,000 football fields.

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It 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.

2:42

Will you grab my hard hat back there on him? Yeah.

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Justin gave me a tour of the facility along with Anand Narayanan Arivan's Senior VP of Asset Management.

2:51

I'm asked for a couple of hardets.

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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.

3:02

It's like a series of shelves. Imagine server racks, right? So it's a bunch of server racks, like you have all your PCs and a bunch of PCs stacked together which have the batteries in them, the inverter inside them.

3:18

There's three per door, so they're stacked. If you open up one of these doors.

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Could we open one of them up? No.

3:23

Yeah. We don't have the keys.

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Unfortunately, they're operating.

3:27

That was a pretty fast no, Cooper.

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I just wanted to open the door. I don't see the problem here.

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The do not press button was so tempting.

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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. They'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.

3:49

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.

3:58

I know. Yeah, it is wild. Justin told me how this all works.

4:02

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.

4:17

That hum you're hearing behind Justin is the H vac 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.

4:32

Yeah,

4:36

that's like rule number one in solar is don't visit in the summer either.

4:42

Sounds like you might have got a bit of a California tan, Cooper.

4:44

Yeah, the sun is not my friend as a red headed man.

4:48

So it sounds like you'll be happier when the sun goes down, which is when Arivon sells the power. When prices are high, Arivon then moves the renewable electrons onto underground cables to transmission lines to the grid. For this power specifically, Arivon has two customers that buy this power and Apple and pge, California's biggest electricity provider.

5:10

It's such a big facility, there's so much power generated that it's hard to find one buyer to take it all. So we ended up splitting the Output to two different buyers of electricity, that

5:20

means that somebody's home, say in Fresno, they turn on their lights and. Or literally anyone who takes PG and E. Exactly.

5:29

Yeah.

5:29

This power is kind of, I mean an electron's an electron. It's hard to tell where it's coming from once it hits a transmission line. But.

5:37

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?

5:46

Yeah, we put that question to Justin.

5:48

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. So we're at that really nice intersection where the technology's 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.

6:15

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 PGE wants it.

6:30

Significant.

6:31

Yeah. So that, that was one of the big knock on renewal. It 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. So when you pair storage with solar, now we can. 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.

6:59

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.

7:12

Tech companies aren't alone. Electricity 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 bower. If there's ever a blackout due to maybe an overworked grid, they can get.

7:32

I think if you have a solar plant or a battery plant or a combination anywhere in the US that's ready to be built these days, you can find an off taker, you know, someone to sell the power. There's just tremendous demand, tremendous demand for it.

7:45

In 2019, California had limited battery storage capacity. In April of last year, batteries could power 10 million homes for a period of time. Just six months later, that number grew to 13 million homes.

7:58

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.

8:21

But this phenomenon you've seen in California, it's going to occur elsewhere in the US it's just because California has the highest penetration level of renewables anywhere in the US and it created the demand for storage. As penetration levels increase throughout the US as they have in Texas and elsewhere, the storage market is going to follow in those areas too, and everyone's ready for that.

8:42

Justin's company, Arivon, 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.

8:55

You know, 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. We'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 and Cannon edits the show and the indicator is a production of npr.

How batteries are already changing the grid

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