How batteries are already changing the grid

Summary

Summary of "How Batteries Are Already Changing the Grid"

Podcast: The Indicator from Planet Money
Host/Author: NPR
Release Date: January 13, 2025

---

Introduction

In the episode titled "How Batteries Are Already Changing the Grid," hosts Cooper Katz McKim and Darian Woods delve into the transformative role of battery storage in the evolving energy landscape. The discussion highlights the journey from initial legislative efforts to the widespread adoption of grid-scale batteries, emphasizing their critical role in stabilizing renewable energy sources like solar and wind.

---

The Birth of Battery Storage Legislation

Timestamp: [00:11 - 01:29]

The episode begins by recounting the legislative efforts of Nancy Skinner, elected to the California State Legislature in 2008. Recognizing the intermittency problem of renewable energy sources—where "when the sun doesn't shine or the wind doesn't blow, there's no power" (00:32), Skinner introduced a pioneering bill. The bill mandated utilities to purchase a certain percentage of battery storage alongside their electricity purchases, aiming to create a market signal for grid-scale storage solutions.

Despite skepticism, with critics dismissing the idea as "pie in the sky" (00:55), the bill passed in 2010. However, meaningful progress was stagnant until 2021, when advancements in battery technology catalyzed a rapid expansion in grid-scale storage.

---

Breakthrough in Battery Technology

Timestamp: [01:29 - 03:06]

Cooper Katz McKim reflects on the delayed impact of the legislation, noting that while the bill passed in 2010, "nothing really happened" initially. The turning point arrived in 2021 when battery technology matured, making grid-scale storage economically viable. This breakthrough was pivotal in shifting the energy grid towards more reliable and sustainable renewable sources.

---

On the Ground at Cal Flats

Timestamp: [03:06 - 08:45]

Cooper travels to California's expansive battery storage facility, Cal Flats, operated by Erivon. Spanning 2,900 acres—"the equivalent of more than 2,000 football fields" (03:26)—Cal Flats exemplifies the scale of modern battery storage operations.

During the tour, Justin Johnson, Erivon's Chief Operating Officer, explains the facility's functionality:

"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 or when it's needed most." (05:02)

The facility houses rows of Tesla-manufactured lithium-ion batteries, akin to those used in Tesla cars. Anand Narayanan, Erivon's Senior VP of Asset Management, likens the storage units to "a series of shelves" similar to server racks, underscoring the technological sophistication of modern battery storage.

The hosts observe the operational hum of the HVAC systems maintaining optimal battery temperatures, highlighting the infrastructural demands of large-scale battery storage.

---

Transforming the Energy Grid and Powering Major Clients

Timestamp: [06:10 - 07:59]

Erivon's model involves splitting the stored power between major buyers like Apple and PG&E, California's largest electricity provider. Justin Johnson emphasizes the flexibility of battery storage:

"It's hard to tell where it's coming [once it hits the transmission line]. An electron's an electron." (06:29)
"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." (07:15)

This reliability addresses one of the primary criticisms of renewables—their intermittent nature. By pairing storage with renewable generation, Erivon enhances the value proposition for clients, ensuring a steady and predictable power supply.

Growing Demand from the Tech Sector and Beyond

Timestamp: [07:59 - 08:32]

The episode highlights the surge in demand from tech giants such as Google, Microsoft, and Amazon, which rely on renewable energy and require substantial power for data centers and emerging technologies like artificial intelligence. Additionally, rising electricity demands from electric vehicles, trains, cryptocurrency mining, and the need for grid backup services are driving the expansion of battery storage.

Justin Johnson notes:

"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." (08:27)

---

Rapid Expansion in California and Beyond

Timestamp: [08:45 - 09:55]

California's battery storage capacity surged from powering 10 million homes in April of the previous year to 13 million homes within six months (08:58). This rapid growth underscores the state's proactive stance on renewable energy and storage solutions.

Justin Johnson explains that California's leading role in renewable energy adoption is set to inspire similar developments nationwide:

"This phenomenon you've seen in California, it's going to occur elsewhere in the US... 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." (09:21)

Erivon's substantial investment of $2 billion in battery storage, with five existing facilities and plans for six more in California, exemplifies the industry's confidence in the future of grid-scale storage.

---

Conclusion and Future Outlook

Timestamp: [09:55 - End]

The episode wraps up by acknowledging California's foundational role, thanks to legislators like Nancy Skinner, in shaping the state's renewable energy trajectory. The hosts hint at exploring how different states, such as Texas with its free-market approach, are adapting to and fostering similar advancements in battery storage in future episodes.

---

Key Takeaways

• Legislative Foundations: Early policy initiatives were crucial in laying the groundwork for grid-scale battery storage.
• Technological Advancements: Improvements in battery technology and cost reductions have made large-scale storage feasible and economically viable.
• Operational Insights: Facilities like Cal Flats demonstrate the practical implementation and operational complexities of battery storage.
• Market Demand: Significant demand from tech companies and growing energy needs are driving rapid expansion in battery storage.
• Future Growth: California's success is likely to inspire and inform similar developments across the United States.

---

Notable Quotes

• Justin Johnson on Demand:

  "There's just tremendous demand, tremendous demand for it."
  08:27

• Nancy Skinner on Battery Storage Vision:

  "We're going to have to figure out how to store it."
  00:39

• Anand Narayanan on Battery Cabinets:

  "It's like a bunch of server racks... with the batteries in them."
  04:17

---

This comprehensive overview underscores the pivotal role of battery storage in revolutionizing the energy grid, ensuring the reliability and scalability of renewable energy sources, and catering to the burgeoning energy demands of modern industries.

Transcript

[NPR]

NPR.

[Cooper Katz McKim]

In 2008, Nancy Skinner was elected to the California State Legislature. So technically my term began in 2009.

[Darian Woods]

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.

[Cooper Katz McKim]

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.

[Darian Woods]

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

[Cooper Katz McKim]

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 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. I'm Cooper Katz McKim.

[Darian Woods]

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?

[Cooper Katz McKim]

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.

[NPR]

This message comes from Charles Schwab. When it comes to managing your wealth, Schwab gives you more choices like full service, wealth management and advice when you need it. You can also invest on your own and trade on Think or swim. Visit schwab.com to learn more.

[Charles Schwab]

This message comes from Schwab at Schwab. How you invest is your choice, not theirs. That's why when it comes to managing your wealth, Schwab gives you more choices. You can invest and trade on your own plus get advice and more comprehensive wealth solutions to help meet your unique needs. With award winning service, low costs and transparent advice, you can manage your wealth your way at Schwab. Visit schwab.com to learn more. This message comes from Capital One with the Venture X card, earn unlimited double miles on everything you buy plus get premium benefits at a collection of host when booking through Capital One Travel. What's in your Wallet terms apply.

[Darian Woods]

[e-mail] Kuba Cats 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.

[Cooper Katz McKim]

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.

[Darian Woods]

I hope you learned this on the trip.

[Cooper Katz McKim]

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

[Darian Woods]

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

[Cooper Katz McKim]

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.

[Justin Johnson]

We grab my hard hat back there on it.

[Cooper Katz McKim]

Yeah. Justin gave me a tour of the facility along with Anand Narayanan, Arivan's senior VP of asset management.

[Anand Narayanan]

I'm asked for a couple of hard.

[Cooper Katz McKim]

Ends 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.

[Anand Narayanan]

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 up together, which have the batteries in them, the inverter inside them.

[Darian Woods]

Three per door.

[Anand Narayanan]

There's three per door.

[Justin Johnson]

So they're stacked. If you open up one of these doors.

[Cooper Katz McKim]

Could we open one of them up? No.

[Anand Narayanan]

Yeah. We don't have the keys. Unfortunately, they're operating.

[Darian Woods]

That was a pretty fast no, Cooper.

[Cooper Katz McKim]

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

[Darian Woods]

The do not press button was so tempting.

[Cooper Katz McKim]

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.

[Darian Woods]

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.

[Cooper Katz McKim]

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

[Justin Johnson]

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 or when it's needed most. When the sun is going down.

[Cooper Katz McKim]

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.

[Justin Johnson]

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

[Darian Woods]

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

[Cooper Katz McKim]

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

[Darian Woods]

So it sounds like you'll be happier when the sun goes down, which is when Revon sells the power. When prices are high. Revon 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. Apple and pge, California's biggest electricity provider.

[Justin Johnson]

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.

[Cooper Katz McKim]

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

[Justin Johnson]

Yeah. This power is kind of. I mean, an electron's an electron.

[Anand Narayanan]

It's hard to tell where it's coming.

[Justin Johnson]

From once it hits the transmission line. But.

[Darian Woods]

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?

[Cooper Katz McKim]

Yeah, we put that question to Justin.

[Justin Johnson]

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 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.

[Darian Woods]

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.

[Justin Johnson]

Significant. 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.

[Cooper Katz McKim]

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.

[Darian Woods]

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 power if there's ever a blackout due to maybe an overworked grid they can get.

[Justin Johnson]

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.

[Cooper Katz McKim]

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.

[Darian Woods]

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.

[Justin Johnson]

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.

[Cooper Katz McKim]

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.

[Darian Woods]

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 Canon edits the show and the indicator is a production of npr.

[NPR]

This message comes from Mint Mobile. From the gas pump to the grocery store, inflation is everywhere. So Mint Mobile is offering premium wireless starting at just $15 a month. To get your new phone plan for just $15, go to mintmobile.com switch. This message comes from Mint Mobile. From the gas pump to the grocery store, inflation is everywhere, so Mint Mobile is offering premium wireless starting at just $15 a month. To get your new phone plan for just $15, go to mintmobile.com switch. This message comes from Warby Parker Prescription eyewear that's expertly crafted and unexpectedly affordable. Glasses designed in house from premium materials starting at just $95, including prescription lenses. Stop by a Warby Parker store near.