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Soaring Solar Power Is Creating Challenges for the U.S. Energy Grid

No other energy source has seen more rapid growth in the United States over the past half a decade than solar power. But soaring solar installations have begun to distort the power distribution and transmission systems in the top solar-producing states such as California, creating challenges for utilities and the grid.  

Battery storage could help alleviate these challenges, and although it is also surging, it is still lagging behind solar capacity additions. 

It is no wonder then that despite a continuous decline in U.S. coal power generation, the share of coal in America's electricity mix is still above 15%, more than any renewable energy source.   

All renewable energy sources combined-wind, solar, hydropower, biomass, and geothermal-surpassed coal-fired generation in the U.S. electric power sector for the first time in 2022. But coal still holds about a 16% share of electricity generation, more than wind's share of around 11%, hydropower's 6%, or solar power's 4% share of the electric generation mix.  

Solar power has now grown to account for about 6% of total U.S. electric power generation after surging by 155% between 2018 and 2023, per EIA data cited by Reuters columnist Gavin Maguire

But while solar power has made the U.S. power-generating system greener, it has also made it more volatile, especially in the top solar market, California. 

There, peak solar power generation coincides with the lowest residential electricity demand during the midday. When power demand begins to surge after 6 p.m., solar output begins to fade.  

To cope with the natural and weather-dependent solar power, the grid needs much more battery storage than currently available to smooth out the difference in peak output and peak demand and the large power price variations. Power systems and grid operators need to cope with often negative prices when solar output is at its peak during the day.

In California, for example, "on sunny spring days when there is not as much demand, electricity prices go negative and solar generation must be 'curtailed' or essentially, thrown away," says the Institute for Energy Research (IER).

California has nearly 47 gigawatts (GW) of solar power installed that could supply a quarter of the state's electricity if it could operate 24/7 and on-demand as traditional sources, including coal, natural gas, and nuclear power do, IER analysts wrote in a commentary last week. 

The 'wasted' solar power output and insufficient battery storage are raising electricity prices in the state, according to the institute. 

Battery storage is on the rise, but it needs to exceed the optimistic government projections to provide power when needed. 

Earlier this year, the EIA estimated that solar and battery storage would make up 81% of new U.S. electric-generating capacity in 2024. Developers and power plant owners plan to add 62.8 GW of new utility-scale electric-generating capacity this year, up by 55% compared to the capacity added last year, 40.4 GW. Solar is set to account for the largest share of new capacity in 2024, at 58%, followed by battery storage, at 23%, per EIA forecasts. The growth in solar additions would be almost double last year's 18.4 GW increase, which was itself a record for annual utility-scale solar installation in the United States. 

"As the effects of supply chain challenges and trade restrictions ease, solar continues to outpace capacity additions from other generating resources," the EIA noted. 

Battery storage additions are also expected to shatter records this year, with U.S. battery storage capacity set to nearly double in 2024 as developers plan to add 14.3 GW of battery storage to the existing 15.5 GW this year. In 2023, 6.4 GW of new battery storage capacity was added to the U.S. grid, a 70% annual increase. California and Texas are in the lead when it comes to battery storage additions due to the rapid growth of variable solar and wind capacity in these two states. 

"In much of the US, batteries are not yet performing that crucial load-shifting role," Ed Crooks, Vice-Chair, Americas at Wood Mackenzie, wrote last week. 

"But California and Texas are pointing the way to the future for other US power markets, and other countries around the world. As the share of variable renewable generation in electricity supply grows, the value of battery storage rises."

WoodMac expects battery storage in the U.S. to grow faster than either wind or solar over the coming decade.  

By Tsvetana Paraskova for Oilprice.com

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Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.  More