Houston Chronicle, Claire Hao

Oil refineries are a common sight across the Houston area, and in recent years, so too are solar panels. Now, a new type of energy infrastructure is popping up around the region: battery energy storage systems.

When built to feed into the power grid, these projects typically feature an array of trailer-like units on a fairly small plot of land and are not particularly eye-catching. They’re quiet and don’t release pollutants, making them good neighbors to nearby landowners, developers say.

As awareness of the technology grows, however, opposition has too. The risk of battery storage fires has galvanized some residents against new projects, despite assurances from developers and industry groups that battery failures are rare. 

Why has battery storage taken off in Texas, and why are companies especially interested in building projects in the Houston region?

Texas battery boom

Lithium ion batteries, which are also used in electric vehicles, laptops, cell phones and many other home electronics, are at the heart of most grid-scale batteries. Lithium ion battery costs have plummeted since the mid-2010s, making its usage cost-effective for energy storage.

Battery storage proliferated first in climate-conscious California, still the state with the most installed capacity, buoyed by lawmaker mandates that utilities procure energy storage and the California grid’s abundance of solar power. 

But Texas could for the first time become the nation’s fastest-growing energy storage market this year. Batteries with the capacity to store about 6,300 megawatts are installed on the Texas grid, enough to power nearly 1.3 million homes on the hottest summer days. Meanwhile, 141 gigawatts of battery storage projects have applied to potentially connect to the grid operated by the Electric Reliability Council of Texas by 2030. 

Developers are drawn to Texas because land is cheap and plentiful, and project permitting and applying to connect to the grid takes less time compared to other markets. With the rapid growth of solar power in the state, battery storage is being built to store excess solar-generated electricity for use when the sun isn’t shining. 

Power demand, too, is growing as more people and businesses move to Texas, adding stress to the already-strained power grid that batteries are well-suited and well-paid to provide backup power to ease. This stress also exacerbates volatility in Texas’ wholesale electricity market, which battery storage operators take advantage of by charging batteries when power prices are low and sending power back to the grid when prices spike, a practice known as arbitrage.

“Texas is the arbitrage mecca,” said Wes Fuller, head of sales for battery storage supplier Powin. “People are chasing, they’re living for that volatility.”

Houston congestion

Houston is infamous for its congested highways. The same phenomenon exists on the region’s power lines. 

That’s because the region is one of the largest sources of power demand in Texas, yet located away from many resources that generate power. On any given day, CenterPoint Energy, the transmission and distribution utility for the Houston area, is importing about 60% of the electricity customers need. The imbalance can lead to “congestion” on transmission lines, when lines lack the capacity to move all the power produced to where it’s needed, resulting in regular spikes in wholesale power prices.

That power demand is growing as more people move to Houston and surrounding suburbs. Utilities typically invest in expensive equipment upgrades to meet increasing demand; battery storage, however, can defer or circumvent the need for these upgrades altogether. By easing congestion and growing pains in the region, battery storage can lower wholesale electricity prices, savings that are eventually passed onto consumers, grid experts say.

When choosing sites in the region, developers look for proximity to existing transmission and substation infrastructure to minimize power losses as the system sends power to the grid. 

“As a result, the number of potential locations for battery storage projects is fairly limited,” said Parker Sloan, director of community and local affairs for Cypress Creek Renewables, a developer that has applied to build a project in League City.