The Grid's New Backbone
Utility-scale storage is scaling quietly--and everywhere
by Futoshi Tachino
Among the most consequential, least appreciated climate gains is the rapid build-out of grid-scale energy storage. Batteries (and modern pumped storage) are now being deployed at record pace on four continents, shifting midday solar into the evening, cushioning wind variability, and trimming fossil peaker use. This is not a niche story: global additions are on track for another record in 2025, with most capacity arriving in utility-scale projects [1].
What changed
Three reinforcing shifts moved storage from pilot to platform.
First, volume: analysts expect ~92 GW / 247 GWh of new storage in 2025 (ex-pumped hydro), up ~23% year-on-year; ~85% will be grid-scale [1]. China alone ended 2024 with 73.8 GW / 168 GWh of “new energy storage,” a 130% annual jump [2].
Second, economics: pack prices fell to US$115/kWh in 2024 and turnkey system prices dropped about 40% year-on-year, to roughly US$165/kWh for typical utility systems — cost trajectories that are unlocking mainstream power-sector use cases [14–16].
Third, policy and market design: clearer rules for participation in energy and ancillary-services markets, plus targeted flexibility procurement, have created bankable revenue stacks in multiple regions [3,7,10].
Where it is happening fastest
United States. In 2025, ERCOT (Texas) overtook California for the largest operating battery fleet, reaching 14.2 GW by Q2 [4]. California crossed 13 GW by end-2024 and surpassed 15.7 GW in Q1 2025 [3,5]. On June 19, 2025, batteries supplied ~26% of CAISO’s evening peak — overtaking gas for that hour — a concrete illustration of storage reshaping net-load ramps [9].
China. Beyond batteries, China’s pumped-storage hydropower is accelerating toward ~130 GW by 2030, underscoring that long-duration storage is also scaling where system needs justify it [8]. Pipeline data show a sustained surge of grid-side projects through 2025 [6].
Europe and the UK. Europe installed a record ~12 GW of energy storage in 2024 across scales and technologies [7]. In the UK, operational battery capacity reached 7.6 GW / 11.5 GWh by August 2025, with large projects coming online to absorb wind surpluses and reduce curtailment [10]. National and EU-level flexibility frameworks are steadily widening market access for storage assets [7].
Global South examples.
• Chile has enacted a modern market framework (Law 21,505) allowing storage to be remunerated for the services it provides; hybrid solar-plus-storage projects of unprecedented scale are now connecting, including a 221 MWp PV + 1.2 GWh system in Antofagasta [11,13].
• South Africa reached financial close on Red Sands (153 MW / 612 MWh), the largest standalone battery project on the continent to date, part of an emerging 11 GWh public procurement pipeline aimed at stabilizing the grid and integrating renewables [12].
Why it matters
Reliability and resilience. Storage is increasingly delivering firm evening capacity and fast frequency response, improving adequacy in regions with steep solar ramps and weather extremes [3,4,9].
Integration of cheap renewables. By shifting energy in time, storage reduces curtailment and unlocks higher wind- and solar-penetration pathways — now a central feature of grid planning in Europe, China, the US, and Chile [3,7,8,11].
Cost discipline. With pack and system prices falling sharply and manufacturing footprints expanding, storage is becoming a standard grid asset rather than a special project [14–16].
What to watch next
Duration and diversity. Four-hour lithium-ion remains dominant for diurnal shifting; pumped hydro and emerging longer-duration chemistries will take a larger role where multi-hour and multi-day flexibility is valuable [3,8].
Market access and siting. Continued refinement of ancillary-service products, interconnection queues, and land-use guidance will govern deployment speed in the US and Europe [3,7,10].
System metrics. Expect more jurisdictions to track not just nameplate megawatts but peak-hour contributions, avoided curtailment, and peaker displacement — where the benefits are clearest [3,9].
Bottom line: Storage has moved from promising to pivotal. The combination of falling costs, clearer market signals, and demonstrated performance is turning batteries — and, in the right geographies, pumped hydro — into the grid’s quiet backbone [1–3,7–16].
References (full details & URLs)
[1] Energy-Storage.news. “Global energy storage deployments on track for record year in 2025, BNEF says.” 21 Oct. 2025. https://www.energy-storage.news/global-energy-storage-deployments-on-track-for-record-year-in-2025-bnef-says/
[2] China Energy Storage Alliance (CNESA). “China releases official energy storage report highlighting 130% growth in installed capacity.” 3 Aug. 2025. https://en.cnesa.org/latest-news/2025/8/3/china-releases-official-energy-storage-report-highlighting-130-growth-in-installed-capacity
[3] California ISO. 2024 Special Report on Battery Storage. 29 May 2025. https://www.caiso.com/documents/2024-special-report-on-battery-storage-may-29-2025.pdf
[4] S&P Global Commodity Insights. “US battery storage: ERCOT surpasses CAISO in Q2 for most operating battery storage capacity.” 17 Sept. 2025. https://www.spglobal.com/commodity-insights/en/news-research/latest-news/electric-power/091725-us-battery-storage-ercot-surpasses-caiso-in-q2-for-most-operating-battery-storage-capacity-in-us
[5] California Energy Commission. “California Energy Storage System Survey.” Accessed 4 Nov. 2025. https://www.energy.ca.gov/data-reports/energy-almanac/california-electricity-data/california-energy-storage-system-survey
[6] pv magazine. “China adds 1,556 new energy storage projects in July, nearly 140 GWh in capacity added.” 2 Sept. 2025. https://www.pv-magazine.com/2025/09/02/china-adds-1556-new-energy-storage-projects-in-july-with-140-gwh-capacity/
[7] Energy-Storage.news (EASE/LCP Delta). “Europe installed 12GW of energy storage in 2024.” 1 Apr. 2025. https://www.energy-storage.news/europe-12gw-energy-storage-2024-eu-state-aid-boost-to-come/
[8] Reuters. “China on track to exceed 2030 pumped storage hydro target by 8%, industry body says.” 24 June 2025. https://www.reuters.com/sustainability/climate-energy/china-track-exceed-2030-pumped-storage-hydro-target-by-8-industry-body-says-2025-06-24/
[9] Reuters. “US power sector battery storage momentum keeps charging on.” 24 June 2025. https://www.reuters.com/markets/commodities/us-power-sector-battery-storage-momentum-keeps-charging-2025-06-24/
[10] Solar Power Portal. “NESO forecasts lowest winter blackout risk since 2019.” 9 Oct. 2025. https://www.solarpowerportal.co.uk/energy-policy/neso-forecasts-lowest-winter-electricity-blackout-risk-since-2019
[11] Ember. Reducing curtailment in Chile: key to unlocking the full potential of renewable energy. 25 Sept. 2025. https://ember-energy.org/app/uploads/2025/09/EN-Report-Reducing-curtailment-in-Chile-key-to-unlocking-the-full-potential-of-renewable-energy.pdf
[12] Globeleq. “Africa’s largest standalone battery energy storage project powers ahead as Red Sands BESS reaches commercial close.” 27 June 2025. https://globeleq.com/africas-largest-standalone-battery-energy-storage-project-powers-ahead-as-globeleqs-red-sands-bess-reaches-commercial-close/
[13] ContourGlobal. “ContourGlobal inaugurates Latin America’s largest solar plant with battery storage (Chile).” 8 Apr. 2025. https://www.contourglobal.com/news/contourglobal-inaugurates-latin-americas-largest-solar-plant-battery-storage-chile/
[14] BloombergNEF via Energy-Storage.news. “Lithium-ion battery pack prices fall 20% in 2024 to US$115/kWh.” 11 Dec. 2024. https://www.energy-storage.news/lithium-ion-battery-pack-prices-fall-20-in-2024-amidst-fight-for-market-share/
[15] BloombergNEF. “Lithium-Ion Battery Pack Prices See Largest Drop Since 2017, Falling to $115 per kWh.” 10 Dec. 2024. https://about.bnef.com/insights/commodities/lithium-ion-battery-pack-prices-see-largest-drop-since-2017-falling-to-115-per-kilowatt-hour-bloombergnef/
[16] Energy-Storage.news. “Behind the numbers: BNEF finds 40% year-on-year drop in BESS costs.” 5 Feb. 2025. https://www.energy-storage.news/behind-the-numbers-bnef-finds-40-year-on-year-drop-in-bess-costs/
Bio
Futoshi Tachino is an environmental writer who believes in the power of small, positive actions to protect the planet. He writes about the beauty of nature and offers practical tips for everyday sustainability, from reducing waste to conserving energy.
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About the Creator
Futoshi Tachino
Futoshi Tachino is an environmental writer who believes in the power of small, positive actions to protect the planet. He writes about the beauty of nature and offers practical tips for everyday sustainability.
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