After decades of service to electricity consumers, our once-reliable power infrastructure system in the U.S. must now meet the complex demands of a 21st-century energy landscape. This landscape is marked by escalating energy needs, increasingly severe weather events, and mounting pressure on an aging electrical grid. American families and businesses urgently need more flexible and dependable power systems.
Enter grid-scale energy storage—a critical technology that is safeguarding U.S. energy security and driving economic prosperity. Innovative batteries, paired with cutting-edge operating systems and safety controls, create a power system with many capabilities. It stores excess energy during times of low demand, releases that energy when it is needed most, and provides advanced grid stabilizing and transmission services. Because of its unique functionality, grid-scale energy storage is critical to addressing our current grid challenges. In addition, job creation and the localization of the supply chain are force-multiplying its benefits for the U.S. economy, paving the way for a secure and sustainable energy future.
Join us as we explore the technological advancements behind these storage solutions, the associated job growth, and the role of American manufacturing.
Enhancing Grid Reliability
One of the most critical functions of grid-scale energy storage is its ability to enhance grid reliability. This is vital to ensure uninterrupted power supply to homes and businesses. During peak demand or unexpected outages, storage systems can rapidly deploy stored power to maintain a constant balance of supply and demand for the grid. This prevents blackouts and reduces dependencies on traditional power plants, which is especially valuable in regions prone to natural disasters or extreme weather events.
The 2021 historic Texas winter storm Uri caused significant blackouts highlighting the importance of a resilient grid. Over 4 million Texans lost power for nearly 71 hours as the state’s primary grid system operator, the Electric Reliability Council of Texas (ERCOT), struggled to prevent grid collapse. In response, Texas has significantly increased its energy storage capacity from less than 300 MW in 2020 to over 3,500 MW today with projections of 10,000 MW by the end of 2024. To put this in perspective, the national average (as of Q2 2022) is that a single MW of power can serve 173 homes.
Recent events continue to underscore the importance of grid reliability. In August 2024, ERCOT forecasted near-historic peak energy demand, with expectations of reaching 86,000 MW of peak demand on consecutive days. This surge in demand, primarily driven by extreme heat and increased energy usage as people return home from work between 4 p.m. and 7 p.m., puts additional stress on the grid.
Fluence is proud to support Ørsted on the Eleven Mile project in Arizona that helps support the power demands of a Meta data center in the region and support peak demand to roughly 65,000 homes in the local area. All 2,000+ Fluence Gridstack enclosures for the 300 MW storage system came from our production facility in Utah.
Energy storage systems play a crucial role in managing these peak demand periods, helping to prevent potential blackouts and ensure a stable power supply.
This is because energy storage (typically ranging from 1 hour to 8 hours or longer in duration) provides firm and peak energy capacity, serves power demand over extended periods, offers backup power and ancillary services, and secures the availability of intermittent renewable energy generation. These systems can also be sited in constrained areas without requiring external fuel supplies, offering utilities critical options during emergencies and helping them get more value out of the grid by serving as transmission assets.
In summary, energy storage systems smooth out variations in electricity supply and demand, ensuring power is available when needed while preventing voltage fluctuations and frequency deviations that can damage equipment and lead to outages. This constant, behind-the-scenes work supplies reliable power required for our modern economy.
Domestic Manufacturing
The decline of domestic manufacturing in recent decades has left the U.S. vulnerable in critical sectors, particularly in supply chains related to electrical infrastructure, with battery storage being no exception. Furthermore, China's dominance in battery component production, accounting for up to 90 percent of global output, has raised national security and economic resilience concerns. Geopolitical tensions and potential supply chain disruptions are expected to persist, making the need for more domestic production of advanced energy storage systems a bipartisan imperative. Policymakers of all stripes are rightly focused on strengthening the U.S. industrial base and technological leadership.
Existing Fluence Gridstack Production, Utah, USA
Fortunately, domestic manufacturing is now ramping up, spurred by new federal policies. In 2022, Congress passed a series of critical incentives within the Inflation Reduction Act (IRA) to support domestic battery product production, energy storage project deployment, and the purchase of domestically produced energy storage products. These incentives - the investment and production tax credits for qualifying energy storage projects, bonus tax credits for projects using products that meet domestic content requirements, and battery storage manufacturing production tax credits - have catalyzed a wave of new investments in America. In the past two years alone, $500 billion in investments has been announced, with $75 billion invested in clean power built in the U.S. and energy storage accounting for $12 billion of that.
This policy-driven shift is already bearing fruit. Fluence's Gridstack Pro, launched in October 2023, exemplifies the potential of domestic production. The product, which includes U.S.-made battery cells and modules, is positioning project owners to qualify for the 10% domestic content bonus tax credits. By producing U.S.-manufactured products and components and implementing a flexible supply chain strategy, we are securing our operations and driving the growth of a domestic supply chain for advanced energy storage systems. This further expands job creation, supporting roles across Fluence's operations and among our suppliers and partners nationwide.
Gridstack Pro is available with US-manufactured 305Ah LFP cells produced in an existing factory in Tennessee – enabling Fluence to bring domestic content systems to market in early 2025.
With continued policy support, U.S.-made storage solutions currently serving U.S. demand could potentially also meet demand from other countries. This would further boost the U.S. economy while enhancing global influence in the energy sector, as countries worldwide seek to modernize their grids and integrate more renewable energy.
Job Creation
The growth of grid-scale energy storage presents a significant opportunity for job creation and economic revitalization. The passage of the IRA has set the stage for a resurgence in the U.S. energy sector, including energy storage. In 2022, a total of 85,858 workers were employed in clean storage jobs, with 72,923 of them specifically in battery storage, representing a 4.6% increase from 2021. While recent comprehensive post-IRA employment data is still forthcoming, the industry's trajectory is promising and is expected to have increased immensely since then.
The energy storage industry offers a diverse range of employment opportunities, from manufacturing and construction to engineering and maintenance roles. These positions span various skill levels and educational requirements, providing career pathways for workers from diverse backgrounds. Importantly, regions that have experienced declines in traditional energy sector employment are now finding new opportunities in energy storage.
The distributed nature of energy storage projects is a key advantage, bringing economic benefits to both urban centers and rural communities across the country. This geographical spread ensures that the positive economic impact is not limited to a few concentrated areas.
Recent data underscores the industry's growth potential in manufacturing too, with 25 battery storage manufacturing facilities announced in the past two years. The clean energy industry has created over 100,000 manufacturing jobs, indicating a broader trend of expansion in clean energy sectors. This is especially notable given the historical context of manufacturing decline in the United States. Between 2001 and 2015—a period marked by two recessions—manufacturing employment fell by nearly 30 percent nationwide, with 71 percent of U.S. counties experiencing a drop in manufacturing jobs.
A Unified Path Forward
The rapid nationwide adoption of storage is evident. U.S. energy storage capacity installations surged by 84% year-over-year in Q1 2024, marking the country’s highest storage capacity ever installed in a first quarter. Moreover, grid-scale storage installations alone increased by 101% in Q1 2024 in comparison to Q1 2023, with Texas, California, and Nevada accounting for 90% of the U.S. total.
These figures underscore the expanding role of energy storage in the U.S. energy landscape, but we still have a long way to go on our path to achieving a secure and sustainable grid. We can achieve that outcome by recognizing that grid-scale energy storage is key to optimizing our entire energy system for greater resilience, efficiency, and economic productivity. As a result, it offers a great opportunity for bipartisan alignment with policymakers. By supporting this growing industry, we can create jobs in communities nationwide, enhance America’s energy security by onshoring supply chains, and ensure that the U.S. remains at the forefront of energy innovation for generations.
Recent developments in Congress highlight bipartisan support for clean energy initiatives. A group of 18 House Republicans published a letter emphasizing the economic importance of the clean energy tax credits in the IRA, particularly in Republican districts where a significant portion of clean energy investments have been made.
The letter states that "Energy tax credits have spurred innovation, incentivized investment, and created good jobs in many parts of the country—including many districts represented by members of our conference." This bipartisan recognition of the economic benefits of clean energy initiatives, including grid-scale energy storage, bodes well for the continued growth and support of the industry.
The momentum we have now is just the beginning. We must accelerate to fully realize the potential of grid-scale storage to power our nation’s future. The path forward is clear: embracing energy storage technology is not just about adapting to the future but actively shaping it to benefit all Americans. By investing in and supporting this critical infrastructure, we can ensure a stable and prosperous energy future.
Want to learn more about energy storage solutions that qualify for the 10% ITC domestic content bonus under the IRA?
The blog is subject to Fluence’s disclaimer’s regarding forward-looking statements.
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