2025 was decidedly the Year of the Battery and the trend of expanding and optimizing the plethora of applications for battery storage systems has continued this year. Given ever-shifting economic outcomes and market conditions, however, the ongoing challenge for battery storage may not be so much what to do with it but how to prioritize its use cases. Tax credits for battery storage dodged several bullets from the OBBA that hit solar and wind, but given that the majority of battery components are still exposed to FEOC restrictions, monetizing those tax credits for utility-scale BESS will continue to require careful navigation. Major electric vehicle manufacturers pivoted in 2025 to producing grid-scale battery systems when EV tax credits were gutted by the OBBA, but soaring gas prices caused by, among other things, the war with Iran, reignited interest in EV’s as a commonsense hedge for household and commercial transportation budgets. Despite the massive lithium deposits discovered in Appalachia and improved safety of lithium ion technology in the past year, sodium ion batteries will soon enter commercial production and their strong temperature performance, safety and cost effectiveness could make a hard run at lithium’s dominance. VPPAs using residential and small commercial batteries as an on-demand generation resource and grid stabilizer are taking hold in a number of jurisdictions, most impressively in Puerto Rico, where a new VPPA program is turning the tide on epic and persistent generation and transmission failures.
A perhaps less flashy but critically important BESS use case should be at the top of the priority list: incorporating battery storage into the long-term transmission planning mandated by FERC Order 1920. Requiring RTO’s, ISO’s, and utilities to submit transmission plans that reflect multiple demand/supply scenarios and deliver a defined set of benefits over an extended horizon of at least 20 years, Order 1920 aims to cure the short-term, generation-driven and often stop gap planning that has been the norm for transmission providers in the past. Batteries have an essential role to play in the more transparent, equitable, cost-effective and technologically efficient transmission plans that Order 1920 aims to foster. Among other benefits to transmission, BESS - both large utility scale and smaller, strategically placed batteries – can:
- reduce the need to build and maintain power lines over long distances from generation resources (which tend to be built in rural areas) to load centers, additionally mitigating energy losses over such long distances;
- correct transmission plans geared towards outlier demand hours by mitigating peak load, which helps to focus new and improved transmission towards hours of consistent and concentrated demand;
- provide energy and frequency regulation during extreme weather events that might hobble other generation resources; and
- balance the pricing of generation supply and demand at interconnection facilities that might otherwise be forced to curtail or cut prices at congested lines.
Expanding our vision of battery storage from generation solution to key transmission strategy will improve renewable energy’s access to interconnection, reduce and balance the costs of energy delivery, address increasing demand and stabilize an aging grid, making BESS a valuable tool in a next-generation transmission planner’s toolbox.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
[View Source]