Megawatts are not enough anymore for leading US BESS markets

AI generated summary

The article discusses the evolution of battery energy storage systems (BESS) in the United States, particularly focusing on California and Texas, which together account for over 65% of the country's grid-connected battery capacity. Initially, these markets prioritized megawatt deployment, but they have now shifted towards emphasizing capacity, availability, and operational discipline. California's growth has been driven by policy mandates and long-term contracts, while Texas has experienced a more market-driven approach with minimal regulatory oversight. This divergence has led to unique challenges in each state, such as revenue compression in California and price cannibalization in Texas.

As the battery storage landscape matures, investors are increasingly prioritizing factors like project location, interconnection viability, and operational reliability. The article highlights the importance of understanding the evolving policy environment and the need for operational discipline to maintain revenue streams. Key strategic signals for investors include the growing value of longer-duration systems, the significance of deliverability over queue position, and the necessity of adhering to stricter operational standards. Overall, the future of battery storage will depend on aligning technology with market needs and navigating complex regulatory frameworks.