The advent of cost-competitive, scalable, utility-scale battery energy storage systems (BESS) has accelerated the buildout of this technology across the U.S. energy landscape. While smaller BESS have typically supported ancillary services, new utility-scale projects coming online have the potential to fundamentally transform the grid. In this Insight, we explore the rapid spread of battery storage projects across the western U.S. and examine some of the impacts that are already being felt there.
Expansion Concentrated in a Few Regions
U.S. BESS development has primarily occurred in areas with significant solar buildout, namely the territories of the Electric Reliability Council of Texas (ERCOT), the California Independent System Operator (CAISO), and the rest of the Western Interconnect. Together, these three regions account for 52% of total solar capacity in the U.S. and nearly 90% of operational BESS capacity. This regional concentration is expected to persist in the near term, with ERCOT, CAISO, and the rest of the Western Interconnect poised to potentially add over 16 GW of battery capacity throughout the rest of 2026. In contrast, the remainder of the contiguous United States is expected to add just 2.8 GW of battery capacity during the same period.
BESS Meet Increasing Share of Evening Demand in CAISO
Although ERCOT and CAISO currently have similar total battery capacity, CAISO experiences less than half of ERCOT’s daily peak load. As a result, BESS discharge comprises a much larger portion of the generation mix in CAISO. Notably, batteries saw a significant increase in generation during the evening ramp in CAISO compared to April last year, averaging about 1.8 GWh more across these hours each day. By comparison, average generation for the entire ISO during this period increased by only 0.5 GWh. This indicates that much of the additional battery deployment displaced other fuel types during some of the most profitable hours on the grid. Natural gas saw the steepest decline, with an average drop of about 4.6 GWh, or down 34.7% from ramp hours in April 2025, while hydro was also down by 3.0 GWh, or 21%.
Curtailments Start Slow but Return to Trend
An additional benefit of the BESS buildout is its potential to reduce curtailments, which occur when surplus renewable energy is discharged into the ground rather than put onto the electric grid. In CAISO, the start of 2026 saw the largest and most prolonged lag in total curtailments in recent years. For the first time since 2021, the cumulative sum of curtailments did not exceed that of the prior year through mid-April. However, curtailments rose sharply throughout April, finally surpassing the 2025 year-to-date total on April 24. This acceleration corresponded with lower load on the system, longer days driving more solar generation, and a notable increase in wind output. In particular, April wind generation in CAISO rose 32% year over year, and the ISO set a new hourly wind generation record of 7.1 GWh on April 13, both contributing to higher curtailments. These developments underscore the growing need for additional BESS capacity, or other solutions such as transmission expansion, to absorb excess renewables to better manage curtailments going forward.
Conclusion
CAISO’s grid has already experienced significant impacts of ambitious battery storage development over the past five years. As these trends take hold in CAISO, similar patterns may soon emerge in ERCOT and the rest of the Western Interconnect as these areas continue to expand BESS capacity. Rapid battery buildout could lead to storage discharge accounting for a larger share of power generation during peak hours and lasting further into the night. However, these advancements may also begin to limit pricing variability within power markets. When combined with less-favorable siting options, this could ultimately slow the pace of battery adoption. Check back in for more Energy Market Insights as we continue to monitor capacity buildouts and the evolving power market landscape.
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