Report Finds Battery Storage Could Cut Energy Costs and Boost Reliability in Central U.S.

A new analysis from Aurora Energy Research suggests that deploying 4 gigawatts (GW) of battery storage across the Central U.S. could deliver more than $7 billion in energy cost savings over the next two decades, while also strengthening grid reliability in a region facing some of the nation’s fastest-growing power demand.

The study, commissioned by the American Clean Power Association, focuses on the Southwest Power Pool (SPP). SPP is projected to see the largest percentage increase in peak demand over the next decade, driven by new industrial loads, population growth, and electrification. The region already has one of the highest shares of renewable generation in the country, largely from wind power, but currently operates less than 1 GW of grid-scale storage.

According to the report, expanding storage capacity in SPP could:

• Reduce evening price spikes by more than 80% through 2035.
• Enable the cost-effective deployment of more than 4 GW of storage within the next decade.
• Provide at least $2.2 billion in consumer and business energy savings over the next 10 years, and $7 billion over twenty years.

The findings align with experience from other markets, where battery systems have been used to smooth demand peaks, support thermal plant efficiency, and provide rapid-response reserves.

Despite significant potential, hundreds of proposed storage projects in SPP remain in the interconnection queue, facing delays tied to permitting, regulatory processes, and market rules. The report notes that nearly 60% of past projects in the queue have been withdrawn.

Industry representatives say addressing these barriers will be key to realizing the cost and reliability benefits outlined in the analysis. Suggested steps include clarifying transmission charges, streamlining state and local permitting, and refining market signals so storage is compensated in line with its grid contributions.

SPP’s large geographic footprint and growing demand make it a focal point for the future of grid reliability in the U.S. Analysts suggest that grid-scale batteries could be deployed relatively quickly compared to new transmission or generation projects, making them a near-term option for meeting rising demand.