Energy Storage Regulatory Framework in the US Achievements and Lessons Learned

Overview & Synopsis

Energy storage has expanded rapidly in the United States, driven by falling technology costs, growing renewable energy deployment, and the increasing need for grid flexibility, reliability, and resilience. Battery energy storage systems now support a wide range of use cases, including energy arbitrage, frequency regulation and other ancillary services, renewable energy firming, transmission and distribution deferral, backup power, microgrids, and emerging resource adequacy applications. California and Texas illustrate two distinct but successful pathways: California’s growth has been supported by resource adequacy requirements, market participation, and policy incentives, while Texas has seen rapid merchant-led deployment driven by wholesale market signals, ancillary service revenues, and system reliability needs.