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Battery Storage Boom Faces Its Biggest Test Yet


Back in January, a massive fire ripped through Vistra Corp’s (NYSE:VST) giant battery storage facility in Moss Landing in Northern California, leading to the evacuation of hundreds of people after toxic fumes polluted the air. While the cause of the fire is still under investigation, a key factor that has so far been identified is the failure of the fire suppression system, which allowed the fire to spread rapidly. The building that housed 300 megawatts of battery capacity was completed five years ago, around the time the U.S. utility scale lithium-ion battery storage sector was taking off, with battery safety standards having been updated multiple times since. And now the sector is having to deal with the fallout of the accident, with a growing number of leaders now strongly opposed to the construction of battery storage facilities in their localities.
“We’re not guinea pigs for anybody ... we are not going to experiment, we’re not going to take risk,” said Michael McGinty, the mayor of Island Park, New York, after passing a moratorium in July for a battery storage system proposed near the village line. In August, Environmental Protection Agency (EPA) Administrator Lee Zeldin visited New York and complained that the state was rushing approvals to meet “delusional” clean energy goals. New York has set an ambitious goal to add 6,000 megawatts of energy storage over the next five years, equivalent to half of its large-scale systems. 
“This is more than a fire, this a wake-up call for the industry. If we’re going to be moving ahead with sustainable energy, we need to have a safe battery system in place,” said Glenn Church, Monterey County Supervisor.
Battery moratoriums refer to a temporary halt on the approval and construction of new Battery Energy Storage Systems (BESS), often a local or state measure enacted to address public safety concerns related to fires and other hazards associated with lithium-ion batteries. These moratoriums gained traction starting in 2023 and 2024, driven by community opposition to proposed BESS projects near homes and schools, high-profile fires, and a perceived lack of comprehensive safety standards for the technology.
However, the experts have pointed out that BESS detractors could be overreacting, and the nascent industry is merely going through teething problems. “This is a relatively immature technology that is maturing quickly, so I think that there are a lot of really thoughtful researchers and other stakeholders who are trying to improve the overall safety of these systems,” Ofodike Ezekoye, a mechanical engineering professor and combustion expert at the University of Texas at Austin, said.
Fire risks and growing opposition are just some of the headwinds facing the U..S. battery storage sector. A recent analysis by the International Council on Clean Transportation found that the One, Big, Beautiful Bill Act (OBBBA), coupled with cuts to other climate policies, could slash U.S. battery production by ~75% by 2030 to 250 GWh from the previously projected 1,050 gigawatt-hours, and EV sales by 40%. According to the report, the new policies could eliminate 130,000 potential jobs in the EV sector by 2030, with the majority in battery manufacturing. Following the passing of the IRA in 2022, companies have announced a total of 128 U.S. facilities for battery manufacturing, with more than half yet to begin construction. Red and purple states including Texas, Michigan, Nevada, Tennessee, Kentucky and Georgia, would be the most adversely impacted.
Interestingly, even Rep. Buddy Carter of Georgia, home to Hyundai’s  new $5.5B EV and battery manufacturing plant, threw his weight behind the bill, calling it “fantastic.” According to estimates by the experts, the project will create $4-5 billion in fresh investments in Bartow County as well as 3,500 new jobs. Over the past five years, EV-related projects in Georgia have created ~$17 billion in investments and more than 22,800 new jobs.
Meanwhile, the pivotal solar sector would face setbacks under OBBBA. According to a study by the Rhodium Group and Massachusetts Institute of Technology, the solar sector has recorded more than $160B in large solar and battery storage projects since the IRA was passed three years ago, marking one of the sector’s most productive periods in recent times. Solar and battery storage have been the fastest growing energy source in the U.S., with the pair expected to account for 81% of new power additions to the grid in the current year.
OBBBA favors solar manufacturing through provisions that incentivize domestic production and streamline the tax credit process, while also setting deadlines for construction and placement in service of solar projects. Specifically, it maintains and clarifies the tax credits for solar projects under Sections 48E and 45Y, while also phasing them out for wind and solar projects placed in service after December 31, 2027, unless construction began within 12 months of the Act's enactment.
By Alex Kimani for Oilprice.com

Oct 8, 2025 09:14
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