Batteries: The Workhorse of an Affordable, Reliable Grid

This report by RMI argues that battery energy storage systems (BESS) can enhance grid reliability and affordability by providing resource adequacy, stability, and resilience. Using California and Texas as successful models, the document highlights how well-defined ancillary service markets and clear interconnection rules allow batteries to compete with fossil fuel generators, reducing costs and improving grid stability. It specifically contrasts these successes with the PJM region, where high uplift costs and interconnection hurdles hinder battery deployment.

• Batteries support three primary pillars of grid reliability: resource adequacy (meeting peak demand), stability (short-term services like voltage and frequency regulation), and resilience (recovery from outages). Battery prices have fallen by 90 percent since 2010, allowing them to replace retiring fossil fuel generators in providing these services.
• Competitive ancillary service markets, such as those managed by the Electric Reliability Council of Texas (ERCOT), lower costs and increase reliability. In January 2024, battery storage in Texas contributed to $750 million in market savings during freezing conditions. Similarly, a transmission line in California enabled 2,400 MW of battery storage and 525 MW of gas resources, saving customers $23.2 million in resource adequacy costs in 2022.
• The PJM region faces significant economic inefficiencies due to a reliance on out-of-market 'uplift payments' to compensate generators during extreme weather, which undermines price signals. In the first quarter of 2025, PJM incurred nearly a billion dollars in uplift costs, which is 10 times more than any other US regional transmission organization (RTO) and over 3 times the cost of PJM's ancillary service market for the same period.
• Battery viability is maximized through 'value stacking,' where resources are compensated for multiple services including capacity market revenues, energy market arbitrage, and ancillary services. In California, CAISO's shift to hourly resource adequacy assessments has incentivized longer-duration battery deployment. In PJM, however, batteries struggle to access the capacity market due to queue closures and noncompliance with FERC Order 2023.

APA

RMI (2025). Batteries: The Workhorse of an Affordable, Reliable Grid. https://rmi.org/resources/batteries-the-workhorse-of-an-affordable-reliable-grid/

Chicago

RMI. Batteries: The Workhorse of an Affordable, Reliable Grid. 2025. https://rmi.org/resources/batteries-the-workhorse-of-an-affordable-reliable-grid/.

Wikipedia

{{cite report |author=RMI |title=Batteries: The Workhorse of an Affordable, Reliable Grid |date=10 September 2025 |url=https://rmi.org/resources/batteries-the-workhorse-of-an-affordable-reliable-grid/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2025batteries, author = {{RMI}}, title = {{Batteries: The Workhorse of an Affordable, Reliable Grid}}, institution = {RMI}, year = {2025}, month = sep, url = {https://rmi.org/resources/batteries-the-workhorse-of-an-affordable-reliable-grid/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }