Batteries are quietly rewiring the grid
From a plaque in Oxford to a third of California's electricity peak: how batteries revolutionise the grid.
A one-minute walk from my office in Oxford, a blue hexagonal plaque hangs on the wall of the Inorganic Chemistry Laboratory. It marks the spot where, in 1980, John Goodenough and his colleagues identified the cathode material that made the rechargeable lithium-ion battery possible.
The history of lithium batteries is fascinating. In November, just a stone’s throw from my department, I listened to a lecture by, and had dinner with, Stan Whittingham, who built the first working lithium battery at Exxon in the 1970s and shared the Nobel Prize for it with Goodenough and Akira Yoshino. Stan described how those early cells came about. He couldn’t have imagined then what would follow.
For years the technology stayed niche: Sony commercialised the first lithium-ion cells in 1991 to power its camcorders. Then came laptops and mobile phones, and lithium-ion swept through consumer electronics.
But the first grid-scale lithium-ion battery was only connected to the grid in 2012: a single 5 MW project in Oregon. Today, 267,000 MW have been deployed globally. By 2030, forecasters expect 800,000 to 1,200,000 MW, depending on how seriously the world takes its climate commitments.
Every so often a technology stops being a pilot and scales rapidly. Solar did it. Onshore wind did it. Grid-scale batteries are doing it right now but and most people haven’t noticed yet.
To see how, I’ve pulled fresh data from Modo Energy (thank you for the access) covering the four biggest benchmarked battery markets: Great Britain, Texas (ERCOT), California (CAISO) and Australia’s National Electricity Market. Together they have gone from a rounding error to around 45 GW in six years. (A note on the numbers: these figures count grid-scale batteries above 6 MW, so the large domestic and behind-the-meter fleets found in places like Germany sit outside them. And “Australia” here means the National Electricity Market; Western Australia’s separate grid — the WEM — adds roughly another 1.5 GW.)
The build-out is exponential, not linear
Start with the headline chart. Installed battery power capacity across these four grids has grown from just under 5 GW in 2019 to around 45 GW today. Texas stands out: from roughly 100 MW at the end of 2019 to over 14 GW now — a more than hundredfold increase in six and a half years. California has the largest battery fleet, at almost 16 GW.
It isn’t just the level; it’s the slope. Taken together, the steepest stretch of the build-out is the most recent one — the combined curve is still bending upward, not flattening. Over the past year alone, every one of these markets added double- or triple-digit percentages to its fleet, and Australia more than doubled its capacity in 2025.
A caveat, though: this won’t be a smooth ride upward. In the most saturated markets — Australia and Texas — merchant revenues for short-duration batteries are already struggling to clear the hurdle for new investment, and the case increasingly depends on longer duration and contracted or structured revenue rather than pure energy arbitrage. High returns attract capacity; capacity competes those returns away; building slows until prices recover. High prices, in effect, cure high prices. Expect that cycle to repeat through the buildout. The direction of travel is unmistakably up — but the path will be bumpy, not a straight line.
Big enough to move the grid
Gigawatts of capacity on their own don’t tell a system operator much. The number that matters is the size of the battery fleet relative to the peak demand the grid has to meet — and on that measure, storage has gone from novelty to material in all four markets. California leads, with batteries now equivalent to about a third of peak demand.
The Financial Times published a version of this picture a few months ago; the climb has continued since — most sharply in Australia. There’s a second way to cut the data that I find even more revealing. Rebase each line to the quarter in which batteries first crossed 1% of peak load, and you can compare how fast each market scaled regardless of when it started. California didn’t just go highest — it went fastest. Great Britain took almost twice as long to reach the same share.
More batteries and longer batteries
The megawatt numbers mask a second shift: the batteries being built can increasingly discharge for longer. Texas shows the split between one- and two-hour systems cleanly. Capacity for two-hour delivery has gone from under a third of the fleet to the majority, overtaking one-hour outright in mid-2025.
Why? Value shifts to systems that can move energy across more of the day. As short-duration markets fill up, developers build longer. Australia’s one-hour fleet has flatlined since 2024; California, shaped by its four-hour capacity rules, barely builds anything shorter.
A quick word on the economics
The build-out has a side-effect. As fleets grow, the price spreads batteries feed on get arbitraged away — more storage chasing the same volatility means thinner margins per megawatt. Australia shows it most vividly, where a wave of new capacity in late 2025 collided head-on with falling revenues.
In twelve months, Australian battery capacity rose about 115% while the per-megawatt revenue index fell roughly 64%. That’s not a market failing but market maturing. Falling revenue-per-MW is exactly what you’d expect as storage stops being scarce; it’s a sign the technology is doing its job. But it’s a side-plot. The main story is still the build-out.
What’s coming next
The pipeline says the fastest chapter is still ahead — though not without friction. Great Britain’s fleet reached 7.2 GW at the start of 2026, and the project pipeline now stands at around 30 GW. But Modo’s latest buildout report is blunt about the bottleneck: how much gets built, and how fast, depends almost entirely on the connection queue. Its base case is roughly 20 GW by the end of 2029 — up to 22.8 GW if connections reform goes smoothly, closer to 17 GW if delays bite. The direction is up and to the right; the open question is the slope.
And the character of the build is changing. Batteries of 200 MW or larger made up 43% of the 2025 pipeline and 74% of 2026’s. The era of small, standalone units is giving way to grid-scale megaprojects.
Put the three threads together — more capacity, longer duration, bigger units — and the direction is unmistakable. Grid-scale storage is quietly rewiring how the electricity system works.
An earlier version of this article was reviewed extensively by Ed Porter and colleagues at Modo Energy who kindly gave me access to their data.