Energy Committee Report

I. Challenges and Solutions Associated with Developing and Siting Energy Projects

A. Emerging State and Local Land Use Restrictions, Permitting, and Siting Processes

In 2024, Columbia Law School’s Sabin Center for Climate Change Law published a revised edition of Opposition to Renewable Energy Facilities in the United States. The 2024 edition documents state and local restrictions and opposition to siting renewable energy projects, as well as energy storage and transmission projects associated with renewable energy generation. The 2024 edition identified a total of 395 local restrictions across forty-one states, nineteen state-level restrictions, and 378 individual projects that encountered significant opposition across forty-seven states. While many of these restrictions existed prior to 2024, the report identified fifty-five new or updated local restrictions, 2 new or updated state-level restrictions (Illinois and Rhode Island), and eighty-two new projects that encountered opposition since releasing the previous edition in 2023. From a regional perspective, the upper Midwest has experienced a large increase in local government restrictions on renewable energy development across Indiana, Iowa, Ohio, Michigan, and Wisconsin. In addition, New York State has also experienced a significant rise in local government restrictions.

In addition, Michigan’s 2023 renewable energy siting law (Public Act 233 of 2023) went into effect on November 29, 2024, which created an option for developers to seek Michigan Public Service Commission approval as opposed to local approval for solar projects (50 megawatts or greater), wind projects (100 megawatts or greater), and energy storage projects (50 megawatts or greater with a discharge capability of 200 or more megawatt hours) if a local jurisdiction does not have a state compatible renewable energy ordinance.

Finally, in 2024 Florida passed HB1645, which after July 1, 2024, prohibits the construction or expansion of offshore wind facilities and associated infrastructure including transmission cables in Florida state waters or within one mile of a coastline or intracoastal waterway.

B. Federal Permitting and Environmental Review Process Improvements

In 2024, several U.S. federal departments and agencies promulgated new regulations or programmatic initiatives to improve permitting and environmental review processes for renewable energy projects.

1. Department of the Interior Offshore Wind Rule

The Department of the Interior (DOI), through its Bureau of Ocean Energy Management and Bureau of Safety and Environmental Enforcement, promulgated updated regulations for renewable energy development on the U.S. Outer Continental Shelf (30 CFR Part 585; 30 CFR Part 285). DOI states that the final rule will provide numerous benefits, including eliminating unnecessary requirements for deploying meteorological buoys, increasing survey flexibility, improving certification and verification processes, establishing a public leasing schedule, reforming auction regulations, and clarifying safety and oversight requirements.

2. Department of Energy CITAP Rule

In furtherance of statutory amendments to section 216 of the Federal Power Act, the Department of Energy (DOE) promulgated the Coordination of Federal Authorizations for Electric Transmission Facilities rule to improve the environmental review and permitting process for qualifying high voltage electric transmission lines. Section 216(h) and the new regulations establish DOE as the lead agency for coordinating a single federal environmental review under the National Environmental Policy Act (NEPA).

3. Department of Energy Categorical Exclusions to the National Environmental Policy Act

DOE announced new categorical exclusions to NEPA for energy storage systems, transmission line upgrades, and solar PV systems. These new categorical exclusions are designed to further speed up DOE’s NEPA environmental review for projects that fall into these categories.

4. Department of the Interior, Bureau of Land Management Geothermal Categorical Exclusions

The Department of the Interior’s Bureau of Land Management adopted categorical exclusions from the U.S. Forest Service and Department of the Navy for geothermal exploration under section 109 of NEPA. Section 109, passed as part of the Fiscal Responsibility Act of 2023, authorizes a federal agency to adopt another federal agency’s previously established categorical exclusion.

5. Department of the Interior, Bureau of Land Management Solar Programmatic Environmental Impact Statement

The Department of the Interior’s Bureau of Land Management released a Final Programmatic Environmental Impact Statement (PEIS) and proposed resource management plan amendments for utility-scale solar development (5 megawatts or greater) on public lands. The PEIS updates the 2012 Western Solar Plan, including an expansion to five additional states (Idaho, Montana, Oregon, Washington, and Wyoming) making more than 31 million acres of public land available for solar development. In addition, the PEIS excludes development in areas with a high likelihood of natural and cultural resource conflicts as well as ensures solar projects avoid, minimize, and compensate for adverse impacts on public lands.

II. Mining and Decommissioning

A. Coal Retirement Trends

Although 22.3 GW of coal-fired electric generation retired over the past two years, coal retirements in 2024 drastically slowed to approximately 3 GW. Despite the coal retirement slowdown in 2024, planned retirements, aging power plants, and decreasing capacity factors are all contributing to continued decrease in coal reliance. 2024 was the first year that wind and solar (without other types of renewable energy generation) produced more electricity than coal. Additionally, EPA GHG regulations finalized in 2024 will require coal-fired power plants that operate beyond 2039 to capture 90 percent of their carbon emissions starting in 2031.

B. Mining and Mine Land Trends

Mining of lithium and other critical materials such as copper, nickel, cobalt, and graphite for renewable energy development remained in high demand in 2024. In 2024, DOE announced an additional $3 billion allocated for 25 projects in 14 different states to bolster domestic production of batteries and battery materials. The federal government is also heavily investing in mining projects and accompanying industrial processes for critical minerals. The largest example is a conditional commitment of a $2.26 billion DOE loan for a lithium carbonate processing plant in Nevada which would produce enough lithium for over 800,000 electric vehicles (EVs) annually.

Relatedly, the U.S. Treasury and Internal Revenue Service (I.R.S.) finalized regulations regarding the section 45X Advanced Manufacturing Production Credit of the Internal Revenue Code (45X), which provides a production tax credit for domestic manufacturing of components for solar and wind energy, inverters, battery components, and critical minerals. The final rules clarify which renewable energy technologies qualify for the credits. Called tech-neutral, the credits were expanded to cover the production of critical minerals. Specific to mining, 45X includes a ten percent tax cut for mineral production. These new rules were created to incentivize domestic processing of critical minerals.

2024 saw a push for repurposing current and former mine land for renewable energy projects. $475 million in funding from the Bipartisan Infrastructure Law (BIL) was allocated for such projects and projects in West Virginia, Kentucky, Arizona, Pennsylvania, and Nevada have already been selected. The selected projects will showcase a diverse array of projects including solar, geothermal, pumped storage hydropower, battery energy storage systems, and microgrids.

III. Environmental and Energy Justice

A. IRA; EJ TCTAC

Throughout 2024, the Biden-Harris administration took significant strides to ensure that its commitment to environmental and energy justice out lives their time in office. Through the Inflation Reduction Act (IRA), $27 billion was appropriated across the federal government for the Greenhouse Gas Reduction Fund (GGRF) which mobilizes financing and private capital to address the climate crisis and “ensure our country’s economic competitiveness, and promote energy independence while delivering lower energy costs and economic revitalization to communities that have historically been left behind.”

In 2024, nine states introduced legislation developing “green banks,” mission-driven institutions that function like loan or investment funds to develop clean energy infrastructure. The implementation of green banks creates the mechanism for states to receive IRA funds and distribute them accordingly for projects that address climate change and environmental justice concerns. Of the ten states that proposed green bank legislation this year, Virginia was the sole state to enact the legislation, joining Massachusetts and New Mexico who passed green bank bills in 2023.

The Environmental Protection Agency (EPA) and the DOE have partnered and selected eighteen Environmental Justice Thriving Communities Technical Assistance Centers (EJ TCTAC) in environmental justice communities throughout the nation to receive a total of $177 million to provide support for the communities, as well as local stakeholders in addressing environmental justice concerns. Each EJ TCTAC will provide training and other assistance to build the capacity of local grassroots nonprofit organizations, tribal governments, and community stakeholders in navigating local, state, and federal grant processes, as well as providing guidance on enhanced community engagement. Each of the centers will also develop and manage communication channels in an effort to alleviate the lack of access to resources and information that has traditionally inhibited environmental justice communities. Funding for the EJ TCTAC’s is expected to carry each center through October 2028. As the political pendulum swings, these investments in environmental and energy justice initiatives are vital to serving the needs of people and equipping state and local governments with the tools to address problems head on.

B. Renewable Energy on Native Lands

The federal government has a long history of energy extraction on Native lands and disregarding Tribal input and oppositions. The federal government has begun to make headway on increasing its consideration and consultation of Tribes in both energy decisions and energy project funding.

In February of 2024, FERC issued a decision denying private companies with no Tribal affiliations preliminary permit applications for seven pumped storage hydroelectric projects that were proposed on Navajo Nation land. The decision stated, “potential applicants should work closely with Tribal stakeholders prior to filing applications to ensure that Tribes are fully informed about proposed projects on their lands and to determine whether they are willing to consider the project development.”

DOE formed the Tribal Fossil Energy and Carbon Management Working Group (Working Group) after holding several Tribal forum discussions. The purpose of the Working Group is to improve collaboration between federally recognized Tribes and DOE’s Office of Fossil Energy and Carbon Management. To start, eight Tribes will participate in the Working Group: Jicarilla Apache, Crow Nation, Navajo Nation, Caddo Nation, Hopi Nation, Southern Ute, Arctic North Slope Iñupiat, and the Mandan, Hidatsa, and Arikara Nation. This is the fourth working group that DOE has formed to increase consultation with Tribes. The Working Group convened several virtual briefings in 2024, and formal meetings begin in 2025.

DOE funding specifically directed towards Tribal communities has increased significantly in large part due to BIL and IRA funding. Notable funding initiatives are further discussed below.

DOE’s Tribal Electrification Program awarded $71 million to thirteen Tribal communities with the goal of increasing Tribal access to electricity. The funding will help connect homes in Tribal communities to transmission and distribution powered by clean energy, provide electricity to unelectrified homes through zero-emissions energy systems, transition electrified homes to zero-emissions energy systems, support home repairs and retrofitting necessary to install the zero-emissions energy systems, and support clean energy workforce development opportunities.

After a competitive application process, DOE awarded a total of $18.8 million to six American Indian and Alaska Native communities to install renewable energy projects. The projects will provide 5.6 MW of renewable energy generation and storage for over 100 Tribal buildings across five states. Applications also opened for an additional $25 million in funding and the projects that are selected will be announced in the summer of 2025 and later DOE doubled the amount of funding to $50 million. The goals of these projects are to “reduce or stabilize energy costs, increase energy security and resiliency, and provide electric power to unelectrified Tribal buildings.”

While funding for renewable energy projects on Native lands has dramatically increased, bureaucracy has impeded funding access. Although the Yakama Nation was selected to receive a $32 million solar grant and an accompanying $100 million federal loan, delayed transmission system upgrades, delayed interconnection requests, and inflated construction costs may cause the funding to expire before the project can get off the ground.

Another barrier to funding access despite the increase in government funding availability is the cost of remaining in lengthy interconnection queues, particularly commercial readiness deposits. The Alliance for Tribal Clean Energy recognized this upfront cost barrier to getting Tribal renewable energy projects off the ground and announced a collaboration with leading foundations and philanthropies to launch the Indigenous Power & Light Fund for Energy Sovereignty. This is a $100 million fund that aims to speed up tribal clean energy projects by financing upfront costs not typically covered by federal funding.

IV. Capital Available for Funding/Financing Renewable Energy Projects

2024 saw continued investment in clean energy project flowing largely from the Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act (IRA).

A. Increased Participation Due to Direct Pay Mechanism

Final regulations promulgated by the U.S. Treasury and I.R.S. in 2024 make it easier for direct-pay eligible entities like Tribes, territories, local governments, public school districts, churches, and hospitals to jointly invest in renewable energy projects. The direct-pay mechanism allows these entities to more easily and efficiently access clean energy tax credits stemming from the IRA.

B. EECBG, C-SITE Funding for Local and Tribal Clean Energy Projects

In 2024, DOE distributed $17.7 million in funding from their Energy Efficiency and Conservation Block Grant Program (EECBG) to local and territorial governments. The projects range widely; for example, some of the selected governments will use the funding for traditional retrofit and benchmarking projects, and others will use the funding for workforce training programs and trainings for residents. DOE also allocated $31 million in Communities Sparking Investments in Transformative Energy (C-SITE) funding for renewable energy projects in disadvantaged communities, energy communities, and small- and medium-sized jurisdictions. The twelve entities selected will focus on transforming liabilities into assets (such as turning vacant lots into housing), modeling new approaches (deploying agrivoltaics in a rural community), reducing operational costs and building resilience (creating resilience hubs), funding workforce opportunities (training unionizing local apprentices for electric bikes maintenance), parking investments (creating new business models for municipal or tribally-owned utilities).

C. 2024 Grid Resilience State and Tribal Formula Grants

Authorized by the BIL, in fiscal year 2024, forty-nine states, five territories, 254 Tribal Nations, and the District of Columbia received a combined total of $473.6 million in Grid Resilience State and Tribal Formula Grants to modernize the grid, reduce and mitigate the impacts of extreme weather events such as wildfires, and strengthen reliability. This funding also fulfills the Justice40 Initiative by meeting the goal that 40 percent of funding be delivered to disadvantaged communities.

D. Decarbonization of Energy-Intensive Industries

In 2024, the Office of Clean Energy Demonstrations (OCED) selected and awarded funding to projects in the Industrial Demonstrations Program (IDP). These high-emitting industries span metals, cement, chemicals, refining, food and beverages, glass, iron and steel, process heat, and pulp and paper. All told, DOE selected thirty-three projects with a total anticipated cost share of approximately $6 billion. Projects range from a green aluminum smelter project to steam-generating heat pumps for cross-sector deep decarbonization to low-emissions to cold agglomerated iron ore briquette production.

E. DOE Hydroelectric Incentives Program

The Infrastructure Investment and Jobs Act (IIJA), also known as the Bi-Partisan Infrastructure Law, authorized funding three hydroelectric incentives programs. In 2024, DOE announced selections for each of the three incentive programs totaling $513.5 million.

Section 40331 of the IIJA authorized $125 million in new incentives payments under the Energy Policy Act of 2005 (EPAct 2005) section 242 for qualified hydroelectric facilities for electricity generated and sold. In October 2024, DOE announced the selection of 39 facilities that will receive a total of $12 million in payments for electricity generated and sold in the 2023 calendar year.

Section 40332 of the IIJA authorized $75 million in new incentive payments under EPAct 2005 section 243 for capital improvements that increase hydroelectric facility efficiency by at least 3%. In February 2024, DOE announced the selection of forty-six projects across nineteen states that will receive up to $71.5 million in incentive payments.

Section 40333 of the IIJA authorized $533.6 million in incentive payments for a newly created program, EPAct 2005 section 247, for capital improvements to existing hydroelectric facilities directly related grid resiliency, dam safety, and environmental improvements. In September 2024, DOE announced the selection of 293 projects across 33 states that will enter negotiations to receive over $430 million in incentive payments.

F. EPA Greenhouse Gas Reduction Fund Solar for All Program

Section 60103 of the IRA amended the Clean Air Act by adding section 134, which authorized the EPA to implement the $27 billion Greenhouse Gas Reduction Fund. Included within the Greenhouse Gas Reduction Fund is the $7 billion for zero emission technologies directed towards low-income and disadvantaged communities, which the EPA used to establish the Solar for All program.

In April 2024, the EPA announced the selection of sixty proposals that will receive a total of $7 billion in solar for all grants. The EPA projects the grants will deliver residential solar energy to over 900,000 households, saving low-income households $350 million annually in electricity costs.

V. Transmission Grid Infrastructure and Energy Storage

More. Faster. In response to anticipated increases in national electric consumption and federal, regional, state, and local regulators as well as renewable energy generators have been pushing harder to increase the speed and number of new U.S. electric transmission miles. Yet despite steady increase in ratepayer costs (due in part to transmission bottlenecks) and growing attention from lawmakers, “[o]nly 55 new miles of high-voltage transmission were constructed in 2023” – and only 125 new miles from January 2024 to May 2024, with progress hampered by a complex and overlapping regulatory patchwork and NIMBY-ism.

Not Fast Enough? 2024 saw significant efforts by lawmakers to address the regulation patchwork problem, but it remains to be seen if they will have any actual effect on the number of new transmission miles built. If regulatory efforts fail to deliver the necessary transmission expansion, we may need to lean more on technological solutions to do more with what we have, including using existing transmission footprints to install lines that can transport and withstand more power. Otherwise, it may be on consumers to adjust behavior in the face of increasing electricity costs.

A. Department of Energy

DOE has not historically involved itself directly in transmission planning. However, as part of its broader climate change efforts, and perhaps as a way to continue moving the decarbonization needle despite a Congress, Supreme Court, and incoming Administration fairly hostile to such efforts, the Biden Administration announced that DOE would offer an investment of $1.5 billion in four transmission projects through the Transmission Facilitation Program, a revolving fund program intended to help projects overcome the financial hurdles facing transmission development. DOE also identified three regions that it considers in particular need of new transmission infrastructure, and which will be eligible for future federal funding: (1) “Lake Erie-Canada Corridor, including parts of Lake Erie and Pennsylvania;” (2) the “Southwestern Grid Connector Corridor, including parts of Colorado, New Mexico, and a small portion of western Oklahoma;” and (3) “the Tribal Energy Access Corridor, including central parts of North Dakota, South Dakota, Nebraska, and five Tribal Reservations, as National Interest Electric Transmission Corridors.”

1. Streamlined Transmission Permitting

Discussed briefly above, DOE finalized a rule establishing the Coordinated Interagency Transmission Authorizations and Permits (CITAP) Program to streamline the federal environmental reviews and permitting processes for transmission projects. The CITAP Program aims to decrease the inefficiencies and overlapping multi-agency federal review process for electric transmission projects that so often leads to extreme delays. The CITAP Program sets a two-year permitting decision timelines, which is a dramatic decrease compared to current federal permitting timelines, as well as requires developers to completes a stakeholder and community engagement early in the project process.

B. Federal Energy Regulatory Commission

Building on its recent grid modernization work (including energy storage in Order 841 and demand response in Order 2222), FERC issued Order 1920 in May 2024 (May Order), and issued its modified Order 1920-A in November 2024 (November Order). The May Order sought to improve long-term transmission planning by outlining a specific and consistent set of factors that transmission providers must follow, including requirements to:

1. Conduct (and periodically update) transmission planning over a 20-year timeline;
2. Consider utility resource plans, state energy goals, and interconnection queues when developing their transmission plans; and consider economic and reliability benefits like production cost savings and extreme weather events;
3. Consider alternative technologies in lieu of new transmission, including power flow control devices and transmission switching, and also consider larger, more efficient or “right-sized” transmission projects instead of replacing and upgrading local power lines (while utilities would have a right-of-first-refusal (ROFR) to build ‘right-sized’ projects, FERC declined to extend the ROFR to jointly built transmission projects); and
4. Reevaluate certain projects that have been approved, but not yet built, if cost estimates increase significantly.

Commissioner Christie objected to the initial May Order, calling it a “blatant violation” of the Supreme Court’s new major questions doctrine as outlined in its 2022 West Virginia v. EPA decision. However, the tweaks made to the November Order seemed to have assuaged such concerns, and it was approved 4-0.

The November Order, which goes into effect January 2025, upheld the core concepts identified in the May Order but expanded the powers of state regulators to direct and shape regional planning and cost allocation. For example, the November Order requires transmission providers to include any state-agreed cost allocation proposals in their compliance plans, even if they are proposing their own cost allocation method, with FERC as the final call. Under the modified requirements, states are also able to request that transmission providers conduct additional planning scenarios to identify which state goals are driving new transmission buildouts and call for those states to pay for the construction.

C. MISO/SPP

Regional grid operators are also looking for new ways to harmonize and partner on transmission planning. In November, FERC approved the proposal submitted by the Midcontinent Independent System Operator (MISO) and the Southwest Power Pool (SPP) to change their tariffs and joint operating agreement (JOA) and to approve the Joint Targeted Interconnection Queue (JTIQ) framework.

The JTIQ framework is meant to address three critical barriers: (1) the huge interconnection request backlog; (2) lack of current transmission system capacity to accommodate that volume; and (3) the significant incremental cost of constructing network upgrades that would otherwise be obligated to pay for the network upgrades under the RTOs’ existing “but for” cost allocation frameworks. According to MISO and SPP, the JTIQ would help expedite construction and interconnection of up to 29GW of new generation in the northern “seam,” which could come online as soon as 2031. Importantly, FERC approved a provision that would allocate the initial costs to interconnecting customers, finding that since these customers were the primary beneficiaries, it was appropriate that they should be responsible for such costs.

D. PJM Capacity Auction

However, on the East Coast, PJM Interconnection announced a huge increase in its regional capacity costs – from $2.2 billion in the previous auction to $14.7 billion for the 2025/26 delivery year. According to PJM, this price spike was due to power plant retirements, increased load, and new market rules. However, even if new generation is ready quickly, PJM will still face the challenge of interconnecting before the retirements take effect. Prior to the capacity auction, major distribution utilities made their case for their ownership of new generation – which could be part of a return to vertical energy ownership – but did not find much traction. Still, these kinds of prices are not likely to quiet the voices calling for a return to vertically integrated energy systems, perhaps with the hope that we can return to a time where power costs were low and prices were stable.

E. Energy Storage Solutions in the United States: Mandates, Policies, and Regional Disparities

Energy storage plays a key role in the United States' efforts to create a cleaner and more reliable energy grid. Renewable energy sources like wind and solar increasingly depend on storage systems to address intermittency and maintain stability. States across the country have adopted storage targets to enhance grid resilience and achieve clean energy objectives. Federal and state policies continue to shape energy storage deployment, with notable variations in approach and progress across regions. Overcoming regulatory and market barriers is shaping up to be critical for fully utilizing energy storage technologies to support a resilient and sustainable energy future.

1. Evaluation of State and Federal Storage Regulations and Policies

State and federal policies together form the backbone of energy storage development in the United States. Federal initiatives establish a nationwide framework for technological innovation, market access, and financial viability. Complementing these efforts, state-level mandates address specific local energy needs and often push the boundaries of storage deployment through ambitious and innovative approaches. Below is a breakdown of some of the more integral and critical goals, policies, and mandates at the federal and state levels.

A. Federal Policies and Mandates

Federal mandates and policies have played a crucial role in shaping the energy storage landscape in the United States. These initiatives have aimed to create a regulatory framework that facilitates the integration of energy storage systems into the national grid as well as wholesale markets. The following list outlines some of the critical and most prominent federal mandates, policies, and laws that impact energy storage in the United States.

i. Energy Storage Grand Challenge

Launched by the DOE in 2020, this initiative focused on accelerating the development, commercialization, and deployment of next-generation energy storage technologies and prioritized research and development, technology transfer, and workforce training to position the U.S. as a global leader in energy storage.

ii. Investment Tax Credit (ITC)

The ITC was expanded under the IRA to include energy storage systems, providing up to a 30% bonus tax credit rate for qualifying projects. This policy significantly boosted the economic feasibility of deploying energy storage technologies.

iii. Federal Energy Regulatory Commission (FERC) Orders

FERC has issued critical regulations to support energy storage integration. FERC Order 841 mandates the removal of barriers for energy storage in wholesale energy markets. FERC Order 2222 enables the aggregation of distributed energy resources, including energy storage, to participate in wholesale markets.

iv. Infrastructure Investment and Jobs Act (IIJA)

Enacted in 2021, the IIJA allocates $6 billion for battery storage projects and grid modernization, emphasizing the role of energy storage in enhancing grid resilience.

B. State Policies and Mandates

Several states have taken proactive measures by setting specific energy storage targets. These mandates aim to promote the deployment of energy storage systems, facilitating the integration of renewable energy sources and enhancing grid stability. The following list highlights states that have adopted notable energy storage goals and mandates, illustrating a range of approaches and levels of ambition.

i. California

As a pioneer, California’s mandate of 1,325 MW by 2020 was not only achieved but exceeded. This mandate was established through Assembly Bill 2514 (AB 2514) and then codified into law, requiring the California Public Utilities Commission to set procurement targets for storage. The state has since updated its targets to accommodate the growing demand for energy storage.

ii. New York

New York set ambitious goals of 1,500 MW by 2025 and 3,000 MW by 2030 as part of its comprehensive clean energy strategy. These goals were formalized under the Energy Storage Roadmap and the Climate Leadership and Community Protection Act (CLCPA).

iii. Massachusetts

In 2018, An Act to Advance Clean Energy, Chapter 227 of the Acts of 2018 (the Act) was signed into law. Section 20 of the Act established an energy storage target of 1,000 MWh to be reached no later than December 31, 2025.

iv. New Jersey

With a statutory mandate of reaching 600 MW by 2021 and 2,000 MW by 2030, New Jersey underscored its commitment to renewable energy integration by having one of the most ambitious plans in the United States.

v. Virginia

Per the passing of the Virginia Clean Economy Act in 2020, Virginia established one of the United States’ largest energy storage targets of achieving 3,100 MWh of energy storage by 2035.

vi. Maine

Although not as large as other states, Maine established statutory goals for energy storage under An Act to Advance Energy Storage in Maine. Specifically, 300 MW by 2025 and 400 MW by 2030.

C. Federal Versus State Approaches

Federal policies create a unified framework, providing funding and regulatory support for energy storage projects. Programs like the ITC and IRA have encouraged nationwide adoption, while FERC orders established fair access to wholesale markets. States, however, drove localized priorities, often exceeding federal requirements to address specific challenges like peak demand or renewable integration. The major example being that California's mandate under AB 2514 set ambitious storage procurement targets, making the state a leader in renewable integration and grid resilience. Similarly, Massachusetts’ Clean Peak Energy Standard demonstrated how state policies can optimize storage to align with local energy needs.

2. Regional Impacts and Variations

The interplay of state and federal policies created regional disparities in energy storage adoption and implementation. Federal incentives provided baseline support, but states with robust mandates achieved faster and broader deployment. In the Northeast, states like New York and Massachusetts led the way, leveraging high electricity prices and state-level initiatives to complement federal programs and drive significant progress. For example, New York’s ambitious goals under the Climate Leadership and Community Protection Act and Massachusetts’ Clean Peak Energy Standard helped these states maintain a leading position in energy storage development.

In the Southwest, regions such as Arizona and Nevada focused on capitalizing on abundant solar resources. Policies tailored to large-scale battery installations enabled these states to align federal incentives with regional renewable energy potential. Conversely, the Midwest lagged behind due to a lack of robust state mandates and a continued reliance on traditional energy sources. States like Illinois, however, began exploring storage policies, signaling potential growth.

This combined framework of federal and state policies ensured a multi-tiered approach. While federal programs established a nationwide foundation for energy storage, states addressed unique regional priorities, balancing national goals with localized strategies to advance energy storage and the clean energy transition.

3. Challenges and Opportunities

As discussed above, energy storage development in the United States faced both significant challenges and promising opportunities. Regulatory hurdles, such as complex permitting and interconnection processes, remained a major barrier to the widespread adoption of storage systems. These administrative obstacles often delayed projects and increased costs, making deployment less accessible for many developers. Additionally, the design of wholesale markets frequently failed to fully recognize or value the benefits of energy storage, further hindering its integration into the energy grid.

Despite these challenges, technological advancements presented considerable opportunities. Innovations in battery technology, including longer-lasting lithium-ion and flow batteries, reduced costs and improved system efficiency. These advancements made energy storage more competitive and appealing to both utilities and private investors. Furthermore, federal funding initiatives, such as the Inflation Reduction Act and the Infrastructure Investment and Jobs Act, provided substantial financial support for energy storage projects. These programs helped offset costs and encouraged broader deployment, particularly in regions with strong renewable energy potential.

By addressing these challenges and leveraging these opportunities, energy storage systems positioned themselves as a cornerstone of the United States’ transition to a cleaner and more resilient energy grid.

4. Conclusion

Energy storage is indispensable for the United States' clean energy transition. While significant progress has been made through state-level mandates and federal policies, challenges such as regulatory barriers and market design persist. Addressing these challenges and fostering regional collaboration can unlock the full potential of energy storage, ensuring a resilient and sustainable energy future.

VI. Looking Ahead

A. Statutes and Policies for State Energy Goals

Many states are well underway setting energy and climate goals, and several passed or updated their goals in 2024. Delaware’s last state energy plan came out in 2005, and in 2024, Delaware’s Department of Natural Resources and Environmental Control released an updated, comprehensive state energy plan focused on providing equitable access to clean and affordable energy for all Delawareans. The Colorado Legislature passed a bill to aid renewable energy siting and help the state meet its decarbonization goals. The Washington State Legislature passed HB 1589 to speed up Puget Sound Energy’s transition away from natural gas.

In contrast, 2024 also saw regression from state energy goals. A New York Department of Public Service and NYSERDA report predicts that New York will not meet its statutory target of 70 percent renewable electricity by 2030 due to increased electricity demand as well as developers backing out of contracts due to inflation and higher project costs. Additionally, the Florida Legislature passed HB 1645 which deleted the words “climate change” from several state statutes and restructured Florida’s energy policy that previously considered climate change to be a priority in energy policy decisions.

B. Artificial Intelligence and Data Centers

A 2024 report out from Lawrence Berkeley National Lab predicts a significant increase in energy use by data centers due largely to artificial intelligence, domestic manufacturing growth, and electrification of various industries. The report looks through 2028 and notes that data centers used about 4.4 percent of domestic electricity in 2023, and that number is predicted to increase to between 6.7 and 12 percent of total electricity by 2028. The report acknowledges the uncertainty of predicting future data center operational practices, especially given the artificial intelligence sector’s attempts to increase efficiency alongside increasing growth.

C. Political Sea Change

The current general trend toward electrification is unlikely to derail despite an administration change in 2025. However, since the November 2024 election, major uncertainty regarding the survival of tax credits, electric vehicles, climate-related trade policies, clean hydrogen, and myriad other clean energy policies have arisen. Some renewable energy supporters cite bipartisan support and predict IRA is protected in part because so much of its funding has flowed to Republican states. The IRA is unlikely to be fully repealed, but piecemeal rollbacks are likely given numerous attempts already in 2023 and 2024. In 2024 alone, Republican lawmakers voted several dozen times on the floor, in committees, and in subcommittees to repeal the IRA and various provisions of the law. The IRA is not the only thing poised for a sea change. Speculation regarding FERC’s composition has begun as well. In sum, 2024’s anticipation of an energy and climate law shift is expected, but many questions remain regarding how quickly and how much will change.