U.S. Accelerates Energy Storage Deployment with State Mandates and New FERC Order on Large Loads

Morgan Lewis USA

Overview

In 2026, state-level procurement mandates are driving large-scale energy storage deployment across the U.S., with integrated resource plan (IRP) reforms embedding storage as a core resource. The Federal Energy Regulatory Commission (FERC) has also issued a landmark order directing grid operators to reform charges for large load interconnections, particularly for AI data centers, accelerating grid access. Demonstrative programs, incentives, and the aggregation of distributed energy resources into Virtual Power Plants (VPPs) are further expanding market access and grid flexibility nationwide.

In Depth

Key Findings

In 2026, the United States is witnessing a robust acceleration in energy storage deployment, driven by a confluence of proactive state-level policies and a landmark federal directive. State procurement mandates are proving to be the most potent catalyst for large-scale storage integration, while a new Federal Energy Regulatory Commission (FERC) order focusing on large load interconnections is positioning battery flexibility at the core of U.S. grid policy, especially for emerging, power-hungry sectors like AI data centers.

Technical / Clinical Details

At the state level, integrated resource planning (IRP) reforms are systematically incorporating energy storage as a foundational resource, compelling utilities to procure storage solutions to meet future demand. Complementary demonstrative programs and incentive structures are broadening market access for innovative storage technologies and lowering initial deployment barriers. The FERC order specifically directs six U.S. regional grid operators to justify or reform electric charges for connecting large loads (exceeding 20 MW), including AI data centers, cryptocurrency mining operations, and advanced manufacturing facilities. This directive aims to expedite the ability of these significant loads to connect to the grid while ensuring reliable and affordable electricity for U.S. consumers. Furthermore, efforts to aggregate distributed energy resources (DERs) into Virtual Power Plants (VPPs) are gaining momentum nationwide, creating new avenues for grid flexibility and stability.

Background & Context

The imperative for energy storage has intensified globally with the rapid expansion of intermittent renewable energy sources, which require flexible solutions for grid stability. Concurrently, the exponential growth of sectors like AI, driving massive data center power consumption, is imposing unprecedented demands on existing grid infrastructure. Against this backdrop, U.S. policymakers are strategically positioning energy storage as an indispensable component of the electricity system. The FERC order represents a federal response to balance the growth of power-intensive industries with the need to maintain grid resilience and efficiency.

Strategic Significance & Outlook

These policy trends are poised to unleash a new wave of growth in the U.S. energy storage market. The combination of stable state-level policy frameworks and decisive federal regulatory reform enhances predictability for investors and developers, facilitating the progression of large-scale projects. Critically, as ‘large loads’ like AI data centers integrate with the grid, battery storage will become central to providing diverse grid services, including peak shaving, frequency regulation, and transmission support. Over the next few years, the U.S. is expected to see a dramatic increase in energy storage capacity, making substantial contributions to building a more resilient, decarbonized, and efficient power grid.

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