Yes, the capacity is increasing. But there's still a massive disconnect between the amount of battery storage required to make renewables usable and the capacity that exists. The link I posted already factors in increasing demand, but the amount of battery production in these projections is still orders of magnitude lower than what is requires.
3 weeks of energy storage in the US works out to 240 TWh given its daily 11.5 TWh consumption. Even if we assume that the projections are accurate and that global battery production will reach 1 TWh in 2023 and 2 TWh per year in 2030, we're still talking about several decades worth of global battery production just to supply the United States' storage requirements. Even just reaching the 12 hours of storage required to reach 80% renewables is going to be difficult to achieve.
The reality is that storage even remotely close to what is necessary to run a country predominantly on intermittent sources has never been built. This is totally uncharted territory as far as energy infrastructure goes. And none of our current solutions are capable of delivering the required scale, save for geographically limited options like hydroelectricity. By comparison, multiple countries generate the majority of their electricity from nuclear power, and one has generated over 80% of its energy from nuclear. Between building a wholly novel solution and simply replicating an existing solution, the latter is almost always the easier task.
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> 1. Instantaneous excess can electrolyse water, producing hydrogen which can be converted into methane and stored/used in existing natural gas systems.
This is much more difficult to do than it sounds. In order to convert hydrogen into methane you need a source of carbon. The fraction of a percent of carbon that exists in the atmosphere cannot feasibly be used. The plans to use synthetic methane as energy storage are contingent on somehow capturing the carbon from burning a gas turbine. California tried to do this by pumping the exhaust into mine shaft, but a leak was sprung and the gas escaped. Not to mention, places without mineshafts nearby have to construct structures to store the exhaust.
> 2. Overcapacity in good times implies proportionally higher production in bad times, lowering the storage requirements.
No it does not. Overcapacity of solar doesn't make the sun shine at night. Overcapacity of wind somewhat increases production in less windy days, but a totally windless day still generates zero energy regardless of overcapacity.