How Batteries Replace Gas Plants

by Emma Hibbard

There’s been a lot of buzz around battery storage, more specifically, its ability to replace or supplement other sources of energy. While battery storage does not “generate” electricity or energy in the classic way that burning fossil fuels or harnessing renewable resources does, it provides energy in its own way. Batteries do not produce power on their own, they store energy produced by other sources in order to later dispense energy when it is needed. A great use for batteries is to make up for the intermittent nature of renewable sources such as storing solar power to be used when it’s dark, or storing wind power to be used when there is no wind blowing.

Last January, the California Public Utilities Commission ordered Pacific Gas and Electric Power Company (PG&E) to seek storage or other non-fossil fuel alternatives to 3 natural gas-fired power plants. Now, 4 battery storage projects are set to come online in 2020, including 2 of the largest in the world. Not only are they huge advances for battery storage, but they are the first energy storage projects to replace natural gas generators that are being retired. The plants being replaced are no longer economical, meaning they cost more to maintain than the amount of energy they generate. The plants are also peaking plants, meaning they are only used in times of high demand, for example on the hottest or coldest days of the year. Since they are used to ensure reliability in local areas throughout high demand, they have had reliability-must-run contracts (or RMR’s) for years, despite being very expensive.

There are 8,760 hours in a year! This chart ranks each hour of the year by the amount of demand (i.e. not in chronological order). For example, the hour with the highest demand in 2017 peaked at around 22,000 MW while those hours with the least demand clocked in at below 10,000 MW. The data pictured are for Pacific Gas and Electric (PG&E), just one of the utilities in California. The 3 gas plants being retired are “peaker” plants, meaning they are only used at peak demand times. Image: Climable.org with data from PG&E

There are 8,760 hours in a year! This chart ranks each hour of the year by the amount of demand (i.e. not in chronological order). For example, the hour with the highest demand in 2017 peaked at around 22,000 MW while those hours with the least demand clocked in at below 10,000 MW. The data pictured are for Pacific Gas and Electric (PG&E), just one of the utilities in California. The 3 gas plants being retired are “peaker” plants, meaning they are only used at peak demand times. Image: Climable.org with data from PG&E

The battery storage options are, according to analysts, cheaper than the cost to continue running the gas plants. Batteries will store renewable energy from solar and wind energy when it isn’t needed, and dispatch energy during the peak hours that the gas plants would have run. Effectively, they’re replacing the need for the natural gas plants and integrating increasing amounts of renewable energy into the electric grid. While the lithium-ion batteries that will be used are an expensive option (see how lithium-ion batteries work here), experts note that “storage at this scale is likely now cheaper than the total cost to run the gas plants” and will result in profits.

This chart shows the load for the top 800 hours of demand in PG&E territory in 2017. Since the natural gas plants that are retiring are peaker plants, batteries would be used to cover demand at peak hours. The batteries are charged by renewable sources (solar and wind), meaning the peak is then powered by clean energy. One important co-benefit of this shift includes cleaner air quality. Image: Climable.org with data from PG&E

This chart shows the load for the top 800 hours of demand in PG&E territory in 2017. Since the natural gas plants that are retiring are peaker plants, batteries would be used to cover demand at peak hours. The batteries are charged by renewable sources (solar and wind), meaning the peak is then powered by clean energy. One important co-benefit of this shift includes cleaner air quality. Image: Climable.org with data from PG&E

This chart illustrates how demand varies over a (randomly-chosen) week. It is easy to see that peaks don’t last long- usually only a couple of hours. In terms of battery storage, a 4 hour duration is certainly helpful during the short periods when demand is high. While this is data from California, it should be similar in other parts of the country and ISOs around the U.S. should take note! Image: Climable.org with data from PG&E

This chart illustrates how demand varies over a (randomly-chosen) week. It is easy to see that peaks don’t last long- usually only a couple of hours. In terms of battery storage, a 4 hour duration is certainly helpful during the short periods when demand is high. While this is data from California, it should be similar in other parts of the country and ISOs around the U.S. should take note! Image: Climable.org with data from PG&E

The use of batteries to supplement renewable generation and make it more reliable is a huge step in the direction toward a carbon-free energy future. As the price of large-scale battery storage projects continues to decrease, we hope to see more states following in California’s footsteps.