Will Energy Storage Replace Peaker Plants?
Today, there are select cases in which lithium-ion batteries are competitive with natural-gas peaker plants. However, in a few years, competition will intensify across the country. And with costs only headed downward, GTM Research and Wood Mackenzie believe that batteries overtaking peakers may be a common occurrence in the U.S. in as little as four years.
FIGURE: Base Case Levelized Cost of Energy – Peaking Gas Combustion Turbine vs. 4hr Li-ion Battery Storage ($/MWh)
Over the next 10 years, the U.S. needs to add 20 gigawatts of peaking capacity to its grid. Over half of that capacity will come on-line in the latter part of the decade: 7,440 megawatts between 2018 to 2020 compared to 12,645 megawatts between 2023 and 2027. That gives energy storage more time to build an economic advantage.
According to a new report, by 2022, new natural-gas peakers will regularly compete head to head with energy storage. In ten years, new natural gas peakers may become a rare sight.
Join GTM Research’s Energy Storage Director to learn:
- How and where energy storage is being integrated into resource planning
- Which U.S. markets will see a surge in peaking capacity additions
- How and when storage will become economic with natural gas
- What could accelerate or slow this shift