It was only three years ago that natural gas overtook coal to become king of America’s power mix, and its throne is already being challenged — by batteries.
As battery costs fall, solar farms are increasingly installing storage systems, allowing them to sock away cheap electricity by day and pump it onto grids at night. Solar-storage projects are already cheaper than gas plants to build in the U.S. Southwest. And that’s bound to spread, some analysts and executives said Tuesday at the BNEF summit in New York.
“There’s a lot more solar and storage happening now than we’ve seen before,” BloombergNEF analyst Yayoi Sekine said in an interview. “Natural gas is still king, but it’s starting to get displaced.”
Here’s what others were saying at the summit about storage giving gas a run for its money.
Mitsubishi Moves In
Even Mitsubishi Hitachi Power Systems Americas Inc., a seller of gas-fired turbines, is getting in on the action. Chief Executive Officer Paul Browning noted that the company just launched a venture to develop renewable energy and storage, called Oriden. To be clear, the company isn’t walking away from gas. “We want to sell everyone every flavor of power generation,” Browning said.
Cheaper Than ‘Peakers’
One niche where solar-plus storage projects can compete best is against so-called peaking gas plants that ramp up in a moment’s notice when power demand spikes. Such plants run only about 10 percent of the time and are idle the rest, BNEF’s Sekine said.
Batteries, on the other hand, can provide other services during down time such as smoothing out ebbs and flows of power on grids. Those side jobs could be key for the technology, Browning said. “Battery-storage for that peaking application is going to have to win on creating additional value that the peaking power plant can’t create,” he said.
Gas Remains Far, Far Ahead
To be sure, gas has a tremendous lead. The U.S. added 23 gigawatts of new gas-fired power plants capacity last year — the highest in at least a decade, Sekine said. Compare that to 4 gigawatts of new energy storage projects installed worldwide.
And while prices for solar-storage projects vary across the U.S., the cost of building and operating gas plants is affordable nationwide as improved drilling techniques have radically reduced fuel costs, Browning said.
“Solar and storage makes sense,” said Steve McKenery, vice president of storage solutions at project developer 8minutenergy Renewables LLC. But they aren’t ready to take over the power sector: “We don’t advocate getting rid of gas today,” he said.
Why Can’t We Be Friends?
Instead of taking each other out, gas, renewable energy and storage could all just work together: Some developers are considering adding batteries to gas plants to make them even more competitive, Browning said.
“Even though we are not in the renewable business, we are hugely supportive of the renewables,” said Meg Gentle, CEO of liquefied natural gas terminal developer Tellurian Inc.
Nuclear Option
The nuclear industry — which long has used pumped hydro projects as a means of storing energy — is looking for new ways to leverage the technology. NuScale Power, which is developing small modular reactors, is designing an option for some units to use excess power to produce hydrogen, which could be stored and converted into electricity later.
“You want to generate electricity the cheapest way possible,” said Rudy Murgo, director of financial planning and analysis for Portland-Oregon based NuScale. “When it’s not generating electricity, you still want it to be doing something productive.”
Source: Bloomberg L.P.
