Gas Peakers Out, Li-ion Batteries In? Not Yet

Gas-fired combustion turbines used as peaking units in electric generation, filling in gaps when demand exceeds supply, are here to stay, at least for a while, according to a new report in the peer-reviewed journal Environmental Science and Technology. Claims that lithium-ion battery storage will replace the gas-fired “pollution cannons,” prolific producers of NOX, particulates, and CO2, often located in minority communities, today are economically wishful thinking.

The paper by a team of four analysts affiliated with Lawrence Berkeley National Laboratory and the University of California at Berkeley – “Private and External Costs and Benefits of Replacing High-Emitting Peaker Plants with Batteries” – finds that “designing Li-ion BESS [Li-ion Battery Energy Storage Systems] to replace peaker plants puts them at an economic disadvantage, even if facilities are only sized to meet 95% of the original plants’ load events and are free to engage in arbitrage.”

Max Auffhammer, UC Berkeley

In a blog posting for Berkeley’s Energy Institute at Haas, lead author Maximilian Auffhammer notes that California and New York have mounted efforts to replace the “inefficient, expensive, and dirty turbines” with clean batteries. This, he said, “seems like a great idea on the surface. Clean & quiet batteries versus a noisy airplane engine spewing NOx. I thought so too, but wanted to understand whether this intuition was right and hence joined forces with the awesome Corinne Scown – who is an expert in life cycle analysis – to study the whole enchi’li-on’ada.”

Auffhammer and Scown, with Jason Porzio and Derek Wolfson, engaged in a two-year study of “the life-cycle cost, climate, and human health impacts of replacing the 19 highest-emitting peaker plants in California with Li-ion battery energy storage systems (BESS). And we mean soup to nuts.”

Auffhammer, a Ph.D. economist, is George Pardee Jr. Professor of International Sustainable Development at UC Berkeley.

They found, “Five of the 19 potential replacements do achieve a positive net present value after including monetized climate and human health impacts, 14 do not – which depends on the size and location of the peaker. We also show that these battery systems cycle far less than typical batteries on the grid and rely massively on the limited frequency regulation market for most of their revenue. All projects offer net benefits in local air pollution, but increase net greenhouse gas emissions due to electricity demand during charging and upstream emissions from battery manufacturing.”

That’s today. What about tomorrow? “If batteries get cheaper and the grids cleaner – both of which seems likely – batteries will look better,” Auffhammer writes. “But we should be keeping an eye on the value of frequency regulation going forward, as that is where most of the revenue comes from. If we install lots of battery storage on the grid, that revenue is likely not going to be there for later installations.”

Bottom line: “What we are showing here is that we should maybe not take it as a slamdunk that batteries are the right way to transition away from natural gas in all cases.”

–Kennedy Maize

kenmaize@gmail.com

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