Replacing peaking plants with battery storage offers several economic benefits:
Economic Benefits
- Cost Comparison:
- Research indicates that new battery storage systems can be more economically viable than new gas peakers, especially when societal costs of emissions are included.
- However, the cost-effectiveness depends on the specific market conditions and policy frameworks. For example, in Maine, 4-hour battery storage is seen as the most economic replacement for fossil-fueled peakers.
- Operational Flexibility and Speed:
- Batteries provide faster response times, allowing them to quickly ramp up or down according to grid needs, which enhances their flexibility over gas peakers.
- This quick response can reduce operational costs by providing instant balancing and peak shaving, improving overall grid management efficiency.
- Monetization of Climate and Health Benefits:
- While battery storage might be at an economic disadvantage if only considering direct operational costs, including the monetized climate and human health impacts can yield a positive net present value for some replacements.
- Long-Term Savings:
- As battery costs continue to decrease, the long-term savings from reduced fuel consumption, lower maintenance needs, and avoided emissions-related health costs can become significant.
Challenges and Limitations
- Duration Limitations:
Batteries have limited discharge durations compared to gas peakers, which can run for longer periods. This may require overbuilding storage capacity or integrating with other energy sources. - Policy Support:
Economic viability is heavily influenced by regulatory policies at both state and federal levels. Supportive policies can make battery storage more competitive by allowing it to participate in peak demand management effectively.
In summary, while battery storage offers several economic advantages over peaking plants, such as cost savings and operational flexibility, its feasibility depends on addressing limitations like duration capacity and receiving supportive regulatory frameworks.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-economic-benefits-of-replacing-peaking-plants-with-battery-storage/
