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$40/MWh is for combined cycle gas turbines that operate at high capacity factors. According to this BNEF report, gas peaking capacity is now threatened by batte

$40/MWh is for combined cycle gas turbines that operate at high capacity factors. According to this BNEF report, gas peaking capacity is now threatened by battery replacement: Electricity demand is subject to pronounced peaks and lows inter-day. Meeting the peaks has previously been the preserve of technologies such as open-cycle gas turbines and gas reciprocating engines, but these are now facing competition from batteries with anything from one to four hours of energy storage, according to the report. The report itself doesn't give a $/MWh figure for these peakers. Lazard's 2017 report puts the lower end of CCGT generation at $42/MWh, close to the EIA number, but gas peaking starts at $156/MWh and goes as high as $210/MWh: https://www.lazard.com/media/450337/lazard-levelized-cost-of-energy-version-110.pdf https://www.lazard.com/media/450337/lazard-levelized-cost-of... Note that they put gas reciprocating engines no higher than $106, so I don't think that batteries at this price threaten gas reciprocating engines yet. Mostly they threaten open cycle gas turbines. Diesel reciprocating engines show a cost of at least $197/MWh and are also threatened by battery-backed renewables. Diesel generators have been heavily used to supply electricity for small remote villages, islands, and off-grid mining sites. For a few years now there has been a trend to reduce consumption of diesel at such sites by partially substituting generator output with renewable electricity. It's possible to make deeper cuts in diesel use with added battery storage, and the payback period is shorter than you might guess from looking at the local gas station's diesel price. Getting the fuel to certain locations can cost nearly as much as buying it in the first place.

Gibbon1 8y ago
This is the thing that gets missed is renuables are competing with peaking power which is more expensive than base load power. The way to think of baseload power is it's the lowest quality power source. If you contract for it you have to use it. And it's generated when other consumers don't need it. Which is why it's cheap. Batteries are competing with very expensive grid stabilization technologies. Solar is selling into the peek daily power cycle.
- 0815test 8y ago
  > This is the thing that gets missed is renuables are competing with peaking power The other thing that gets missed is that they aren't competing at all, because renewables are unreliable and non-dispatchable. So, more renewables means more peaking power other things being equal. What can directly compete with peaking power is battery storage (though pumped hydro is king there) and demand-response.
  - behindmyscreen 8y ago
    .....woooosh.....
  - breakyerself 8y ago
    Renewable + storage are competing directly with peakers. The storage makes renewables dispatchable and if you look at the performance of the battery in Australia it appears to be much higher performance. The system dispatchs power in a fraction of the time a peaker plant can.
    - Scipio_Afri 8y ago
      Takes a lot less time to throw a switch on what is essentially a capacitor than start a gas turbine, even if its the small peaker gas turbines.
- Retric 8y ago
  Wind and solar are baseload power. Very cheap, but don’t follow the demand curve. That’s a fairly direct replacement for coal and nuclear, it’s just peeking power in we need to deal with. Because they are so cheap wasting some power output each day is simply not as big a deal. The balance point between extra wasted production, storage, and peaking power plants is not obvious or nessisarily stable as prices change.
  - the8472 8y ago
    Wind and solar are neither baseload nor peaking power sources. They are intermittent sources where you need other parts of the grid to smooth out the intermittent nature. Either via storage, via peakers or via additional baseload on top and something that consumes the excess that intermittent + baseload can produce. Sun is totally out during the night. And wind is only as much a reliable baseload provider as it will provide during the worst days of the year, which in many locations can be a tiny fraction of their average load factor.
    - rossdavidh 8y ago
      Many good points above, I just wanted to point out that there are lots of places like where I live, where peak electricity is nearly completely correlated with the sun shining (air conditioning). Not that this matters for places where it's not that way, just pointing that out.
    - Retric 8y ago
      The fact that wind and solar don’t produce steady state power is completely irrelevant. What power companies care about is the difference between the cheap energy sources production and demand. Night time demand is often so much lower than peak demand that it takes less peaking power plants to cover solars night time deficit than coals daytime deficit. PS: The difference between winds minimum expected output and average output is also smaller than most assume. Locations that get more wind at specific times of the day are common and let you tailor supply and demand. Unusually high winds end up wasted, but discarding 5% of output does little to change the relative costs.
- SomewhatLikely 8y ago
  If batteries are the enabler, couldn't you just over generate using a cheap base load tech, dumping excess to battery? Or are renewables plus batteries cheaper than base load tech plus batteries?
  - Gibbon1 8y ago
    Yeah battery storage is a arbitrage business. Buy cheap sell high. Buy midnight wind from North Texas at three cents a kwh and resell it on a cloudy humid afternoon in Phoenix for thirty. Currently fossil fuel and nuclear power is really cheap late at night. In the future it'll be less predictable but there is absolutely a business there.
dragontamer 8y ago
I'm not sure if these numbers being quoted are good for analysis. The "Nessie Curve" shows that power at 5:00pm is worth more, especially in sunny environments (like Hawaii). Solar energy is taking over those areas, but solar power begins to drop dramatically as the sun sets. 5:00pm to 8:00pm is still quite warm, so you need to turn on the gas turbines to provide electricity. But solar's efficiency has dropped dramatically, so you can't really rely upon solar power in those hours (well... you can... but at dramatically lowered efficiency). I'm not sure any analysis is worthwhile unless it includes the time-of-day, as well as the number of hours that the batteries can load-shift power. 5:00pm to 8:00pm power is going to cost more in the future than 12:00pm power, simply due to this whole solar energy thing going on.
- heavenlyblue 8y ago
  >> number of hours that the batteries can load-shift power Isn't that defined by the price per MAh of the batteries which was mentioned in some of the parallel threads?
- philipkglass 8y ago
  I just wanted to make clear that BNEF is talking about batteries threatening fossil peakers that produce expensive electricity, while OP was wondering how inexpensive CCGT generation could be threatened by batteries. CCGT and peakers are distinct and have different costs even when they both burn natural gas. Hawaii doesn't generate electricity from natural gas but it does consume a lot of petroleum-fueled electricity: https://www.eia.gov/state/?sid=HI#tabs-4 https://www.eia.gov/state/?sid=HI#tabs-4 Here's a story about a Hawaiian island replacing diesel output with solar and batteries from a couple of years ago: https://arstechnica.com/information-technology/2017/03/kauai-is-moving-from-diesel-generators-to-renewable-energy-with-help-from-tesla/ https://arstechnica.com/information-technology/2017/03/kauai... More recently, the Hawaiian Public Utilities Commission has approved 247 megawatts of new solar capacity backed by nearly a gigawatt-hour of battery storage: https://pv-magazine-usa.com/2019/03/28/hawaiis-new-reality-of-solar-plus-storage-under-10-cents/ https://pv-magazine-usa.com/2019/03/28/hawaiis-new-reality-o... "The price for each of these contracts was between eight and ten cents per kilowatt-hour. This is cheaper than both gas peaker plants and HEI’s current cost of fossil fuel generation, much of which is petroleum-based, which the company put at around 15 cents per kilowatt-hour." Note that these prices are only $80-$100 per MWh, because most of the solar electricity is consumed immediately and doesn't need to be stored in a battery.
bluGill 8y ago
Note that diesel generators have the counter intuitive property of using more fuel at 50% of max load than at 80% of max load. Most other power generations have some variation of this where operating a 80-90% of max power is where they are more fuel efficient. Thus even for conventional generation battery backup on the grid has the potential to save money.
- thedrbrian 8y ago
  citation needed. I could see an engine using more fuel per unit power at a lower power level but not less fuel overall. If they did you would just run the engine at 80% all the time and waste the excess in a massive water brake or resistor bank.
  - brianwawok 8y ago
    I am sure it is per unit. Means you are better off to run it at high load and battery the excess power, then shut the whole thing off for a bit, vs run it at 50% all the time.
    - cryptonector 8y ago
      If you have two engines you could be running at 40% each, or shut one down and run the other at 80%, it will be more efficient to do the latter (unless you have to be able to start the idle one quickly and that's not possible if it's at 0%, so then you run one at 75% and the other at 5%).
  - crushcrashcrush 8y ago
    Engines are simple pumps that operate most efficiently “fully open”
- RandomBacon 8y ago
  I don't know about using more fuel at 50%... They are however, are more efficient around 70% load than 50% load.
- D_Alex 8y ago
village-idiot 8y ago
And that’s why Kauai is starting to replace their diesel generators with solar + Tesla batteries.

Gibbon1 8y ago

This is the thing that gets missed is renuables are competing with peaking power which is more expensive than base load power. The way to think of baseload power is it's the lowest quality power source. If you contract for it you have to use it. And it's generated when other consumers don't need it. Which is why it's cheap. Batteries are competing with very expensive grid stabilization technologies. Solar is selling into the peek daily power cycle.

0815test 8y ago
> This is the thing that gets missed is renuables are competing with peaking power The other thing that gets missed is that they aren't competing at all, because renewables are unreliable and non-dispatchable. So, more renewables means more peaking power other things being equal. What can directly compete with peaking power is battery storage (though pumped hydro is king there) and demand-response.
- behindmyscreen 8y ago
  .....woooosh.....
- breakyerself 8y ago
  Renewable + storage are competing directly with peakers. The storage makes renewables dispatchable and if you look at the performance of the battery in Australia it appears to be much higher performance. The system dispatchs power in a fraction of the time a peaker plant can.
  - Scipio_Afri 8y ago
    Takes a lot less time to throw a switch on what is essentially a capacitor than start a gas turbine, even if its the small peaker gas turbines.
Retric 8y ago
Wind and solar are baseload power. Very cheap, but don’t follow the demand curve. That’s a fairly direct replacement for coal and nuclear, it’s just peeking power in we need to deal with. Because they are so cheap wasting some power output each day is simply not as big a deal. The balance point between extra wasted production, storage, and peaking power plants is not obvious or nessisarily stable as prices change.
- the8472 8y ago
  Wind and solar are neither baseload nor peaking power sources. They are intermittent sources where you need other parts of the grid to smooth out the intermittent nature. Either via storage, via peakers or via additional baseload on top and something that consumes the excess that intermittent + baseload can produce. Sun is totally out during the night. And wind is only as much a reliable baseload provider as it will provide during the worst days of the year, which in many locations can be a tiny fraction of their average load factor.
  - rossdavidh 8y ago
    Many good points above, I just wanted to point out that there are lots of places like where I live, where peak electricity is nearly completely correlated with the sun shining (air conditioning). Not that this matters for places where it's not that way, just pointing that out.
  - Retric 8y ago
    The fact that wind and solar don’t produce steady state power is completely irrelevant. What power companies care about is the difference between the cheap energy sources production and demand. Night time demand is often so much lower than peak demand that it takes less peaking power plants to cover solars night time deficit than coals daytime deficit. PS: The difference between winds minimum expected output and average output is also smaller than most assume. Locations that get more wind at specific times of the day are common and let you tailor supply and demand. Unusually high winds end up wasted, but discarding 5% of output does little to change the relative costs.
SomewhatLikely 8y ago
If batteries are the enabler, couldn't you just over generate using a cheap base load tech, dumping excess to battery? Or are renewables plus batteries cheaper than base load tech plus batteries?
- Gibbon1 8y ago
  Yeah battery storage is a arbitrage business. Buy cheap sell high. Buy midnight wind from North Texas at three cents a kwh and resell it on a cloudy humid afternoon in Phoenix for thirty. Currently fossil fuel and nuclear power is really cheap late at night. In the future it'll be less predictable but there is absolutely a business there.

dragontamer 8y ago

I'm not sure if these numbers being quoted are good for analysis. The "Nessie Curve" shows that power at 5:00pm is worth more, especially in sunny environments (like Hawaii). Solar energy is taking over those areas, but solar power begins to drop dramatically as the sun sets. 5:00pm to 8:00pm is still quite warm, so you need to turn on the gas turbines to provide electricity. But solar's efficiency has dropped dramatically, so you can't really rely upon solar power in those hours (well... you can... but at dramatically lowered efficiency). I'm not sure any analysis is worthwhile unless it includes the time-of-day, as well as the number of hours that the batteries can load-shift power. 5:00pm to 8:00pm power is going to cost more in the future than 12:00pm power, simply due to this whole solar energy thing going on.

heavenlyblue 8y ago
>> number of hours that the batteries can load-shift power Isn't that defined by the price per MAh of the batteries which was mentioned in some of the parallel threads?
philipkglass 8y ago
I just wanted to make clear that BNEF is talking about batteries threatening fossil peakers that produce expensive electricity, while OP was wondering how inexpensive CCGT generation could be threatened by batteries. CCGT and peakers are distinct and have different costs even when they both burn natural gas. Hawaii doesn't generate electricity from natural gas but it does consume a lot of petroleum-fueled electricity: https://www.eia.gov/state/?sid=HI#tabs-4 https://www.eia.gov/state/?sid=HI#tabs-4 Here's a story about a Hawaiian island replacing diesel output with solar and batteries from a couple of years ago: https://arstechnica.com/information-technology/2017/03/kauai-is-moving-from-diesel-generators-to-renewable-energy-with-help-from-tesla/ https://arstechnica.com/information-technology/2017/03/kauai... More recently, the Hawaiian Public Utilities Commission has approved 247 megawatts of new solar capacity backed by nearly a gigawatt-hour of battery storage: https://pv-magazine-usa.com/2019/03/28/hawaiis-new-reality-of-solar-plus-storage-under-10-cents/ https://pv-magazine-usa.com/2019/03/28/hawaiis-new-reality-o... "The price for each of these contracts was between eight and ten cents per kilowatt-hour. This is cheaper than both gas peaker plants and HEI’s current cost of fossil fuel generation, much of which is petroleum-based, which the company put at around 15 cents per kilowatt-hour." Note that these prices are only $80-$100 per MWh, because most of the solar electricity is consumed immediately and doesn't need to be stored in a battery.

bluGill 8y ago

Note that diesel generators have the counter intuitive property of using more fuel at 50% of max load than at 80% of max load. Most other power generations have some variation of this where operating a 80-90% of max power is where they are more fuel efficient. Thus even for conventional generation battery backup on the grid has the potential to save money.

thedrbrian 8y ago
citation needed. I could see an engine using more fuel per unit power at a lower power level but not less fuel overall. If they did you would just run the engine at 80% all the time and waste the excess in a massive water brake or resistor bank.
- brianwawok 8y ago
  I am sure it is per unit. Means you are better off to run it at high load and battery the excess power, then shut the whole thing off for a bit, vs run it at 50% all the time.
  - cryptonector 8y ago
    If you have two engines you could be running at 40% each, or shut one down and run the other at 80%, it will be more efficient to do the latter (unless you have to be able to start the idle one quickly and that's not possible if it's at 0%, so then you run one at 75% and the other at 5%).
- crushcrashcrush 8y ago
  Engines are simple pumps that operate most efficiently “fully open”
RandomBacon 8y ago
I don't know about using more fuel at 50%... They are however, are more efficient around 70% load than 50% load.
D_Alex 8y ago

village-idiot 8y ago

And that’s why Kauai is starting to replace their diesel generators with solar + Tesla batteries.