Energy Storage's Emerging Challenge to Natural Gas in the Power Sector

RBN Energy is one of my favorite sites for energy news.  You must sign up to receive the daily articles but there is no cost involved.  RBN covers all segments of the industry so not all of the articles may be relevant for the reader however those that address natural gas and LNG may be of interest and are well researched and written.  I am not posting the graphs that accompany the article because they don't tend to work well here on GHS so I am including a link to the full article at the bottom.


Save It for a Rainy Day - Energy Storage's Emerging Challenge to Natural Gas in the Power Sector

Tuesday, 07/14/2020Published by: Housley Carr  rbnenergy

For a few years now, U.S. natural gas producers have benefited from the electric-power sector’s shift from coal-fired plants toward gas-fired ones. The ongoing transition makes sense. Not only is gas-fired generation cleaner, it’s mostly been cheaper than the coal alternative. Better still, gas turbines and combined-cycle plants are very flexible companions to all those new wind farms and utility-scale solar facilities, whose variable output requires at-the-ready replacement power when the wind’s not blowing and the sun’s not shining. But with the continued push by many state regulators — and many utilities — for lower-carbon generation fleets, gas-fired plants are facing a growing challenge from energy storage, mostly in the form of very big lithium-ion batteries. Today, we look into the increasing use of large-scale batteries in utility settings and whether they might pose a serious threat to gas-fired power in the 2020s and beyond.

​We’ve blogged every so often about the competition between coal- and gas-fired power generation, a steel cage match that’s been intensifying since the start of the Shale Era, with coal the consistent winner early on but gas victorious every year since 2015. As we said a couple of years ago in Slow Burn, coal plants (blue line in left graph in Figure 1) provided an impressive 45% of the electricity generated in the U.S. in 2010, when gas plants (orange line) accounted for only 24%. As shown in the left graph in Figure 1, by 2016, coal’s share had plummeted to 30% and gas’s had increased to 34%, according to the Energy Information Administration (EIA). The shift from coal to gas has continued apace since then; in the first four months of 2020, gas plants provided 40% of the U.S.’s electricity, while coal plants provided only 17% –– less than nuclear plants (with just over 21%; gray line) and renewables (hydroelectric, wind, solar, etc., with just under 21%; yellow line) for the first time ever.

The transition away from coal toward gas-fired plants and renewables has been driven by economics, of course, along with superior environmental impacts, while the march toward high renewables penetration has benefited from policy-driven assists from federal and state environment regulation (on coal-plants emissions, for example) and tax incentives (for new wind farms and solar facilities). As of the end of April 2020, there were 479 gigawatts (GW, or 1,000 megawatts, or MW) of gas-fired generating capacity in the U.S., more than twice the 226 GW of coal-fired capacity that remains online (see right graph in Figure 1). Renewable capacity now totals 241 GW, including 106 GW in wind farms and 40 GW in solar, with another 22 GW of wind and 12 GW of solar scheduled to be added over the next 12 months. (About 4.5 GW of new gas-fired capacity will be coming online over the same period.)

The shift to gas and renewables looks like it will continue; natural gas prices are low and likely to stay generally low, and we expect there will be an increasing emphasis on decarbonization by many state regulators and utilities — and probably by the federal government too — through the 2020s. A couple of other things will happen as well. For one, the same effort to reduce carbon-dioxide (CO2) emissions that helped spur a slew of coal-plant retirements is already being applied to put a lid on new gas-fired power — it may be the cleanest fossil fuel, but it’s still a fossil fuel. In fact, much of the opposition to new natural gas pipelines in the Northeast and Mid-Atlantic states in recent years, including Dominion and Duke Energy’s recently canceled Atlantic Coast Pipeline, has come from those who favor a faster shift to renewables and oppose any new plants fired by fossil fuels. But the electric grid’s increasing dependence on variable-output renewables like wind and solar also is increasing the need for supplemental, complementary generating capacity that can be easily ramped up and down with the fluctuations in wind and solar power production. As we said in our introduction, gas-fired combined-cycle plants are ideal in that role as companions to wind and solar, in that their output can be dialed up and down as needed to support the renewable part of the power equation. But the push to further reduce CO2 emissions going forward by capping or reducing gas-fired generation includes a plan — or is it a hope? — to build out a vast network of energy storage facilities that over time would reduce and even eliminate the need for any type of fossil fuel-fired power.

One type of energy storage has been used by U.S. electric utilities for years: pumped-storage hydro, a sort of closed-loop hydroelectric plant that releases water from an upper reservoir to a lower one during periods of peak power demand and then uses lower-cost, off-peak power to pump the water back to the upper reservoir. There are currently about 22 GW of pumped-storage facilities in place in the U.S., but their usefulness is very location-specific. They require big reservoirs with big elevation differences — try to find that in the flatlands of the Midwest. So the type of energy storage on everyone’s minds these days is batteries or, more specifically, lithium-ion batteries that can store significant amounts of electrical energy, either from renewable facilities like wind farms and solar arrays or from more conventional sources of power. According to EIA, there was only about 1 GW of utility-scale battery storage in place in the U.S. as of late April, with another 1 GW slated to be added by the spring of 2021.

But that may only be the beginning, as evidenced by a combination of utility requests for proposals (RFPs) and integrated resource plans (IRPs). For example, Pacific Gas & Electric (PGE) alone has approved plans for more than 1 GW of new battery storage capacity that will come online by 2023, including a 300-MW facility that Vistra Energy is installing at PG&E’s Moss Landing power station in Monterey County, CA, and a 182-MW facility that Tesla — yes, Elon Musk’s outfit — is installing for the utility at the same site. Then there’s NextEra Energy, which plans to invest more than $1 billion on battery-based energy storage projects in 2021, including a 409-MW project in Manatee County, FL, by its Florida Power & Light (FPL) subsidiary. Even the once-staid Tennessee Valley Authority (TVA), a federal entity created during the New Deal era to build flood-control and hydro dams, is getting into the act: it’s reviewing responses to a March 2020 RFP for 50 MW of energy storage and considering the possibility of adding a lot more later.

It’s important to point out here that energy storage capacity isn’t really the same as capacity at a gas-fired plant. A gas-fired combined-cycle plant with a capacity of, say, 900 MW, can generate 900 megawatt-hours (MWh) of energy every hour, as long as it’s being fed natural gas, but a 300-MW energy storage facility like the one Vistra is building at Moss Landing is designed to generate only 75 MWh for four hours before it needs recharging. In other words, it would take many, many large-scale energy storage projects to begin to make a dent in gas-fired power’s dominance. Also, especially when complementing a resource such as wind, the duration of the backup need isn’t necessarily known, making the finite life of a battery a real liability.

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Interesting - but is there an endless supply of lithium?  It used to be very rare and I'll bet there are many, many tons thrown away every day from consumer products.  Also, the U.S. is not the only country going for it.  Will the price skyrocket? - Thanks

Lithium can be sourced from brine.  There are a good many brine wells in south AR.  There is also a company new to the brine play that has built a processing facility. I suspect they might like the price to skyrocket!  LOL! I'll post a link below. 

Battery technology and materials are continually evolving.  Remember NiCad batteries.  I have a set of power tools with those old batteries.  Not too powerful and not long battery life but for home use they work okay.  Li-Ion may be the predominate battery technology now but will likely be passed by other technologies that are now in their infancy.  There are several candidates that look to be cheaper, more energy dense and quite scalable. The holy grail so to speak is 100 kWh of energy for $100.  At that point EVs are cost competitive with ICE vehicles.  If memory serves the batteries for the original Tesla S were just over $1000 per kWh.  The last I recall the cost is now ~$134.

The issue is not lithium, it is cobalt.  It may max out.


It is a challenge to keep up with the evolution of battery technology.  Tremendous amounts of capital are being invested in the development of more efficient and cheaper batteries.  While lithium may be the focus of most of current development, there are numerous other potentially superior battery designs that provide better performance at cheaper costs.  Even cobalt may eventually be replaced.  Anyone following this evolution might imagine that the next few years will be the golden age of battery design evolution.

SVOLT unveils cobolt free batteries for EVs

While the emission-reducing properties of electric vehicles are widely accepted, there's still controversy around the batteries, particularly the use of rare earth metals like cobolt. SVOLT, based in Changzhou, China, has announced that it has manufactured cobolt-free batteries designed for the EV market. Aside from reducing the rare earth metals, the company is claiming that they have a higher energy density, which could result in ranges of up to 800km (500 miles) for electric cars, while also lengthening the life of the battery and increasing the safety. Exactly where we'll see these batteries we don't know, but the company has confirmed that it's working with a large European manufacturer.


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