Competition is growing for gas power plants, battery storage is putting pressure on them – Seznam Zpravy

A number of countries that are converting their energy systems to renewable sources have to rely on “dirty” sources burning fossil fuels, especially gas. Power plants that use this raw material for production can be put into operation quickly to compensate for outages – to replace currently idle solar or wind sources or to cover jumps in consumption.

This role could probably soon be fulfilled by giant battery storage, which is slowly displacing gas-fired power plants in the plans of energy companies. According to the findings of the American non-profit organization Global Energy Monitor provided to the Reuters agency, 68 projects to build gas power plants were stopped worldwide in the first half of this year.

A recent example is the plan of the American company Competitive Power Ventures, which announced in October that it was abandoning the plan to build the Keasbey Energy Center gas plant in New Jersey, which was supposed to have a capacity of 657 megawatts. The company cited low electricity prices and the lack of state guarantees as the reason.

Steam-gas power plants are an important part of electricity production in the Czech Republic as well. The largest one, operated by ČEZ in Počerady, has a capacity of 888 megawatts. At the same time, according to the distribution company ČEPS, the country should hurry up with the construction of other such sources, because otherwise there is a risk of failing to comply with the state energy concept, according to which we should not import more than a tenth of the annual consumption.

The urgency of the demand for resources that can balance the volatility of renewable ones grows as their share in total production increases. According to independent analysis company Ember, the share of solar and wind power plants in the European Union’s total electricity supply rose to 22 percent last year, surpassing gas at 20 percent for the first time. 16 percent of electricity came from coal-burning power plants.

At the same time, some battery storage operators are already able to offer back-up electricity sources at prices comparable to gas-fired plants, which could mean that demand for these sources will dry up.

This is shown, for example, by the British company Carlton Power, which this year launched a plan to build a battery storage facility in Manchester to replace the previously planned steam-gas power plant, which the company originally wanted to build there for 800 million pounds.

According to BloombergNEF, the cost of one kilowatt-hour from a lithium battery dropped to $151 (3,390 crowns) last year, or half of what it was in 2016.

Due to the shift in the role of steam-gas power plants, their construction projects encounter difficulties with financing, as it is significantly more difficult to model the return on such an investment. While it was previously expected that such a power plant would provide electricity stably during its approximately twenty-year cycle and thereby generate profit for its operator, these sources are now increasingly triggered according to current needs, which are difficult to predict.

Another complication is then the European Union’s rules for “green financing”, or pressure on investors to favor environmentally friendly projects. To qualify for such money, a gas-fired power plant must be equipped with a carbon capture system or set up to burn low-emission gases such as hydrogen. All of this must be in place by 2035 at the latest.

Demand for backup sources may also be further reduced by the accelerating transformation of energy management. For example, last year the British company Octopus Energy offered a small financial compensation to households that go without electricity for an hour during the energy peak. This experiment achieved the amount of energy that would be saved if half of London switched off all electrical appliances for an hour.

Another alternative source could be electric cars, which can be charged during times of low consumption and then serve as a backup source for increased demand. According to an analysis by Kaluza last December, such a vehicle is parked 90 percent of the time with a charged battery, whose capacity of around 40 kilowatt-hours would be enough to supply a typical household with electricity for two days.

Kaluza estimates that the 40 million electric cars that should be in operation in the European Union by 2030, with a capacity of 52 gigawatts, would be able to replace almost one third of the steam-gas power plants operating at that time in the EU.

“When the transmission grid starts to move away from conventional generation, it will have a lot of options to choose from,” Carlton Power CEO Keith Clarke told Reuters.