Battery storage now more cost effective than gas-fired peaker plants, research shows

Big batteries have emerged as the more effective provider of peaking services within the electricity market, beating out gas generators on cost and effectiveness, new analysis published by the [Australia] Clean Energy Council has argued.

Peaking generators play an important role within the electricity system, providing additional supplies of power at short notice when demand for electricity surges to very high levels, such as very hot summer days.

Traditionally, these services have been provided by open cycle gas generators, which have the ability to start generating electricity in less than 15-minutes. However, these generators are generally costly to operate, lay dormant for most of the year and secure most of their revenues during the brief periods throughout the year when wholesale electricity prices are extraordinarily high.

However, Clean Energy Council chief executive Kane Thornton says new analysis shows that battery storage technologies are now competitive as providers of peaking power, as they can inject power into the grid virtually instantaneously, and falling technology prices are seeing batteries become the cheaper option.

“Large-scale batteries are now undoubtedly the best option to meet periods of high electricity demand,” Thornton said. “Batteries can provide a premium peaking service in periods of high demand traditionally met by peaking gas plant. Batteries can ramp up quickly, have near zero start-up time and provide a better frequency response.”

Analysis undertaken by the Clean Energy Council compared the costs of a new 250MW gas fired generator with those of a 250MW big battery project, finding that the battery could deliver peaking services as much as 30 per cent cheaper, based on current technology prices.

13 April 2021

IEEFA