Gas peaker plants may be among the first casualties of a new Minnesota law requiring utilities to include energy storage as part of their long-range plans.
The provision, part of an omnibus jobs and energy bill, “puts energy storage on a level playing field with natural gas plants and other resources,” said Ellen Anderson, executive director of the University of Minnesota’s Energy Transition Lab. “Utilities will have to acknowledge the capabilities storage can provide as an alternative to, say, a fossil fuel plant.”
The most likely victim could be peaker plants, which operate when utilities face high demand for short durations, such as hot summer days, she said.
A 2017 study commissioned by the Energy Transition Lab found that peaker plants are a “marginal resource for meeting capacity needs” and that storage, and solar-plus-storage, are “becoming increasingly cost competitive.” By 2023, the report predicts, the cost of storage becomes less than building new peaker plants.
Minnesota’s investor-owned utilities are in different phases of presenting their integrated resource plans before the state Public Utilities Commission. The first utility to unveil an integrated resource plan since the law passed is Xcel Energy, which included energy storage in its forecasts.
The major aspects of Xcel’s plan call for retiring all its remaining coal plants within the next decade, operating the Monticello nuclear plant until 2040, and adding 4,000 megawatts of solar and 1,200 megawatts of wind. The plan calls for the acquisition of one combined cycle natural gas plant and the construction of another, along with an aggressive energy efficiency program.
Xcel goals call for reducing carbon by 80% by 2030 and for producing no carbon through energy production by 2050.
Released July 1, the plan anticipates that energy storage in the 2030s will provide more dispatchable power and play a greater role supporting reliability. Price declines and technology advances between now and then will make utility-scale storage “an integral resource used to meet this need,” the report said.
At the same time, the report warns that energy storage has limitations in a system with much greater variability due to renewable generation. The answer to the problem of intermittency in renewable energy will not be energy storage.
“The current state of battery storage technology does not have the ability to match the duration of such events without significant (and very expensive) over-build of those resources,” the report states in an executive summary.
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