Dive Brief:
- Maine can replace two aging gas-fired peaker plants with up to 200 MW of 4-hour battery storage at a lower lifetime net cost than a new gas plant, Clean Energy States Alliance said in an April 11 report produced by Strategen.
- Though 2-hour battery storage is the lowest-cost peaker replacement under ISO New England’s current forward capacity accreditation framework — followed by a new F-frame turbine — 4-hour battery storage is more economical under an effective load-carrying capability framework that disadvantages shorter-duration storage assets, the study said. ISO-NE is mulling a switch to effective load-carrying capability accreditation, the study noted.
- “Although it does take Maine as a case study, this report shows [that] battery storage can compete cost-effectively with gas peakers and can be the best, least-cost solution for retiring old fossil-fuel peaker plants,” CESA Contributing Editor Todd Olinsky-Paul said in an April 30 webinar on the study’s findings.
Dive Insight:
Maine is on track to meet its goal of installing 300 MW of energy storage capacity by 2025, the Maine Public Utilities Commission said in March. Though the state has less than 100 MW of active grid-connected storage, approximately 225 MW in additional storage capacity is slated to come online by the end of next year, CESA said.
ISO-NE’s present capacity accreditation framework, known as qualifying capacity, incentivizes shorter-duration storage assets. But “storage resources with longer duration might be needed to replace existing fossil-fueled peaking capacity given potential changes to the capacity accreditation mechanisms,” CESA said.
CESA honed in on three particularly costly and underutilized peaker plants as candidates for replacement: the 54-year-old, 40-MW Cape Gas plant; the 23-year-old, 183-MW Verso plant, which previously provided energy to a now-defunct paper mill; and the 59-year-old, 114-MW Wyman 3 plant. In 2022, the plants had respective capacity factors of 0.1%, 0.6% and 3.3%, CESA said.
The U.S. has more than 1,000 peaker plants, and many are dual-fuel, meaning they can run on either natural gas or more polluting fuel oil, Olinsky-Paul noted. Among other pollutants, peaker plants emit nitrogen oxides and sulfur dioxide, which contribute to respiratory illness, cardiovascular disease and other maladies.
“Even though they run infrequently, they are very costly … and they are highly polluting,” in part because they are “not as tightly regulated as larger plants,” Olinsky-Paul said.
Retiring Wyman 3 and Cape Gas, “the oldest and most inefficient peakers in the state’s current fleet,” would result in annual emissions reductions of 9,700 tons of CO2, 8.4 tons of NOx and 14.6 tons of SO2, the CESA study said. Approximately 83,000 people live within three miles of the two plants, the majority in communities classified by the EPA as disadvantaged, the study said.
Replacing Wyman 3 and Cape Gas with more efficient gas plants would significantly increase overall emissions because the new plants “can run economically more often,” the study found. Under this scenario, total emissions would rise by 104,000 tons of CO2, 12 tons of NOX and 0.5 tons of SO2, causing significant adverse public health impacts in the surrounding communities, CESA said.
“Local emissions impacts from new natural gas power plants in Maine, sized to replace the retiring Wyman and Cape Gas units … would be expected to cost an estimated $7.1 million annually by 2030, based on the morbidity and mortality of NOX and SO2 as precursors of PM2.5 [particulate pollution],” CESA said.
Accordingly, the study included one analysis that considered only the “pure” costs of replacing the peaker plants and another that included a social cost of carbon and local pollutants like NOx and SO2. Because battery systems emit no carbon or local pollution, battery replacement costs remained constant in both comparisons.
With social costs included, the net cost of a new F-frame gas turbine rose from $1.87/kWh to $3.10/kWh under both capacity accreditation frameworks. The net cost of 2-hour storage replacement came in at -$0.54/kWh under the qualifying capacity framework and $3.12/kWh under the effective load-carrying capability framework, while the net cost of 4-hour storage was $2.42/kWh under QC and $2.63/kWh under ELCC.
