Gas peaking stations are progressively surrendering their role of closing gaps in renewable energy, according to Business Live. Their post on November 21, 2023 claims giant battery prices have fallen to the point they compete with natural gas. Scores of developers are abandoning projects, as gas peaking retreats from what was once solid ground.
Long Term Economics Behind Peaking Gas Retreat
Business Live creates a case for the economic advantage passing from natural gas to giant batteries. Although it adds that the information came to light during a Reuter’s survey of, “more than a dozen power plant developers, project finance bankers, analysts and consultants”.
Those role players in the electricity generation industry apparently revealed two quite surprising facts. These were that some battery operators are already supplying backup power to grids at prices competitive with gas power plants. And this in turn suggests ongoing peaking gas retreats in future.
However, perhaps the biggest surprise was when US-based non-profit Global Energy Monitor let slip another astounding fact. This revelation shared with Reuters was that, “68 gas power plant projects were put on hold or cancelled globally … in the first half of 2023”.
Uncertainty Over Future Gas Revenues is Another Factor
Carlton Power is a case in point how future uncertainty is contributing to gas peaking retreating. The utility recently abandoned a close-to-one-billion-dollar natural gas power project in United Kingdom.
The utility previously ran gas plants as part of their base load. This factor is now closer to 40%, and could halve again over the next ten years. This makes it difficult to calculate profitability in the second half of a twenty-year cycle.
Giant batteries are definitely in the ascendancy compared to this trend. They are becoming cheaper, install faster, and are easier to relocate if priorities change.
Moreover, European Union now requests that new peaking gas plants use carbon capture, and be able to adapt to low carbon gases. We do live in interesting times in our world of batteries.
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