Big Batteries Are Taking a Bite Out of the Power Market

By Russell Gold

Giant batteries charged by renewable energy are beginning to nibble away at a large market: The power plants that generate extra surges of electricity during peak hours.

Known as peakers, the natural-gas-fired plants are expensive to run, and typically are called into service only when demand rises and regular supplies are insufficient. That makes them vulnerable to inroads from lithium-ion batteries, which have fallen in price in recent years, and are emerging as a competitive alternative for providing extra jolts of electricity.

Numerous big batteries are under construction or consideration in the U.S., especially in the Southwest, where some companies see a shiny future for “solar plus storage” projects.

A glamour shot of the battery array in Australia.

In Arizona, Tucson Electric Power is building a 100-megawatt solar facility and a 30-megawatt battery array. The project, being

developed by NextEra Energy Inc., would allow Tucson Electric to store inexpensive solar generation in the morning, when power demand is low, and deploy it in the heat of the afternoon. The company hasn’t disclosed its costs.

Jim Robo, NextEra’s chief executive, told investors late last year that the batteries can provide power “for a lower cost than the operating cost of traditional inefficient generation resources.”

A battery array three times the size of the Tucson project is being developed in Long Beach, Calif. Fluence Energy LLC, a joint venture of AES Corp. and Siemens AG, is building a battery that could power 60,000 Southern California homes for up to four hours. It will be the largest lithium-ion battery in the world—three times larger than a battery built last year by Tesla Inc. in Australia.

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