Gas as a transition fuel for grids may be around for a lot less time than we thought. We already know that large batteries, if they are cheap enough, can replace gas plants to provide peaking power to grids reliant on intermittent wind and solar. Bruce Robertson at IEEFA says the numbers are showing battery costs declining even more rapidly than wind and solar. Precisely because of that increased competitiveness Australia’s AGL Energy is starting the transition away from gas, explains Robertson. Elsewhere in Australia, France’s Neoen is planning a $2.1bn gigawatt scale solar, wind and battery plant. Meanwhile in the U.S., Vistra and investor Capital Dynamics are each planning gigawatt scale batteries, at least 10 times the size of today’s biggest battery plant. Gas prices are very low at present. If and when they start to rise, the case for grid batteries will only get stronger.
Batteries are usurping the role of gas in the power system. Grid scale battery usage is increasing rapidly, and battery cost deflation is faster than wind or solar.
Gas companies are finally starting to see this transition, and to act.
AGL Energy, a company whose very name is synonymous with the gas industry and who produced the iconic natural gas “Living Flame” advertising campaign in 1979, announced on 13 August 2020 that the falling cost of battery storage makes a case for big batteries usurping the role of gas in a renewables rich grid.
Even gas companies are looking at batteries
On 17 August 2020, AGL Energy’s newly appointed chief operating officer Markus Brokhof said: “There is a clear business case for big batteries.” He added that they were starting to compete with gas peakers on commercial terms to firm up supplies of wind and solar.
Gas is struggling to compete with batteries, with gas prices globally being at historic lows.READ MORE