Batteries Are Taking the Gas Peaker’s Best Hours
ConocoPhillips Doubles Profit to $4 Billion, Raises Dividend Leon Stille has a background in energy sciences (MSc and BSc) and is pursuing a PhD in energy policy.
He currently runs his own company,… Gas peakers have always had one decisive economic advantage: they were relatively cheap to build.
A peaking plant could sit idle for most of the year, then start when demand and electricity prices surged.
Its fuel was expensive and its efficiency often mediocre, but low upfront costs made that acceptable.
The owner did not need thousands of operating hours to recover an enormous initial investment.
Australia has now crossed an important threshold.
The country’s CSIRO, working with the Australian Energy Market Operator, finds that batteries have become cheaper than gas for supplying routine peak demand.
Four-hour battery systems have moved below open-cycle gas turbines on capital cost, while their operating characteristics are better suited to the short, sharp evening peaks increasingly created by abundant daytime solar.
This does not mean gas has become useless.
It means batteries are taking the part of the flexibility market that gas peakers were best paid to serve.
Lithium prices, inflation and supply-chain disruption pushed project costs upward in 2022 and 2023.
But manufacturing continued to expand, material constraints eased and competition intensified.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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