Renewable proponents say batteries can stabilize the grid, but experts say costs are ‘astronomical’

For the past five years, the Sierra Club has been waging a war with operators of the nation’s coal-powered electric generation.

The attacks have plenty of resources thanks to billionaire and former Mayor of New York City Michael Bloomberg, who in 2019, donated $500 million to the elimination of every bit of America’s coal-fired capacity. Last year, the billionaire dropped another $500 million into the effort. Forbes Magazine estimates his net worth at $106.2 billion.

A coal plant in Maryland may be emblematic of the conflict. Despite the Sierra Club’s well-funded effort against that plant, the episode illustrates the problem with trying to solve "green" grid reliability problems with battery facilities.

Keeping the lights on

Last November, the owner of the Warrior Run coal-fired power plant announced it would cease operations in June, which was the last Maryland coal-fired power plant to set a retirement date. The Brandon Shores Power plant was set to retire by the end of 2025, but PJM Interconnection’s models found that doing so would threaten Baltimore with blackouts during high demand.

Over the past few years, seasonal and long-term reports from the North American Reliability Corporation, a nonprofit national power grid watchdog, show increasing issues with resource adequacy — meaning that the supply of electricity can’t meet demand — especially during periods of high demand, such as during heat waves, wind droughts and cold snaps.

In the last 20 years, the United States has pursued an ever increasing amount of wind and solar on its grid, rising from 0.3% 20 years ago to 15.6% last year. Meanwhile, fossil fuel generation declined from 71% to 59.1% in the same period.

With the federal government passing regulations that make it too expensive to run coal plants,  PJM decided the best course of action would be to extend two high-voltage power lines from Pennsylvania into Maryland, for a cost of $800 million. The project won’t be completed until the end of 2028, so the coal plants have to keep operating until then.

The Sierra Club wasn’t happy that the coal plants would keep running, so they came up with a proposal to shut the plants down by 2025 and maintain reliability, which they claimed would be cheaper — a battery facility, paid for by ratepayers.

“Many reliability events arise on short notice due to unexpected outages of other power facilities, so the quick response of the battery could make all the difference in keeping the lights on,” the Sierra Club explained in a press release on the proposal.

The Sierra Club claimed the capital investment would be $480 million, and with the revenues it would produce over its lifetime — about 10 to 15 years — would make the total investment $135 million. Earlier this month, PJM explained that the proposal is entirely unworkable. Not only would the facility cost $200 million more than the transmission line project, disputing the Sierra Club’s figures, it would provide a scant four hours of backup in the case of a high-demand load.

“This concept, regardless of size, is not able to replace the need for the existing generation capacity until the FERC-approved transmission solutions needed to support the BGE and greater PJM system are energized,” the regional grid operator explained in a letter to Maryland officials.

Seeing is believing

Wind and solar energy only produce electricity during the right weather conditions, and those times don’t always line up with demand. Faced with the problem of intermittency, renewable proponents point to batteries as the solution.

However, batteries are expensive and only provide four to eight hours of electricity, whereas wind and solar energy can fall to zero generation, sometimes for days.

Energy expert Isaac Orr, who co-writes “Energy Bad Boys,” told Just the News that renewable advocates argue the costs of batteries will plummet, and they will cite sources that don’t support the facts on the ground.

In the PJM analysis, Orr said, the operator found the cost of replacing some of the capacity at the Brandon Shores coal plant would cost around $416 per kilowatt hour. For comparison, the average price of electricity in the U.S., according to the Energy Information Administration (EIA), is 16.10 cents per kilowatt hour, and the average American home uses 899 kilowatt hours per month.

“When it comes to the cost declines championed by battery advocates, we'll believe it when we see them,” Orr said.

Orr and his writing partner Mitch Rolling did a cost comparison of energy storage options with a utility in South Dakota that retired a coal-fired power plant in 2021. The Otter Tail Power Company has a 285-megawatt natural gas turbine, which replaced the coal plant.

Natural gas burns a lot cleaner than coal, and it provides dispatchable power, meaning it doesn’t rely on variable conditions to produce electricity, as wind and solar do. However, natural gas is not as easy to ship and transport as coal, and since it’s used for heating, supplies can get stretched during extended periods of cold.

When limited supplies are diverted to home heating, there’s less available for generating electricity for industry. This can cause price hikes, Rolling and Orr explain, as happened during the 2021 Winter Storm Uri, when gas spot prices rose to $23.86 per million British thermal units (BTU), when they’re typically around $3 per million BTUs.

On-site liquified natural gas storage can provide the kind of backup storage needed to ensure resource adequacy and protect against price spikes. Otter Tail, according to Orr and Rolling, is planning to add such a facility for between $70 million and $90 million. The facility will be able to fully power a 285-megawatt gas-fired power plant for five days, running 24 hours per day. This comes to $2.34 per kilowatt hour when the storage is tapped.

Using data from the EIA, Orr and Rolling use a figure of $329 per kilowatt hour for battery storage. To build a comparable battery facility for Otter Tail’s storage would cost $11.25 billion.

LNG storage is not without shortcomings, Orr said in an interview. The LNG storage options last four to five days, whereas a coal plant can store enough energy on site to run the plant for three to six months. Nuclear power plants, it’s worth noting, can store 18 months of fuel on site.

“The energy storage at coal and nuclear sites is also essentially free because the fuels are in solid form and are easy to store, either in a large coal pile or inside the nuclear power plant. There are fuel handling costs at coal plants, but that is part of generating power at those plants,” Orr said.

Orr said as the nation becomes more reliant on gas-fired generation, it’s important that the facilities have some type of fuel storage on site to guard against supply interruptions.

“I think the industry is trying to figure out how much energy storage will be good enough,” Orr said.

Global picture

Dr. Ariel Cohen, senior fellow at The Atlantic Council, testified at a Senate Budget Hearing earlier this month about the economic infeasibility of lithium-ion batteries. Based on figures from the National Renewable Energy Laboratory, Cohen estimated that a 10-hour storage facility would cost $338 per kilowatt hour. Therefore, to power the U.S. for a single day on batteries, would cost $3.7 trillion per day.

In addition, depleted lithium batteries are considered a "hazardous waste" by the Environmental Protection Agency, adding to the ultimate cost of using lithium-ion batteries as backups. 

“This is not the cost of installation or production, which will be astronomical. These costs highlight the infeasibility of a rush to shift from natural gas and nuclear, as suggested in the Inflation Reduction Act (IRA) and the Build Back Better plan,” Cohen said in his submitted testimony.

In January 2023, Tesla CEO Elon Musk claimed on X that a small area of solar panels plus storage could power the world. Energy expert Alex Epstein, author of "Fossil Future", estimated how much a battery facility providing three days of backup for a solar-powered world would cost based on the average cost of a Tesla Power Wall. The final price tag came to $590 trillion, six times the global GDP.

While renewable energy proponents are betting on decreasing battery costs, that's not certain to happen. Rising demand, driven by subsidies from the Inflation Reduction Act, could drive up the costs of the facilities. Likewise, China dominates the markets in the minerals needed for the facilities, and environmentalists fight any attempt to open mining projects in the U.S., which will keep supply chains constrained.

Trying to stabilize the grid with batteries will likely remain a massive -- and expensive -- endeavor.