[belorn]

A month or so back someone posted a report by a financial investing advisor for the energy sector, and they were pretty clear what is and what isn't economical viable right now.

Solar + storage of 1-6 hrs can be made economical viable as long as the storage can have 365 discharge cycles each year, assuming prices get high enough each such cycle. Each unit of storage get a return on investment each day, and each are used fully at the point in time when the market price is at peak.

Under those precise circumstances the economics of storage is cheaper than nuclear. The only other cheaper alternative to nuclear is to use renewables when the weather is optimal and fossil fuel when the weather is not optimal, or just use fossil fuels (through that is just a waste of money and the climate).

Naturally this advisor firm could be wrong and someone here could start the world first economical viable operation that uses wind for renewables and then charge a reverse hydro operation. It would make for a nice news item.

[epistasis]

Making such broad statements about economical versus not economical is difficult, because batteries serve so many purposes and have so many revenue streams that deployment is highly locational, depending on the specifics of the grid and where and when demand causes congestion.

There's also little incentive to install storage when solar and wind penetration is low, but as higher percentages of the grid is powered by renewables, then storage quickly becomes far more attractive.

Currently, there are 14.5GW of batteries in development across the US, and this is just a tiny nascent industry. Even as a small industry, this is many times the power capacity of nuclear currently in development.

This biggest challenge with batteries right now is low supply, and competing with demand from EV production, which provides higher margins:

https://www.reuters.com/business/sustainable-business/how-ba...

[belorn]

If we are talking about the US and not like places like northern Europe, then they have a lot of existing capacity for fossil fuel production. The cheapest way to produce energy would be to just add more renewables and use that fossil fuel whenever that weather isn't optimal. Batteries might be competitive to fossil fuel in places such situation as highlighted by the financial advisor, ie when they can discharge fully each day of the year at the maximum price point.

[epistasis]

The batteries can often be cheaper than fossil fuels, especially when colocated with existing solar. Most solar designs currently under size the inverters compared to maximum solar power output, to get the cost optimal balance. Batteries on-site allow storage of that extra DC energy, and then reuse of the same inverters outside normal solar generation hours to discharge the batteries.

This means that hitting the cost peak is really easy for batteries.

As this cheapest form of energy begins to dominate, and the "baseload" generators like coal or combined cycle gas become more expensive than solar, then it becomes less economical to run the "baseload generators because they don't have sufficient price support during the peak solar output times. This will raise the night time prices of energy, as the daytime prices decrease, and eventually storage plus solar becomes cheaper than new "baseload" facilities, and then cheaper than continuing to run existing "baseload" facilities.

I put "baseload" in quotes because on the past baseload meant cheapest energy, in addition to slow and expensive dispatchability. That is all changing.

[belorn]

> and then reuse of the same inverters outside normal solar generation hours to discharge the batteries.

Yes, if we are talking about hours of capacity then batteries can be very cost competitive to fossil fuels. That is exactly what the financial advisor stated in their report.

In areas where solar + batteries can reliable handle all year round demands for energy, those technologies should just replace fossil fuels. There will likely be some natural gas plants that get subsidies to exist as reserve in case there is a sudden weather change, but nuclear wouldn't be a great option in such places.

[jacquesm]

A big variable too is the price development of batteries, which is trending in the right direction due to more and more production capacity coming on-line but once grid storage and EVs start to compete for those batteries the price could well be going up.