Renewables Law Blog

Talen Energy To Convert PJM Coal Plants to Battery Storage; Save Jobs, Tax Base

It’s no secret that coal plants have had trouble competing with cheaper renewables and natural gas in recent years. Unexpectedly low prices from PJM’s latest capacity auction spurred a fresh wave of retirement announcements this month. But Talen Energy has decided that rather than retire coal plants and walk away, it would convert those sites to be used for other renewable energy-related projects. While Talen promised in November 2020 to shut down roughly 5 gigawatts of coal capacity in the 2020s, the company wanted more of a comprehensive strategy for this transition.  “This is the first of hopefully many unit transitions from coal to lower-carbon sources and battery,” said Cole Muller, who oversees Talen’s fossil-powered fleet in the territory of regional transmission organization PJM. “It’s really about decarbonizing, …investing in the communities and continuing to provide opportunities for our people.” After that project, Talen plans to build a 1-gigawatt battery fleet in the next three to five years on its existing properties, using individual batteries as large as 300 megawatts. “If you just retire it, you have a significant loss to both jobs and the tax base, and the communities at large,” Muller said. Talen tapped battery developer Key Capture Energy to build a 20-megawatt system as a demonstration of the concept. That smaller size allows for a streamlined approval process, Muller noted. But the battery will act just like any other commercial power plant, bidding into PJM’s markets for capacity, ancillary services and energy arbitrage. Assuming that goes well, Talen can add up to another 115 megawatts of battery storage to fully utilize the coal plant’s grid connection capacity. That’s a distinct advantage for developing batteries at an older power plant. The site has been cleared to export a certain amount of power to the grid, so there’s less risk of having to pay for hefty network upgrades as developers must do at greenfield sites. The coal-to-battery switching remains too nascent to be labeled a trend. But we hopefully will see more of these transitions in the future making the switch from coal to renewable energy a win for everyone.

A power plant in Maryland ditches coal for batteries, a first for the US (canarymedia.com)

U.S. Department of Energy Funding Flow Battery R&D

The Department of Energy (DOE) recently announced that it will be awarding up to $20Million to support research and development of emerging flow battery storage technology.  The DOE’s announcement can be found here.  Battery storage has been identified by the DOE as an integral piece of the puzzle to modernizing our grid and enabling the deployment of additional renewable energy resources.  Regarding flow battery technology, the DOE stated that “while lithium-ion batteries are commonly used in electric vehicles and portable devices for various applications, flow batteries are particularly well-suited for grid storage needs.”  The DOE aims to incentivize development of scalable and cost-effective “mid-sized” flow battery systems (between 10 to 100kWh).  This funding opportunity follows several other recent announcements supporting the growth of energy storage, including the DOE’s Energy Storage Grand Challenge, a Department-wide program to accelerate the development, commercialization, and utilization of next-generation energy storage technologies and sustain American global leadership in energy storage, and a recently proposed Federal Bill to introduce a federal tax credit for energy storage, similar to those available to solar and wind projects.