Feb 25, 2021

Drax Power Station dropped as gas economics 'fail to add up'

Drax
CarbonTracker
sustainablepower
Dominic Ellis
2 min
By 2030 CCGT gas power at £67MWh will be 63% more expensive than a new Clean Energy Portfolio according to Carbon Tracker
By 2030 CCGT gas power at £67MWh will be 63% more expensive than a new Clean Energy Portfolio according to Carbon Tracker...

Drax' decision to drop its 3.6GW CCGT complex shows power companies are waking up to the reality of the unfavourable economics of new gas plants, according to Catharina Hillenbrand, Carbon Tracker's Head of Power & Utilities.

By 2030, CCGT gas power at £67MWh will be 63% more expensive than a new Clean Energy Portfolio (CEP) on a Levelised Cost of Energy (LCOE) basis, according to Carbon Tracker. 

In its 2020 annual report, submitted to the London Stock Exchange, Drax said it will not develop new gas fired power, building on its decision to end commercial coal generation and recent sale of existing gas power stations.

Will Gardiner, CEO of Drax Group said its focus is on renewable power and it aims to be carbon negative by 2030, after unveiling a total loss after tax of £158 million and net debt of £776 million. 

"The proposed acquisition of Pinnacle Renewable Energy will position Drax as the world's leading sustainable biomass generation and supply business, paving the way for us to develop bioenergy with carbon capture and storage (BECCS) - taking us even further in our decarbonisation," he said. 

Drax' results and renewables pivot coincided with a Carbon Tracker report warning new generation gas power plants in the UK could derail the country’s climate targets, push up household bills and waste up to £9 billion of investment. 

If all the 14GW of planned power plants went ahead – including the 3.6GW planned by Drax – developers could be left with £9 billion of stranded assets, it reports.

Hilenbrand said by ignoring a least-cost clean energy solution, the UK risks veering off a net zero pathway and penalising consumers "as they will be the ones to bear the higher electricity prices".

Its recommendations for investors and policymakers are: 

  • Embrace coal-to-clean instead of coal-to-gas: new investments in gas capacity to partially fill any capacity gap left by the coal and nuclear phase outs will unlikely be a least-cost solution over the investment payback period. Importantly, our analysis highlights that a CEP is not only cheaper than new CCGTs but also offers equivalent grid services;
  • Reform the capacity market to ensure that gas is not disproportionately rewarded at the expense of other resources: this will ensure the grid does not overlook the least-cost option for the services required.
  • In the UK the optimum mix of technologies in a CEP would see the contribution of each resource divided as follows: 
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Jul 26, 2021

Form Energy receives funding power for iron-air batteries

Energy
batteries
grid
Renewables
Dominic Ellis
3 min
Startup Form Energy receives $200 million Series D financing round led by ArcelorMittal’s XCarb innovation fund to further develop iron-air batteries

Form Energy believes it has cracked the conundrum of commercialising grid storage through iron-air batteries - and some of the biggest names in industry are backing its potential.

The startup recently announced the battery chemistry of its first commercial product and a $200 million Series D financing round led by ArcelorMittal’s XCarb innovation fund. Founded in 2017, Form Energy is backed by investors Eni Next LLC, MIT’s The Engine, Breakthrough Energy Ventures, Prelude Ventures, Capricorn Investment Group and Macquarie Capital.

While solar and wind resources are the lowest marginal cost sources of electricity, the grid faces a challenge: how to manage the multi-day variability of renewable energy, even in periods of multi-day weather events, without sacrificing energy reliability or affordability.

Moreover, while Lithium-ion batteries are well suited to fast bursts of energy production, they run out of energy after just a few hours. Iron-air batteries, however, are predicted to have theoretical energy densities of more than 1,200 Wh/kg according to Renaissance of the iron-air battery (phys.org)

The active components of Form Energy's iron-air battery system are some of the cheapest, and most abundant materials: iron, water, and air. Iron-air batteries are the best solution to balance the multi-day variability of renewable energy due to their extremely low cost, safety, durability, and global scalability.

It claims its first commercial product is a rechargeable iron-air battery capable of delivering electricity for 100 hours at system costs competitive with conventional power plants and at less than 1/10th the cost of lithium-ion and can be optimised to store electricity for 100 hours at system costs competitive with legacy power plants.

"This product is our first step to tackling the biggest barrier to deep decarbonisation: making renewable energy available when and where it’s needed, even during multiple days of extreme weather, grid outages, or periods of low renewable generation," it states.

Mateo Jaramillo, CEO and Co-founder of Form Energy, said it conducted a broad review of available technologies and has reinvented the iron-air battery to optimise it for multi-day energy storage for the electric grid. "With this technology, we are tackling the biggest barrier to deep decarbonization: making renewable energy available when and where it’s needed, even during multiple days of extreme weather or grid outages," he said.

Form Energy and ArcelorMittal are working jointly on the development of iron materials which ArcelorMittal would non-exclusively supply for Form’s battery systems. Form Energy intends to source the iron domestically and manufacture the battery systems near where they will be sited. Form Energy’s first project is with Minnesota-based utility Great River Energy, located near the heart of the American Iron Range.

Greg Ludkovsky, Global Head of Research and Development at ArcelorMittal, believes Form Energy is at the leading edge of developments in the long-duration, grid-scale battery storage space. "The multi-day energy storage technology they have developed holds exciting potential to overcome the issue of intermittent supply of renewable energy."

Investors in Form Energy's November 2020 round included Energy Impact Partners, NGP Energy Technology Partners III, and Temasek.

In May 2020, it signed a contract with Minnesota-based utility Great River Energy to jointly deploy a 1MW / 150MWh pilot project to be located in Cambridge, MN. Great River Energy is Minnesota's second-largest electric utility and the fifth largest generation and transmission cooperative in the US.

Last week Helena and Energy Vault announced a strategic partnership to identify additional opportunities for Energy Vault’s waste remediation technologies as the company begins deployment of its energy storage system worldwide. It received new investment from Saudi Aramco Energy Ventures (SAEV) in June.

Maoneng has revealed more details of its proposed 240MWp / 480MWh Battery Energy Storage System (BESS) on Victoria’s Mornington Peninsula in Australia (click here).

The BESS represents hundreds of millions of dollars of investment that will improve electricity grid reliability and network stability by drawing energy from the grid during off-peak periods for battery storage, and dispatching energy to the grid during peak periods. 

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