Energy Storage Peaker Plant Replacement Project

The United States relies on more than 1,000 natural gas- and oil-fired peaker power plants across the country to meet infrequent peaks in electricity demand. These peaker plants tend to be more expensive and inefficient to run for every megawatt-hour generated than baseload natural gas plants and emit higher rates of carbon dioxide and health-harming criteria air pollutants. Peaker plants are also typically disproportionately located in disadvantaged communities, where vulnerable populations already experience high levels of health and environmental burdens.

Renewable energy and energy storage systems are beginning to emerge as competitive replacements for this fossil fuel infrastructure. Simultaneously, numerous states across the country are designing incentives and targets to support energy storage deployment. Together, these developments provide a unique opportunity to use energy storage to strategically displace some of the most polluting peaker power plants on the grid.

In this screening analysis, we identify peaker power plants across nine states that may be prime candidates for replacement based on operational and grid characteristics, and whose replacement may yield the greatest health, environment and equity co-benefits. This approach aligns state efforts to adopt energy storage with environmental and societal goals. We supplement our screening analysis with a discussion of how storage adoption and peaker plant replacement is affected by the policy and regulatory environment in each state.

Below, we report our findings for each individual state in our study: Arizona, California, Florida, Massachusetts, Nevada, New Jersey, New Mexico, New York, and Texas. These findings include state-level summaries, interactive data visualization tools, and technical documentation summarizing data, methods and the policy and electricity market landscape.

Arizona

Arizona has 17 gas- and oil-fired peaker plants and units at larger plants, which are aging, inefficient, and tend to be located in the state’s low-income and minority communities. These facilities have low capacity factors but longer run hours. Given the state’s plentiful solar potential, their best replacement may be a mix of solar+storage or a portfolio of clean energy resources. Learn more about Arizona:

California

Peak electricity demand in California is partially met by nearly 80 power plants, which are located disproportionately in the state’s disadvantaged communities and operate frequently on poor air quality days. State renewable energy policies and energy storage targets align well with replacing these plants, and California has begun to deploy energy storage in lieu of peaker plants across the state. Learn more about California:

Florida

In Florida, nearly half of the state’s 35 peaker power plant units are located at larger plants, and many are old, inefficient, infrequently used, and have high emission rates (one-third primarily burn oil). Florida has few supporting policies, but local utilities have begun solar+storage procurements. Learn more about Florida:

Massachusetts

Massachusetts has 23 peaker plants and units at larger plants, which are aging, have high pollutant emission rates (two-thirds burn oil), and are located disproportionately in low-income and minority communities. The state’s 2030 energy storage targets and proposed Clean Peak Standard provide an opportunity to replace these plants with cleaner resources. Learn more about Massachusetts:

Nevada

Nevada has five peaking units at four plants, all but one of which are located at larger gas plants. These units are located near the state’s cities, and while three are rural in rural areas, two are located in low-income and minority communities in urban Las Vegas. Their operations align well with solar+storage. Learn more about Nevada:

New Jersey

New Jersey has 15 peaker plants and units at larger plants, many of which are aging and one-third of which burn oil. These plants are disproportionately located in the state’s low-income and minority communities. New Jersey has set 2021 and 2030 energy storage targets that provide an opportunity to replace these plants with cleaner resources. Learn more about New Jersey:

New Mexico

New Mexico has 11 gas- and oil-fired peaker power plants and units, many of which are relatively young, run for long periods, and have high capacity factors. However, a few of the state’s less efficient, less used, and more urban plants might be good candidates for replacement with a portfolio of clean energy resources. Learn more about New Mexico:

New York

New York has 49 oil- and gas-fired peaker power plants and peaking units at larger plants, a third of which burn oil and many of which are located in areas the state considers to be environmental justice communities. New York has a suite of initiatives that support the replacement of these facilities with energy storage and other clean resources, including a new limit on emissions of nitrogen oxides from peaker plants by 2025 and a 3,000 megawatt energy storage target by 2030. Learn more about New York:

Texas

Peak electricity demand in Texas is met in part by 65 oil-and gas-fired peaker plants and units at larger plants, ranging from young to old, rural to urban, and with a wide range of operational characteristics. Energy storage may be a promising alternative to proposed new peaker plants in Texas, in addition to replacing facilities with higher emission rates or located in vulnerable communities. Learn more about Texas:

Technical Methods and Policy and Regulatory Framework

Technical methods and data sources for the peaker replacement project are available in our technical and policy documentation. We also provide an overview of state policies affecting energy storage and peaker power plants, as well as a discussion of electric transmission grid considerations.

Contact us: For questions, comments, or to request a walk-through of these data visualization tools, please contact PSE Director of Research Elena Krieger at: krieger@psehealthyenergy.org