Vistra, which emerged from the bankruptcy of Energy Future Holdings and recently completed the acquisition of Dynegy, said last year that it will close 4.2 GW of Texas coal capacity. Despite that, the company has said it has no plans to build new plants and will instead look to optimize its remaining fleet.
At a June 12 analyst meeting, Morgan said he is “happy with what we have in conventional generation.”
The Upton 2 battery project is expected online in the fourth quarter of this year to soak up renewable energy that would have been wasted.
“With batteries, some of this extra generation will be captured and discharged at peak times,” the company explained in a presentation. “Batteries can also be charged from [the] grid at low power prices (i.e., at night) and discharged in the morning.”
The project should have attractive returns because of its eligibility for the Investment Tax Credit and bonus depreciation, its ability to use excess solar generation, and energy arbitrage opportunities, Vistra told analysts.
In the near term, batteries are “most likely to threaten investment in new peaking plants … short duration storage may allow peaking plants to provide non-spinning reserves,” Vistra noted in its presentation.
A GTM Research report released in March concluded a third of new gas peaker capacity will be at risk from four-hour energy storage by 2027. The report said 20 GW of new peaking capacity are forecast to come online by 2027.
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