Damage control: Can BWL's new gas plant be scaled down?

(Editor’s note: This is the first in a series of stories examining sustainability and energy issues affecting greater Lansing.)

The Lansing Board of Water & Light broke ground June 3 on a new, $500 million dollar gas-fired plant, but unsuccessful opponents of the plant are hoping the BWL will at least consider scaling it down.

The BWL touts its new 250 MW plant, now going up near the Erickson Power Plant in Delta Township, as the bridge to a carbon-free, all-renewable future and the only way to reliably replace the aging Eckert and Erickson plants, set to retire in 2020 and 2025, respectively.

The large scale of the project stoked widespread concerns about locking Lansing into burning more fossil fuels for decades to come.

Gas-fired plants emit about half as much carbon pollution as coal, but new plants like the BWL’s are likely to turn the ignition key on a 30- to 40-year fossil-fuel-driven ride into the future, just when scientists say emissions have to be cut drastically by 2050 to avoid a cascade of catastrophes.

A June 28 story in The New York Times described natural gas as “the new climate battleground.” As hundreds of aging coal plants are retired, energy companies and utilities are planning at least 150 new gas plants and thousands of miles of pipelines, according to The Times.

However, as the cost of renewable energy plummets and battery storage technology develops quickly, other utilities, like Consumers Energy in Michigan, have declared they will build no more gas plants.

Last year, CMS Energy, parent company of Consumers Energy, rolled out an energy portfolio that calls for no new gas plants. When a reporter for the website MiBiz asked Consumers CEO Patti Poppe about the utility’s “big bet” on solar, she had a ready reply.

“A big bet is a 1,000 megawatt natural gas power plant,” Poppe replied. “What I like about renewables is you don’t have to make that big bet. You can gradually add. You only build to demand, as opposed to building a 70-year asset that you hope you’re going to need.”

With ground already broken on the new plant, which the BWL has dubbed Delta Energy Park, that battle seems settled in Lansing.

But unsuccessful opponents of the plant are still pushing the utility to jettison one component of the plant: a simple cycle combustion turbine generator, also known as a peaker, used “to support intermittent renewable generation” in periods of peak demand, according to the BWL.

In an email to City Pulse, BWL spokeswoman Breina Pugh wrote that the peaker will serve as backup for the two main generators and “provide a small percentage of power to the plant.”

“Renewable energy is an intermittent source of power that needs a reliable back-up and storage technology that does not exist today Pugh wrote. “Storage capability has not evolved to the scale needed for a utility of our size but we continue to investigate storage options as they arise.”

But the energy picture is changing fast. Trade sites are buzzing over the implications of recent advances in energy storage for the automotive and utility sectors.

A March 2018 report from the National Renewable Energy Laboratory, part of the U.S. Energy Department, found that “the cost of energy storage has declined dramatically in recent years, presenting an opportunity for energy storage to perform functions currently met by conventional generators that serve peak demand.”

S&P Global Market Intelligence, a much-relied-upon source for investors, declared this spring that “by most measures, 2018 was a long-anticipated breakout year for batteries,” with record investment going into research, product development and manufacturing “as prices plummet.” Global annual energy storage additions more than doubled, and are on pace to surge another 78% in 2019, according to Bloomberg New Energy Finance.

In an interview with S&P Global, Tom Buttgenbach, president and CEO of developer 8minutenergy Renewables LLC, said “I can beat a gas peaker anywhere in the country today with a solar-plus-storage power plant. Who in their right mind today would build a new gas peaker? We are a factor of two cheaper.”

Even factoring for hyperbole, it’s clear the market is evolving faster than the BWL can pour cement, lay bricks and fit pipes at the new Delta Energy Park.

Marshall Clabeuax of the Michigan Climate Action Network is among those trying to persuade the BWL to drop the “peaker.”
“Across the country, these products are being mothballed,” Clabeaux said. “I know we broke ground now, but in L.A., there are plants that were 50 or 60% done and they’ve turned the project off because of the costs and the risks.”

Clabeaux referred to General Electric’s decision in June is to shut down its 750 megawatt gas-fired Inland Empire Energy Center plant in California, even though the plant had 20 years left in its useful life. (The plant will now be used as a battery storage site.)

Douglas Jester, an advisory, nonvoting member of the BWL Board, said the new Delta Energy Park could well share the fate of California’s Inland Empire and never live out its natural life.

“Because of concerns for climate change and the advancing technology, natural gas plants are going to have to be retired earlier than when they wear out,” Jester said.

However, in a twist, Jester said the “peaker” might come in handy.

“Even with storage coming along rapidly, we still have good days and bad days in renewable generation,” Jester said. “Current storage technology can work really well for day vs. evening, but we don’t yet have the technology ready to handle multi-day storage.”

The peaker, Jester said, might be useful to fill in renewable gaps — more useful, in the long run, than the two big combined cycle units that make up the bulk of the BWL’s new plant.

“The plant’s going to be built,” Jester said. “It’s contracted. But its use will be displaced within a couple of decades by wind and solar that are cheaper to build and operate than it will be to operate the gas plants. We’ll just displace them and they’ll sit there, lightly used.”