An analysis completed by Strategen Consulting concludes that Indiana investor-owned utilities should reconsider plans to construct new natural gas-fired combustion turbine plants given the confluence of factors that now make energy storage a competitive alternative.
In 2020 and 2021, three of Indiana’s investor-owned utilities, Northern Indiana Public Service Company, Indiana Michigan Power Company and CenterPoint Energy Indiana proposed to build new natural gas-fired combustion turbine plants in their integrated resource plans.
Strategen said that “much has changed since then, justifying a reassessment of each of the utilities' plans,” including:
- The passing of the Inflation Reduction Act in 2022 to dramatically reduce the cost of clean energy resources,
- Natural gas price spikes,
- Extreme weather events increased in frequency, and
- The Midcontinent Independent System Operator and PJM Interconnection began undertaking processes to update market constructs.
Prepared for Advanced Energy United, the report finds that the IRA enables significant savings and makes battery storage with equivalent capacity more economical than each utility’s proposed CT.
In the year of deployment, battery storage would provide savings of $3.4 million for NIPSCO, $66.2 million in savings for I&M, and $3.5 million in savings for CenterPoint, before taking into account additional factors such as stranded assets and fuel price volatility risk, the consulting firm said. Savings in subsequent years are anticipated to be even greater.
The full report is available for download.