Back in 2017, Tesla switched on the world’s biggest battery storage facility. Located in South Australia, the 159 MWh battery array can supply 30,000 homes with electricity in case of a blackout. For about one hour. Fast forward five years, and we have Reuters reporting that battery storage technology has advanced so far that utilities are now canceling plans for new gas generation capacity. But that’s not the whole story.
Energy companies, Reuters said in that report, had shelved or straight out canceled 68 new gas generation capacity projects in the first half of the year. The reason for the cancellations, per the sources that the news outlet interviewed, was the uncertain long-term economics of this capacity in light of declining costs for battery storage. Indeed, the long-term economics of any baseload electricity generation capacity have changed in the past decade or so, excluding nuclear. The reason the economics have changed is that governments in Europe and, more recently, the United States and Canada, have started penalizing generation fueled by hydrocarbon