(REPOST: Oil Price.com)

Batteries are hot right now. Energy storage was referred to as the Holy Grail of renewables by one industry executive, as it would solve its main problem: intermittency. No wonder then that everyone is working hard on storage.

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They are working so hard, it seems, that prices, which used to be a major obstacle along the path toward renewable energy storage gaining ground, have fallen much lower than the price of traditionally generated and stored energy, the Wall Street Journal notes in a recent story on giant batteries.

One Minnesota utility, Xcel Energy, not long ago, carried out a tender for the construction of a solar + storage installation, receiving 87 bids whose average price per megawatt hour was just US$36. This compares with US$87 for electricity generated by peakers, with the price including the cost of construction and fuel purchases for the plant.

But peakers are not regular power plants. They only work for a few hours a day when demand is at its highest, and this makes them less cost-efficient than regular power plants. Yet the fact that big batteries are beginning to make the construction of new peakers uneconomical could be a sign of what is to come: more and cheaper installations that use renewable energy to power tens of thousands of households.

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