Iron-air batteries to displace natural gas in firming the grid?

Xcel Energy commits to pilot project of new 100-hour storage technology at its Comanche station in Colorado. Might this technology displace natural gas?

by Allen Best

When I first posted the story about Xcel Energy’s pilot program at Pueblo with iron-air storage technology on the Big Pivots website, one reader posted a response that made me laugh:

“I think it’s appropriate that the steel city uses rust process for battery storage,” said Ken, who is from Pueblo.

The basic principle of the technology offered by Form Energy is the interaction of iron with oxygen. While discharging, the battery breathes in oxygen from the air and converts iron metal to rust. While charging, the application of an electrical current converts the rust back to iron and the battery breathes out oxygen.

In some eyes, Pueblo may look like the rust belt. Ah, but that may be the future.

Adam Quinton

But the suggestion posed by a Big Pivots reader also deserves highlighting. Adam Quinton, in a LinkedIn posting, said he believes the new technology that Xcel expects to have in place sometime in 2025 at its Comanche Generating Station will fill “a crucial gap in the race to introduce more #renewableenergy to #decarbonize the grid.”

Quinton is a board member of Holy Cross Energy who lives in Edwards.

Xcel says the 10-megawatt batteries will deliver power for up to 100 hours. If this technology proves out, it will allow Xcel to operate a more reliable grid. Important, too, is the cost. When I talked with Robert Kenney, the president of Xcel Energy’s Colorado division, he acknowledged the iron-air batteries will come at a “fraction” of the cost of lithium-iron batteries. Elsewhere, I saw a report of one-tenth ^h the cost.

The implications?

“What these assets will do is provide ample ‘clean firm’ power dispatchable over long periods— longer than the average winter storm for example,” Quinton wrote.

Xcel says it will start having data available by 2026 about how effective this technology is. If it is effective, then he sees a significant consequence:

“It sounds like the ringing of the death knell for gas fired “peaker” plants —which are both costly and dirty,” Quinton wrote. He added that the case for adding new gas plants had become much weaker “given the likelihood they would become stranded assets.”

Quinton was a managing director at Bank of America Merrill Lynch. In his last role there, he headed the institution’s global macro research team of 175 people. He has a degree from Cambridge University and was an adjunct professor at Columbia University School of International and Public Affairs.

This is from Big Pivots 67, a reader-supported e-journal covering climate change and the resulting energy and water transitions in Colorado.

In this thesis, Quinton got support from Peter Kelly-Detwiler, the author of a 2021 book, “The Energy Switch: How Companies and Customers are Transforming the Electrical Grid and the future of Power.”

Peter Kelly-Detwiler

“It makes a strategy of investing in a whole lot of new gas gen that much riskier – there is a non-zero chance that some of these new gas plant investments become future stranded assets in a carbon constrained world,” he wrote on Quinton’s post.

“It’s not like the development of new storage technologies is slowing down,” he added, citing other new announcements. “They may or may not get to commercialization, but other tech likely will. My point is that gas gen efficiencies are pretty well flatlined (low 60%), and only get

about 1% better each decade,” Kelly-Detwiler added. “By contrast, storage tech is so new, and there are so many potential variants, that it has room to get a lot better.”

Asked about the future of gas in Xcel’s portfolio, Kenney said this: “If we see success with this program, we will explore how we can expand it and scale it up further. But to what extent it will displace ‘peaker’ plants or any other technology, that would be the learning that we would expect to come out of the pilot itself. So stay tuned.”

In announcing the pilot projects, Bob Frenzel, the chief executive of Xcel, said the 100-hour batteries at Pueblo and at a coal site in Minnesota “will strengthen the grid against normal day-to-day, week-to-week, and season-to-season weather variability, in addition to extreme weather events, including severe winter storms and polar vortex events.”

Duration of storage matters entirely as electric utilities add low-cost and emissions-free renewables. Short-duration storage, such as the lithium-ion batteries installed in conjunction with a new solar farm near Glenwood Springs in 2022, can help. They provide two to four hours of storage.

With 100 hours of storage, utilities can smooth the highs and the lows of renewables. Consider Storm Uri, the week of cold in February 2021 when wind on Colorado’s eastern plains ceased for several days. Utilities cranked up turbines burning natural gas that was suddenly in high demand. Consumers are still paying off those bills. Tri-State even resorted to burning oil.

Summers have brought inverse problems of spiking demand caused by heat. In 2021, it got so hot in Portland that electric lines for trains melted, and some people without air conditioning literally baked to death in apartments. Colorado regulators worry whether the state’s utilities can handle such weather extremes.

Robert Kenney

Iron-air batteries alone are unlikely to solve the intermittencies of renewable energy or the havoc produced by a warming and more erratic climate. This pilot project does represent a notable effort to explore whether they can be scaled.

Success in this could be invaluable for Holy Cross Energy in its aim to distribute 100% emission-free electricity to its 55,000 members in the Aspen, Rifle, and Vail areas by 2030. The Glenwood Springs-based cooperative in 2022 delivered 50% emissions-free energy.

Sam Whelan, the vice president for finance at Holy Cross, said that increased reliability by Xcel will help Holy Cross reliably deliver electricity to its members.

Holy Cross has been investigating its own options—and has had conversations with Form Energy. It will look at many alternatives, including green hydrogen and pumped-storage hydro, each with problems but also promise.

“You have to start something, and you have to start in small increments as well,” says Whelan.

Tri-State Generation and Transmission, Colorado’s second largest utility, has a different but related problem. It wants to best use infrastructure associated with its coal-burning operations at Craig after the last unit closes before 2030. Iron-air batteries were cited as one possibility as it shapes up its resource plans in the next several years.

The solar industry also started small, Whelan observed. “It was not that long ago that solar costs were significantly higher,” he said. Now, solar has become competitive. “It will take these incremental storage projects to prove out and hopefully pave the way.”

“This is an exciting new frontier for energy storage in Colorado,” said Mike Kruger, chief executive of the Colorado Solar and Storage Association. “This announcement goes to show that when there is clear policy, American companies can innovate to meet the electric power sector’s needs.”

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