Assessment of Potential Alternatives for Local Peaking Capacity in the Entergy New Orleans Service Area

This briefing paper provides an up-to-date overview of large-scale grid-connected battery storage projects and includes information on the cost-effectiveness of battery storage and solar as viable alternatives to traditional natural gas peaker power plants. The paper, prepared by Strategen Consulting for Clean Energy Group and Alliance for Affordable Energy, was presented as evidence to the New Orleans City Council by a coalition of local advocates opposing a peaker plant proposed by the utility Entergy New Orleans.

Entergy New Orleans submitted proposals to the City Council for two peaker plant options: a 226 MW peaking natural gas-fired combustion turbine or 128 MW of gas-fired reciprocating engines. However, Entergy’s original application and supplemental and amending application outlining an assessment of need for local generation and analysis of potential alternatives, overlooked certain options. Most importantly, Entergy did not conduct a serious analysis of battery storage or solar+storage as alternatives for meeting local energy needs. The applications each included only a single reference to energy storage resources, claiming, without any backing analysis or testimony, that storage was not a cost-effective option at this time.

This briefing paper clearly presents multiple real-world cases where battery storage resources, both with and without solar, were selected as cost-effective alternatives to traditional power plants. The paper also finds that a battery storage project would represent a significantly lower net cost to ratepayers than either of the alternatives proposed by Entergy New Orleans.

In light of these findings, the briefing paper recommends that the City Council reject the proposals and require Entergy to conduct an all-source solicitation for resources that would be open to a variety of resources, including batteries and solar. This type of solicitation would allow for broad market participation to determine the most cost-effective mix of resources to meet system capacity and reliability needs.

Unfortunately, the New Orleans City Council ultimately chose to allow Entergy to move forward with the plant, though legal challenges against the power plant are still pending.