Why the energy transition needs peaker plants

We may think of ourselves as individuals, but the electricity grid would beg to differ.

Between 4pm and 9pm every day, enough of us settle down at home with a hot drink, the TV and lights switched on, laptops whirring, washing machines spinning — to produce a collective surge of energy demand.

To ensure that demand is always met, peaker — or peaking — plants step in to provide power at the busiest times, ensuring grid reliability during peak periods, as their name implies, to avoid blackouts.

The evolution of the peaker plant

Peakers are typically smaller than the traditional baseload power plant and can provide power swiftly and for short bursts of time — often just a few hours per day. This could be when households are synching their energy needs, when air conditioning units are working overtime during a heatwave, or even during winter weather extremes, when grid operators are ensuring there’s no repeat of outages such as those caused by Storm Uri in Texas in 2021.

You might think that with the rapid growth of renewable energy, peaker plants would be needed less and be on the wane. In fact, their usage has increased over the past five years.

One reason for this is that solar production reaches its zenith at midday, a mismatch with prime energy demand which, as mentioned above, tends to occur in the early evening. Flexible, dispatchable energy — via a peaker plant — bridges that gap.

Most peakers run on natural gas, and in the United States, the nearly 1,000 plants currently in operation account for more than 3% of the nation’s annual net electricity generation. This percentage is only set to grow. Projections and research show that 20GW of peaking capacity will need to be added to the US grid in the next decade.

As a result of this, it’s no surprise the global peaking power market was valued at over $990 billion in 2022 and is anticipated to reach $1.2 trillion by 2031.

How peakers help with the global energy surge

Alongside the global drive to switch to renewable energy is an ever-increasing demand for more power generation — our dependence on the latest technologies, like artificial intelligence, and the rise of the electric vehicle, means our energy requirements continue to ramp up.

What’s more, the ongoing retirement of coal plants, while a welcome and necessary step towards the world’s net zero goals, means this supply must be replaced — and with their intermittent nature, which means output varies both daily and seasonally, renewables cannot fulfil this remit alone.

With global electricity demand expected to grow by 4% this year and next, compounded by issues of intermittency and fluctuating power usage, peakers have an essential role to play in the energy transition to deliver reliable electricity. And the onus is on them to provide this fast energy more sustainably.

Mitsubishi Power, a power solutions brand of Mitsubishi Heavy Industries (MHI), has developed advanced heavy-duty gas turbines that can cut CO₂ emissions by 65% compared to traditional coal plants — and also convert to either hydrogen or a hydrogen blend in the future. A peaker in Ontario, Canada, and another in Oklahoma, US, are set to reach commercial operation in the next two to four years — the first two projects in North America that will use these types of gas turbines in a peaking application.

Peaker plants and the energy transition

Energy generated in off-peak hours can be stored in batteries for a short-term solution — with the batteries generally deployed for sub-hourly, hourly and daily balancing.

Another, longer-term solution is green hydrogen — produced by splitting water molecules via electrolyzers powered by renewable energy — which can be stored in large quantities for long periods of time and converted back to electricity when needed. The International Renewable Energy Agency gives the example of Germany, where its renewable energy sources cannot currently meet demand in winter — an ideal time for hydrogen produced in the summer to be brought out of storage, it suggests.

It’s a plan that’s already underway at the Advanced Clean Energy Storage Hub in Delta, Utah. This site will use excess renewable energy to produce green hydrogen and store it in two huge underground salt caves until it is needed.

With the need for these plants unlikely to diminish anytime soon, the more sustainably peakers can be run the better.

As we shift toward a higher-demand clean energy future, the intermittent nature of renewables like solar and wind creates gaps in the power supply that peakers can quickly fill. Their ability to rapidly respond to fluctuating demand flexibly, bridge mismatches between peak energy production and consumption times, while ensuring grid stability, is essential. As demand intensifies due to lifestyle adjustment, the rise of data centers and AI — and is tested during extreme weather events — peakers emerge as an increasingly important tool on the path to net zero.