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Grid scale battery cost reductions - the final nail in the fossil fuel coffin?

Dave Borlace delivers a knockout punch to the fossil fuel industry's most entrenched defense: the claim that renewables cannot handle the evening peak. By shifting the focus from theoretical potential to hard-won economics in Australia and California, he argues that the "duck curve" is no longer a problem to be solved by gas turbines, but a revenue opportunity for batteries. This is not a story about green idealism; it is a story about grid operators discovering that batteries are faster, cheaper, and more reliable than the hulking gas plants they were told were indispensable.

The Death of the "Peaker" Excuse

For decades, the fossil fuel narrative relied on a specific weakness in renewable energy: the sun goes down, but the lights stay on. Borlace dismantles this by highlighting the "duck curve," a chart showing solar generation dropping just as evening demand spikes. He notes that the industry's solution was always the same: "The only reliable way to plug that gap, according to the fossil fuel industry, is to call upon quick response gas fired power stations known as PA plants." These are expensive assets that sit idle most of the year, yet their costs are baked into consumer bills.

Grid scale battery cost reductions - the final nail in the fossil fuel coffin?

The author's most compelling evidence lies in the speed of response. While a spinning gas turbine takes 30 to 90 seconds to react, and a cold start can take up to 30 minutes, batteries operate in "about 100 milliseconds, which is effectively instant." This isn't just a technicality; it is a fundamental shift in grid stability. Borlace writes, "That makes them uniquely suited for grid stabilization and nowadays increasingly attractive as an alternative to peak plants as well." The implication is clear: the very feature that made gas plants valuable—their ability to ramp up quickly—is now obsolete.

"Gas peakers that were once considered essential and indispensable are now looking increasingly uneconomical."

Critics might argue that relying on batteries for such critical infrastructure ignores the risk of battery degradation or supply chain bottlenecks for lithium. However, Borlace counters this by pointing to the sheer scale of deployment already underway, suggesting the technology has moved past the pilot phase into commercial reality.

From Ridicule to Revenue

The article's narrative arc is bolstered by a specific historical turning point: Elon Musk's 2017 bet to build a 100-megawatt battery in South Australia in 100 days. Borlace recalls how this was met with "mercilessly ridiculed by the mainstream media and by political lites," yet the result was a grid saver. He cites independent analysis showing the project "saved the South Australian grid more than 150 million Australian dollars or about 100 million US in its first two years of operation."

The savings didn't come from simply storing energy; they came from frequency control. Borlace explains that even small deviations in grid frequency can cause blackouts, and batteries handle "frequency control ancillary services" far better than thermal plants. The argument here is that the economic model has flipped. Batteries are no longer just a backup; they are the primary tool for managing the grid's most volatile moments. He notes that in places like Collie, Western Australia, the region is transforming into a "massive battery hub" where "the last of three remaining coal plants will be closed... All of that capacity will by then be provided by batteries."

This transition is not limited to sunny climates. Borlace addresses the skepticism regarding colder, cloudier regions by citing 2025 research from Cornell University. The study suggests that with increased wind penetration and better grid flexibility, batteries can work anywhere. He writes, "In wind heavy regions, batteries can store excess wind overnight, smooth out multi-hour ramps, and reduce the need for gas even without lots of solar output." The key, he argues, is not just the hardware, but the market design. "Policy is the hidden variable here," he states, noting that batteries thrive where markets allow them to compete on an even playing field.

"The evening peak that was once the stronghold of coal and gas is now becoming the moment that proves we no longer need them at all."

A counterargument worth considering is the "dunkelflaute" phenomenon mentioned by Borlace—multi-day periods of low wind and sun that still require robust solutions beyond standard batteries. While he acknowledges this as a remaining challenge, he frames it as a solvable engineering problem rather than a systemic dead end.

The Bottom Line

Dave Borlace's strongest asset is his refusal to treat battery storage as a futuristic concept; he grounds the entire argument in the immediate, profitable reality of the Australian and Californian grids. The piece's vulnerability lies in its optimism about market design, assuming that political will can always align with economic efficiency to remove fossil fuel subsidies. However, the trajectory is undeniable: when flexibility becomes the primary currency of the grid, the slow, carbon-heavy inertia of fossil fuels simply cannot compete.

Sources

Grid scale battery cost reductions - the final nail in the fossil fuel coffin?

by Dave Borlace · Just Have a Think · Watch video

For decades, our electricity grid relied on a familiar formula. Coal plants ran more or less constantly. Gas plants filled up the gaps, especially during the critical evening peak when demand surged just as solar generation fell away. And that evening peak was always the hardest problem.

It was used to justify expensive gas pea plants, the constant construction of new pipelines, and claims that renewables could never fully replace fossil fuels. But something remarkable is now happening in many parts of the world, especially in places like Australia and California. Giant batteries charged up by nothing more than sunshine and wind during the day are stepping into that evening peaker role. Not in theoretical research papers, not in smallcale pilot projects, but in reality every day, storing cheap renewable power during the day and displacing gas and coal precisely when the grid needs the power the most.

We talk about battery technology a lot on this channel as and we recently looked at the astonishing explosion of domestic battery storage systems down in Oz that are now helping to stabilize the power networks there. But gridscale installations are also now really starting to change the shape of supply demand curves. And as they displace the old technologies, their developers are even starting to find opportunities to site them in the very locations where coal and gas plants once stood, potentially providing employment opportunities for local communities. So despite the extraordinary efforts of the fossil fuel industry to maintain its profitable monopolistic status quo, could the new disruptors now finally be starting to win the technological battle?

Hello and welcome to Just Have a Think. We've heard the argument of the skeptics, haven't we? Wind turbines don't work when it's not windy, and solar panels don't work when it's dark. It's an astonishing piece of radical insight, don't you think?

Fortunately, grid system design engineers and operators who do this stuff for a living are aware of that patently obvious function of basic physics and have been developing technological solutions to it for decades. One of the biggest challenges has been that evening peak that I mentioned earlier. No doubt you've seen some variation of this chart, often called the duck curve, which shows how in sunny regions with lots of solar panels, solar power floods the grid around midday. Then, just as most people get home in the early ...