Battery energy storage systems (or "BESS") have the potential to balance the intermittent and non-dispatchable characteristics of renewable resources as those resources become an increasing part of generation portfolios. Using BESS in conjunction with solar or wind power generation improves system reliability and helps stabilize the grid while decreasing society's reliance on fossil fuels. BESS also have the potential to ensure the transition to renewable energy sources advances environmental justice ("EJ") goals.
BESS may benefit EJ communities if battery storage facilities are constructed in place of retiring fossil fuel plants. Battery energy storage is expected to help phase out the use of "peaking" power plants (or "peaker" plants) in the journey to full decarbonization. Peaker plants generate electricity as needed to meet peak demand, yet they are also a source of substantial greenhouse gas emissions and air pollutants. As BESS can offer similar grid stability and reliability benefits, old peaker plants can be replaced by BESS without compromising the energy system's peaking capacity and reliability. By displacing peaker plants, the recent rise in battery energy storage promises to increase energy resiliency and reduce greenhouse gas emissions, while also reducing local air pollution from fossil fuels.
Thus, replacing fossil peaker plants with BESS can promote environmental justice because peaker plants disproportionately affect EJ communities. Most peaker plants are located near low-income and underserved populations, which contributes to increased air pollution in those communities. In addition to their carbon emissions, peaker plants emit ground-level air pollutants. When sited in place of fossil peaker plants, BESS projects may alleviate certain health and environmental inequities by reducing local air pollution in EJ communities.
In addition to improving air quality, replacing peaker plants with BESS may result in economic benefits for communities—including EJ communities—in the form of lower energy prices, increased tax revenues, and quality job creation.
- Affordable Energy: Replacing peaker plants with BESS can help lower energy prices for consumers, including EJ communities, particularly by reducing peak demand charges. A recent report found that it would be more cost-effective to replace Maine's existing peaker plants with utility-scale BESS than to install new gas peakers. Similarly, one assessment found that battery storage is a "viable" alternative to constructing a new peaker plant in Massachusetts; the BESS would result in reduced emissions and costs. This cost-effective energy production could lead to consistently lower consumer energy prices, especially as the cost of BESS is expected to decline over time.
- Tax Revenue: Hosting a BESS facility may generate tax revenue for EJ communities and help improve the local economy. It is currently uncertain whether host communities can collect more tax revenue from peaker plants or from battery energy storage facilities, and the answer likely varies depending on applicable state and local tax laws. For example, in some states, BESS may qualify for certain property tax exemptions. As the cost of batteries continues to decline, however, battery energy storage is likely to become increasingly profitable, which may allow some host municipalities to collect more in property taxes from BESS facilities. Additionally, because the air pollution produced by peaker plants depresses nearby property values, replacing these plants with BESS—which are generally perceived as safer and less disruptive than peaker plants and produce no direct emissions—may improve property values throughout the surrounding area.
- Job Creation: As they typically only run for less than 1,500 hours per year, peaker plants are not a major source of employment. In contrast, battery energy storage projects are creating many new jobs in construction, manufacturing, business services, and other fields, though not all of these jobs may be available to EJ communities. In 2023, the U.S. Department of Energy reported that battery storage employed 72,923 workers, representing 81% of all Transmission, Distribution, and Storage jobs across the entire energy industry. Additionally, the number of BESS-related jobs is expected to increase, whereas fossil fuel-related employment is on the decline. Furthermore, by supporting the expansion of the renewable energy industry, BESS contribute to an increasing number of jobs in the clean energy sector, which currently accounts for over 84% of new net electric power generation employment.
It is important to note that—despite these wide-ranging health, environmental, and economic benefits—battery energy storage is not free of equity concerns. As with any large industrial development, BESS projects can potentially raise issues for EJ communities. However, by giving thoughtful consideration to the EJ implications of their projects, BESS developers can help ensure that battery energy storage lives up to its potential as a tool for affirmatively advancing environmental justice.
Originally Published 05 June 2024
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