The Peabody Peaker Problem: Are old solutions still viable?

Submitted by Jerry Halberstadt on Mon, 06/07/2021 - 23:41

We must not continue to rely on fossil fuels for everything. There are new ways to provide reliable, affordable, renewable power. Can we provide the peak demand for electricity using renewables?

The Massachusetts Municipal Wholesale Electric Company (MMWEC) is proposing to build a 55 MW natural gas and oil peaker power plant in Peabody, MA. The proponents of the plant have not provided transparency, nor have they addressed the many concerns of citizens, advocates, and legislators.

The plant would run on a combination of natural gas, hydrogen, and oil to provide the required capacity for about a dozen local municipal light plants. Capacity is a 40% reserve of electric power that can be called upon during peaks, short periods of higher than usual electric need. There are several other ways to meet the capacity obligation that would possibly avoid the harmful impact of a fossil-fueled plant.

Will this plant be an environmental, health, and safety threat to people in their homes in Danversport and Peabody—including two environmental justice communities, a school, a nearby dairy farm in Peabody, and to the Danvers branch of Mass General Hospital? Has the impact of a fossil-fuel on the global climate crisis been evaluated? Experts in the climate crisis, public health, and new legislation to rapidly lower carbon emissions all say that a fossil fuel plant is harmful.

Have alternatives been considered? We don’t know, and the citizens and ratepayers of Peabody and Danvers have a right to know, as does every citizen of the Commonwealth.

People with extensive experience in public health, environment, and the process of moving from fossil fuels to clean sources of electric power are concerned—because there has been no transparency, no engagement with the ratepayers, civic officials, or state legislators.

In order to move forward with the plant, MMWEC has applied to the Department of Public Utilities (DPU) for permission to borrow up to $170 million. In testimony to the DPU, legislators expressed concern at the lack of transparency about the plant (project 2015A). Experts in public health cited the many adverse impacts on health and well being; experts in electrical power storage and distribution proposed alternative solutions. In the following testimony by the plant advocates to the DPU, none of the issues and concerns or alternative approaches to providing a reliable supply of electricity were addressed by the proponents of the plant.

Therefore it is essential that the proposed peaker plant be halted while we have a stringent, comprehensive evaluation of all reasonable alternatives to provide the peak power required by ISO new england. Ratepayers will be the ones paying for any mistakes for 30 years and more important, it will harm our grandchildren.

Lest there be any doubt about the urgency of shifting from fossil to renewable sources of energy, consider that the level of CO2 in the atmosphere has reached 419 PPM, a new and alarming high.

"The ultimate control knob on atmospheric CO2 is fossil-fuel emissions... But we still have a long way to go to halt the rise, as each year more CO2 piles up in the atmosphere. We ultimately need cuts that are much larger and sustained longer than the COVID-related shutdowns of 2020."—The Hill

What is the plan?

What do we know so far? The information that MMWEC and the Peabody Municipal Light Plant (PMLP) have provided does not seem balanced and in some parts, seems to be in error or an effort to deflect criticism.

We know that they plan to use natural gas and hydrogen, as well as oil.

Methane as fuel

Natural gas is largely methane, and it leaks from the point of extraction, from pipelines, and all along the distribution system. Methane is harmful to health, and it is an extremely powerful and harmful greenhouse gas.

Drew Shindell, a professor of earth science at Duke University, said, “But if we can make a big enough cut in methane in the next decade, we’ll see public health benefits within the decade, and climate benefits within two decades.”

In Peabody alone at the end of 2020, based on reports by gas distribution utilities to the Department of Public Utilities, there were 156 unrepaired leaks releasing 60MT to the atmosphere.

Ronald DeCurzio, the Chief Executive Officer at MMWEC, claims that the plant will be less polluting than the majority of existing plants, and thus provide a net reduction of carbon emissions. However, there may be other, non-fossil ways to provide the essential need for reliable electricity while also reducing carbon emissions and other sources of pollution.

Hydrogen as fuel

We have just learned that hydrogen would be one of the fuels. What technology is used to refine the hydrogen? There are health and environmental concerns about refining and using hydrogen. While burning hydrogen may be a clean source of electricity, will combining hydrogen with natural gas produce toxic emissions. Should the use of hydrogen mandate a new environmental impact statement? There may well be a role for renewable hydrogen in energy. We should be able to review the status of this technology in terms of safety, reliability, and cost. Some observers see the use of hydrogen as part of an industry effort to keep fossil fuel plants running even after better options become available.

Clean hydrogen

The Department of Energy is working to reduce the cost of clean hydrogen to make it an affordable resource for fuel cells and as a fuel. It seems like early days for the technology.

“The Energy Earthshots are an all-hands-on-deck call for innovation, collaboration and acceleration of our clean energy economy by tackling the toughest remaining barriers to quickly deploy emerging clean energy technologies at scale,” Energy Secretary Jennifer Granholm said in a statement. 

"The goal for hydrogen energy seeks to reduce the fuel’s cost by about 80 percent, [to $1 per kilogram] as hydrogen produced using renewable energy currently costs about $5 per kilogram, according to the department."—Frazin, Rachel, Granholm launches 'Earthshot' goal of reducing hydrogen energy cost to $1, The Hill,  June 9, 2021

Battery storage

Peter Dion, general manager of Wakefield Municipal Gas and Light, one of the municipal utilities signed on to the project, thinks that batteries are not reliable. However, others assert that battery storage systems are reliable, as demonstrated in this report from Australia and this analysis, and battery peak solutions are gaining ground.

Dion claims that batteries can not keep running for days like a gas-fired plant can. But isn’t the Peabody peaker plant promoted to meet short-term peak capacity requirements of 40% above their basic supply, not for continuous operation? If it is for continuous operation, then the CO2 and other pollutants will be much higher than advertised.

The present site, Dion correctly states, is ideal for connecting to the existing grid infrastructure, but it is too small an area to install sufficient batteries.

However, there are quite a few community electric plants that are signed up to meet their capacity obligations through the proposed peaker plan; might the need be split among several of the municipal light plants and they could each install a smaller battery? For example, Peabody is obligated to provide 30% of the 55MW produced by the peaker, that would be about 16MW, needing a relatively small area for battery installation.

Costs & managing risk

The projected lifetime of the power plant is 30 years, according to Dion. Battery peak systems can last 20 years, so Dion is correct that batteries would need to be replaced. Would the total costs, including replacement, be excessive? The total costs of operation and finance need to be taken into account. A comparison of a new gas-fired peaker with a battery peak supply actually favors batteries in terms of cost and reliability.

Experience with battery storage for providing peak grid capacity is growing, and is winning the competition with gas-fired peakers. The costs for capacity and energy favor batteries for two or four hour service, according to a report from New South Wales. There are risks for gas in terms of cost, regulation, and availability as well as the carbon impact. Batteries can respond faster, require less maintenance, and are therefore available when needed. Batteries can be charged from renewable as well as fossil sources.

The fossil fuel plant has to buy fuel; the battery system could purchase renewables or fossil fuel sources. The risks of possible new regulations on fossil fuels, increases in the cost of natural gas, or competition from new technologies could force an early shutdown of the plant, but the loan paybacks would fall on ratepayers for 30 years. While health, environmental, and climate issues may not have direct monetary costs to the project, they are nevertheless essential considerations for the individuals, communities, and nations who may suffer.

This is a classic case of risk management; have all the factors been considered? DeCurzio claims that the proposed plant will assure a lower cost than on the open market for meeting capacity obligations, and the savings can be devoted to greater use of renewables. He sees it as a hedge against volatile and higher prices for capacity. So we will burn fossil fuels to limit emissions?


Electric supply reliability is a concern for light plant and the community. Deciding how to move forward is an exercise in management of risk. If the supply of natural gas diminishes (as fracking is shut down) and/or more stringent regulations are put in place, the cost and reliability of the proposed plant becomes uncertain. Some observers think that the fleet of existing fossil fuel peak power generators are at the end of their ability to run and may become “stranded assets”—something you can’t use but still have to pay for.

If the proposed plant is added to the two existing power plants at that location: what might happen if there is an explosion at any of the plants? What would that mean for regional power? Is it wise to further concentrate on the use of fossil fuels?

DeCurzio, CEO of MMWEC, argues that the kind of disastrous failure of the electrical system in Texas during extreme weather is a reason for installing the Peabody peaker plant.

The Texas power system was designed to isolate from the national grid, so outside sources of power could not be imported in the crisis, and there were no requirements or incentives to build reserve capacity. Another factor was that the power system was not able to function because of the weather, with plants and distribution breaking down because of equipment failure.

Severe weather is also a threat in New England. In the event of a prolonged weather event or natural disaster, the area electrical system could fail. Severe weather and cold pushed the New England system to the brink in two weeks of the winter of 2017-2018. So, although the conditions in Massachusetts are different, and the electrical power system is regulated, New England is also vulnerable.

All plant managers must comply with the complex system of regulation imposed by ISO new england. That system seeks to assure a reliable, adequate supply of power to reduce the chances of a disaster such as took place in Texas.. That regulatory regime may need to be adjusted to better encourage reliance on renewables and the creation of local interactive grids and other innovations that will change the business model of electrical plants.

DeCurzio says that the ability of his area to import power is limited, therefore it is important to have local generation capability. Would the proposed peaker plant adequately address this? What would be the impact of running it continuously for a week or two? Does this point to a need for upgrading the grid? Does it point to a new solution to develop local renewable sources with storage?

Sunk costs

Proponents of going ahead with the peaker plant point to the large sums that have already been spent and the costs that would be incurred by breaking existing contracts, as well as the costs and uncertainties of buying capacity in the market. It is not clear how the money has been spent or funds obligated.

Is it not irresponsible to spend money on a major project without already securing the finance? If the peaker project is abandoned, then the ratepayers will nevertheless have to pay off those costs. But sunk costs must not determine the future plan. In lay terms, if you are in a hole, stop digging.

These arguments are not giving us the whole story. We have yet to see a comparison of the total costs, benefits, and risks of proceeding with the peaker plant vs battery storage or another solution. The way to do that is by prudent due diligence which must include a comparison of net present value, i.e., the total costs of each proposal over the lifetime of the program.

Manage risk by creating new options

The plant leadership expects fluctuations in the cost of capacity services purchased in the ISO auctions, and they view the proposed peaker plant as providing a hedge against high costs. Others think the auction prices may continue to decline. The problem is similar to that of an insurer or stock trader: will the price rise or decline? What is the best strategy? And when considering the choice between gas-fired peakers and battery peakers, evidence is emerging that batteries may be a better financial investment. We ought to see a comparative net present value analysis of the alternatives, as exemplified in the Australian report and in the analysis by Lazard, Levelized Cost of Energy and Levelized Cost of Storage – 2020.

“The levelized cost of energy (LCOE), or levelized cost of electricity, is a measure of the average net present value (cost) of electricity generation for a generating plant over its lifetime. It is used for investment planning and to compare different methods of electricity generation on a consistent basis.” —Wikipedia

Another way to handle this dilemma is not to commit to either view long-term; instead, for 3-5 years, purchase capacity services in the ISO auctions while developing and implementing the following strategies that can reduce exposure to the risks of predicting the future cost of capacity services.

What are the alternatives that can provide the needed power when it is needed? Solar and wind are not always available at the time of need, although this energy can be stored with batteries, or by generating hydrogen to serve as storage for burning when needed or in a fuel cell.

Several options exist to reduce and meet peak demand, including:

  • load flexibility
  • grid interactive buildings, grid upgrades
  • battery
  • virtual battery (program to manage timing of energy use, shifting use to reduce peak demand, by using the thermal mass of the building and contents).
  • fuel cell
  • hydrogen as fuel
  • geothermal
  • efficiency, insulation
  • The plant manager can work with customers to reduce total electric demand during peak hours; smart buildings
  • The plant manager and customers can work to increase local supplies of energy (rooftop and/or community solar); smart grid

A combination of strategies will eliminate or reduce the need to provide additional peak capacity and help to satisfy the plant’s obligations to ISO-newengland.


We see no evidence that MMWEC and the participating municipal light plants have done adequate due diligence. The have spent and/or obligated money that must be paid by ratepayers before assuring the financing to cover their obligations. We have not seen a basic tool of financial evaluation, the net present value of the proposed plant compared with the net present value of the alternatives.

“The levelized cost of energy (LCOE), or levelized cost of electricity, is a measure of the average net present value (cost) of electricity generation for a generating plant over its lifetime. It is used for investment planning and to compare different methods of electricity generation on a consistent basis.” —Wikipedia

MMWEC supporters argue that failing to go ahead with the peaker plant will be dangerous and expensive, however they don't compare it with alternative solutions. If we go ahead and consider the risks and costs of the environmental impacts, the effect on environmental justice communities, the damage to health and well-being, and the climate crisis, we must take a good hard look at this project and consider alternatives, options that can better meet the requirements to reduce carbon emissions mandated by the Commonwealth.

The major benefits provided by the municipal power plants are that they provide reliable and inexpensive electric power. The risk is that if they continuing to rely on fossil fuel methods of production and centralized distribution, the electrical system will be in danger of becoming unreliable and expensive.

Building the proposed peaker plant may not be a good idea. It has not been demonstrated to be a prudent investment. There are likely better ways. No one said that the transition to clean energy would be easy, but solving this problem is how we must do it.

We must delay the plant, giving us time to evaluate alternatives, do the environmental due diligence, and work with the community. Peak power requirements can be met in other ways while the evaluation and planning takes place. The local grid could be transformed and strengthened in a few years, reducing the amount of peak power needed. There are strategies for reducing the need for capacity and for creating a resilient, efficient, local or regional grid network to complement central source and distribution methods, and battery costs are dropping. We need to see the long-term options from a business and financial perspective, and not be influenced by scare tactics or the existing contracts and costs without at least doing the due diligence.

For the most part today, we generate electricity in a central location and distribute it to where it is needed. However, with the new ability to create electricity in each building using solar panels, it is now possible to distribute electricity in the local area or back to the central distribution point. This poses an opportunity for electric plants to innovate a new business model.

We need to understand this peaker plant and the social, cultural, business, regulatory, and structural issues that stand in the way of switching to a carbon-free future. The light plant engineers who are in favor of this current peaker project are striving to do the right thing as they understand it. We need to fully understand their constraints and capabilities. We may need to work together to change laws and regulatory systems to better support clean energy transitions. For example, MMWEC wants to enable the use of wind power to meet capacity requirements. We need to understand the options and the opportunities as well as the barriers to a cleaner power system so we might work together.

When a discussion reaches the point when the person’s perspective is rejected because they are not qualified to speak, rather than evaluating competing arguments, something is wrong. There are no “outsiders” in this situation, there are no troublemakers, unless perhaps they are the industry advocates of fossil fuel forever. Most people are trying to do the right thing. We need to come together to solve the problem. We are facing not only local impacts of electrical generation and distribution, but regional and global threats because of the climate crisis.

Everyone, including those not yet born, has a stake in what we do today. “Ask not for whom the bell tolls, it tolls for thee.”


I appreciate the inputs from members of an online group, Stop Peabody Power, and thank Lilly Worthley and Judith Black for reading a draft and for their helpful comments. I got the the gas leaks maps and of how to manage providing peak power during a delay or pause from members of this group. I am grateful for the ideas from my friends in Breathe Clean North Shore, from Logan Malik; Maiyim Baron and Arnie Epstein of ECA; Steward Lazares (Peabody conservation), and so many others.

All errors and omissions are my sole responsibility.

Please feel free to use any or all of what is posted at as long as you credit the source © Jerry Halberstadt and cite the link; I'd appreciate a note on such use. Exceptions: materials like guest articles etc. that are not my copyright.


Budrick, Zack, CO2 concentration levels hit record high, show no impact from pandemic, the Hill, June 7, 2021

Clean Energy Council, Battery Storage: The new clean peaker. April, 2021. Clean Energy Council (Australia)

DeCurzio, Ronald C.,  Proposed Peabody gas plant, now on hold, makes sense, CommonWealth, June 1, 2021

DOE Technical Targets for Fuel Cell Backup Power Systems, Hydrogen and Fuel Cell Technologies Office

Filatoff, Natalie, Battery storage systems 30% cheaper than rival gas peaker plants for firming renewables, April 12, 2021

Frazin, Rachel, Granholm launches 'Earthshot' goal of reducing hydrogen energy cost to $1, The Hill,  June 9, 2021

HEET, Gas Leak Maps at December, 2020, Home Energy Efficiency Team (HEET)

ISOnewengland, Winter 2017/2018 recap: Historic cold snap reinforces findings in Operational Fuel-Security Analysis, ISO newswire, April 2018

Landrigan, Philip J., M.D., Howard Frumkin, M.D., Dr.P.H., and Brita E. Lundberg, M.D., The False Promise of Natural Gas, N Engl J Med 2020; 382:104-107; DOI: 10.1056/NEJMp1913663 January 9, 2020

Lazard, Levelized Cost of Energy and Levelized Cost of Storage – 2020 (LCOE 14.0), October 19, 2020

Milford, Lew, Seth Mullendore, and Abbe Ramanan, Hydrogen Hype in the Air, Clean Energy Group, December 14, 2020

Mullendore, Seth (Clean Energy Group) Solar+Storage Reliability Puts Gas Plants at Risk, July 29, 2020 An industry study in California and an MIT study show that solar with battery storage is as reliable as conventional fossil fuel plants, the effective load carrying capability (ELCC) is close to 100%; wind with battery storage has an ELCC of 62%.

NREL, Storage Futures Study

Renewable Energy World, Hydrogen hype in the air, December 21, 2021

Shemkus, Sarah, Could batteries replace a proposed peaker plant in Massachusetts? As a municipal power supplier pauses plans to build a natural gas peaker plant, advocates are urging its backers to consider battery storage instead, but questions remain about whether it’s practical for the site. Energy News Network June 2, 2021

Strategen Consulting, The Fossil Fuel End Game: A Frontline Vision to Retire New York City’s Peaker Plants by 2030, March 2021 PEAK Coalition

Tabuchi, Hiroko, Halting the Vast Release of Methane Is Critical for Climate, U.N. says: A major United Nations report will declare that slashing emissions of methane, the main component of natural gas, is far more vital than previously thought. New York Times, April 24, 2021



Levelised cost of capacity: batteries vs gas peakers
AUD$/KW/YR 2-hr battery 4-hr battery open cycle gas turbine peaker
Capital cost 89 139 128
Fixed operations & maintenance 13 23 16
Variable operations & maintenance 18 35 59
Total 119 197 203


Levelised cost of energy: batteries vs gas peakers
AUD$/MWH 2-hr battery 4-hr battery open cycle gas turbine peaker
Capital cost 143 117 156
Fixed operations & maintenance 26 13 13
Variable operations & maintenance 26 26 65
Total 195 156 234

Source: Clean Energy Council, Battery Storage: The new clean peaker. April, 2021. Clean Energy Council (Australia)

“The levelized cost of energy (LCOE), or levelized cost of electricity, is a measure of the average net present value (cost) of electricity generation for a generating plant over its lifetime. It is used for investment planning and to compare different methods of electricity generation on a consistent basis.” —Wikipedia


Breathe Clean North Shore,

Community Action Works "Our mission is to work side-by-side with communities, empowering you with the skills and resources needed to prevent or clean up pollution at the local level."

Mass Climate Action Network "MCAN works with more than 40 communities around Massachusetts to help them take action against climate change...MCAN works collaboratively with our many chapters and other organizations to change and strengthen climate change and clean energy policies in Massachusetts."   Massachusetts Climate Action Network  Local Clean Energy

Elders Climate Action   "The mission of Elders Climate Action is to mobilize elders throughout the United States to address climate change while there is still time to protect the well-being of our grandchildren and future generations."