Wikipedia Deep Dive

Peaking power plant

14 min read

The Power Plants That Sleep Most of the Day

Imagine a fire station where the trucks only roll out during the absolute worst emergencies. The rest of the time, the firefighters sit idle, equipment gleaming but unused. This is essentially how peaking power plants operate—they're the emergency responders of the electrical grid, springing into action only when demand surges beyond what the regular power stations can handle.

These facilities, commonly called "peaker plants" or simply "peakers," represent one of the most economically peculiar corners of the energy industry. Some run for thousands of hours per year. Others might operate for just a handful of hours annually. Yet both must be ready at a moment's notice, maintained in perfect working order for that critical moment when everyone turns on their air conditioning simultaneously on a scorching August afternoon.

Why Electricity Demand Isn't Constant

To understand peaker plants, you first need to understand a fundamental truth about electricity: it cannot be easily stored, and the amount generated must precisely match the amount being consumed at every single moment. This balance must be maintained continuously, second by second, across the entire electrical grid.

But human behavior is anything but constant.

In hot climates like Arizona or Texas, electricity demand typically peaks in late afternoon. Offices are still running their air conditioning systems at full blast, but now households are joining in as people return home from work. The grid groans under this dual burden. In colder regions like Minnesota or Norway, the opposite pattern emerges—demand spikes in the morning hours when space heaters kick on and factories fire up their equipment after the overnight lull.

Temperate climates split the difference, often seeing their highest demand in the evening hours when people cook dinner, run dishwashers, and settle in for an evening of television and charging devices.

Base Load: The Tireless Workhorses

The foundation of any electrical grid rests on what engineers call "base load" power plants. These are the tireless workhorses designed to run continuously, day and night, week after week, stopping only for scheduled maintenance or unexpected breakdowns.

Nuclear power plants exemplify this approach perfectly. A nuclear reactor is phenomenally expensive to build—often costing billions of dollars—but once operational, the actual fuel costs are remarkably low. The uranium fuel rods release their energy slowly over months or even years. This economic reality means nuclear plants make the most financial sense when they run at full capacity around the clock, spreading that enormous upfront investment across as many kilowatt-hours as possible.

Coal plants historically followed a similar logic, though environmental regulations and competition from cheaper natural gas have pushed many into retirement. Hydroelectric dams with reliable water supplies also serve as base load generators, since their "fuel"—flowing water—costs nothing at all.

But here's the problem: these base load plants are terrible at changing their output quickly. A steam-cycle power plant—whether coal, nuclear, or natural gas—might take hours to go from cold standby to full production. You can't just flip a switch and instantly generate more power. The physics of heating water, generating steam, and spinning massive turbines simply doesn't work that way.

Enter the Peaker Plant

Peaker plants exist to fill the gap between what base load stations can provide and what the grid actually needs during those critical high-demand periods. They sacrifice efficiency for flexibility.

The math works like this: a well-designed base load combined-cycle plant might convert 60% of its fuel's energy into electricity. A simple peaker plant using only a gas turbine—essentially a jet engine bolted to a generator—typically achieves only 30 to 42% efficiency. Nearly half the energy in that natural gas simply escapes as waste heat.

So why build something so inefficient?

Speed and simplicity. A gas turbine can start generating electricity within minutes. Some can reach full power in under ten minutes. Compare that to a coal plant that might need twelve hours to come online from a cold start, or a nuclear plant that requires days of careful preparation.

The economics become even more counterintuitive when you consider how rarely some peaker plants actually run. If a plant operates only fifty hours per year, building an elaborate efficiency-improving system makes no financial sense. The fuel savings would never justify the construction costs. Better to build something cheap and simple that sits ready for those rare moments when it's truly needed.

The Price Premium for Peak Power

Electricity generated by peaker plants commands dramatically higher prices than base load power. This isn't arbitrary—it reflects genuine economic reality.

Consider the situation from the power plant owner's perspective. You've built a facility that might sit idle for 8,700 hours of the year, generating zero revenue. During those precious 60 hours when you do operate, you need to earn enough to cover your mortgage, your maintenance costs, your fuel, your staff salaries, and still turn a profit. The electricity you sell during peak demand periods has to be expensive, or the entire business model collapses.

As of 2020, open-cycle gas turbines were producing electricity at roughly $151 to $198 per megawatt-hour. For comparison, a modern wind farm might generate power at $30 to $40 per megawatt-hour. The peaker plant costs four to five times as much per unit of electricity—but it can produce that electricity exactly when it's needed, regardless of whether the wind is blowing.

The Technology Inside a Peaker Plant

Most peaker plants are remarkably straightforward machines, at least by power-generation standards.

The dominant technology is the gas turbine, which works on principles nearly identical to a jet engine. Air gets compressed, mixed with fuel—usually natural gas—and ignited in a combustion chamber. The resulting hot gases blast through a turbine, spinning it at tremendous speed. That spinning shaft connects to a generator, which converts mechanical motion into electrical current.

The simplicity is intentional. Fewer components mean fewer things that can break down during the long idle periods. Simpler designs start faster and tolerate the thermal stress of rapid heating and cooling better than more elaborate systems.

Some peaker plants use reciprocating engines—think of extremely large versions of car engines—which offer even faster start times and better efficiency at partial loads. These are particularly useful for smaller facilities or areas where the grid needs very quick response times.

Fuel flexibility matters too. While natural gas is the preferred fuel for its low cost and relatively clean combustion, many peaker plants maintain tanks of diesel fuel or jet fuel on site. If natural gas supplies are interrupted during a heat wave or cold snap—precisely when peaker plants are most needed—the operators can switch to liquid fuel and keep generating.

Heat Recovery: Making Peakers More Efficient

There's an obvious problem with letting all that waste heat escape into the atmosphere. Engineers have developed several approaches to capture it.

The most common solution is the Heat Recovery Steam Generator, usually abbreviated as HRSG. This device captures the hot exhaust gases leaving the turbine and uses them to boil water into steam. That steam then drives a second turbine and generator, extracting additional electricity from the same fuel. The resulting "combined cycle" plant achieves dramatically better efficiency—some exceed 60%—but the additional equipment takes time to warm up, reducing the plant's ability to respond instantly to demand spikes.

Cogeneration takes a different approach, using the waste heat directly rather than converting it to electricity. A peaker plant located near an industrial facility might send its hot exhaust to help dry products, sterilize equipment, or provide process heat. Plants near residential areas might feed district heating systems, warming buildings through the winter. These arrangements work best for plants that operate regularly enough to make the infrastructure investment worthwhile.

A cleverer solution is turbine inlet air cooling. Gas turbines perform better when the incoming air is cold and dense. On hot summer days—exactly when peak demand is highest—the ambient air is warm and thin, reducing turbine output precisely when it's needed most. Inlet cooling systems chill the air before it enters the compressor, boosting power output by up to 30%. Some facilities pair these cooling systems with thermal energy storage tanks, chilling a large mass of water or ice overnight when electricity is cheap, then using that stored cold to boost turbine performance during peak afternoon hours.

Hydroelectric: The Original Peaker

Long before natural gas turbines became the default choice, hydroelectric dams were meeting peak demand. Water, after all, is the ultimate flexible fuel.

A dam operator can open the gates wider and send more water through the turbines when demand rises, then partially close them when demand falls. The response time is measured in seconds or minutes, not hours. And unlike a gas turbine that consumes fuel with every kilowatt-hour generated, the water keeps flowing whether you use it or not—though environmental regulations often mandate minimum downstream flows to protect ecosystems.

Many dams are intentionally built with more generating capacity than their water supply can sustain continuously. A dam might have turbines capable of producing 500 megawatts but only enough water flow to average 200 megawatts over the course of a year. During peak demand periods, the operators open the floodgates and generate at full capacity. During off-peak hours, they throttle back and let the reservoir refill.

This flexibility makes hydroelectric dams remarkably valuable to grid operators. The incremental cost of generating an additional megawatt-hour is essentially zero—just the water falling through the turbines—yet that power can be delivered exactly when it's worth the most.

Pumped Storage: The Giant Battery

But what if you could make your own mountain lake?

Pumped-storage hydroelectricity is elegantly simple in concept. Build two reservoirs at different elevations, connected by a tunnel containing turbines that can run in both directions. When electricity is cheap and abundant—typically overnight—pump water from the lower reservoir to the upper one, storing energy as gravitational potential. When electricity is expensive and demand is high, let the water flow back down through the turbines, generating power.

This is not a power source. It's storage. The pumping process consumes more electricity than the generation process produces—typical round-trip efficiency is about 75 to 85 percent. But the economic value of peak electricity is so much higher than off-peak electricity that the transaction still makes financial sense.

Pumped storage represents the largest-capacity form of grid energy storage available today. Some facilities can store many gigawatt-hours of energy, dwarfing any battery system. The technology is mature, reliable, and well-understood, with facilities operating successfully for decades around the world.

Start times are impressive too. A pumped storage facility can go from standby to full output in minutes, with some modern designs starting in tens of seconds.

The Battery Revolution

In the past few years, lithium-ion batteries have emerged as a serious competitor to traditional peaker plants. The economics have shifted with startling speed.

In 2021, Australia's Clean Energy Council found that battery storage had become 30 percent cheaper than gas peaker plants for providing peak power. Not in some theoretical future scenario—right now, in practical real-world deployments.

The New York Power Authority, which operates much of the power infrastructure for one of the world's largest cities, announced plans to replace gas peaker plants with battery storage. In Ventura County, California, 142 Tesla Megapack battery units—providing 100 megawatts of capacity—replaced a gas peaker plant entirely. In Lessines, Belgium, 40 Megapacks took over for a turbojet generator.

Batteries offer advantages that turbines simply cannot match. Response time is measured in milliseconds, not minutes. A battery system can begin discharging the instant grid frequency drops, providing that critical first response while slower generators come online. This makes batteries extraordinarily valuable for grid stability services—markets that didn't really exist until batteries became cheap enough to compete in them.

There's also the pollution question. A gas peaker plant, even one burning relatively clean natural gas, still produces carbon dioxide, nitrogen oxides, and other emissions. Many peaker plants are located in or near urban areas, close to the demand they serve, putting those emissions where they affect the most people. Battery storage systems produce zero local emissions during operation.

Solar Thermal: A Different Approach

In 2017, a novel approach emerged from the U.S. Department of Energy's Technology to Market program. Solar thermal peaker plants would use a unique property of concentrating solar power—its ability to store energy as heat.

Unlike photovoltaic solar panels, which convert sunlight directly into electricity, solar thermal systems use mirrors to concentrate sunlight and heat a material, typically molten salts. These salts can be stored in insulated tanks, retaining their heat for hours or even days. When electricity is needed, the hot salts transfer their heat to water, generating steam that drives a conventional turbine.

This means a solar thermal plant can generate electricity after sunset, unlike traditional solar panels. The concept proposed by engineer Hank Price would have utilities pay capacity payments—essentially retainers—for solar thermal plants to be available when needed, just like traditional peaker plants. The sun provides the energy for free, but the plant can dispatch that energy on demand, day or night.

The Changing Role of Peakers

The historical role of peaker plants evolved in a world where base load power came primarily from coal and nuclear plants. The peakers filled in the gaps, handling demand spikes that those steady generators couldn't address.

But the grid is transforming. Wind and solar power have grown from curiosities to major contributors in many regions. These renewable sources are inherently intermittent—they generate when the wind blows or the sun shines, not necessarily when demand is highest.

This creates a paradoxical situation. On a sunny, breezy afternoon, renewable generation might flood the grid with cheap electricity. A few hours later, as the sun sets and wind dies down, that generation plummets just as people return home and turn on appliances. The need for flexible generation that can ramp up quickly has actually increased, even as the total amount of generation capacity has grown.

Combined-cycle gas plants have evolved to address this. Modern designs can start one turbine in peaker mode within minutes, generating power quickly though inefficiently. Over the following hours, the plant brings its heat recovery systems online, transitioning to a more efficient combined-cycle mode. This flexibility—peaker speed with base load efficiency—makes these plants particularly valuable in grids with high renewable penetration.

Grid interconnections offer another solution. The Western Electricity Coordinating Council operates intertie paths that connect electrical grids across much of western North America. When California faces an evening peak, it might import power from hydro-rich British Columbia or wind-heavy Wyoming. Spreading generation across wider areas smooths out local demand spikes and lets different regions help each other.

The Future Is Flexible

The fundamental challenge that created peaker plants hasn't gone away: electricity demand varies, and generation must match it. What's changing is the toolkit available to meet that challenge.

Traditional gas turbine peakers will likely remain part of the mix for years, though their role continues to shrink. Batteries are taking over the fastest-response functions, while combined-cycle plants handle longer duration peaks. Pumped storage remains valuable where geography permits its construction.

New technologies continue emerging. Vehicle-to-grid systems could one day let millions of electric car batteries collectively serve as a massive distributed storage system, absorbing power while parked during the day and feeding it back during evening peaks. Smart grid technologies let utilities manage demand itself, automatically dimming loads or shifting consumption to smooth out peaks before they require peaker plant activation.

The fire station analogy has limits, of course. Fires are unpredictable emergencies. Peak electricity demand follows patterns—patterns that engineers have learned to anticipate, measure, and increasingly, to reshape. The question isn't whether we'll still need flexible power generation in the decades ahead. It's whether that flexibility will come from burning fuel in turbines or from electrons flowing through battery cells, pumped water cascading through mountain tunnels, or technologies we haven't yet invented.

The peaker plant, in other words, isn't dying. It's evolving—becoming less about quick-start combustion and more about whatever technology can most economically bridge the gap between what we're generating and what we need, precisely when we need it.