Can battery storage become economical?

Some of you may have heard of Tesla, the American company that produces high-end electric vehicles.

It was recently announced that they are going to build a new factory – dubbed the Gigafactory – to help meet growing demand for their cars, and more specifically batteries. This could have a huge impact on renewable energy across the world.

The fundamental issue with many renewable energy sources is that they are intermittent – they only produce energy when the sun shines (in the case of solar), or when the wind blows (in the case of a wind turbine). There are very few renewables that are completely predictable – I think tidal is pretty much the only one.

Energy demand, however, is fairly predictable – for example, there is a peak in demand at 6pm when everyone arrives home and turns on the TV and cooks dinner. Compare this to the usage in the middle of the night – at 3am, the majority of people are asleep, so very little energy is required.

One of the major issues is trying to manage intermittently-produced electricity in an efficient manner to better meet the predictable demand.

Could the Gigafactory make energy storage economical?

Unfortunately, there is no really efficient way to store electricity. In fact to try and store electrical energy it needs to be converted to other types of energy, which can then be converted back to electricity as required. You can read about some of the proposed energy storage solutions being put forward here, but I guess the front-runner is the battery.

Batteries are used by almost everyone but normally on a small scale, for example in mobile phones or the TV remote. The thought of powering a whole house with a battery is not feasible at the moment, mainly because it is cost-prohibited, but the Gigafactory may be about to change all that.

The aim of the Tesla Gigafactory

At a cost of $4-5bn, the Gigafactory is charged with dramatically increasing the number of batteries manufactured each year. The aim is for this one factory to produce as many lithium ion batteries each year as are currently produced worldwide each year. In doing so they are predicting the price of the battery to fall by 30%.

They are not predicting any breakthrough in technology to produce these cost reductions. They are simply going for the economy of scale logic: that the more you produce, the cheaper you can produce each unit for. Compare this with the impact of China opening massive solar PV manufacturing plants and halving the price of solar panels in just one year.

Not only would the price of batteries falling help bring the price of electric cars in line with traditional petrol/diesel cars – which should help drive mass adoption. In addition, energy storage would become less cost-prohibitive. All an industry needs is a bit of competition to drive down prices – so, yes, the Gigafactory would start the trend, but no doubt other companies may take them on to further drive down prices.

Electric cars as energy storage solutions for the home

This is definitely something we will look at in more detail in the near future, but for now just consider an electrical car as a bank of batteries on wheels – a mobile energy store if you like. Most people assume that electric cars just get charged and then they get driven around before they need recharging. Well, take the ‘mobile energy store’ logic a bit further and we could find ourselves in a position where a car is powering the home using its battery supply. Electricity collected at night from wind turbines, for example, could be used to charge car batteries. Then, if not driven the following day for whatever reason, the batteries in the car could be used to power the home.

Essentially, a smart meter would manage the relationship between charging the batteries in the car and using the batteries to power the house depending on the state of the grid. But imagine selling the electricity stored in your electrical car back to the grid – surely this would be a popular idea and would help drive uptake of the electrical vehicles. Furthermore, thousands of these mobile energy stores are already installed in homes, so we already have a test bed for this type of system.

We will be following this new technology closely so look out for new blogs!

Installing Battery Storage

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