Will Tesla be a Game-Changer for Battery Energy Storage?

, , Senior energy analyst | March 17, 2014, 11:38 am EDT
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Last week Tesla, an electric car manufacturer based in Palo Alto, made national news by announcing it intends to launch a “Gigafactory” to produce lithium-ion batteries for at least 500,000 vehicles by 2020. This is no small potatoes. The level of battery production Tesla envisions is equivalent to the lithium ion batteries produced worldwide last year.

Tesla expects that such production will lower the cost of these batteries by 30 percent. The ability to make cost-effective and durable batteries is critical for widespread adoption of electric vehicles. (For more on Tesla’s announcement, check out Rachael Nealer’s blog which contains advice on how Tesla can get the most from its investment.)

Lithium ion battery installation. Source: David Dodge, Green Energy Futures

Lithium ion battery installation. Source: David Dodge, Green Energy Futures

The potential role of storage in a clean energy future

Storage could also play a significant role in helping the electricity grid absorb large amounts of renewables and capture clean energy for use when the sun isn’t shining and the wind isn’t blowing.

While batteries and other advanced energy storage devices like flywheels have been installed on the electricity grid at a relatively small scale in New York and the mid-Atlantic region, they need large payments to cover costs and are not yet competitive with other energy technologies that provide grid flexibility.

Realizing the potential role of storage in a clean energy future, California was the first state in the country to roll out a storage purchase mandate (1.3 gigawatts by 2020) to grow the market and reduce prices through economies of scale. California’s storage policy is widely acknowledged as a good start rather than an end point regarding the amount of storage we should consider investing in to turn off fossil fuels once and for all.

Will Elon Musk revolutionize the storage market the way that Henry Ford transformed the auto industry? It’s too early to tell, but I say keep reaching for the stars.

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  • The real question is which storage technology has the least total cost. If, e.g. 1) lithium hydride batteries caused the Malaysian Airlines disaster, by a fire, then there is a setback; 2)If the total cost of a PV, PT, and LH system is TOTAL cost effective against the PV – CH4 option, then we have a real ball game. Total costs include all environmental costs, including water use, Co2 and CH4 pollution as well as the unknown costs of non-sensitive fracking. Again, the real judgment requires honest assessment of all costs.

    In a geopolitical world, maybe we should have fracking, with appropriate use of biodegradable additives, and water which is available in quantities sufficient for all legitimate uses. If frack-based LNG supplies were available, when needed, in Germany when Putin seized Crimea, the sangenfroid choice could be for the US to insure the “Deutsche Volk” of winter fuel in return for Deutschland to make a strong response. After-all while Hitler may have failed to take Moscow, the potential still exists in the economic sphere except for the lack of German natural resources.

  • Steve Harris

    YEAH!!!!! FINALLY!!!!!!!!!!!!!!!

  • Jon from Milwaukee

    I have thought for years that the two largest challenges keeping electric cars from being attractive to a wider segment of society are the charge time and the range. Lithium-ion batteries currently can give electric cars a much more competitive overall range compared to gasoline cars, but are too prohibitively expensive to use in car most people could afford. If this proposed factory can really drop the price of lithium-ion batteries by that much, it would help make electric cars much more widely available. Then the only big challenge would be to figure out how to charge the car in minutes instead of hours. If you forgeot to plug your car in at night (like my own mother for example, who often forgets to plug her phone in), I don’t think most people would take kindly to having to wait several hours for their car to charge up in the morning.

    Even if this doesn’t revolutionize the electric car market, there are many very useful applications for lithium ion batteries, and making them less expensive is something I see as a good thing.

    • Jason Lacoss-Arnold

      Tesla is already building out a network of supercharger DC chargers that can add about 170 miles of range in 20 minutes if I remember correctly. This will solve that last issue as well as making cross country trips doable. They don’t even charge. Nissan Leaf has something similar.

  • Kianti Murphy

    I understand and appreciate their efforts. I am looking forward to the results. Fortunately, I think that people want to have the power to generate their own power. I think there are enough good-hearted people with the ability that will also contribute their efforts. I myself have an interest in equipping people to generate enough electricity to repeatedly charge their own personal batteries so they can match their consumption levels. Someday we will get there.