How Battery Storage is Evolving Our Electric Grid: Continuing the Conversation
November 30, 2020
On September 23, the Cleantech Corner hosted a webinar discussing “How Battery Storage is Evolving Our Electric Grid.” The conversation touched on the pressure that our current grid is facing in the evolution towards decarbonization and increased renewable energy resources. Our talented panelists highlighted the important role that energy storage will play in this transition to more distributed clean energy. The implementation of storage requires many resources and comes with numerous challenges, as explained by panelists.
This webinar ended in an intriguing discussion with the audience, where a question and answer format fueled the productive fireside chat. Great audience involvement left numerous questions unanswered, which our panelists have taken the time to respond to below.
Question: Tesla projected a price reduction of 56% at Tesla battery Day within 3 years, do you think it is realistic?
Response from panelist Brian Bartholomew of Bloomberg New Energy Finance:
From a recent report by Bloomberg New Energy Finance’s (BNEF) head of Energy Storage, James Frith: “In order to reduce cost, accelerate scale-up and improve performance, Tesla has, in essence, reimagined the entire lithium-ion battery manufacturing value chain. The rewards this approach offers are clear – a 56% reduction in pack cost, a 54% increase in range, and a 69% reduction in capital investment. It is also an incredibly high-risk approach. The company is counting on realizing multiple major technological advances at the same time. The chance that one or more of these endeavors doesn’t work or is delayed is high. As long as Tesla successfully delivers some of these technologies, it can expect some improvements but it may find that its improvement in comparison to others is not as large as it hopes.”
Question: At Tesla’s Battery Day, Elon Musk said he’s confident Tesla will sell a $25,000 car in 3-5 years as new innovations in battery tech are integrated into the Tesla supply chain. Besides suppliers keeping up with the demand for raw materials, what’s the biggest hurdle Tesla and others will face in opening up EVs for the masses?
Response from panelist David Nenon of Tesla:
Affordability is the biggest hurdle for Tesla and the broader EV market. Batteries are still too expensive, hence Tesla’s decision to develop in-house manufacturing capability. However, there is still execution risk on getting to the $25,000 car. Policy could be a big help here – EV subsidies have been a helpful start, but subsidies that further incentivize battery manufacturing and innovation would be even better.
Question: To meet the need for battery capacity that’s highlighted here, the need for rare earth metals will become much greater. Do the mineral deposits present on earth have the capacity to carry battery development into the Terawatt energy we need for renewables to dominate the energy space?
Response from panelist David Nenon of Tesla:
The most important battery metals are lithium, nickel, cobalt, iron, manganese, and aluminum, none of which are classified as rare earth metals. There is more than enough of each metal in the earth to support the Terawatt scale – the challenge is the mining capacity to extract these metals in an environmentally friendly manner. Metals prices are at an all-time low, which does not incentivize miners to start new projects. Battery recycling is a powerful way to circumvent this problem, as new batteries are made from old battery metals.
Question: I’ve read that the COVID-19 pandemic is expected to reduce the cost of carbon permits, create a more ‘friendly’ environment for non-renewable energy, and discourage companies from transitioning to renewable energy in the short-term. How is Strata approaching this issue to help prevent a slowdown in the transition to renewables?
Response from panelist James Robinson of Strata Solar:
The COVID-19 pandemic is likely to reduce energy demand, at least temporarily, which will likely suppress energy prices. That could have a detrimental effect on renewable energy development, but it could also serve to phase out non-renewable energy more quickly; consider a coal-fired power plant that is marginally economic. In any case, any effect due to COVID will likely be relatively short-lived on the scale of multi-year development cycles and 20+ year asset lives.
Strata proactively engages with regulators on the local, state, and federal level in order to advocate for legislation that lets renewable energy play on an even playing field with non-renewable energy sources. These efforts will continue throughout the COVID-19 pandemic and into the recovery once the pandemic has passed.
Question: People talk about the need for long-duration storage, between 10-100 hours of storage to deal with some of the resource adequacy issues that have evolved with wildfires and hurricanes. Most of the lithium-based technologies are limited to 4-8 hours of storage. At the same time, hydrogen and hydropower may be better suited for seasonal storage. Is there a market for storage technologies that can provide long-duration storage even if they are not arbitraging intra-day markets at the 10-100 hour scale? Would it be better to focus on improving R&D on lithium batteries or long-duration options?
Response from panelist James Robinson of Strata Solar:
There is currently a limited market for long-duration storage, but that is beginning to change. California just issued a Request for Proposal (RFP) for long-duration storage, which is the first major RFP to target 8+ hours of storage. Hopefully, these RFP’s will become more common, which will spur development into long-duration storage. Greentech Media has a good article covering this issue: So, What Exactly Is Long-Duration Energy Storage?
Your question around whether it is better to continue to invest in R&D on lithium-ion storage or to look for different technologies is an interesting one. My opinion is that lithium-ion has such a large head start, especially since it is also used in electric vehicles, that it will likely remain the best option for the 4-12 hour timeframe for the foreseeable future. Once you get above that range, into the multi-day or even seasonal storage category, there is room for other better-suited technologies to step in and beat out lithium-ion.
Question: Where do you see the market evolving for commercial and industrial customers? The utility and residential applications are well-publicized and seemingly well established.
Response from moderator Ron DiFelice of Energy Intelligence Partners:
It’s an emerging market that will grow as pricing for energy storage gets lower and companies demand around-the-clock, zero-carbon energy (as opposed to renewable energy that must be supplemented with fossil fuel generation due to intermittency). Utilities are slow to provide this, so companies serious about sustainability will do it themselves and they will need energy storage. Here’s one of the first examples by Google: Google Pledges 24/7 Carbon-Free Energy by 2030.
Question: Is there a social science type of route to go into the field?
Response from moderator Ron DiFelice of Energy Intelligence Partners:
Yes – Economics and law are very important aspects of growing energy storage deployments and renewable energy businesses. The industry needs good policy people, too.
If you were unable to attend the webinar, and are interested to learn more, click here: How Battery Storage is Evolving our Electric Grid.
About the Author
This blog was written by Summer Lanier, a junior Environmental Studies major on the Sustainability track from Benson, NC. She is minoring in Information Systems and is passionate about the intersection of technology and the environment, and feels that cleantech will play a vital role in our future.