Battery Technology is the Key to Stopping Climate Change
It will make capitalism the environment’s best friend
Battery technology has been what has limited the scaling of renewable energy sources. Energy demand varies greatly throughout the day, and with the seasons. This variation is one of the primary advantages of carbon-based energy sources over renewable sources: we can precisely control the production of energy by controlling the mass of fuel that is burning. This power is then immediately placed onto the electrical grid. It’s very efficient since in any industry putting resources in storage is an expense that could be done without.
This is not the case for renewable energy. The generation of energy from solar panels and wind turbines is predictable on an annual basis, but not at a particular point in time. At a particular time, the amount of energy produced can greatly exceed demand, producing an energy surge in the power grid, or it might be much less, meaning rolling blackouts and outages to make sure essential operations are kept running.
An effective battery storage system can store excess energy in the case supply exceeds demand, and it can release stored energy to make the difference if demand exceeds supply. What are the technical and economic drawbacks that prevent the installation of sufficient battery capacity? The main one is simply first cost, or the cost to manufacture and install a large array of batteries. Lithium-ion batteries, which are the current state-of-the-art, use cobalt and nickel as components, two relatively expensive metals.
Despite this, battery costs have dropped dramatically from an estimated $1000/kWh in 2010 down to roughly $120/kWh currently. This was accomplished through a combination of research and optimizing manufacturing. However, developing new battery technology that uses cheaper metals than lithium-ion batteries is key to further reducing the price per kilowatt-hour. The price target at which battery-supplied electricity is priced competitively with carbon-based sources is roughly $100/kWh.
And Tesla’s new battery technology will be able to do this.
Tesla’s battery supplier, CATL, has developed a new battery technology known as a lithium-iron-phosphate battery. This battery does not use nickel or cobalt, and some analysts predict this new technology will reduce battery costs to as low as $60/kWh in five years. At this price point, an electric vehicle will be cheaper than a vehicle with an internal combustion engine. And operating a utility-scale power plant that uses renewable energy and battery storage will be cheaper than one relying on carbon-based energy sources. Without government subsidies.
Utility-scale battery deployments have already started. Several projects have been deployed across the United States, but the largest is currently under construction in California. In collaboration with PG&E, Tesla has broken ground on a facility in Moss Landing, California that will release up to 730 megawatt-hours (MWh) of energy using 256 of Tesla’s lithium-ion (Li-ion) Megapacks, with an option to upgrade to 1.2 gigawatt-hours (GWh) of capacity. This could power all of San Francisco for up to six hours. When Tesla begins utilizing its new battery technology, these projects will only get cheaper, and more commonplace.
Large oil companies are already taking notice of the effect of this new technology on their bottom line. BP is currently shifting investments into renewables in anticipation of a shift in utility investor funds away from carbon-based energy sources. This will be a major systemic shift in how energy is produced and consumed globally and will result in a dramatic reduction in carbon emissions in a way that is economically sustainable. And it will require no action on the part of governments whose political incentives do not align with supporting renewables.
The clean energy revolution is here. And, because of technological innovation, markets will drive it.