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Why Elon Musk's Batteries Frighten Electric Companies
JoeyRox writes: The publicized goal of Tesla's "gigafactory" is to make electric cars more affordable. However, that benefit may soon be eclipsed by the gigafactory's impact on roof-top solar power storage costs, putting the business model of utilities in peril. "The mortal threat that ever cheaper on-site renewables pose" comes from systems that include storage, said physicist Amory Lovins. "That is an unregulated product you can buy at Home Depot that leaves the old business model with no place to hide."
So, what evidence is there that electric companies are scared? Sounds like just the contention of a greeny.
Still, the Edison Electric Institute, a trade group representing America’s investor-owned utilities, recently announced that its members will help to encourage electric vehicle use by spending $50 million annually to buy plug-in service trucks and invest in car-charging technology. “Advancing plug-in electric vehicles and technologies is an industry priority,” said EEI President Thomas Kuhn.
Uh, "advancing as a priority" is actually the opposite of fear.
Southern California Edison is planning to spend about $9.2 billion through 2017 to allow the two-way flow of electricity on its system, said Edison International CEO Ted Craver. “We are certainly big supporters of electric transportation,” Craver said. He added: “That electric car isn’t just going to stay at home. It’s going to go other places. It’s going to need to get charged in other places. And I think our ability to provide that glue for all those things that are going to plug into that network is really how we see our core business.”
Again, sounds positive. Actually the only negative thing in the article is that electric cars might cause a load our infrastructure isn't ready for -- to the contrary a solar charging station in the home would mitigate this. Is the new journalism format to title your articles with a thesis directly contrary to all the actual evidence you're about to present?
My work here is dung.
Learn about the super tricks the Electric Companies don't want you to know about!
But all I see putting the Utilities business model in jeopardy is inept management and political pandering. Rooftop solar and battery storage cannot even begin to compete with efficient central generation and distribution. Utilities however have no incentive to run an efficient organization. For decades that have been drunk on the power of captive rate-payers, with no competitive pressure to be efficient. Rooftop solar and batteries threaten to bring that competition to the game. Modern utilities are so bloated and inefficient that the rooftop solar and battery combination is a threat despite being much less efficient. So yeah, utilities are scared, but not for the reasons, or in the manner the Solar proponents claim, but scared they will have to grow up, and abandon the monopoly model and actually run an efficient business. Competition always frightens the monopolist.
Electric utilities would in fact love local storage for solar rooftops. The big technical problem for them is that when a cloud goes over an area, all the electricty being pumped back into the grid suddenly drops drastically and the power company has to have generation capacity to add in within seconds to avoid brown outs. By having even 30 minutes worth of storage in the home, the batteries could fill in for the local drop and ease the imapct on the power company.
This is becoming a very big problem in Germany now and there are companies whose sole business is to supply incredibly expensive (thousands of dollars per kilowatt hour in some cases) electricity within a few seconds notice. I believe there was even a bloomberg article on this a few months ago.
Utilities are scared that enough customers will stop using them that they'll have to raise rates with remaining customers in order to continue to pay for the power production machinery that's on-credit, which will further drive away customers to alternative sources of power.
Thing of it is, there's really no excuse for new single-family homes to not have solar on the roof. It's a lot more affordable for the average family if the solar is part of the mortgage than if it's a separate itemized purchase. I'd like to retrofit my house to solar as well, and I'm considering how to do it, but the local power company wants to charge out the ass to solar customers that are grid-tied, basically to make it as expensive as if you're buying power from them, and they want to pay jack and shit (and jack left town) for power that you sell back to them.
Do not look into laser with remaining eye.
You should care about how they might respond with Lobbying and Legislation that will block your and everyone's ability to actually use the batteries.
They will respond to protect themselves and their revenue stream, most anyone would.
History has shown they will not hesitate to utilize almost any method available.
That is what you should be concerned about.
This will revolutionize the grid. I was reading that lithium ion batteries are around $500/kWh right now wholesale (and I've seen some you can buy from China that make me believe that's roughly true). Then there's a projected cost as low as $180/kWh in about 5 years after Tesla's factory ramps up (and no doubt others start to come online).
Right now (in Ontario) I can buy peak electricity at about 13 cents per kWh and maybe 7 or 8 cents per kWh at night. Imagine a system of batteries where I buy power at night, store it, and then use that during the day. I worked the rough numbers and at today's battery prices I'd be hard pressed to get a return on my investment in 20 years, and that's only considering battery cost. However, if you use $180/kWh, suddenly you might see the payback period on a system like that drop below 10 years, and if I can do it at that price, what can a utility do with its economy of scale?
The addition of economical grid-level storage will radically change the way the utilities run their business. You won't need so much idle generating capacity such as natural gas or coal sitting around to service peak loads because you can charge up your battery banks at night using nuclear and during the day with solar and consume them during the peak periods.
"I have never let my schooling interfere with my education." - Mark Twain
Better battery technology would be an incredible benefit for some utilities. They could store some of their excess generation output at non-peak times and sell that electricity later on at times of peak demand.
Absolutely!
But... So could we. Currently, solar has become cheap enough that you can see an ROI on a grid-tie system in well under a decade (under five years if you can do most of the work yourself and just get a sign-off on final inspection from a licensed electrician). Key phrase there, however, "grid-tie" - Meaning you don't need to care whether or not your installation actually meets your home's total demand, nor do you need to care about aligning your home's production and demand curves.
In order to make going totally off-grid viable, you need the ability to cheaply and safely store somewhere in the ballpark of 100KWH (three to four days for a typical US household). Currently, that costs a small fortune in batteries, not to mention the space they take up, the weight, the outgassing, the useful lifetime, etc. If Elon turns all those problems into one pallet-sized box that sits outside your house and has one wire in from your array, and one wire out to your breaker box, all for a few grand - Suddenly a hundred million Americans have no use for the local electric company.
You must mean that notoriously goddamn liberal hotbed of politics called Texas. They really don't like that whole goddamn liberal free market direct sale model. If only they could learn from that famous bastion of conservative thought that started the whole mess: California. Let's not cloud the issue with facts. They're terribly inconvenient.
"Suppose you were an idiot..... And suppose you were a member of Congress... But I repeate myself."
Germany is cloudier than Seattle and yet they're the global leader in solar power. Go figure.
Have you looked at the price of Solar these days? In bulk it's down to less than $2/watt and that includes the inverter. You can install 800w of capacity for $1200 these days (plus batteries) so you're looking at $3000-4000 for 1KW professionally installed with lead acid battery backup. I pay about $1500-1800 a year for electricity in Texas and that would cover about 70% of my peak usage and would pay for itself after the third year. Solar is good for about 18-20 years and drops below 80% of it's nameplate rating after about 25 years. After year 5 you can just take your savings and roll it in to buying additional capacity/maintenance.
moox. for a new generation.
They do not like anything that winds up with them selling fewer electrons. They don't even like cogeneration. When I was a reporter, writing about the electric industry about ten years ago, at the time the industry was saying they would help large businesses implement cogeneration to achieve greater efficiency, I learned about the "cogen killers" - people working for the electric producers who would on the sly, go and pressure large businesses to NOT implement cogeneration. This industry is rife with this kind of thing, so I would suggest you take anything one of their PR people says with a gigantic grain of salt, and then start following the money.
One of the things that has been driving battery development is size and weight. Basically the higher the power density the cooler the iPhone. But with a house you don't really care if the battery is the size of a deep freeze as long as it does its job. This is not entirely true in that shipping and installation are a bit of a concern but once there most people won't care.
;thus house batteries not only benefit from the car battery research but can use low power density discoveries that cars might not readily use.
What an ideal house battery will have is long term durability (20+ years), very low maintenance, and very low cost per Kwh.
These are close to what researchers are looking for with car batteries
But where this all gets interesting is that the economics look very bad for the power companies if only a few percent of customers are able to abandon the grid. Typically those who can abandon the grid will be private homes owned by slightly wealthier people. These are easy and typically profitable customers to service so losing many of them will see profits vanish while not seeing infrastructure costs drop significantly (you still have to run power past their houses).
But the power companies are facing all kinds of much more subtle problems. For instance people generally hate the power company, thus they will typically enjoy screwing them over if the costs are roughly equal. Also people like going green which means that they are willing to endure minor hardships to go off grid (appeals to boomers). Lastly as boomers are heading into retirement one of the most important things is to nail down a budget. Energy costs can be unpredictable and so installing a fully off grid system could result in a near perfect guaranteed energy cost.
Going forward people are also going to have more and more electric cars. A full solar system with large batteries will potentially mean little or no energy costs when running a car. This again will appeal to people on a fixed budget as they can then watch gas prices go up and down and simply not care.
But the economics are very interesting. If the power company loses 5% of their customers that will almost translate to a 5% drop in revenue with only a tiny drop in costs. This could then start a vicious cycle where they try to make up for it with higher rates which drives away customers and so on. This could spiral until the only people still on the grid are those who can't go solar because of too high a demand for too little surface area (tall buildings) or simply don't have the capital wealth to finance the upgrade (poor people).
Some people have commented that some factories can't go off grid but this is a fallacy in that other than the heaviest of heavy industry most factories could easily meet their energy needs with a solar system combined with some local generation. The key to the local generation making sense is if the above vicious circle were to drive up electrical prices local generation would make sense for a growing number of situations.
There is a great historical precedent for this. Horses in large cities. Basically if in 1880 you drove your buggy into any large city you weren't alone and there were plenty of services available. But once the car began to take over and the richer made the switch it not only ate into the customer base a bit but it caused many horse service companies to no longer be able to justify the lower profit use of such prime downtown real-estate. So as more and more horse servicing companies closed it became more difficult to have a horse in a big city. Then the city officials realized that horses sort of sucked (cleaning horse poop and dead horses from the streets isn't cheap) so they began to push them out. Horses continued in the countryside for decades longer but in the cities the horses were mostly gone very very quickly. So one cannot simply compare the costs of a horse to a car and make a prediction. It becomes the whole situation from psychology to short ter
Just randomly connecting to the grid and backfeeding power causes real problems (i.e. your generator electronics get fried, you can electrocute the guy trying to fix a power outage, etc.). You need special equipment to make sure there are no phase mismatches, it needs to detach itself from the grid if the grid-side drops in a power outage, and you need a new meter.