Last week, Elon Musk and his Tesla corporation changed the world. Or so you might think from reading the press coverage about Musk’s long-expected announcement that the gigafactory Tesla is building in Nevada will produce batteries not only for Tesla automobiles, but to use as storage for renewable energy–especially rooftop solar–as well.
EverReady is probably pretty jealous; an announcement about a new battery has never received so much attention.
As one might expect, the New York Times carried the most straightforward story about the new Tesla battery. The Washington Post took the opportunity to add more context, and useful context at that, to the story in Why Tesla’s announcement is such a big deal: The coming revolution in energy storage.
Jeff McMahon at Forbes took the most provocative approach; his piece was titled Did Tesla Just Kill Nuclear Power?
We reposted McMahon’s piece on Facebook and Twitter–with the added comment: “Yes. And fossil fuels too.” And it quickly became the most popular item we’ve ever posted–as of this morning more than 172,000 people have seen it on their Facebook pages; more than 12,500 have read the article directly from our Facebook and Twitter links. More than 300,000 overall have read it–we suspect that’s far higher than a typical Forbes’ online post.
Clearly, Tesla has tapped into something.
And yet, it’s a battery. The same kind of thing that powers our laptops and phones and kids’ toys. Let’s face it, most Americans probably aren’t nearly as excited about the announcement of a new battery as are those of us who follow energy issues closely.
But don’t tell Musk it’s just a battery. In fact, don’t tell anyone. Because this is, in fact, a game changer.
“Our goal here is to fundamentally change the way the world uses energy,” Musk said. “We’re talking at the terawatt scale. The goal is complete transformation of the entire energy infrastructure of the world.”
No one will ever accuse Musk of thinking small.
What Tesla is doing–and we’re just at the very beginning of this transformation–is changing the entire nature of electricity generation and distribution. Utility executives across the country probably were pulling out their hair as Musk made his announcement last week–at a webcast press conference, powered by Tesla batteries, that began after midnight.
It’s not that Tesla’s technology is unique; there are a growing number of companies in the battery and electricity storage business. But take a look at the Tesla PowerWall above. It doesn’t look like any battery you’ve ever seen. It’s sleek, as beautiful in its way as the latest Apple product. That’s what Musk is aiming for: to make the essentially boring business of storage of electricity as hip and essential as the latest IPhone.
But, unlike Apple which does so at higher price levels than its competitors, Tesla is breaking price barriers.
Before the announcement, energy pundits anticipated that the PowerWall would cost about $15,000. Instead, there are two models: a 7 kw/h battery for $3,000 and a 10 kw/h battery for $3,500. That’s a stunning difference.
Installation will add to the cost, of course, but not by as much as predicted either. SolarCity is already taking lease orders for the PowerWall at $5,000, installed. Purchase, installed, begins at $7,140. The company says it plans to install PowerWalls at every single solar installation it does by 2020.
At these sizes, a single PowerWall won’t allow many people–only those with the most energy efficient homes–to move off the grid. And the PowerWall is being touted more as a backup power system for when the grid goes down than a means of full self-generation of electricity.
But Musk pointed out that the design allows up to nine PowerWalls to be hooked up together–way more than enough power to cover a household’s needs. So if grid defection is the goal, it can be done; with two or three PowerWalls the cost already is not outrageous (presumably, installation of multiple PowerWalls will be lower per unit than for a single battery).
The thing is, the prices are going to go down over time, just as solar has gone down. True mass-scale 365/24/7 rooftop solar is no longer a goal. The goal has been met, and over the next few years it will become easier and easier for every household to attain. Which means it will become easier and easier for every household–and every brick-and-mortar business–to become self-sufficient power plants.
That’s what Musk means when he says Tesla (and companion company SolarCity) are out to change the global energy infrastructure. Now he’s provided the first consumer-acceptable device to do that. Not only consumer-acceptable, the PowerWall could become–like the IPhone a decade ago and the Apple Watch now–a product that people flock to. It will fill a need that most people, certainly most people who don’t think about energy issues on a daily basis, didn’t know they had.
As homeowners show off these PowerWalls in their garage, hooked up to the solar panels on their roof, the need–and the desire–for them will become obvious. And sales will take off, further reducing costs, allowing for greater deployment of the technology. That’s surely what Tesla is counting on.
Tesla’s pricing already will put added pressure on all the other companies–and some energy experts think some of the other designs may well be superior to Tesla’s–to reduce their prices as quickly as possible.
Mass production, which Tesla will attain through its Gigafactory, will also bring down prices. First at Tesla, but once other manufacturers get involved in a large scale, with them too. Although it may turn out that other manufacturers will wait and see whether Tesla’s battery venture works before investing billions of dollars in giant production factories. The danger is if they wait until then, they may find themselves too far behind the curve. So the pressure will be on to act more quickly if they want a piece of this market.
Tesla is not going to make batteries just for the household level. It’s also planning to manufacture the PowerPack–a larger system based on 100 kw/h modules that can be stacked together to reach the gigawatt level. Smaller PowerPacks would be used for larger power users like Wal-Marts and the like. The really large, multi-module models will be used at the utility-scale, to provide real backup for solar power plants and wind farms and make the grid more amenable to large amounts of utility-generated renewables.
Already, Tesla is talking to one utility about a 250 MW system–by itself larger than the 220 MW of storage expected to be installed nationwide by the end of this year.
The knock against renewables used to be that they were too expensive and too inefficient. Both of those problems have been solved. The cost of renewables, especially solar, has plummeted in recent years while capacity factors of both solar and wind keep rising.
So then the pro-nuclear and fossil fuel forces seized on the “intermittency” and related “reliability” arguments. The sun isn’t always shining and the wind isn’t always blowing, therefore true “baseload” power–provided by large atomic reactors and coal and gas plants–are necessary to ensure that electricity is always available when needed. Or so they say.
That argument seems like common sense, but has always been overblown. Several European nations already have a high penetration of renewables and they’ve managed to keep the lights on quite successfully. In fact, European grid reliability is better than that of the U.S. But now, Tesla has blown that argument entirely out of the water, in the most public way possible.
What the utilities fear most is the other factor Tesla has just brought to the marketplace: the real ability for homeowners to move off the grid entirely if they want to or, if they don’t, for them to generate enough electricity to power their homes and sell some back to the utility if they want, or just store it for a while and never bother to actually use grid-supplied power.
In the first case, the utility loses the customer entirely and permanently. The second case may even be worse for the utility: it doesn’t lose the customer, but rather than selling him/her power, the utility buys his/her power. Either way, the utility loses, especially if it clings to the increasingly-outdated model of the utility’s business as being the sale of more and more electricity, rather than the 21st century model of the utility being the facilitator of the provision of electricity services–whether through increased energy efficiency, self-generated rooftop solar, community solar, or other distributed energy sources.
Tesla says ending utilities is not its goal. And it may not be. But if the PowerWall and its competitors to come are as successful as Tesla believes it will be, that may well be the outcome.
That would be the complete transformation of the electricity business Elon Musk says he seeks. And it would be the fastest and cheapest way possible to attain the nuclear-free, carbon-free energy future that will effectively address the global threat of climate catastrophe.
Imagine that: giving households the ability to cost-effectively achieve those ingrained American values of independence and self-reliance turns out to be the solution to so many environmental problems: climate change, radioactive waste generation, threat of nuclear meltdown, mountain top removal of coal, fracking, the list goes on.
Tesla has laid down the marker: it is possible to change the world.
May 5, 2015
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