rss
27

Tesla gears up for charge into home battery storage market

Print Friendly

Tesla Motors, the electric vehicle company throwing down a major challenge to the global motor industry, says it is now looking to become a front-runner in energy storage in a major new challenge to the traditional electric utility business model.

hanergy-tesla-570x378

Tesla, which already has a market worth more than half of General Motors, despite having just a fraction of the sales, says its next big market is the battery storage sector, and will release a lithium-ion battery storage produce in the next few months.

Chief technical officer JB Straubel says designs are nearly complete, and production will begin within the next six months.

“We’re going to unveil some of the Tesla home battery consumer battery that will be for you using and people’s houses or businesses, fairly soon,” he told an analysts in a conference to discuss Tesla’s latest results. “It’s really great. I’m really excited about it.”

Tesla, with its Model S vehicle, has broken down the barriers on electric vehicles with its high performance, luxury and extended range (400kms to 500kms), and its success has accelerated the EV efforts of other car makers such as BMW, GM and Ford.

Its $5 billion giga-factory, the first large-scale motor vehicle battery plant in the world, is now being built in Nevada with the help of Panasonic. It is also expected to have a dramatic effect on the energy storage market, helping bring battery costs down by as much as two-thirds, according to some analysts.

But Tesla on Thursday also indicated it was planning to enter the consumer battery storage market with it own product. It has already tested the market in partnership with Solar City, the solar leasing company that is also chaired by Tesla founder Elon Musk.

The combination of rooftop solar and battery storage is expected to revolutionise the global utility business. However, while EV batteries can provide back-up to homes, and can export back into the grid, they are not as efficient for that purpose as specifically designed stationary storage arrays – in homes, business, or located on the grid.

Morgan Stanley said last year that Tesla’s energy-storage product could be “disruptive” in the US, Europe and other markets, encouraging consumers to go off-grid, helping to push battery storage costs below $100/kWh.

Other financial analysts from UBS, Deutsche Bank, and Citigroup, among others, have made similar conclusions, suggesting that the combination of solar and storage would be more cheaper than grid power within a few years in many countries, including the US and Australia. Citigroup says the advent of storage will hasten the demise of fossil fuels, centralised coal generators in particular.

The Tesla move directly into the consumer storage market could accelerate that impact. Already, utilities are starting to reshape their business to fit in with a new market that will focus on distributed, or local generation, rather than the centralized model that has prevailed for decades. In Australia, the major retailers, and numerous smaller players, are also rolling out solar plus storage offerings.

Bloomberg notes that Tesla has already installed a storage unit at its Tejon Ranch Supercharger station in Southern California and has several other commercial installations in the field.

straubel-headshot_310_230But Straubel (pictured right) also noted that the utility market may be even bigger than the consumer market, and said the company was talking to “almost all of them.”

In California and Texas, there are large programs designed to encourage battery storage, which is seen as helping stabilize the grid, and allowing more variable renewable energy generation such as wind and solar.

It is also seen as a cheaper alternative to expanding and upgrading the poles and wires network, In Australia, Queensland network operator Ergon Energy is installing up to one hundred 100kWh battery storage units because it is less costly than traditional grid upgrades. The units will be installed without subsidies, and other network operators are also trialling various battery storage models.

Straubel has talked of his interest in battery storage before. He said last year that 400 kilowatt-hour battery pack at the Tejon Ranch supercharger site in Southern California “is the perfect application for energy storage” with its “incredibly peaky load,” he added.

Stationary applications are much easier to design for from a vibration, thermal and charge profile standpoint compared to an automobile. “The [energy storage] market is going to grow faster than people think,” although “the value of backup power is hard to quantify,” he said at the time.

Among other highlights from the conference call, Tesla said:

It had met its target of producing 35,000 vehicles in 2014 and plans to produce 55,000 vehicles in 2015.

Its Supercharger network now covers the US from coast to coast, as well as most of Europe.

The Model X falcon-wing minivan is slated to begin shipping in six months. It has 20,000 reservations.

Musk said that if the company could keep at current growth rates, it would be worth as much as Apple is today ($US700 billion) within 10 years.

To do that, Tesla plans some significant capital expenditure, of a scale that is rarely seen in modern companies today.

“We are going to spend staggering amounts of money on CapEx,” Straubel said. “I mean for a good reason and with the great ROI (return on investment).

The Gigafactory began construction two months ago, and its battery pack (for cars) will be in mass production in 2016.  

RenewEconomy Free Daily Newsletter

Share this:

  • Cooma Doug

    I remember when Apple were in this growth phase. Large companies were talking up main frame computers in most Australian business.

    • barrie harrop

      I remember when IBM said there was world market for handful of these.

  • Blind Freddy of Cairns

    Yes Giles that is correct, but firstly in Australia if you think everyone will exit then that is false. About 1/3 of residences are rentals. 1/3 are owned outright and 1/3 on a mortgage, so how many will exit is unknown but probably 1/3 maximum at best. There will also be resistance as it will still be a sizeable investment and houses are changed on average every 7 years. For business it is hard to say, some will change others might not have the ability to bung up a solar array. The other factor is exactly what Tesla are famous for, EV’s. If EV’s do take off, you would need an awfully big solar array and battery storage to charge your EV every night. So a grid connection with off peak charge will still be required. Looks like the utilities will win again!

    • Phil Gorman

      Please give references to the evidence you’re using Blind Freddy.

    • RobS

      The average EV uses ~160Wh/km and the average daily driving distance is about 38 km. this means the average daily power consumption for an Australian EV is about 6kWh. With average australian conditions to produce 6kwh a day from a solar array requires approximately 1.5kW of panels, the average solar array going onto Australian homes is a little over 3kw and rising, an additional 1.5kw to provide all the charge necessary to power an EV is actually quite a small addition.
      As for penetration, many of the competitors in this space are modelling their systems on common household appliances, Bosch for example has quite deliberately made their grid interactive home storage systems incredibly similar in size and footprint to a standard domestic refrigerator. This sort of modularity has a number of benefits, namely familiarity, ease of placement and portability as renters can simply take the device with them as they would other home appliances. I don’t see rentals being a major impediment once the economic signal is there.

      • Pedro

        The only problem I see with your calculations is that most EV owners will drive to work in the morning. Therefore their home PV system will not charge the EV and the EV will be charged in the evening when they get home rather than supplying power to the home for self consumption.

        Perhaps there will be a market for the EV owner to rent a 2kW PV system installed at their workplace to charge the vehicle….cheaper just to plug in and not tell the boss.

        • RobS

          As long as it is a grid feed system and you can plug into a slow charger at work which more and more workplaces are enabling then it matters not if the generation is occuring 20km away at home. Alternatively if you are desperate to be truly self sufficient then as the topic is home storage you can always have 6kwh storage at home in addition to the rest of the homes needs which stores power for later use in the evening recharging the days driving needs.

        • nakedChimp

          just get 2 EVs and always charge the one you’re not driving around with 😉

          • Pedro

            That is so wasteful. How about a driverless EV to drop me at work, then it drives itself home to charge up.

        • Andrew

          Or use a controlled tariff 31 that comes on after peak usage. Look at most electric hot water systems. Also the cost per kW is $0.165 and not $0.33. (Click QLD figures used inc GST).
          I’d be happy to cook and do other peak electrical based activities from the remainder of my electric cars battery and have it charge on off peak later. It could even cook me breakfast if it still got me to work and back.
          It wouldn’t just be me using power from my cars batteries. With a smart grid my car would be one of many helping to take the peak off peak demand.

          • Pedro

            A different approach to tariffs could be a solution. For example the utility pays nothing to home owners for exported PV power, but the owner of the PV system could buy it back from the utility at a highly discounted rate. In effect the PV owner is paying a fee for virtual storage.

            Like the idea of an EV cooking me breakfast. If I had a driverless EV I would get rid of the drivers seat and install a mini breakfast bar….espresso machine and all.

    • Mark Roest

      Hello again Blind Freddy and all,
      Check out the Edison2 Very Light Car. They said they will run a gas engine because the batteries weigh too much. I kept digging in their website until I found numbers that supported the idea that you could drive 300 miles at 40 miles per hour on 19 kWh (or 100 miles at 100 mph), if the kWh per kg (and per liter) is high enough — which it will be in 2-4 years. That’s just 4 hours of Aussie sun on a 5 kW array.
      By the way, it’s also a beautiful car — I like it even better than the Aptera.
      Regards,
      Mark

      • Blind Freddy of Cairns

        Yes I checked the Edison out. It has a 10.5kWh battery, that can take it about 160klms, so yes at 38klms per day you would only need about 1kW of additional solar to run that using an 80% charge efficiency and 80% efficiency on the trip usage . But that Edison is only a bit better than a bike. If you look at a real alternative, the Model S Tesla on the other hand has a 60kWh battery, so at 38klms per day you would need about 3kW extra panels. Altogether to run a household of 4 in Brisbane (say 21kWh CEC), plus a Tesla S (11kWh) you would need around 7.6 kW of solar (CEC 4.2 hours efficiency), so yes you have a point but that is only adequate, on rainy days, you would quickly run out of power. Better to have that grid back up.

    • David Osmond

      I suspect it will be a while before we have mass grid defection. But pretty soon people will be using home storage just to maximise their PV self consumption. So instead of PV owners exporting excess electricity to the grid during the day for 6-8c and buying it back that evening for ~30c, they can store the excess in their own batteries and resuse it late themselves.

      Regarding EV electricity usage, an EV driving 15,000kms per year will require about 3,000 kWh of electricity. That can be provided by a 2 kW solar panel on the roof – nothing too outrageous!

      That being said, it’s obviously more complicated if you are off-grid, and need the power regardless of whether it’s been a cloudy day or middle of winter etc.

    • MorinMoss

      “how many will exit is unknown but probably 1/3 maximum at best”
      The utilities will collapse if that many left the grid in under a decade.

      • Blind Freddy of Cairns

        Don’t think so. According to BREE residential energy usage only represents 12% of the total. The vast majority is used by manufacturing, mining transport. They have connections sized in megawatts won’t be disconnecting anytime soon. In QLD the solar PV’s have reached 25% penetration already and sure it has impacted the utilities, but they are still going along ok. (The QLD gov is paying out $600m a year for the 44cent FIT). Even if 1/3rd of home owners did put a PV and battery storage in place, many of those would stay connected to the grid as a backup. Even 1/3rd of 12% is bugger all.

        • MorinMoss

          There are lots of businesses that can go solar and with a storage battery they can cut their utility bill enormously.
          The utility will then have to charge fees to keep a grid connection which will then cause some of the biggest outfits to attempt to cut the cord if the fees are unreasonable.
          Businesses that operate mostly in the daytime will be the first to do so and expect to eventually see electricity co-ops spring up.

  • Mark Roest

    Hello Blind Freddy and all,
    Check out the PACE program concept, which has returned on a pretty large scale in California, after Fanny Mae and Freddy Mac said they’d fight it because it put them second in line instead of first in line in case of a problem with payments. California’s Legislature solved the problem by establishing a $10 million account to be used to keep the payments going in event of a default by a borrower, to assuage Fanny Mae’s and Freddy Mac’s fears.
    Basic concept: local gov’t floats a bond which is drawn on to pay for energy efficiency and renewable energy retrofits; the bill goes onto the property tax rolls, and stays with the house when the house is sold. (The improvements also stay with the house, of course.) Result: no negative cash flow for the buyer. The system is administered by a dedicated company that screens and enrolls the contractors, and either does or contracts with energy auditors who identify what’s needed and sign up the homeowner or landlord. They may offer 3 different size projects to choose among.
    Oh, and it also works for commercial projects! No reason why it would not work for industrial and agricultural as well. I think they just haven’t explored that yet.
    Regards,
    Mark

  • Craig Allen

    Another factor that would make a big difference to the economics of home storage is utilities paying feed-in rates that reflect value based on time of day. All my PV generation goes into the grid during the day when the sun is shining and I’m not at home. This is the best deal for me as I signed up when the feed-in tarrif was higher than the retail tariff. Surely it would be worth more to the utility if I stored it and delivered it durig peak demand periods. If they they payed me a higher rate at those times then I would be more likely to install storage with software to manage the exports for greatest profit to myself and value to the utility. Some retailers will realise this eventually and facilitate it I imagine.

  • Cedric Melin

    Tesla’s home storage is aiming at 5 kW.
    Tesla’s ModS is 85 kW.
    Basically a household may have a wheel needs of 170 kW (ModS + ModX)
    So going off grid is impossible unless home storage and solar PV cover for kW wheel needs.
    Therefore storage will only create more competition for cheaper electricity. While the electric car will save the utilities that can provide kW for wheels. Therefore, the utilities that will survive will enter EV charging infrastructure both on the go and at parking.

  • I’ve read that EV changing stations need storage to smooth demand from the grid. Does Tesla use storage at their charging stations already?

    • Ronald Brakels

      A Tesla supercharger might use as much power as 3 machine presses in operation or the air conditioning in a large supermarket on a hot day. Small factories and supermarkets don’t requires storage to smooth demand from the grid and so neither do superchargers. But Tesla superchargers could use batteries to smooth demand from the grid, as could factories or supermarkets.

    • JonathanMaddox

      I believe Tesla *does* incorporate some local stationary battery storage into their supercharger venues, almost as much for the purpose of evaluating their performance in a stationary application as for smoothing their load peaks. But as Ronald explains, it’s not strictly necessary for them to do so, as the existing grid is more than capable of handling sudden demand surges and drop-offs of similar magnitude from large commercial and industrial users, and indeed as gusts hit wind turbines and as clouds pass over solar panels.

  • CaptD

    Using California as an example, those that have installed Solar Panels are now being ripped off by their Utilities since the Utilities only pay them a small amount for any Energy the home/business owners push into the Grid usually during the peak usage period when that Utility charges others high prices for that same Energy. Storage batteries will allow home and business owners to store what energy they generate and thereby further reduce their months Energy costs while also writing off the cost of the equipment just like their Utilities do, which will further reduce their payback period after which they will be get “free” Energy which could easily also power their vehicles since ever more are now purchasing eVehicles whose batteries could also add additional capacity to ones home storage system when the eVehicle is parked.

    Imagine Utilities designing a future GRID that encourages home and business storage since it would provide huge additional capacity when needed like during a natural disaster or any other extraordinary situation.

  • I agree. I think for this to really take flight, you need to get the utilities on board in a mutually beneficial way with the home owner. Sadly, the likely realistic way to do that is through legislation.

  • Daniel Snyman

    I once suggested (on an e-vehicle website) that petrol driven cars be fitted with a device to charge domestic batteries while driving to work … and my idea got shot down by the editor. And several commentators. But surely it must be possible and feasible?