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Three signs that the Great Energy Disruption is already here

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CleanTechnica

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Nearly 10 months ago, Tony Seba, author of the 2014 book Clean Disruption of Energy and Transportation, posted a video on YouTube, “CleanDisruption.” In both, he projected that a nearly complete disruption of the energy business would begin in 2020 and be well underway by 2022, the year he projects for distributed solar power with battery backup to fall below the cost of transmitting electricity. It is a point at which centralized power plants, if they are to compete with solar-plus-storage, will have to provide power for free. He believes that all centralized electric power producers will be obsolete by 2030, as will conventional cars and utility companies.

I would suggest that anyone reading the book or watching the video keep in mind that the projections are wrong. Tony Seba gives really compelling reasoning leading to his conclusions. The problem is that the rate of change he expected seems to have been off a bit. It appears that he was much too conservative, and change is going on much faster than he anticipated.

In his March 2016 video, Seba talked about the fact that the cost of electricity from solar power had dropped below 5¢/kWh. Less than a year after that, it dropped below 3¢/kWh in multiple auctions. This is far faster than he anticipated, and would make the disruption happen sooner than 2022.

While the decline in the cost of solar power is clearly very great, however, the decline in the cost of grid storage appears to be taking off. Seba spoke of a decline in cost of 19% per year, but that rate has been exceeded by important technologies.

Lazard’s Levelized Cost of Storage Analysis – Version 2.0 has appeared, showing some important changes from version 1.0. While the Levelized Cost of Storage (LCOS) for several types of storage have declined at the rates consistent with what Seba suggested, three stand out — one of these is reported by Lazard, and the others appeared in recent news.

First, in the version 1.0 report, the LCOS of compressed air storage was reported at $192/MWh. This is a low figure for natural gas peaking plants. In version 2.0, however, the figure had dropped 33% to $116–140/MWh, well below what those peaking plants normally charge. This shows a technology for storage that is getting competitive with nuclear power generation.

Second, examining the 1.0 and 2.0 versions of the report, we can see a decline of 23% in the costs of lithium-ion batteries. Lazard’s analysts may not have known that Tesla would essentially double the storage capacity of its powerwall batteries with an increase in price that really only covered the addition of new inverters. The Gigafactory has come online, even though it is only about 35% finished, and this will drive the price of lithium-ion batteries down further. These changes point to reductions in the costs of storage on the level of 50%.

A third story that could change the market has come from US battery manufacturer Eos. This company has announced a partnership with Siemens on storage solutions. Eos’ batteries are built on a minimum unit size of 1000 MW & 4000 MWh, at prices ranging from $160 to $200 per kWh. Eos’ website gives the LCOE of energy stored in the battery at 12¢/kWh to 17¢/kWh. The LCOE is well below the minimum cost of that of a gas peaking plant, and at a point where it is starting to get competitive with nuclear power.

Combined with the Lazard LCOE reports for solar and wind, these prices for storage are already getting to the point of being very much disruptive. In Lazard’s latest Levelized Cost of Electricity Analysis (version 10.0), solar power is at an average of 4.6¢/kWh to $6.1¢/kWh and wind power at 3.2¢/kWh to 6.2¢/kWh. The new low-cost storage solutions do not really have to compete with nuclear, coal, or gas. What they need to do is to combine with wind and solar power to compete with baseload power. It looks like that could be happening already.

The Great Energy Disruption may already have begun.

 

Source: CleanTechnica. Reproduced with permission.  

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  • wmh

    Does that nuclear power cost include the cost of demolishing the nuclear power station and guarding the radioactive remains for 200,000 years? Also, how does the catastrophe-cost compare with solar?

    Some storage is already zero cost:- energy storage as hot water in your domestic electric hot water service.

  • Kevfromspace

    What a time to be alive…

  • Jo

    Looks like I have to find some other goals to fight for.
    Renewable energy will take care of itself. Even our government will not be able to stem the tide.

    • Common Sense

      May I suggest toxic chemicals in our food and water.

    • neroden

      Sure. HOWEVER, there is about to be a big *financial* divergence. People who invest in solar, batteries, wind, insulation, etc. at the right time will win big financially; those who remain dependent on inefficent use of dirty fossil fuels (or worse, invested in them) will find themselves with a lot less money.

      Now is the time to strike it rich… so that you have more wealth to fight for whatever goals you choose to fight for next 🙂

  • Common Sense

    In the not too distant future it will be possible to obtain all of your energy needs from your rooftop.

    • Ian

      Many people already do this

      • Common Sense

        How many?

        • Ian

          I would be just one. And our house has been energy neutral since 2009. With the 60cent FIT have been very cash positive since then.

          Now, anyone who exports over around 15 units a day to cover daily charged, and are on a good FIT (such as Powershops 10 c/ unit) can be in the same boat. That is on the proviso the house is efficient, is efficiently operated and appliances are efficient, with a suitable pv system.
          -Even with all-electric homes using solar or heat pump HW systems.

          So there would be many (based on how easy it is (but I don’t have numbers). And it is easy today

        • Mike Dill

          My situation is currently outside the average, but is an example. I live in the hot desert (Las Vegas), and I will have 8kW on my roof by this summer. With some luck Tesla will have a PW2 for me by then as well.

          The solar will provide 100% of my current (annual) electric needs, but I may need to add a few more kW if I get another electric car. One PW2 will get me to the point where 60% of the year (most of the fall, winter, and spring) I can run my house without exchanging electrons with the grid. Putting a second one in would get me to 85%. Getting fully off the grid would take one or two more, or an alternate fuel source.

          So this can happen now, even in places as unlikely as Las Vegas.

        • Marcus

          Us too
          Have the LG Chem 10kWh battery with a 6kW pv array on the roof. Huge excess energy during the day, could power both neighbours…

  • Matthew Sloane

    Are Lazards cost of storage numbers in Australian or US dollars?

    • Mike Dill

      USD

  • bobcanada

    Here in Canada , we get less sun , so this event will take longer than Australia