Affordable batteries for green energy are closer than we think | RenewEconomy

Affordable batteries for green energy are closer than we think

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The high storage costs are now rapidly falling, suggesting that the financial appeal of electric cars and stationary storage is set to keep increasing.

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The Conversation

Tesla Model S
Battery costs can make up a quarter of the cost of an electric car such as this Tesla Model S. Shal Farley/Flickr, CC BY-SA

At the heart of the current debate around energy is the question of storage. In cars, how to build batteries that run for hundreds of kilometres; in electricity, storing energy from solar panels for when the sun doesn’t shine.

Our analysis shows that the past very high storage costs are now rapidly falling. This suggests that the financial appeal of electric cars and stationary storage is set to keep increasing considerably in years ahead.

First introduced by Sony in 1990, lithium-ion batteries are already the dominant type of battery for technologies such as mobile phones, laptops and electric cars, and are expected to remain so for some time. Their strength lies in being able to store a high amount of energy in a relatively small and lightweight package, as well as being capable of charging and discharging thousands of times while retaining most of their storage capacity.

How much do batteries cost?

The uptake of most new technologies is initially limited by high costs. This also seems to be the case for the uptake of electric vehicles in Australia.

Batteries represent a substantial proportion of the cost of electric vehicles. For example, just the individual battery cells in the Californian Tesla Model S electric car make up 25% or more of the vehicle purchase cost.

As a result, battery costs are a key factor in whether or not, and when, certain technologies find widespread adoption. However, information on battery costs is not easily accessible. The price of batteries depends significantly on the volume ordered. For large orders, this price is set on a case-by-case basis.

Neither battery cell manufacturers nor corporate buyers of batteries tend to disclose the specific content of the deals they strike. As a result, outsiders have difficulty gaining an accurate insight into costs. The best available sources are reports by research institutes and consultancies that directly communicated with major players in this field.

To shed some light on battery cost trends, as part of a joint project between the University of Melbourne and IBM Research – Australia, we have conducted a meta-analysis of current battery costs and future cost predictions. The graph below shows the cost trends for full battery packs, which contain the battery cells themselves, battery management electronics, a cooling system, and protective housing.

The analysed studies (links at end) focus specifically on battery packs for automotive markets. However, the battery packs for other large applications, such as domestic systems used to store energy from solar panels for evening use, are very similar so the results have implications far beyond the automotive domain.

Predicted cost trends for full lithium-ion automotive battery packs

The results indicate that battery pack costs per kilowatt-hour have been decreasing rapidly, from an average cost of around US$800 in 2009 to around US$600 this year. Furthermore, this decreasing trend is expected to continue, with battery system costs predicted to drop to around US$310 by 2020 and further to US$150 by 2030.

However, there are significant differences in the estimates, particularly regarding current costs and those until 2020. If these correspond to differences in specific deals struck, they could well be the determining factor for economic success of the corresponding battery purchasing companies.

More affordable electric cars

To put the numbers into perspective, one kilowatt-hour of storage offers sufficient energy to travel approximately 6km in an electric car, or 120km on an electric bicycle. While the battery of an electric car capable of driving 200km would have cost around US$28k in 2009 and US$22k today, the cost is expected to drop to US$11k by 2020 and around US$5k by 2030.

In addition to the initial cost, it is important to consider that despite presently high electricity prices in Australia, the cost of fully charging a 200km-electric car is only around AU$8. Assuming petrol prices keep rising as they have in recent years, it seems very likely that for many people electric cars may soon offer clear economic benefits over petrol cars.

More affordable storage for solar power

Beyond transportation there are many other fields that are directly impacted by reducing battery cost.

Rooftop solar storage, for example, can benefit greatly by being able to store surplus energy generated during the day for use later in the evening. In addition to the personal satisfaction that comes from knowing that your own roof is powering your evening energy needs, there are also financial benefits.

For example, a typical Victorian customer with rooftop panels will earn around 8₵ for feeding one kilowatt-hour into the grid during the day, but pay 33₵ to buy back the same amount in the evening.

More affordable batteries could make storing solar power easier. Pujanak/Wikimedia

Consider this analogy: You have an apple tree that drops a fresh apple every afternoon. But you rarely fancy eating apples in the afternoon and you also don’t have a fridge to store it on hot days, so you sell it to your neighbour to keep it from going to waste. Then most evenings you fancy eating an apple, so you buy one back from your neighbour. The “catch” is that you sell the apple for $1 but buy one back only a few hours later for $4, i.e. at a substantial loss.

Investing in a stationary battery system is the equivalent of buying a fridge. Both items have a big upfront cost, but once bought, mean you never again have to lose money on a daily basis by trading something that you will require only a few hours later.

The outlook

As lithium-ion battery costs continue to decrease, the opportunities to reduce on-going transportation and electricity costs become ever more positive. And the environmental benefits offered by solar generation and electric cars alike suggest that batteries, as the ticking hearts of these green technologies, may well turn users’ own hearts just a little bit greener.

 

Source: The Conversation. Reproduced with permission.

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9 Comments
  1. Peter Castaldo 6 years ago

    I have a holden volt and love the car I have driven about 800kms now and only used 1.5 litre of petrol. I appear to be getting a bit under 5kms / kWh coming out of the plug in the wall. So its costing me about $3.20/100kms in fuel costs because I use an off peak 16c rate at the moment. Electric cars are great and I would say the best thing is the smoothness of the ride.

  2. Alexander Dudley 6 years ago

    Companies that can provide leasing arrangements that lock in electricity cost certainty and take out the up-front dissuader could make serious money from PV + storage for homes and businesses.

  3. Hugh Sharman 6 years ago

    Another bit of optimistic hype, I fear!

    Go back six or seven years to the confident prediction that lithium was “the way to go” for cheap, affordable electricity storage. Read the confident predictions from 2006 onwards, of a vast market in waiting for hungry investors, by all the companies who make their business from selling “market reports”. Then look again at the actual history of lithium developments, including the serial bankruptcies of A123, et al from 2011 onwards.

    Because of the dependence of lithium on the abundant availability of relatively rare and expensive metals, the irony is that any huge expansion of this business will result in a rise in the price of the commodities on which these batteries depend, so creating a cost asymptote which is already apparent, at a level far beyond pockets of increasingly squeezed consumers in most of the so-called developed world.

    Lower cost batteries, that really do depend on abundant and intrinsically cheaper metals like zinc and lead are getting there need a few years before they can become cheap enough for affordable domestic storage, almost no matter how cheap rooftop PV gets.

    • wideEyedPupil 6 years ago

      POssibly will see combinations of more than one battery chemistry for everyday and range extensions. Tesla already patented around the control logic for such devices. And don’t rule out supercapacitors for instant charging/torque delivery.

  4. juxx0r 6 years ago

    Nissan Leaf replacement battery 24kWh for $5,499 USD or $229.125 per kWh.

    “In June 2014 Nissan USA announced an updated battery replacement program allowing the outright purchase of a new battery pack for US$5,499. The price does not include labor and the trade-in of the old pack is mandatory. Older 2011–12 model year Leafs will require a mounting kit to retrofit the new pack for an additional US$225. The new pack will be the same as the one in the 2015 model year Leaf, with the latest battery chemistry which Nissan claims will be more heat tolerant. Financing for the replacement battery will be announced by the end of 2014.”

    http://cleantechnica.com/2014/07/01/nissan-leaf-replacement-battery-priced-5499/

    Gee i hope we can get down to $310 per kWh by 2020.

  5. Peter Smith 6 years ago

    According to an article on their Twitter stream, Aquion Energy are ramping up production of their Aqueous Hybrid Ion batteries which are anticipated to sell at close to lead-acid prices. They use no expensive rare materials, and appear to have better performance than lead-acid. They are specifically designed for immobile storage, sacrificing volumetric efficiency for economy, safety and long life. The web site has much more information, but you have to register (free) for commercial details.

    There may well be other companies at a similar state of development, but with a less effective publicity team. It is pretty clear that lithium ion will not be competitive for stationary storage applications where volume and weight are not tight constraints.

  6. Richard Head 6 years ago

    Some rather dubious figures here, as others have noted. I particularly like the notion that you can go 120km on 1KWh on an electric bicycle.

    Lithium Ion as currently constituted will not be the answer, so these predictions are somewhat irrelevant. It will take a new chemistry, and many are on the way.

    • wideEyedPupil 6 years ago

      So according to you Tesla and Panasonic just placed a bad bet on their Billion dollar Li-ion battery manufacturing plant. Agree many chemistries on the way but Li-ion is here today and as silicon wafer PV has shown incubancy can count for a lot.

    • Valentin Muenzel 6 years ago

      Richard, many thanks for your comment. Re 120km range, my daily commuting vehicle is a 36V 8Ah electric bicycle (36V*8Ah=288Wh). I frequently ride this 20km between charges and have on at least one occasion ridden it for 34km with some energy still remaining at the end (though max power was getting limited). That’s where the 120km come from.

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