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Battery costs drop to key level as electric car sales continue to rise

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The Conversation

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Both electric cars and renewable energy stand to gain significantly from cheaper storage. Mariordo/Wikimedia, CC BY-SA

 

The cost of batteries is one of the major hurdles standing in the way of widespread use of electric cars and household solar batteries. By storing surplus energy, batteries allow households to reduce power bought from the electricity grid. Unfortunately, batteries have so far been prohibitively expensive.

But research published recently in Nature Climate Change Letters shows battery pack costs may in some cases be as low as US$300 per kilowatt-hour today, and could reach US$200 by 2020. This cost development is notably cheaper and faster decreasing than I and many others expected.

The battery in a typical mid-range electric car stores around 25 kilowatt hours of energy. The analysis therefore suggests that the cost of electric car batteries may be as low as $7,500 today and reducing to $5,000 by 2020.

Falling prices will pave the way for what could be a rapid transition to a cleaner energy system.

Lower battery prices today and tomorrow

Last year, my colleagues and I analysed the cost-benefits of household battery storage alongside rooftop solar systems. Encountering difficulty in finding reliable sources of present and future lithium-ion battery costs, we published our own study on The Conversation.

Previously published analysis of battery cost trends. Muenzel et al/The Conversation

 

 

Our analysis of ten studies published by research institutes and consultancies suggested a dramatic fall in battery cost over the next two decades, making solar power and electric vehicles more affordable.

The new research by two Swedish researchers published in Nature Climate Change Letters this month used a similar approach but found an even sharper plunge.

Björn Nykvist and Måns Nilsson of the Stockholm Environment Institute analysed 85 sources of data including journal articles, consultancy reports, and statements by industry analysts and experts. They report that since 2011 the number of electric vehicles worldwide has doubled each year.

The core conclusion of the new paper is that the cost of full automotive Lithium ion battery packs has already reduced to around US$410 per kWh industry-wide. Market-leading manufacturers such as Nissan and Tesla are already seeing prices around US$300 per kWh. In our previous work we estimated these levels to be reached only in 2018 and 2022, respectively.

The new battery cost analysis suggests even lower costs. Nykvist et al/Nature

 

 

The analysis also estimated that the industry as a whole is currently seeing annual battery cost reductions of 14%, while for leading players with already lower costs this is closer to 8%. It is therefore predicted that battery cost for all involved should converge to around US$230 per kWh in 2017-2018. This is seven years earlier than estimated in our previous analysis.

Assuming continued electric vehicle sales growth, the authors suggest costs as low as US$200 per kWh are possible without further improvements in the cell chemistry.

Of megalawsuits and gigafactories

As battery costs decrease, technologies such as electric vehicles and household energy storage are likely to undergo a transition, from niche products in the hands of early adopters to standard acquisitions by pragmatic consumers.

Companies in the sector are well aware of this potential for transition. This explains why, for example, Tesla Motors is making a US$5 billion dollar bet in the shape of a massive battery factory. By doing so, the company hopes to gain economies of scale and reduce costs further.

Increased opportunities naturally attract commercial competition, which has the potential to further accelerate the technological improvements. On the flip side, however, intense competition can also turn ugly. This seems to be the case in a recently filed lawsuit regarding rival battery chemistry patents involving BASF, Umicore, 3M, and Argonne National Labs.

Transitioning to a more sustainable future

In the context of the grid, larger energy storage resources offer many opportunities. Customers can use more energy produced by their own solar panels. By collaborating with customers, utilities can develop more intelligent and versatile grids. And jointly, the penetration of intermittent renewables in our electricity mix can be increased significantly.

The findings published this month suggest that the transition from niche to mainstream product may well occur far sooner than people believe. And given that the perceived unlikelihood of governmental clean technology commitments in Australia has apparently reached April-Fools’-joke-worthy levels, it seems about time.

The Conversation

Source: The Conversation. Reproduced with permission.  

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  • Jason

    This is exciting …But can we talk about this with some maturity?

    The problem is analysed in an important paper by Weißbach et al.1 in terms of energy returned on energy invested, or EROEI – the ratio of the energy produced over the life of a power plant to the energy that was required to build it. It takes energy to make a power plant – to manufacture its components, mine the fuel, and so on. The power plant needs to make at least this much energy to break even. A break-even powerplant has an EROEI of 1. But such a plant would pointless, as there is no energy surplus to do the useful things we use energy for.

    There is a minimum EROEI, greater than 1, that is required for an energy source to be able to run society. An energy system must produce a surplus large enough to sustain things like food production, hospitals, and universities to train the engineers to build the plant, transport, construction, and all the elements of the civilization in which it is embedded.

    Weißbach et al. calculated the EROEIs assuming pumped hydroelectric energy storage. This is the least energy intensive storage technology. The energy input is mostly earthmoving and construction. It’s a conservative basis for the calculation; chemical storage systems requiring large quantities of refined specialty materials would be much more energy intensive. Carbajales-Dale et al.2 cite data asserting batteries are about ten times more energy intensive than pumped hydro storage.

    Adding storage greatly reduces the EROEI (the “buffered” values in the figure). Wind “firmed” with storage, with an EROEI of 3.9, joins solar PV and biomass as an unviable energy source. CSP becomes marginal (EROEI ~9) with pumped storage, so is probably not viable with molten salt thermal storage. The EROEI of solar PV with pumped hydro storage drops to 1.6, barely above breakeven, and with battery storage is likely in energy deficit.

    This particular study does not stand alone. Closer to home, Springer have just published a monograph, Energy in Australia,3which contains an extended discussion of energy systems with a particular focus on EROEI analysis, and draws similar conclusions to Weißbach. Another study by a group at Stanford2 is more optimistic, ruling out storage for most forms of solar, but suggesting it is viable for wind. However, this viability is judged only on achieving an energy surplus (EROEI>1), not sustaining society (EROEI~7), and excludes the round trip energy losses in storage, finite cycle life, and the energetic cost of replacement of storage. Were these included, wind would certainly fall below the sustainability threshold.

    • Geoff James

      Hi Jason. In fairness to Valentin, he is talking about batteries for electric vehicles, and the utility of an electric vehicle would be measured in a very different way than EROEI and take into account societal factors (e.g. reduced smog in Beijing) as well as personal factors (e.g. great acceleration and home energy integration). And in fairness to stationary storage, it’s utility is not best measured in combination with generation plant, but through the range of services that can be provide to the network (e.g. voltage regulation and peak shaving), the market (e.g. effective ancillary services), the retailer (e.g. a physical hedge against high wholesale prices), and of course the customer (e.g. self consumption of solar energy and backup power). I think only a minority of stationary energy storage will be installed at generation sites. But thanks for the reference to Weißbach et al. which I hadn’t heard of before, great work. Geoff.

      • Miles Harding

        One this that does concern me is the lifespan of current Li-ion batteries. I am seeing indications that will result in vehicles with short useful lives and probably almost zero resale value. Low battery replacement cost is a welcome improvement, but a 7 year working life may make EVs environmentally worse than their longer lived ICE counterparts.
        If the much smaller Prius battery is anything to go by, I feel that this is going to be the next reputation hurdle for the EV makers.

        Stationary batteries are a wholly different proposition with much less stringent weight, power and volume requirements, so many more materials are available for consideration. We should expect utility compatible lifespans of 20+ years and low levelised costs.

        Aqueous Sodium Ion batteries are showing promise in this area.

    • David Osmond

      Hi Jason,

      my issue with the Weissbach paper is the results are highly dependent on the amount of buffering and over-capacity factors assumed. He has used storage requirements of 10 full load days for wind and solar PV. This may make sense if you are trying to power the entire country (or your house) with only wind, or only solar, but if you are using a variety of sources then this assumption can be completely wrong.

      I may be going off-track a little, as this article is more about batteries for home storage and cars, so perhaps the numbers in the Weissbach paper are reasonable for this scenario. But when you try to use them for powering an entire country, that’s when things get ridiculous.

      For example, the UNSW 100% renewable study, where one of the scenarios has 34 GW of wind and 30 GW of PV, Weissbach would therefore require 640 GW-days of storage, or 15 TWh. This is an extremely large amount, so it’s not surprising it has a poor EROEI.

      In contrast, the UNSW study has indicated that we can get 88% of our electricity from wind & solar, with another 6% coming from gas turbines and 6% from existing hydro, and only require about 200 GWh of storage. They have calculated that this system could meet our demands on an hourly basis throughout the year meeting our current reliability standards.

      Clearly, having just 200 GWh instead of 15 TWh of storage makes a massive difference any EROEI calculations that include storage.

      I should also mention that Weissbach is using figures from an old turbine in Germany’s poor wind resource, with a resultant Capacity Factor of 23%. In contrast, the average wind farm in Australia is obtaining a CF of 34%. Clearly a modern turbine in Australia’s better wind conditions will also reduce storage requirements.

      http://www.ies.unsw.edu.au/about-us/news-activities/2013/04/least-cost-100-renewable-electricity

    • onesecond

      Oh please, not that nonsense again. D. Weißbach is a Dipl. Phys. in nuclear physics, currently working on his Ph.D. and he is affiliated with the so called “Institute for Solid-State Nuclear Physics” which is nothing other than a private fan club for molten salt reactors of nuclear physicists that still can’t get over the fact, that renewables have stolen their thunder. He has an agenda and serves it by making poor assumptions of capacity factors, needed storage capacities, outdated solar module efficiencies and industrial processes.

      http://festkoerper-kernphysik.de/

      I am sorry that this website has no English version, but here in Germany noone that matters takes them seriously.

      • Jason

        This type of response is exactly the type we see from climate change deniers. ..they play the person to discredit the research. You might notice there are 3 separate data sources and there are more. …
        EROEI is notoriously complicated by the assumptions but the one thing that can not be denied under any circumstances is the current model of economic growth requires an ever increasing amount of energy per capita for development and renewable energy sources have a lower EROEI than fossil fuels meaning under the current economic orthodoxy it will be impossible to successfully swap fossil fuels out for renewable energy sources. I’m talking full replacement not just deep penetration into the grid due to lower EROEI.
        Maybe if we reduce the size of our society’s consumption by 50% and become radically more efficient with a smaller population in a steady state economic paradigm renewable energy might be able to run the whole show…

        but the idea that we can just swap energy sources especially to a lower EROEI and continues on with business as usual is hilariously delusional

        • Calamity_Jean

          If a person insists on using obsolete information and making unrealistic assumptions, that person deserves to be criticized personally.

          • Jason

            or if the person yearns so pathetically for things to be one way they can’t see the obvious bloody facts showing it’s not going to happen…

            No one can argue that renewables have the same EROEI as fossil fuels – they don’t that is a fact.

            couple this with the current economic paradigm there is an obvious problem, and a major one at that…

            there is plenty of coking coal left in the world, there is plenty of oil and gas but the day will come when these new energy systems are going to have to stand on their own and if we don’t address the cultural stupidity of assuming renewables will run business as usual the black friggin rhino won’t be the only thing going extinct …

            don’t succumb to the delusion that all we need to do is swap our energy sources and we will enter nirvana and live a life in techno utopia …

            it is far more complex than that….

          • Calamity_Jean

            “…all we need to do is swap our energy sources and we will enter nirvana and live a life in techno utopia…. “

            I didn’t say that. After we have swapped our energy sources, we will still have ingrown toenails and obnoxious bosses, same as we do now. What we won’t have is increasing carbon gas pollution.

          • Calamity_Jean

            Actually, if you think about it carefully, the EROEI is better for renewables than it is for fossil fuels. If you dig up some coal and burn it, or pump up some oil and burn it, you get a certain amount of energy. If you want more energy, you need to dig more coal or pump more oil. But if you install a wind turbine or solar panels, for the price of a little maintenance (wind) or almost no maintenance (solar), you get energy out for years and decades into the future.

          • onesecond

            The EROI of renewables is high enough. Nobody argues against improving energy efficiency, because it totally makes sense economically and of course has huge potential cause current energy consumption is very stupid and inefficient. There are a lot of problems that have to be adressed to solve the worlds problems, bashing the EROI of renewables as insuffient still is just plain wrong. I want to see far less consumption and society to be far less materialistic too and there are billions of reasons for that but that doesn’t take anything away from the vast amounts of energy the sun sends to earth and our capability of accessing that.

        • Coley

          Do these EROEI calculations take into account health costs and the environmental damage associated with CC?

          • Jason

            If it turns out the energy profit isn’t sufficient with renewable energy then we won’t have health care. …this is the point that everyone is missing in all these conversations : scale.
            Renewable energy has less bang for our buck full stop, no one can argue that fact, what this means when you think it through is there will not be enough spots at the table for everyone, because we’ll be forced to shrink the total enterprise. Radical social upheaval will result assuming we try to run consumerism on renewable energy sources.
            Technology is not going to be our ultimate problem it is our culture, our alienation from our intrinsic interconnectivity with the Universe that has lead us to the crisis we face now and without addressing it no amount of wishful thinking about renewable energy will solve the root crisis.
            technology will not solve the delusionally immature cultural problems brought about by defining the good life as ONLY materialistic. …

        • onesecond

          Lol, this is exactly the oposite. Environmentalists all the time expose ulterior motives, affiliations and worrying funding of climate scepitcs and rightly so.
          I totally disagree, renewable energy could run the whole show. I loathe excess capitalism as much as the next guy, but don’t try to bend physics to fit your ideology. I am totally with you that mindless consuming unnessary crap should stop asap and I am worried about the biocapacity of the earth, soil degradation, the overused carbon capacity of oceans and atmosphere, waste disposal problems, collapsing eco systems, extinction of species and so on. What I am not worried about is the EROI of renewables and their potential to scale.

          • Jason

            Read my response to Coley. To address the issue you raised we need to stop growing the economy this is not possible without a totally radical cultural shift and my bet is this will be a bridge to far and we’ll attempt to run consumerism on renewable energy and it’s just not going to happen for the reasons you brought up above. … it’s the scale of the ENTIRE endeavour that renewable energy can’t support.

          • onesecond

            I care about what’s true regarding the physics of things, that is where I am coming from regardless of growth debates or anything. Your agenda obviously is to have society turn away from “endless growth” and consumerism. The funny thing is, at least in my point of view, that you are detrimental to your own goals by bashing renewables. I think you are factually wrong on the physics side of it in the special case of EROI of renewables being insufficient, but even regardless of that, you should encourage people to turn 100% renewable and super energy efficient and not scare them away, by telling them that their entire civilisation will collapse if they go renewable. The change in society you desire is in my book more likely to happen along the way, so why would you send people running scared back to fossil fuels and nuclear, that are not needed and that destroy the planet?

          • Jason

            You got it completely backwards… my intentions are to wake people from their stupor that leads them to believe renewable energy is the solution to ALL human problems with the environment…. the fact about renewable energy poor EROEI vs fossil fuels is beyond dispute and since you so casually throw this fact away leads me to believe you still have some distance to cover in understanding that our growth based culture is an anomaly only facilitated by the huge energy profits from fossil fuels. Yes this technology might support a society but it won’t be this one or be recognizable in any way to the one we live in today. ..for how will renewable energy solve the issue of deforestation? Or over fishing? Or wealth concentration? Or women equal pay? Or the most important one of all, our interconnectedness with everything? Our cultural expectation is to keep going exactly as now but powered by renewable energy is delusionally naive for the reasons you mentioned in the previous post. It simply isn’t going to happen unless the culture changes and we grow up and throw off these ridiculous superstitions called religion and neoliberal economics that believes we can grow forever on a finite planet. Finally globalization is knitted together with very long supply chains and there is NO technology that is going to power the trucks other than diesel this means we will have to relocalize the entire supply chains transport long distance by ship or rail and if you look at the budgets from most of the developed and developing world where are they investing? Roads, airports, and ports. So we’re investing today in yesterday’s technology how smart is that? So don’t expect miracles from renewable energy for they are not going to solve the root issues that are driving the conflict we see all over the world

          • onesecond

            You are mixing things up and throwing everything in one basket. The truth is that renewable energy IS the solution to a lot of problems, of course not to all the problems. Their EROI is lower than fossil fuels or nuclear but certainly high enough to sustain human civilization, especially when energy consumption gets a lot smarter and more efficient. By bashing renewables you help noone. Focus on standing up against fossil fuels, nuclear, plastic, materialism, neoliberalism etc. You won’t scare people into changing anyway. You have to offer a viable alternative for a good life (good life obviously meaning without all the things above, for instance without cheap useless plastic products from China). That is a lesson learned from the green movement in Germany and that is how you change the world.

      • Jason

        The Weißbach study, for example, used transparent calculations based on published data and was accepted for publication in Energy, a peer-reviewed journal.

        And the authors were able to put up a spirited defence of the work in the face of a critique by Marco Raugei of the Faculty of Technology, Design and the Environment at Oxford Brookes University in the UK.

        In a nutshell, the current work on EROI and similar measures suggests there could be something fundamentally wrong with the move to renewable generation sources in general and the use of energy storage to balance intermittent sources in particular.

        The question is: what could and should the energy storage industry do about it?

        – See more at: http://energystoragereport.info/eroi-energy-return-on-investment-energy-storage/#sthash.wy5iR8Gc.dpuf

        unfortunately if you want to read the reply from Weißbach to Marco Raugei criticisms you have to pay $34.95 …if someone can find it for free and post it here that would be ideal

        cheers

    • Jouni Valkonen

      EROEI is meaningless with renewable energy, because renewable energy can be self-looped. I.E it is possible to use solar power to manufacture solar panels. For example, for any practical purposes, the EROEI of Tesla Gigafactory batteries will approach to infinity, because that factory will be roughly 100 % powered by locally produced renewable electricity.

      EROEI was meaningful in the fossil fuel era, but that era is long gone.

      • Jason

        my word.. you need to think this through a bit more clearly…

        • Jouni Valkonen

          That what I said above, is quite easy concept. Because it is so easy, it might also be very hard to understand. But I am sure that you can understand, that only the cost of solar panels measured in dollars matters.

          Actually, we could run sustainably our economy even if eroei of solar panels would be less than 1. This is because if some remote location, such as in Iceland, there is very cheap and sustainable geothermal and wind power, then it is possible to establish there solar panel factory and export panels to the rest of the world. This would effectively be transmitting power from Iceland to Europe without HVDC connection.

          Similar the EROEI of synthetic methane for energy storage, is by definition below one. Still it can be economically viable to run synthetic methane plant. But this was of course what you already understood.

          Therefore even if EROEI of solar panels is even marginally above one, we can self-loop solar power factory, and in effectively we can gain infinite EROEI. Of course if it required 10 sqr.km Sahara to be covered with solar panels in order to produce 1 sqr.km solar panels for European markets, then it is very hard to see how it could be economically viable. But if solar panels are cheap enough, we could produce sustainable solar power even if EROEI was just 1.1.