How Trump could be a win for battery storage – and renewables

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In good news for Australian renewables – and perhaps even better news for a nervous US market – Deutsche report names “detrimental solar policy” as one of biggest drivers of global battery storage market, which it says has reached an inflection point.

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Deutsche Bank has become the latest major analyst group to confirm that the age of economic battery storage technologies – and all the benefits they will bring for the rapid roll-out of distributed renewables like rooftop solar – is hurtling towards us at a rate that not many foresaw.

In a report released on Thursday, the global banking group said the global battery market was at an inflection point, with global consumption expected to treble from 70Gwh in 2015 to 210GWh by 2018, and then more than double again to 535GWh by 2025.

But where it gets really interesting is what the report says about the drivers of this head-spinning growth.

The first, and not so surprising, is falling cost. As we have witnessed in Australia with the latest Tesla Powerwall rollout, lithium-ion battery costs are on a rather exciting downward trajectory, from $900/kWh in 2010 to $225/kWh in 2015 and on track to reach lows of $150/kWh by 2020, according to Deutsche.

Screen Shot 2016-11-11 at 11.57.51 AM

Tesla/Panasonic li-ion costs, the report notes, are already below $200/kWh for cells and around $225/kWh for the entire battery pack, making them a cheaper-than-grid option for solar households already, as we reported here.

But on policy, Deutsche has this to say: “Regulatory environment will likely be a critical driver of storage adoption rates and contrary to consensus views, detrimental solar policies could potentially act as a significant growth catalyst for storage sector.

“We expect rules related to solar feed-in tariffs or net metering to continue to change as solar penetration rates increase.

In Australia, the report offers by way of example, “it is estimated that buying power from the grid can be three times more expensive than the value of locally generated solar power exported to the grid.”

This is good news for Australian consumers, offering yet another reason to believe that our market will be a global leader in affordable battery storage.

But it could also be good news for the battery market in America – and the global market by association – with its newly elected President vowing to scrap clean energy support mechanisms and focus its funding on “non-phoney” environmental causes.

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As PV Magazine reported here on Thursday, Trump can “can significantly thwart solar if he and the Republican government decide to pre-emptively end the 30 per cent solar Investment Tax Credit (ITC), which was recently extended to 2020.

“Additionally, the federal research and development support for solar under the Department of Energy’s SunShot Initiative also has a dubious future from a man who thinks that solar panels have a 10-year lifespan and a 28-year payback period (switch these figures and it is closer to reality).”

But, while that sort of “negative policy” could turn out to be a win for consumers, if Deutsche is right and it has the unintended effect of spurring on battery storage uptake, it might also find the incumbent energy industry, and policy-makers with them, playing a dangerous game of catch up.

According to the report, distributed generation (DG) sources are estimated to displace more than 320GW of new large-scale power plants globally between 2014 and 2023 and new DG capacity additions could potentially exceed added centralised generation capacity by as early as 2018.

“This increased penetration of distributed generation should drive the need for intelligent distribution networks comprised of nanogrids, microgrids and virtual power plants (VPPs),” Deutsche says.

All this points to the fact that, as Giles Parkinson wrote on Thursday, “the incumbent energy oligarchs have no reason for complacency or satisfaction” from Donald Trump’s win in the US. They are more exposed to disruption than ever.

On this note, the Deutsche report has some tips for savvy market players, pointing five viable energy storage markets that it believes are gaining a lot of traction: load shifting, peak shifting, grid management, ancillary services, and reserve power.

“These five major applications should create market demand for battery storage of 1.5GWh in 2016, 8GWh in 2020 and 50GWh in 2025 in a reasonably conservative scenario,” the report says.

Among these sub-categories, Deutsche believes peak shifting will be the most important market, with estimated growth to 40GWh by 2025.

Screen Shot 2016-11-11 at 11.57.14 AM

As the report notes, peak shifting moves power from low-demand hours to periods of peak demand, by using electricity generated during non-peak hours to charge batteries either within the grid or behind the meter for discharge during peak demand, with a typical duration of cycle of 30 minutes to 2 hours.

“Peak-shifting is a growing market with a number of new entrants offering industrial and consumer-level integrated installations (PV and batteries),” the report says.

“We expect Peak Shifting demand to grow from 500MWh in 2015 to 40GWh in 2025 (55% CAGR), driving a $3.9 billion battery market, which Lithium-ion should dominate due to its superior cell
performance and costs.”

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34 Comments
  1. Carl Raymond S 3 years ago

    Seems to be roughly two years from sod turning to profit centre for a Gigafactory (GF).
    GF1 North America 2016
    GF2 Europe 2018
    GF3 China 2020
    GF4, we should start the campaign now for South Australia – work starting 2020, running 2022. As much as I’d love it to be in my home state of NSW, South Australia appear to be more deserving.
    It could be sooner if Tesla have to funds to build two simultaneously, or find that copy/paste of the design shortens the timeline.

    • Ian 3 years ago

      The world needs at least 200 GF and Australia needs 2 of these. The government or other interested party just needs to put up the big shed and could let Panasonic do the rest. That’s all Musk is doing!

    • liquidblueocean 3 years ago

      My recollection is that SA asked Tesla last year, and they said no.

      • neroden 3 years ago

        They should ask again. Next year. Tesla’s got too much on its plate right now.

    • Miles Harding 3 years ago

      Does it need to be a Tesla Gigafactory?

      What an opportunity for our super funds to divest from coal and oil to a sunrise industry!

      The terms, globalisation, growth and sustainable, are so freely used that they have lost their meaning or have taken on entirely unrealistic ones. They have become part of the economic mantra that is never questioned and rarely understood for what it is.

      Most of us understand that ‘growth’ is transient and we will eventually be forced to stop or, more likely, contract as materials, environment and energy enforce sustainablilty and curb our aspirations.

      I believe we should be looking at ‘globalisation’ in the same light. The benefits to society seem to be far less than is generally stated. For each job created in a developing (slave) economy, one is lost in the developed (consumer) economy with the difference in costs being used to deliver cheaper stuff to that unemployed factory worker, while inflating corporate income due to the very low wages and lack of environmental standards in the slave economy.

      It comes as no wonder that the supposed beneficiaries of globalisation are less than happy with their parlous situation and resort to candidates that offer to re-arrange the system. The sad thing is that Trump and a right wing conservative agenda are diametric to the needs of the people and will likely make their situation worse as the monied few grab for all the remaining cash.

      • stucrmnx120fshwf 3 years ago

        I know where your coming from, but if we look at the roaring twenties, last time an explosion of internal combustion engines and electricity, this time 25 times as much power, from just 25% of the world’s deserts. In Australia 2,500 times our current consumption, so I don’t think we’re looking at shortages and rationing. This will defeat the Trumps of the world, from sheer economics, trying to bring back coal, will cost more than solar, plus storage, eg. Liquid Silicon with thermal photovoltaic systems, to turn the heat back to electricity, to refresh your psyche, try Tony Seba’s Clean energy Disruption, start with YouTube. Then read the book, it’ll really pick up your spirits.

        10 electric vehicles coming out soon, Tesla scaling up to 10 GW of battery production, from 1 GW, in 2020, as the roaring twenties resume, in just one year, the price per kWh has halved for power storage. And the old Powerwalls were more popular, than the production capacity, hence the new combined battery and electric vehicle factories for Tesla. Samsung’s new battery factory, solar tiles, Australia might be exporting, a Trillion tonnes of liquid hydrogen, per year in 2030. Heroic engineering, cheap energy, cheap transportation, cheap food from high rise agriculture, will regenerate the middle class, by giving them disposable income and employment. In spite of all the attempts, to crush the real revolution, the third industrial revolution, politics shmolotics, 1st, 2nd, 3rd IR’s, that’s what improves quality of life, standard of living.

      • Carl Raymond S 3 years ago

        It could be another gigafactory, but I like what I see in Nevada.
        It’s designed with some consideration for aesthetics.
        It’s designed to be net energy positive, with not even a gas line in.
        It uses robotics where possible, maximising the number of skilled jobs versus unskilled jobs. This helps make it competitive in Australia versus a low wage country.
        It’s designed to be compact – max output for minimum resources.
        They already have the blueprint, thus minimum fuss and delay between sod turn and profit centre.
        It will make 2170s, the best cell at the minimum cost, and which supports supercharging – a crucial factor for outselling ICE cars.

        I will leave it for others to talk to the problem of unequal income distribution. We have to focus on climate change, because if we fail on that front, it’s game over for Earthlings regardless. I will say just this.
        – Most jobs are actually chores. Losing a job to a robot is not the same as losing a job because the product is no longer wanted. In the first instance, the income still exists – the problem isn’t to protect the job, it’s to protect fair income distribution.
        – Economic growth can and must be completely decoupled from raw materials. It’s not possible yet (e.g. we can’t recycle batteries until we have batteries), but it’s the end goal.

    • GlennTamblyn 3 years ago

      Just an alternative thought, since the location of any battery factory is only marginally related to the location where power is generated, wouldn’t the best candidate locations be those regions that will be most impacted by the closing down of FF power? So the Latrobe valley in Victoria, Hunter region in NSW etc.

      As we have seen with Brexit/Trumpism/Hansonism etc. when one section of society bears to much of the burden of an economic or technological transformation, their justified anger can manifest in many unpleasant ways.

      Also the old major FF power station sites have existing infrastructure in the form of transmission lines etc that may give them a leg up in terms of siting for wind or solar farms, Battery farms etc.

  2. Kenshō 3 years ago

    This is what I wrote before the election. Tesla Motors and their ideology are part of the trickle down effect, which has generated a Trump being in power:

    The American election appears a litmus test on how unhappy and roused into anger and outrage the American people are. If they mobilise to voice their wrath on conservative governments, we may see all sorts of unanticipated changes in government policy, whether they be of an evolutionary or involutionary outcome. Manufacturers like Tesla who have storied their own trickle down effect, may find themselves operating in a very different policy environment. The American people are becoming restless and impatient, allot like nature. Despite misconceptions, evolution doesn’t lead with any class or people, it suffers a collective inertia. The biggest failure of neo-liberal economic theory, is the economy is faster and better when every living being are included as contributing to the whole. We may yet see Tesla clubbed, by the force of their own myopic class based approach to renewable energy implementation. Instead of dropping the price of Powerwall 2, Tesla Motors chose to double kWh and leverage consumption of the few. Tesla Motors ideology of an energy utopia, is using a green image to justify a beast magnified by the power of intellect. If I look into any Model S owner’s private affairs, I’d find the same appetites and sense gratification, as any other human being, merely a greater variety and complexity of them.

    • MaxG 3 years ago

      Sort of agree / disagree — you’ve got the neo-liberal issue right, where we all loose out, because wealth goes to the few top percent, while 98% suffer… and I am convinced to the point of no return, as the under educated class or masses have no idea on how a sustainable economy, money system, and democracy should work.
      It is (not) funny that most liberals whine about welfare, yet at the same time they are the biggest receivers of welfare (what I call middle-class welfare) such as baby bonus, first home buyers grant, private health insurance rebate, private schools publicly funded, etc. or in simple terms: privatise profits and publicise costs.
      As for Tesla, I would not hammer the company for working properly in the current market system — it is what it is; you R&D, skim the market with a pricey product to recoup the cost, and go down a level at lower price points and increase volume. What Tesla has done and is doing, eventually bringin their product to the masses.

      • Kenshō 3 years ago

        The destiny of humanity is an awareness of social justice and environmental sensitivity. That’s the real tipping point.

      • Rod 3 years ago

        Yes, these poor saps who voted for Trump actually think he will improve their lot.
        From what I have read his first moves will be to reduce tax rates for the rich, reduce company tax and remove death duties which is currently on those over a certain wealth amount.
        For anyone interested in how trickle down economics fails for the middle class and poor, the Brits had a doco recently called Us and Them (I think). The wealth gap is and will continue to widen my friends.

        • Kenshō 3 years ago

          Same in Australia, here the most recent stats.
          http://ppesydney.net/wealth-inequality-australia-timely-new-report/

          • Rod 3 years ago

            Thanks. One of the “what ifs” from this election is if Bernie ran instead of Hillary. His Social Democratic policies would have resonated with many of those who voted Trump.
            However, can you imagine the Anti Communist type attacks he would have had to endure.

          • Kenshō 3 years ago

            It depends how powerfully he could have put across the implementation of his values – with policies people needed, IMHO. This would have enabled voters to discern the difference between attacks he is communist versus standing for social justice. It would also have helped if he could destroy the opposition, by bringing to light any fear mongering against minorities, when the only minority humanity need really concern itself, is the 1% who have been really good at extracting wealth from the earth, accumulating and keeping it.

    • Martin Sevior 3 years ago

      Kenso, I totally disagree with your politics but not your aims. The fixed costs of the integrated inverter and power electronics make a 6 KWHr Powerwall 2 no where near as useful in terms of price/KWHr as a 14 KWHr product. Your comment of “if everyone had an energy efficient house like me they would not need a 14 KWHr battery..” is utterly selfish. Most people cannot afford a house that efficient and while keeping their creature comforts. Cold beer on a hot day and hot showers on a cold morning are the benefits of civilization. People want them.

      • Kenshō 3 years ago

        I agree a sizeable proportion of the population would find 14kWh of overnight storage useful, even people without EV’s. Installers seem to be suggesting 6kWh PW 1’s began with orders of one product then began climbing to 2 and 3. On the downside, a single 14kWh product is a large step size for expansion, given the product can be stacked side by side. Generous FIT’s are ending and the market will reveal how useful the 14kWh product is.

  3. Kenshō 3 years ago

    Here’s an email from Australian Greens’ leader Richard Di Natale:

    Trump wins US election
    Share hope, not fear.
    Dear friend,
    Like many of you, I’ve been glued to the news today coming out of the United States. And I am gutted by the result.
    What we’ve seen tonight in the United States presidential election is shocking and disappointing. An American President has been elected on a platform of racism, xenophobia, sexism and nationalism.
    Like you, I am shocked and disappointed by the result.
    SHARE OUR POST
    What this result demonstrates, more than anything, is the need for a voice of reason in a post-Brexit, post-Hanson and post-Trump world. A voice that stands with asylum seekers, values equality and supports vulnerable communities.
    Together, we are that voice, standing side-by-side in these extraordinary times.
    During moments like this, I’m comforted by reflecting on the difference we’ve made right around Australia over the past 30 years of Greens in Parliament. I choose to look to the future in hope, not fear.
    SHARE HOPE, NOT FEAR
    I’m as devastated as you are with the US result. But now is the time to stand together, ensuring nothing like Trump ever surfaces in Australia.
    Richard Di Natale
    Australian Greens Leader

    And here’s my reply:

    Dear Richard,
    There’s a great deal of fear and disappointed in your email below. When I worked on the phones for lifeline, I was encouraged to build rapport with the caller first, discover why the caller has made the call. As my leader I hope you will do the same when seeking to understand the needs of the people who voted for Trump and Hanson, regardless of any personal wounding you may carry from your past, as a result of having a different ethnicity and being vilified, judged or discriminated against. I’d like you to see these misgivings aside and respond with rapport and empathy, knowing those people too, feel wounded.
    No you don’t know how I feel. I have an absence or fear or misgivings at working with people of difference, including those lacking an understanding of structural oppression like Hanson, and I would seek to form common values to set those Australians (and Americans) at ease, all of us can find ways to create a fair society by redistributing the wealth of nations fairly.
    kind regards

  4. MaxG 3 years ago

    @Sophie Vorrath: could you please name the Deutsche Bank as such, and not call it Deutsche… or would you call the Commonwealth Bank the Commonwealth?

    • nakedChimp 3 years ago

      It’s common in German to call the ‘Deutsche Bank’ just ‘Deutsche’ if it’s been referenced before.. as there is no other thing really that is called ‘Deutsche’.
      The only other context this word would make sense in, is when you’re referring to a group of Germans.

  5. Adam Smith 3 years ago

    Gee what a turnaround in comment at RenewEconomy, ugly, ugly, ugly to, the fossil fuel brigade has no reason for complacency or satisfaction” from Donald Trump’s win in the US. They are more exposed to disruption than ever. Renewables now have a solid foothold on future energy and now will continue the momentum.

    • stucrmnx120fshwf 3 years ago

      The roaring twenties are coming and nothing he does, can stop it.

      • Kenshō 3 years ago

        This is ungrounded wishful thinking. The sort Elon Musk and his followers constantly propagate. Trump was the only candidate offering radical transformation. Trump is elected because one way or another Hilary Clinton’s “deplorables” will rise. America will descend in civil war or rise in social justice. That’s a disruption. Social justice and ecological goals are wedded together.

        • stucrmnx120fshwf 3 years ago

          It’s true that sustainable immigration, could bring social justice. That we ought to honor partnerships for peace, with Russia. But, investors in Trump, got half a cent, in the dollar return, some say, he’s still broke. That the banks, still give him 5 million dollars a month, as the brand manager of Trump. If the Koch brothers, offer him another 5 million a month, his income will double. With his tax holiday of 18 years, for bankrupting, his own company. Expired or about to expire, he might need that money and be very grateful, to his patrons. Might all be scuttlebutt, or it might be true, tax havens, keep these things very private after all. As does Wikileaks, they have their orders, from the Kremlin after all.

          • Kenshō 3 years ago

            Perception is subjective. If Trump has a catch cry to “make America great again”, to a counsellor it suggests an emotional undercurrent of make me great again, perhaps indicating personal loss. Regardless, all that matters now is his capacity to find direction in the crisis. He wants to win. Regardless of his ability, he will know he will be assessed based upon performance. He has said “I alone can fix this”.

  6. Ian 3 years ago

    Renewable energy “whack-a-mole” that is what this Trump thing is all about. Bash the mole here and it pops up there!

    • stucrmnx120fshwf 3 years ago

      It’s hard to keep an industrial revolution from happening, see Tony Seba’s Clean energy Disruption, on YouTube, you’ve got the idea already, well spotted.

  7. Kenshō 3 years ago

    Trump could remove subsidies for consumers purchasing solar panels, decrease feed in tariffs and increase unavoidable fixed charges for grids. Tesla also recently created an unnecessary barrier to consumers by doubling capacity of a battery/inverter, instead of halving the entry into solar/storage. To counter these impediments to consumers, Tesla (and other manufactures) could have the price of battery/inverters instead of their recent response to keep the price the same and double capacity. Tesla “fans” have argued the reason Musk did this is pre-empting EV uptake, though the reality is Tesla batteries have a 10 year reduced kWh warrantee and most people won’t have an EV for 10 years. Tesla has attempted to pull the kart before the horse, slowing solar uptake. The following specifications for a battery/inverter product would exponentially speed up solar uptake amidst adverse political and economic conditions:

    * usable capacity 6.75kWh (Half Powerwall 2),
    * 3.5kW peak/2.5kW continuous output power with 10kW transfer from grid (Larger inverters don’t result in bill reduction because multiple high power loads are rarely turned on at the same time),
    * recommended indoor installation (Batteries can lose up to 50% of their life for each 10 degree rise in ambient temperature),
    * internal modular design (Internal parts like the inverter, charger, BMS can be replaced separately),
    * at least 2x MPPT inputs (For at least 2x rooftops of different tilt or orientation to north),
    * battery voltage compatible with small size PV arrays (current rooftops are difficult to redesign),
    * battery voltage suitable for the manufacture of a DC appliance industry (Most household appliances run internally on DC and stripping appliances from the inverter reduces cost, increases reliability and increases simplicity of design),
    * installed AU $5000 (Same capacity as Powerwall 1 and half the price of Powerwall 2).

    In summary, maximum solar uptake for the most people, in the most countries, in the fastest way, will be facilitated by entry level products that are flexible, expandable, modular, easily serviced and serve present conditions of the market.

  8. Kenshō 3 years ago

    Hero says real feelings about how politics and media created the Trump phenomena. This guy has got more awareness than all the Australian Greens put together.

  9. Kenshō 3 years ago

    A lack of realisation and the progression of realisation:
    According to those discourses in society which focus upon awareness, there is a state called realisation. In future, those people for whom this state has not yet emerged, will be relegated to subordinate positions. Presently, the public sphere is dominated by these unaware career and ambition seekers, a testimony to their misdirected goals. So how will society unfold it’s collective awareness and what stretches out before us?
    a) the majority in current leadership are overly intellectual, one facet of awareness. We can recognise these persons, because they trot out their ideologies, their beliefs, are occupied with incessant thinking. Nothing spontaneous and direct ever enters their awareness, beyond an incredibly slow volley of thoughts which inevitably do eventually lead to breakthroughs, though slow going it is,
    b) after those occupied by their intellects, emotional intelligence follows. Instead of individuals like Richard Di Natale, who are occupied and determined by nurturing their unconscious personal hurts, the next group see the subjectivity of their thoughts and the associated feelings, and move their awareness inwards to establish a comprehensive clearing house. This process resolves all the unloved feelings, discontent and arrives at a deeper equanimity and emotional stability. As a result, the mind is no longer driven and for the first time the intellectual individual experience a profound stillness and mastery of their mind, bringing the mind into something new and profound,
    c) emotional clearing and mental stillness has thus led to the state we term presence, peak experience, samadhi, satori, the high plateau experience, realisation. The individual experiences an ability to remain “present” removed from the trappings of the mind and emotion, the rest are mired in. The individual no longer seeks external achievement, ambition, accumulation, as the individual already feels completed. A felt sense of connection with nature becomes evident. Social justice is know not as a mere intellectual concept which cannot as yet be actualised, and instead becomes a facet of the individuals consciousness.
    Naturally humanity’s journey along this continuum will bring about changes in divisions on the political landscape with greater ability to cooperate, environmentalism will be less around fear of climate change and more around a relationship with the land and all that’s living. Even national identity is dissolved, a presence connecting all surpassing all previous hurts and divisions. This is the journey our best sciences are describing, the journey of the evolution of the human being, the evolution into awareness of life itself, an understanding of the soul in the religious terminology, a non-intellectual grasp of the soul’s experiential connection with spirit. hearing such a description, the individual without such awareness will struggle to dismiss, ridicule or misinterpret, and yet this awareness alone will result in reestablishing social justice and ecological sensitivity. I’m not saying I have this awareness. I’m saying I’ve done the work to listen, be educated out of my ignorance and learn personal responsibility to undertake the journey of healing.

  10. Ed 3 years ago

    A gigafactory in Aust. would be great, but perhaps an Australian company like Redflow could produce locally as well with the necessary support/investment. John Hewson’s recent comments about green bonds and providing a vehicle for super funds and internationals to in invest in Australian green tech and infrastructure were spot on. Perhaps this could translate to manufacturing as well. http://www.theage.com.au/comment/its-time-to-lead-on-renewables-20161110-gsm6fz.html

  11. john 3 years ago

    Just as a comment on battery storage implimentation.
    I have just finished a study and using very realistic figures for output of the PV system and the number of days used for a small business situation that will require a 30 kW system and 3 PW 2 batteries 355 days a year after 10 years the bottom line over those years the bill for energy would be $12,000 the net outcome would be $21,000 in front of the capital cost in fact the whole project is paid for in the 7th year.
    So yes battery take up is going to happen especially in the larger energy energy user area.
    As to the home owner situation unless they are very larger users over 50 kWh per day not so brilliant.

  12. Kenshō 3 years ago

    Request: Public Apology from Richard Di Natale.

    Based upon the email circulated from Richard Di Natale which I’ve provided in my posts below, and having thought about it carefully, in my view Richard owes the people of America and Australia, who voted for Trump and Hanson respectively – an apology as a result of these statements:

    “An American President has been elected on a platform of racism, xenophobia, sexism and nationalism… What this result demonstrates, more than anything, is the need for a voice of reason in a post-Brexit, post-Hanson and post-Trump world.”

    No Richard, voters chose candidates to represent their needs for jobs etc and structural oppression to be addressed. As this quote from the IMF describes, these communities have real needs:

    “if the income share of the top 20% (the rich) increases, then GDP growth actually declines over the medium term, suggesting that the benefits do not trickle down. In contrast, an increase in the income share of the bottom 20% (the poor) is associated with higher GDP growth. The poor and the middle class matter the most for growth”.
    https://www.theguardian.com/us-news/2016/nov/12/first-brexit-then-trump-can-australia-be-spared-a-similar-voter-backlash

  13. Analitik 3 years ago

    Doesn’t anyone else see that the projection improvement of Li batteries has basically flattened out according to the first Deutsche graph?

    Sodium metal halide seems to have more scope for improvement

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