Mixed Greens: A battery-powered peak solution?

Natural gas may face a challenge to its status as the perfect peaking power solution — not to mention the perfect partner for intermittent renewable resources — with the claim this week by A123 Systems’ CEO that falling prices for lithium-ion batteries will make power-storage systems competitive with natural gas as a source of electricity during periods of high demand by 2016. “In general, batteries will come down by about half in price from 2010 to 2015,” David Vieau told Bloomberg on Monday. Vieau says that improvements in battery chemistry and manufacturing will drive down prices and boost shelf life, making lithium-ion batteries a viable replacement for gas.

According to the report, A123 has shipped more than 90MW of its battery storage systems — which can provide anywhere between 10 kilowatts to 500 megawatts of power within milliseconds, and for up to eight hours at a time — to be used by utilities instead of gas-fired peaker plants for meeting short periods of peak demand, sometimes only a few hours a year. Bloomberg says that US utilities owned by AES Corp, Sempra Energy and Edison International have invested the technology. According to Vieau, the grid business now makes up 40-50 per cent of A123’s sales. The challenge now, he told Bloomberg, “is to demonstrate that they last 10 to 20 years.”

Gearing down

Elon Musk’s EV outfit Tesla Motors may have seen its loss widen in 2011’s final quarter as it wound down production and sales of $109,000 Roadster electric cars, Bloomberg reports. The average estimate of 11 analysts surveyed by Bloomberg was for a loss, excluding some items, of 62 cents a share. On that basis, says Bloomberg, Tesla reported a fourth-quarter loss of 47 cents a share in 2010’s fourth quarter. The company is due to release quarterly results on Thursday.

Tesla’s next great EV hope, the Model S sedan, is expected to go into production in mid-2012 and, with a base model priced at $57,400, is intended to expand the California-based company’s sales volume. “We believe Tesla is at the cusp of becoming a self-sustaining company, in terms of revenue, with a crisp execution of the Model S launch,” said Amir Rozwadowski, a New York-based analyst with Barclays Capital, in an interview. “A lot of the company’s future success will be determined by a successful launch of Model S. Investors are focused on that.”

But auto sector analyst Alan Baum, principal of Baum & Associates, says that a widening of Tesla’s quarterly loss would affirm the views of the EV-maker’s critics: “The people who think electric vehicles are not ready for prime time are going to say yet again that Tesla is a failure,” Baum said.