Development in energy storage seems to be gaining momentum. Last Monday the CEO of Tesla Motors caused a ripple in the energy storage sector when he revealed on Twitter that “a major new Tesla product line – not a car – will be unveiled” on 30 April at the company’s Hawthorne, California, design studio.
It is widely assumed that the “new product” to which Elon Musk was referring will be a residential energy storage system. A recent Analyst Reaction from Bloomberg New Energy Finance looks into Tesla’s existing activity in consumer-focussed power storage and its potential for market expansion. Notable obstacles to widespread adoption of residential storage systems include long payback periods and existing ‘net-metering’ policies, whereby “homeowners with PV systems on their roofs can effectively sell excess power back to the grid at retail rates, largely eliminating the economic motivation for local storage”.
Tesla is not alone in recognising the potential of energy storage products to tackle the challenge of fluctuating electricity demand coinciding with a relatively fixed supply. Chinese carmaker BYD expects to double deliveries of energy-storage units this year on rising global demand. Last year the carmaker delivered units with capacity to store 57MWh, ranging from residential to industrial scale units, in markets including the US, Germany and Japan.
Growth in energy storage may be a helpful development given the increasing threats facing electricity grids worldwide. Turkey grappled with its most extensive power failure in 15 years last Tuesday and the Netherlands also experienced a five-hour-long power outage on 27 March that caused major disruptions to public transport and air traffic in and around Amsterdam. A report by Bloomberg News published last week pointed out that increasing use of telecommunications, the internet and smart meters opens up the electricity grid to hackers, making it more vulnerable to external interference. Tesla’s lithium-ion battery technology may ultimately threaten the traditional electric grid, allowing consumers and businesses to retain greater independence over their electricity supply. AResearch Note published by Bloomberg New Energy Finance details the technologies and chemistry behind lithium-ion batteries.
There were several developments in offshore wind last week. Siemens plans to roll out production of its wind turbines for the 330MW Walney Extension offshore wind farm off the coast of northern England. The owner of the wind farm, Dong Energy, has received guaranteed state incentives for the programme, whereby it will receive a fixed price for the electricity produced for 15 years.
Meanwhile, a favourable UK climate of low-carbon subsidies and government backing of offshore wind has contributed towards the UK Green Investment Bank raising almost half of its target of $1.5bn towards the first fund dedicated to supporting sea-based wind projects. The bank hopes the fund will drive down costs of offshore wind, helping the UK meet EU obligations to cut pollution, whilst providing predictable, low-risk returns for investors.
Investment in solar power is also continuing to shine brightly. Chinese solar panel maker Risen Energy raised $400m from investors to develop 379MW of solar projects in Asia and Latin America. Chinese solar phenomenon Hanergy Thin Film Power Group issued as many as 4.1bn new shares to companies Baota Petrochemical Group and Manshi Investment Group, as its stock market value soared to above that of Sony.
Meanwhile, Duke Energy announced its plans to install as much as 500MW of solar power in Florida by 2024, a proposal that would more than triple current capacity. The Sunshine State ranks 13th in installed solar capacity amongst US states, despite ranking third in rooftop solar potential. The lack of a requirement for renewable power use and obstacles in the way of the residential solar power leases have contributed to Florida’s current dearth of solar power.
However Florida may become more favourable to greenhouse-gas-free solar power in the near future, as the US looks to promote its deepest de-carbonisation yet for 2015, explored in last week’s Research Note entitled US power outlook: 2015 = deepest decarbonisation ever. These aims are in line with President Barack Obama’s formal pledge submitted to the UN last week, in preparation for the global climate summit in Paris this December. The US administration is proposing to cut heat trapping pollution 26-28% below 2005 levels by 2025, an ambitious goal which will rely upon deep cuts in coal-fired emissions.