Batteries will transform power grids

18 November 2015 6:12 pm

A revolution is happening in power storage.

According to analysis from Lazard, the price of batteries will fall to the point that they will be competitive against back-up fossil fuel power generation for a wide range of uses. As a result, they’ll be competing for access to the power grid. As the Financial Times reports, batteries are still typically more expensive for uses such as supporting the grid at times of strain or backing up renewable energy, but Lazard expects that in five years’ time they will be generally competitive options even without any subsidies or tax breaks. And new electricity storage installed on to the grid to support wind and solar power is likely to grow more than 60-fold from 196 megawatts of capacity this year to 12,700MW in 2025.

“Storage is looking far more optimistic in terms of innovation and material impact now,” said George Bilicic, global leader of Lazard’s power, energy and infrastructure practice.

Lazard’s study found that the costs of solar and wind energy have fallen by 80 per cent and 60 per cent respectively since 2009. That makes them much chapter than gas and coal, and less than half the cost of nuclear. They also come in at one-third the cost of peaking gas.

At the same time, manufacturing capacity will increase with investments such as Tesla’s battery “gigafactory”, now under construction in Nevada.

Elon Musk, the powerhouse behind Tesla, has a vision: he wants to pair the new Tesla powerwall batteries with solar panels—either on the rooftops of homes or in large-scale solar farms. These panels will store energy during the day, when the sun is shining, so that it can be used in our homes, for free, at night. And that is much more efficient, and cheaper, than using energy from power plants that produce greenhouse gases

And that, he says, will be the key to reducing greenhouse gas emissions.

If nothing else, it’s a warning to utilities around the world. It will completely destroy their business model