Tesla CTO: Our Energy Storage Division Is “Growing As Fast As We Can Humanly Scale It”

7 months ago by Steven Loveday 46

Tesla Energy – Powerpack – Utility and Business Energy Storage

The Tesla Powerpack has started making its way into mainstream news as of late. Just the other day, we reported about the Mira Loma substation partnership with Southern California Edison, which is was the largest of its kind in the world.

A Cluster Of Tesla Powerpacks – Utility and Business Energy Storage System

Several “island” destinations are also employing Tesla Powerpacks to relieve aging diesel units, and go off-grid from mainland power supply.

Now, two more massive facilities, constructed by Tesla, AES Corp., and Altgas Ltd., are set to go online simultaneously. Each in and of itself – as well as the Mira Loma plant – all could qualify as the largest battery storage facility on the planet. Combined, they make up 15 percent of all battery storage facilities installed in the entire world over the course of 2016. Tesla CTO J.B. Straubel remarked:

“It’s sort of hard to comprehend sometimes the speed all this is going. Our storage is growing as fast as we can humanly scale it.”

As was the case with the Mira Loma facility, Southern California Edison had to rush to get the storage facilities in place. Impending shortages, blackouts, and an unforeseen recent natural gas leak all moved the projects’ need to “immediate.” Straubel added:

“There were teams working out there 24 hours a day, living in construction trailers and doing the commissioning work at two in the morning. It feels like the kind of pace that we need to change the world.”

Not long ago, batteries were too expensive to even consider projects such as this. Partly due to the EV revolution, battery manufacturing has transformed by leaps and bounds, and continues to move forward. Capacity is increasing, while cost is decreasing. The entire global market for battery storage in 2016 was less than one gigawatt. California’s goal for 2020, for the state alone, is 1.32 gigawatts. Tesla alone aims to provide 15 gigawatt hours of battery storage by 2020.

Source: Bloomberg

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46 responses to "Tesla CTO: Our Energy Storage Division Is “Growing As Fast As We Can Humanly Scale It”"

  1. Big Show says:

    Can you say “tipping point”?

    1. BenG says:

      We are getting there, but these installations are more or less mandated by California, not the response of a free market. I’d say the tipping point where they become economical is still some many years away. I’d guess 10 or more.

      While they call these new installations grid-scale, they aren’t really close to providing the power that even a small gas peaker plant can deliver each day.

      1. Ron M says:

        Actually the reason for installing the storage batteries was to prevent electricity outages which could happed became of the leak of the natural gas storage facility in October 2015 when a well blowout resulted in the worst methane leak in U.S.history that caused the worst methane leak in U.S. history.

        1. BenG says:

          California is mandating battery storage for the grid. Otherwise the utility would have found a cheaper way to solve the problem.

            1. BenG says:

              I assume they could make natural gas work if the state weren’t trying to move away from it.

      2. Joseph says:

        AES has also signed a 20-year PPA with Southern California Edison to build a 100MW/4-hour duration storage array at its Alamitos facility, to (in part) replace aging natural gas generation there.

      3. speculawyer says:

        No, it is not 10 years away. It will be faster than that. Solar PV and wind are now REALLY cheap . . . and if they can push the battery prices down just a little more, there will really be a big move to solar/wind/battery systems.

        (Along with other things like pumped-hydro, demand-response programs, HV DC transmission lines, etc.)

        1. BenG says:

          It’s a big stretch to call solar ‘really cheap’ at this point. Levelized cost of electricity (LCoE) from solar is still higher than for a new combined cycle gas plant. California doesn’t have much room to add wind power.

          Add cost of battery to solar and it probably doubles the LCoE, and that only helps you to cover evening demand, then you still need backup from another power source for night-time and early morning, much less having a cloudy day.

          So, until prices come way down on Solar + Battery, or prices go way up on natural gas, it’s going to be quite a while before the price point of their levelized cost of electricity cross. 10 years is pretty optimistic I think.

          1. MikeG says:

            Ben,

            Solar + storage is here today. On the island of Kauai Tesla/SC built a 13MW solar + 52 MWh storage facility and has a PPA with the local utility for about 11.9 cents/kWh.

            Not only that, bit AES is proposing to build a 28 MW solar + 100 MWh storage facility on Kauai and sell the power through a PPA.

            1. BenG says:

              Island economics are a different story. I agree solar + wind + battery is economically competitive with the diesel grid power they rely on now.

              1. Stan1 says:

                Islands aren’t a different story. They are part of the larger whole. Yes, the reason the PPA is competitive at the wholesale level at 11.9 cents/kWh is because they are competing against expensive oil fired generation. But the fact remains, the combination is competitive with grid electricity in some locations already. That is a tipping point…

          2. Someone out there says:

            For completely replacing fossil generation solar+battery is probably not cheap enough but as in this case replacing standby peaker plants which are much more expensive it might actually be cheaper. It’s about picking the low hanging fruit first, install batteries to replace the most expensive power first and then work down from there as prices drop.

          3. ItsNotAboutTheMoney says:

            It’s worth noting that the fall in estimated average levelized cost of solar has been staggering. From $125.3/MWh in 2014 for 2020, to $74.2/MWh in 2016 for 2022.
            (EIA estimates $57.2/MWh for Advanced CCGT; it has dropped in large part because of reduced estimated variable costs, a combination of low NG prices and improved technology.)

            In good locations, onshore wind is now estimated to be cheaper than CCGT. Turbines get larger, modeling improves and capacity factor increases.

            The cheapest projects projected are geothermal.

            But, rather than targeting CCGT, wind/solar + storage key target is eliminating peakers, which have much higher levelized costs.

            One of the interesting things that’s happening with CCGT is that companies are working on improving ramp rates, which has been a limitation that has required more use of peakers. It’s possible that faster-ramping CCGT will squeeze out some of the morning ramp.

          4. Stan1 says:

            Lazard’s most recent unsubsidized LCOE comparison ($/MWh) just published in December showed utility scale solar between $46-61 and wind between $32-62. Both continue to drop in cost as deployment increases. Combined cycle gas with LCOEs between $48-78 is the only encumbent power generation technology still competitive today. There are no cost reduction paths for it to remain cost competitive. All generation technologies require backup when they generate sufficient levels of grid power. It is very likely we are already past the tipping point based on the 11.9 cents/kWh solar plus storage PPA mentioned. Your 10 year horizon is absurd.

            1. Stan1 says:

              Link to Lazard’s study:
              https://www.lazard.com/media/438038/levelized-cost-of-energy-v100.pdf

              They do not cost out the required backup for incumbent technologies and based on GM’s $145 kWh, their storage costs are too high.

            2. BenG says:

              To say that “All generation technologies require backup when they generate sufficient levels of grid power” and dismiss the problem of intermittency of renewables is just wrong. There’s a big difference between needing “backup” every night and every cloudy day vs needing backup when a plant goes down for maintenance.

              The Lazard estimate is for ideal siting (southwest US for solar) and ignores the additional cost required for utilities to integrate it into the grid because of the intermittency problem.

              $145/kwh is battery cell-cost only which ignores the cost of pack construction, wiring, inverters and other body of plant stuff that probably ballpark doubles the installed cost by the time the utility pays for it. Tesla sells its Powerwall 2 for $392/kwh retail and that is about the same as I’ve seen estimated for their bigger PowerPack 2.

              These installations we are seeing now such as the Tesla Mira Loma plant are basically small scale prototypes of what utilities might install in the future if the current installations work like they’re supposed to, and it indeed be many years before it’s scaled up to true utility sized installations that. AES’s contract for a 400 MWH installation at Alamitos won’t be finished until 2020 and even that is still well below the scale needed to combine with a solar plant to replace a small combined cycle natural gas plant for even one full day.

              1. Stan1 says:

                No, back-up for renewals isn’t some type of voodoo as you seem intent on implying. In fact it is generally easier since the grid operators know in advance when the sun sets or the wind won’t blow. A windmill going down isn’t a major issue for them like a coal plant going off line with no notice. German grid operators have publicly stated these facts.

                But, I don’t intend to rebut to all of your bluster. Your 10 year horizon isn’t remotely “optimistic”.

                1. Stan1 says:

                  Here’s a source on renewable integration: https://cleantechnica.com/2015/12/11/grid-operator-70-solar-wind-on-german-grid-before-store-needed/

                  Of course $145 was only for the cell!

          5. Ron M says:

            There’s a Pacific Ocean latest offshore wind turbine is 9MW 1 turbine could power 7,200 homes. 100 could power 720,000 homes.

      4. przemo_li says:

        Here I was thinking I’ve read some Islands want Tesla Powerpacks to replace aging infrastructure.

        You think that was uneconomical choice on their part? How so?

      5. John Winnick says:

        Hydro carbon emissions are toxic and should be replace with solar and batteries. Natural gas is no different than having coal, oil, or nuclear with environmental consequences.

        Replacing the peaker planets has saved 2,500 homes from a disaster that is occurring around the world with a very bad science experiment. Pollution should be mitigated at all costs. Tesla is building and developing the batteries as fast as humanly possible to advert extinction of the human species.

      6. John Winnick says:

        There are better solutions in the future for batteries but nickel, cobalt, and manganese components are hard to beat with the costs and 100% recycling. The Tesla Powerwall 2.0 is double the density with 30% lower cost than any other battery.

  2. John says:

    I want a powerpack in my basement.

      1. speculawyer says:

        The various electronics need to improve. No one has a really good integrated solar PV, controlling, charging, etc. system.

        1. BenG says:

          Hopefully Tesla will solve this problem within a few years with their integration of Solar City and offer of a complete package.

        2. Brian says:

          Sure. Right now, they offer me no benefit, since I have inexpensive and reliable electricity. I’m not sure what the residential use case would be, short of completely off-grid installations.

          My point was simply that if someone wants to buy a PowerPack from Tesla, they are available now.

        3. Nix says:

          Tesla/SolarCity starts production of their Solar Roofs in the middle of this year starting in California, and working east starting around December. It will be interesting to see how they package that with the Powerwall II which has a built in inverter.

          I have no idea if they could use that built in inverter for double-duty with the solar roof. But if they could that would cut costs.

  3. Brian says:

    “Partly due to the EV revolution, battery manufacturing has transformed by leaps and bounds, and continues to move forward”

    Yes. And batteries got to the point where the EV revolution was possible thanks to the portable electronics revolution (cell phones, laptops, tablets, etc). This whole thing is snowballing. With the added scale of grid energy storage, batteries will continue to increase in supply and decrease in cost until we reach the limits of physics and materials.

    The future is looking bright!

  4. J P DeCaen says:

    One problem with natural gas is that the production methods are iffy from a safety point of view. All kinds of things can happen during the fracking/production process, like methane getting into drinking water, earthquakes, and leaks of toxic fracking fluids from holding ponds. I can see how a more controlled centralized and transparent energy production/storage system such as solar/ battery can be subject to a tighter control from an environmental safety point of view although some risks atill exist when extracting/ producing battery materials such as nickel and cobalt. Of course there are GHG concerns as well.

    1. Ron M says:

      In North Dakota there allowed to flare off large amounts of natural gas while fracking for oil. They flare off almost 40% of the natural gas. Unbelievable waste of natural resource and a huge problem r climate change.

  5. unlucky says:

    AES is more prepared for this and also selling a lot more capacity now. But it’s a non-story.

      1. unlucky says:

        Link to what? It’s AES’s primary business and they’ve been in it longer, not just jumping in recently with Li-Ions. Yes, they are prepared.

        Maybe you should look up the company?

        1. Nick says:

          Link to substantiate your claim.

          You made the claim, I’m calling you on it.

          The link you provide will be super enlightening on the state of the grid scale battery storage market.

          You say it’s a non story, let’s make it a story! 😀

    1. BenG says:

      AES has more history with grid connected battery storage, and has more history and expertise with grid power in general, but I’d say Tesla has given them a hell of a run for who is ‘better prepared’ at this moment in time, given the investments in the Gigafactory, partnership with Panasonic, and electrical engineering and battery pack expertise they’ve accumulated.

      It is incredibly impressive how fast Tesla completed the Mira Loma installation.

  6. speculawyer says:

    The storage biz a great way to sell cells before the Model 3 is up and running.

    All islands should be looking into buying a combo of solar PV, wind, and battery storage to slash their dirty diesel costs.

    1. BenG says:

      Yep. Island economics are far better for solar + battery than on the mainland. Diesel is grossly expensive for grid power.

      1. przemo_li says:

        Plus battery storage expansion is easy. You just need more land that wont drown.

        Need even more due to growing demand? New RE plant? New hospital?
        Slap some more storage here and there.

  7. leptoquark says:

    “There were teams working out there 24 hours a day, living in construction trailers and doing the commissioning work at two in the morning. It feels like the kind of pace that we need to change the world.”

    Oh boy that sounds great! So refreshing! Straubel is exactly right: we need a WWII scale mobilization, with armies of people installing every wind turbine and solar panel we can get our hands on. We are starting to move in that direction, even in the Age of Trump. But, we’re just getting our feet wet. Now we need to roll up our sleeves and really start to get serious.

    Wade into it, JB!

  8. Pushmi-Pullyu says:

    There certainly is growing demand for large-scale grid energy storage.

    But despite Tesla Energy’s growing market here, I’m not convinced that li-ion batteries are the right solution for stationary energy storage. Li-ion batteries are optimized for high energy density and high power in relation to the amount of energy stored. Neither of those characteristics are needed for stationary energy storage.

    Something like flow batteries would be far better, if those could be re-engineered to provide more power. As they say: “Necessity is the mother of invention.” I suspect that within a few years, there will be a better solution for stationary storage than large banks of li-ion battery cells.

    1. Stan1 says:

      The potential solutions are so varied that it is almost pointless to wonder. Baseload was a technology flaw that we designed grids around. Likewise, electricity usage does not equal “demand”. Very few people demand clean socks at 7:00PM.

    2. ItsNotAboutTheMoney says:

      There are always other potential solutions.

    3. Doggydogworld says:

      Flow batteries and such may make more sense in theory, but economies of scale often trump theory.

      That said, the best stationary battery technology is the “free” battery in a long range EV. Fill it up at work with dirt-cheap midday solar and trickle out 10-15 kWh to power your home overnight.

      V2H uber alles!