L-ion batteries to cross $100/kWh in 2018, residential solar + electric battery cost-competitive with grid electricity by 2020

Energy storage prices are falling rapidly, allowing new combinations of solar, wind, and energy storage to “outcompete” the costs of coal and natural gas plants, according to a new study.

Research and development investment for energy storage projects have brought the cost of a lithium-ion battery down from $10,000 per kilowatt-hour in the early 1990s to an expected $100 per kilowatt-hour in 2018, the researchers said. Residential solar and electric battery storage could become cost-competitive with grid electricity by 2020, they added.

“Dramatic cost declines in solar and wind technologies, and now energy storage, open the door to a reconceptualization of the roles of research and deployment of electricity production, transmission, and consumption that enable a clean energy transition,” the study says.  Furthermore, meeting the carbon emissions-reduction goals, as outlined in the Paris climate agreement, will require a greater focus on research and development, the study notes.

The new study, “Energy Storage Deployment and Innovation for the Clean Energy Transition,” was authored by researchers at the University of California, Berkeley, TU Munich, and the Center for Digital Technology Management in Germany and was published in the Monday issue of Nature Energy.

Wind turbines and solar panels generate power when the wind is blowing and the sun is shining. They work intermittently, unlike gas- and coal-fired power plants, which can generate steady power as needed to meet consumer demand.

Various systems exist to deal with intermittency, from installing a lot more wind and solar over a large geographical area to storing surplus energy until it is needed. A wide array of technologies are used for energy storage, including solid state batteries, flow batteries, flywheels, and compressed air. Gigawatt-scale grid storage would improve the transmission and distribution system, resulting in lower future investments necessary to ensure grid stability and improve customer, according to the study.

One of the barriers to lowering the cost of energy storage is that public research and development spending in energy has slowed down, even as reliable electric power delivery has become a higher priority. From 1976 to 2015, total U.S. federal research and development spending dropped from 1.2 percent to 0.8 percent of the U.S. GDP.

“We note that the relative decline in public R&D spending could forestall critical cost reduction and advances toward achieving a deep decarbonization in the electricity sector and bringing new material advances from the lab to the market,” the study says. “One way to drive this research is through government spending that could achieve drastic cost reductions for energy storage systems.”

The federal government provides seed money for energy technologies, including energy storage. In 2016, the Department of Energy’s Advanced Research Projects Agency-Energy (ARPA-E) was funding 75 battery system projects that the agency said have the potential to transform renewable energy storage in the next five to 10 years.  However, the House passed a so-called minibus spending bill last week that eliminates funding for ARPA-E, which would end agency’s research into battery projects. President Donald Trump also called for the elimination of ARPA-E in his proposed fiscal-year 2018 budget.

The potential for drastic cuts to federal research and development of energy storage technology, as proposed by the Trump administration, “would certainly be a short-term blow” to innovation, Daniel Kammen, a professor at the University of California, Berkeley and director of its Renewable and Appropriate Energy Laboratory, said in an email to ThinkProgress.

Kammen, who was one of the three co-authors of the energy storage study, argued that dramatic funding downturns limit the competition between different competing technologies.  “We saw a great increase in positive competition under the Obama-era ARPA-E program, when many candidate technologies competed for recognition and support,” he said. “Now, if the Trump cuts do take place, this will not only cause a short-term tightening, but can also cut into this ‘diversity-competition’ which is so important over the long-run.”

Tesla has been one of the leaders in energy storage innovation, with its Gigafactory in Nevada and a lithium-ion storage facility in southern Australia. Deepwater Wind, a wind energy development company, on Tuesday announced a proposed a 144-megawatt wind farm with 40-megawatt hours of battery storage provided by Tesla for its offshore Massachusetts project.

California is home to the first energy storage mandate on the grid, requiring utilities to procure 1,325 megawatts of storage by 2020. In Europe, the city of Berlin, Germany, plans to install a 120-megawatt battery underground to support wind and solar efforts at prices as low at 15 cents per kilowatt-hour.

“These innovative policies showcase the range of storage options that may benefit clean energy, from small Powerwall batteries in the home to city-scale storage facilities providing back-up to utility-scale wind and solar farms,” the study says.

Tony Dutzik: Tesla’s Most Important Disruption Isn’t About the Technology: It’s the Business Model

The automobile manufacturer/franchised dealer system has proven to be a remarkably effective and resilient system for putting lots of cars in lots of people’s hands very quickly. If you see electric vehicles as a necessary (but by no means sufficient) part of a strategy to eliminate transportation carbon pollution, auto dealers and legacy manufacturers are people you really want to have on your side. Moreover, Tesla’s ability to actually deliver on the promise of the Model 3 is still very much in question.

The strategic dilemma is not much different from that facing electric utilities in relation to distributed solar power. Utilities that lobby states to clamp down on distributed solar may win the battle by preserving a revenue stream in the short run, but risk losing the war by positioning themselves for mass defections from the grid as solar power, energy storage and microgrids become cheaper and better developed. Advocates for clean energy often oppose utilities’ efforts to limit solar power, but they also generally recognize that the transition to a clean energy future will be far easier, cheaper and more efficient if the strengths that utilities bring to the table can be harnessed, rather than tossed aside.

There is simply no way to appreciate the challenge Tesla poses to the auto industry without understanding how cars currently get into the hands of consumers – and how electric and connected vehicles in general and Tesla’s in particular propose to change that. Tesla’s success is vital to the rapid electrification of the vehicle fleet. So too, though, is the ability of automakers and dealers to resolve the strategic tensions that hamper their ability to champion electric vehicles … before it’s too late.

[1] EVs will, of course, require tires and body work, and likely some maintenance of electrical systems and mechanical elements, but eliminating complex and fickle internal combustion engines removes a lot of headaches.

Getting wind and sun onto the grid, by the International Energy Association, 16 March 2017

Insights paperWhile wind and solar power are taking off in many countries, there are still some misconceptions about their reliability.

Wind and solar PV technologies have seen rapid cost reductions and can now provide electricity at or below the cost of traditional sources in a growing number of countries. This makes them more appealing for countries seeking to meet growing power demand and decarbonize their energy system at the same time.

Since variable renewable energy (VRE) technologies have certain unique properties, integrating them into power systems means understanding how they relate to other parts of the grid. The level of adaptation needed to effectively integrate VRE also changes as more low-carbon resources are built. Making the right changes when they are needed avoids both overspending, delays and protects security of supply.

In this context, a new report on “Getting Wind and Sun onto the Grid” explains when certain challenges related to VRE integration are likely to emerge, and how to solve them.

While wind and solar power are taking off in many countries, there are still some misconceptions about their reliability. For instance, does fluctuating wind and solar production need one-to-one “back-up” capacity? Does it impose high cost on conventional generators? Is it possible to integrate variable renewable production if you don’t have storage?

The new report clearly shows that integrating VRE technologies requires little extra effort, especially at the initial deployment stage. The variability of its production is negligible compared fluctuations in demand, something that power-system operation and conventional generators have been designed to deal with. Indeed, wind and solar can be built without destabilising power systems or causing ballooning cost and operational complexities.

Based on existing power systems, the report identifies four phases in VRE integration, each with specific characteristics and operational priorities. In the first phase, wind and solar have no noticeable impact on the system, and the priority is to communicate clearly where and when solar and wind projects can connect, and what technical requirements these plants must comply with. In a second phase, as their share of total power production grows, the focus shifts to managing first instances of grid congestion, and to incorporate forecasts of VRE generation in the scheduling and dispatch of other generators.

In the last two phases, wind and solar start to affect the overall grid and other generators. As the share of VRE grows, the challenges that power systems face will relate both to system flexibility – relating to supply and demand in the face of higher uncertainty and variability – and system stability – the ability of the of power systems to withstand disturbances on a very short time scale.

The continued growth of wind and solar power will be a priority for the decarbonisation objectives set by the Paris Agreement, which entered into force in November 2016. The timing and scale of the challenges relating to VRE integration will depend on the characteristics of each individual power system. Since many countries are starting to introduce VRE, this report specifically focuses on the initial deployment phase. This report helps policy makers and other stakeholders understand how to determine what challenges are likely to be encountered as they introduce wind and solar power and when these are likely to emerge. Most importantly, it suggests the solutions at hand at each step of the way to a cleaner, more resilient and – likely – cheaper power system.