Falling Battery Costs Are The Key To An Electric Future

Falling Battery Costs Are The Key To An Electric Future

Battery storage is one particular technology that isn’t advancing as fast as we want. Despite all the promises of graphene and carbon nanotubes, batteries for long-term and high-demand energy storage are falling in cost largely thanks to improvements in the development of good ol’ fashioned lithium-ion cells. There’s one particular dollar figure where batteries (and the renewable energy sources that go hand in hand with them) beat out fossil fuels, and one number where they’d be far and away the best electricity delivery technology.

Power station image via Shutterstock

RenewEconomy’s Giles Parkinson has an excellent treatise on the potential future of battery technology, and its applications both for transport — like the Panasonic lithium cells inside the Tesla Model S — and utility, industrial and residential applications, like off-grid home solar energy storage for a house or peak demand ‘clipping’ from a high-energy-consumption industrial location.

The key to that uptake would be the lowest possible cost per Kilowatt hour — and the ultimate goal, as quoted by Swiss investment bank UBS, is a price for battery storage lower than $100/kWh. Citigroup says $230/kWh is the tipping point where battery storage is more cost-effective than conventional, live energy generation and the potential of fossil fuels, and UBS declares that number reachable within the next two to three years. $100/kWh is further off, but it’s still entirely reachable.

RenewEconomy notes that Navigant, another consultant and analyst firm, suggests that the Tesla Gigafactory will produce batteries with a raw materials cost of approximately $69/kWh and an overall production cost approximately 10 to 20 per cent higher — around $76 to $83/kWh.

Another significant number is the suggestion that the market for battery storage — from electric car and truck brands, from homes and businesses, and from large-scale utilities — will grow 50 fold by 2020. Prices are falling significantly as time goes on; Navigant researcher Sam Jaffe compares the $180/kWh price that Tesla pays Panasonic now with the $1500/kWh price average cost only five to seven years ago.

Large-scale and widespread battery energy storage — whether it’s your Tesla, or a on off-grid solar storage setup on your roof and in your garage, or a battery installation in your business to offset demand — will revolutionise the way that we consume and produce electricity in the future. All it will take is for one particular technology to advance to that magic tipping point. [RenewEconomy]