Will Tesla Change our World?
By George Harvey
On March 30, Elon Musk, the CEO of Tesla Motors and Chairman of SolarCity, set a lot of people buzzing when he tweeted that Tesla would be introducing a new product line, but it would not be cars. Speculation centered on batteries, because he had started moving on the construction of a $5 billion battery plant months earlier. It was assumed that a plant of that size was much too big to be intended to build batteries for Tesla’s cars.
Then, on April 30, 2015, Musk announced that Tesla had three new lines of batteries for sale. For the home, there would be two “Powerwall” batteries, a 7kWh battery priced at $3000 and a 10kWh model at $3500. An industrial-scale battery called a “Powerpack” would hold 100kWh, and be priced at $25,000.
There were, of course, a lot of people whose reaction was, “Ho-hum. What could be interesting about batteries?” They did not understand the implications. But the response in many important places was astonishing.
Arnie Gundersen, well-known for his commentary on nuclear power, told an audience the Tesla battery was the final nail in the coffin of the nuclear industry. Even more surprising, an article appeared in Forbes a few days later with the title, “Why Tesla Batteries Are Cheap Enough To Prevent New Power Plants.” The excitement, however, was not just a bunch of words.
Tesla pre-sold $804,000,000 worth of batteries in the first week after the announcement.
To understand why all the fuss is going on, a little background might be reviewed. Last year, analysts for Oncor Electric Delivery Company calculated the break-even point for utility-scale storage batteries at $350 per kWh. Tesla’s Powerpack, the big sister of the Powerwall home battery, will come at a cost of $250/kWh. This means that battery storage is cheap enough that the combined cost of solar power and a battery is lower than the cost of the least expensive fossil fuel choices in many places.
This changes everything. In fact, it is what is called “disruptive.”
The cost of the batteries is so low that the prices of electricity produced by wind turbines and stored in them is lower than the cost from natural gas plants. The cost of electricity from batteries charged with solar is competitively priced, but solar power has the huge advantage of having an absolutely predictable cost of fuel. Electricity generated by coal and nuclear plants is simply no longer competitive at all. There really may be no reason to build another fossil fuel or nuclear-powered plant.
Elon Musk pointed out that the amount of space needed to power the country with solar panels was actually very small. On a huge map of the United States, the area was just a small square in the middle of Kansas. He also pointed out that this need not be land with any agricultural value; it could largely be on the rooftops of buildings, or roofs and canopiess over parking lots or other urban areas. Only shortly before the Tesla battery press conference, in fact, the journal, Nature Climate Change had published a study concluding that nearly 100% of the electrical needs of California could be from such urban sources.
This is a turning point.
The economic factors are compelling. We will almost certainly be shifting rapidly to renewable power backed up by batteries. Interestingly, Musk’s position on competition is that he wants to see other companies offer similar products. In fact, he is so interested in doing this that he is giving away the technology of the lithium-ion batteries he is selling, much as he has done with the technology of the cars sold by Tesla.
For years, we have heard the same old complaint about renewable energy, “The sun doesn’t always shine, and the wind doesn’t always blow.” It was once a pretty effective way of putting a damper on the enthusiasm of people interested in renewable energy. It was never a valid point, but troublesome to deal with, because answering it involved a complicated explanation that went over the heads of people who were mentally or financially stuck in a century-old paradigm. But now, there is an answer in a single, short response that anyone should be able to understand, “Tesla batteries!”
Elon Musk’s announcement of the Tesla battery can be seen at bit.ly/tesla-battery-announcement.