I'm not sure what you mean by Tesla cannibalizing the peakers? Do they already own traditional peaker plants?
I agree revenue is revenue, I'm just saying this is perhaps unlikely to provide more revenue from sales outside CA.
Tesla's PowerPack installs (battery storage receives federal incentives, nat gas does not) will replace peakers, leaving them as stranded assets (the cannibalization I refer to).
Edit: unepipe: Tesla packs perform the exact same role as a peaker plant: energy on demand.
They are distributed, dispatchable loads and generators, available to draw or release energy from/to the electrical grid as needed, when commanded to do so by a grid operator.
I assume I used "cannibalization" improperly in this context. Mea culpa.
So current peakers will not be stranded assets, especially because the life of batteries is likely less than 20 years.
I'm really very interested in the economy and technology associated with deploying clean energy. I'm an idealist and want to see green power, but only in a way that makes sense. And I'd like to profit it from tracking the process.
Have you got any other resources or directions to go to find more information like this? I've found this: https://sam.nrel.gov/download
I ask for I am uneducated in this area.
The batteries will nibble away at the most expensive peaks first, the plants that run for only very short periods per year.
Meanwhile solar and wind will roll out to displace fossil fuel usage as well. Ideally they'll meet in the middle at some point, but it appears financially viable for this process to start now, and await further drops in pricing to expand later.
Otherwise there will be a big jump in demand for batteries, as power companies will be looking for hundreds of GWh of battery capacity. If they make a yearly profit for the power company that's significant enough to warrant the CAPEX of replacement, increasing the battery price by 10% only means one or two more years before break-even. So power companies could easily afford that if we assume the investment at current price levels is profitable for them.
That is going to significantly (negatively) affect the price developments of batteries and constrain supply even more than today, so EV manufacturers will be faced with either losing (more) money on each car or increasing prices and selling less cars.
Unless we assume Tesla is looking to pivot out of EVs in general, but I think that's a rather absurd assumption given their current actions.
Tesla is selling internally to themselves, and already has production set up for batteries for stationary power.
The best outcome is for demand to ramp up, keeping prices high long enough to fund the rest of the construction of the gigafactory.
No praying required.
Sure car batteries and power banks are different, but they're all Li-ion and I believe Tesla (unlike others) is packing 18650's in both.
(What is the net present value of $1000 in 2020? 2025?)
Also, there are other vendors happy to sell more batteries, including alternative technologies which are unsuited to cars but very suited to static power battery stations. (eg, Flow Batteries)
This would be a great thing for EVs. At worst it will be a few years of slowed down growth for EVs just like we're seeing now with cheap oil. These are all temporary, and neither will "kill EVs". And after the dust has settled, you'll probably see $50-$70/KWh batteries in cars.
"From around 1995 through 2010, energy storage costs had fallen by about 14% a year – a rate that means the price will halve in a little more than five years. In 2010 – that rate sped up to 16% a year, and while a 2% increase might seem small it actually means that instead of taking five+ years to halve – it would now take slightly less than four years, more than 20% faster. Tesla’s Gigafactory has now increased the rate of price decrease even faster than the 16%. It is estimated that the Gigafactory, by doing nothing more than moving all of the supply chain arms under a single roof, has decreased the price of battery packs by 30-50% – while doubling the global volume."
https://electrek.co/2016/05/19/the-math-and-evidence-all-aro...
JB Staubel has indicated the same... https://www.youtube.com/watch?v=lgcozueYXMU&feature=youtu.be...
The gist is they can absorb power at a cost that is pretty close to free (when there is excess power flowing through the grid) versus burning a fuel whose price is volatile, a steep declining cost curve for batteries, and aggressive federal government tax incentives.
I'm not sure that should be included in the cost analysis, otherwise anything can be subsidized to the point of being "cheaper".
https://electrek.co/2016/09/09/tesla-quietly-reduced-the-pri...
"At the time, the Powerpack was being quoted at $470/kWh, but now we learned that Tesla brought the price down to $445/kWh."
Incidentally Goldman sachs estimates the cost to be around $200/kWh back in February.
http://webcache.googleusercontent.com/search?q=cache:n5WQK1A...
They're probably not profitable in the usual sense of the word. Instead they're just required by the regulators that enforce the utility monopoly and set the utility rates such that the power company doesn't go out of business.
i don't know anything about power, but this is faulty business logic. we do plenty of stuff that isn't profitable, but rather is value-add to either win or retain business.