A New Era of Batteries Spells Trouble for Gas in America | Hacker News Reader

A New Era of Batteries Spells Trouble for Gas in America

bloomberg.com

89 pointstoomuchtodo103 comments

"A New Era of Batteries Spells Trouble for Gas in America" is the article's actual title, but the text does not back up this assertion.

Rather, a regulatory agency in California is ordering PG&E it must hold a competitive solicitation to "address two local sub-area capacity deficiencies and to manage a high voltage issue in another sub-area", because they're being blackmailed by Calpine [1] over three peaker plants.

Calpine has said they'd shut down the plants unless they get extensions on their must-buy contracts. The causality suggested in the article is backwards from the actual facts.

[1] http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M200/K6...

In California, yes, PG&E is being required to use non-fossil fuel resources for peaker functionality.

But, battery storage is cheap enough to start replacing peakers nationwide [1]. GE also laid off 12k people from their gas turbine generator business due to dropping demand [2]. Also, "Major CEOs of power companies have also suggested, in a much more aggressive time frame, that peaker plants will go away entirely by 2020 in the USA." [3]

Batteries will never get more expensive. Renewables will continue their aggressive cost decline curve. Ergo, peakers are stranded assets, and energy storage + renewable will continue their march down the electric generator market vertical (peakers->load following->base load).

[1] https://electrek.co/2017/12/13/solar-batteries-to-take-10gw-...

[2] https://www.bloomberg.com/news/articles/2017-12-07/ge-is-sai...

[3] https://twitter.com/jburwen/status/940635406697160704

The Minnesota report [1] discussed in your links is much more nuanced than just the graph excerpt. It suggests that a judicious use of federal investment credits and future anticipated cost decreases might make storage combined with solar generation a competitive or cheaper option than natgas peakers by 2023, but also proposes that Minnesota is well-positioned to start early, and learn by example.

While this may presage an industry trend, it's a long way away from the raw, unsubsidized numbers of storage-only timeshift solutions fully being cheaper than peakers. Battery storage isn't booming because it's that good right now; it's about to start expanding because of smart players taking advantage of subsidies, and betting on long-term trends.

[1] http://energytransition.umn.edu/wp-content/uploads/2017/07/W...

I agree that there's nuance. Renewables and energy storage receive subsidies, yet there is no carbon tax to level the playing field with traditional fossil peakers (or even load following or base load fossil, for that matter).

Besides California, Arizona, Hawaii, Massachusetts, New Jersey, New York, and Washington are also mandating utility scale energy storage. I anticipate additional states mandating the same in the near (1-3 years) future, which will contribute to driving down the cost of energy storage as manufacturing scales up. Time will tell.

Replying here because I can no longer edit.

I just found this interesting article about how China wants to be the destination for all things lithium ion storage for repurposing.

https://www.bloomberg.com/view/articles/2018-03-11/china-s-g...

This could mean a profound shift in utility battery storage if all of these EV batteries are going to go into grid storage after their useful life has been depleted in vehicles.

So you disagree with toomuchtodo that storage is cheaper now, but agree about where things are going in the long term.

One thing not touched on in the article is the marginal cost of wind and solar is near zero. Meaning when supply exceeds normal demand the price falls to near zero. This usually presented as a problem, but for some businesses this is potentially a big opportunity. If you consider a electric furnace processing scrap steel can easily use 10-100 MW of power for thirty minutes at a time. Potentially zero margin electricity can be used to decarbonize other industries as well.

But presumably marginal electricity is priced at 0 because there aren't many buyers on the market.

As more people figure out how to use bursts of electricity, they'll become buyers and prices may rise.

They are frequently built using feed-in tariffs, which guarantees that electricity will have a positive fixed price. Otherwise they're basically impossible to finance because as you say the generation marginal cost is zero so they'd just have to accept any price otherwise and lose money for the investors.

https://en.wikipedia.org/wiki/Feed-in_tariff

Which will result in solar and wind having a faster Roi and so even larger investments. Despite the faster adoption for solar and wind that we are having currently all over the world. Energy storage is a still a very large bottlekneck.

As one example of a new buyer who can use bursts of electricity: If you have a large number of electric cars with big batteries, which don't have to charge every day, and they're plugged in both at work and at home, you can do a lot of good by having them charge when electricity is cheapest.

And it's not exactly high-tech, it's just a little bit of schedule prediction.

Sure, but your grid operator won't offer you the low rate unless you can convince them that your fleet will actually not charge during high demand and not just conveniently switch over to the fixed rate socket.

It's definitely an opportunity, but the price at peak production periods is near zero precisely because nobody has yet figured out how to soak up these kinds of transient production peaks effectively, with sufficiently fast ramp-up and scale. It won't stay at zero if some big users figure out how to use that energy profitably. Though that wouldn't be bad overall. If some large users did figure out how to take advantage of these periods, it'd be a step towards smoothing out both grid pricing and usage.

Cryptocurrency miners have the fast ramp-up and scale required.

But they're profitable at high energy demand times too, so there's no incentive for them to run only during low demand.

Cryptocurrent miners have a strong incentive to locate in places where the $ per kWh rate is consistently low 24x7x365, not just for peaks. Such as near a hydroelectric dam in east Wenatchee WA. Mining also requires very little in the way of network connectivity, maybe 10Mbps at most, so it can be located just about anywhere.

Relevant article from this week regarding miner activity in that area:

https://news.ycombinator.com/item?id=16551848

It appears empirically that they don't. If they did, there wouldn't still be peak-production periods when energy was near zero cost, since they would've arbitraged that out.

Does that run the risk of being damaging to the currency network -- could transient spikes of mining push up the difficulty and thus affect functionality once the energy price goes back up?

You don't even need energy spikes for that, it already happens when hashrate is mobile between different networks.

That's actually what made me think of it (Nicehash pushing up the difficulty on the smaller coins); I just wasn't sure if something more cyclical would have the same effect or be easier to counter.

Cryptocurrency mining isn't enetgy constrained. Right now it it is capital constrained. Your primary costs are fixed upfront purchases of ASICs and GPUs.

Is there really nothing that we could do with this excess energy? Couldn't we purify water or run simulations or something similar?

It's not economically effective to run a supercomputer only during peak times.

Some Nordic countries that have large district-heating systems have started experimenting with dumping the excess energy into those.

Electricity to heat is not that efficient; normally district heating systems run off of the waste heat of electricity generation. Are you talking about an example where the waste heat isn't enough to power the district heat?

Actual energy to heat is only useful in a true excess energy availability situation, but usually you'd start building up heat storage to decouple heat availability from electricity demand, which would otherwise be a problem with cogen plants. And heat storage is so much cheaper and efficient than electrical storage, so you want to run your cogen in sync with electricity demand. Once the heat storage is there, it becomes an absolute no-brainer to also use it when you have excess electricity to dump (as electric heating is 100% efficient, it's the production of electricity in thermal plants that makes electric the worst form of heating).

We use heat pumps for district heating in Drammen, Norway. Run this through your favourite translation engine to read all about it: http://www.energi.no/brakeroya-varmesentral-apnet

Pumped storage hydroelectric plants seem the obvious target to me https://en.m.wikipedia.org/wiki/Pumped-storage_hydroelectric...

Desalination does seem like a good target. I think synthetic hydrocarbon production will be a good place to dump excess too. Pharmaceuticals and plastics aren't going anywhere, and I bet they'd appreciate a cleaner starting point than bitumen.

Electric cars have the obvious potential to absorb peaks. With range on recent models far exceeding typical daily use, it becomes increasingly easy to make charging dependent on supply.

If the "hydrogen economy" people ever figure out a way to make the equipment and fuel cells economical, cracking hydrogen from water at times when power is $0.00 per kWh could be one method. Takes a massive amount of amperage. Store it in tanks and use as needed through giant fuel cells.

Energy losses from this scenario are high enough that there are probably other usage scenarios that would beat it. It's certainly the case that there are already many peak-storage solutions deployed and none of them involve hydrogen.

there are already many peak-storage solutions deployed and none of them involve hydrogen

That seems like an overstatement. There has definitely been considerable research into using hydrogen as "peak-storage solution", and I think some approaches are actually being deployed. For example, here's an NREL story from last year: https://www.nrel.gov/continuum/energy_integration/hydrogen.h...

The article agrees with you that the current inefficiencies of the round-trip to the grid are large, but claims that generating hydrogen as a vehicular fuel using excess solar and wind power does make sense. So if the parent was envisioning those "giant fuel cells" as being mobile (or located somewhere really remote), then he's not that far off.

OK, so what % of peak storage solution is hydrogen?

That’s a demonstration project and to the extent that it’s “deployed”, so are tokamaks.

Hydrogen may be feasible for peak balancing but it seems correct to say that it is not currently used this way.

> Store it in tanks and use as needed through giant fuel cells.

Or just push it into the gas pipeline grid, it provides storage capacity and has the applications already waiting (the amount of hydrogen allowed in the final mix varies between regions, but we are a long shot from displacing natural gas by that fraction, worst case you'd have to add in a slightly lossy methanation step).

It works, a well developed gas grid already has all the storage capacity you could ever need and you wouldn't have to scrap your existing gas peakers even after scaling to 100% renewable. Perfect migration paths tend to be disappointingly unspectacular.

It's kind of entertaining that you mostly said the same thing as the person you replied to, but apparently don't realize it.

Why do you see it as the same? Gibbon1 points out that there is a current opportunity for a business that can take advantage of sporadically available almost free power, and _delirium extends this to say that paradoxically this opportunity will disappear as soon as there is a business that can use this power. Gibbon1 may or may not agree that the opportunity will disappear once it's being utilized, but this wasn't mentioned in his comment. So what is _delirium failing to realize?

Random thought, but I wonder why solar panel manufacturering plants aren't powered by solar panels.

they all are, but indirectly. I challenge you to find any manufacturing plant that's powered by a direct energy source instead of grid power - it's simply not efficient to manage demand peaks and valleys yourself when there's a huge amount of infrastructure already dedicated to doing exactly that.

Most large aluminum plants generate their own power.

This isn't strictly true, but isn't strictly false. Power plants are often built to supply power to aluminum smelters, like in New Zealand [1], Oman [2], and Iceland [3], but they're usually connected to the grid in the end. Iceland has a grid circling the island [4], Oman is upgrading its grid and building out interconnects [5][6], and in New Zealand, Manapouri went from exclusively supplying the Tiwai Point smelter to being a power station of the South Island grid.

[1] https://en.wikipedia.org/wiki/Manapouri_Power_Station [2] http://www.powerengineeringint.com/articles/print/volume-17/... [3] https://en.wikipedia.org/wiki/K%C3%A1rahnj%C3%BAkar_Hydropow... [4] https://nea.is/hydro-power/electric-power/transmission/ [5] https://www.omangrid.com/en/Pages/Existing-Transmission-Syst... [6] https://businessgateways.com/news/2017/07/30/Oman-plans-to-i...

The generators are connected to the grid, both for buying & selling but it is absolutely not true they don’t manage the ebbs & flows. Quit the opposite it’s a major part of their business

Until someone puts in a tie line from Roxburgh to Benmore Manapouri's power is really only available to the lower third of the South Island. Mind you the sooner we shut down the smelter and redeploy that power to locally owned industry the better

Most large aluminum plants are located very near giant hydroelectric dams, but I do not know of a single one that actually owns the dam.

http://www.alcoa.com/global/en/what-we-do/energy/default.asp

Alcoa has a whole division for energy generation. Their energy plants are collocated with aluminum plants, most like the Warrick operation are coal but they do have a hydro plant.

The Lochaber Hydro Electric scheme in Scotland was privately built and is still privately owned and feeds water to power the aluminium smelter in Fort William.

Paper mills tend to. They have lots of waste wood and need heat for their process.

The one near here is one of the largest power plants in the region.

Interestingly, I live in rural Japan and went on a trip with some of my neighbours. One of them brought her son along who is a buyer of natural gas for Fuji film. I asked how they are set up. He told me that they generate all of their electricity onsite from natural gas generators. It seems that they also need the waste heat for some other processes so it makes sense for them. I asked him about solar and wind because I know that both are fairly good bets here (more than 200 days of sun per year at 34 degrees latitude, coastal position with near constant moderate wind). He said that because of the waste heat that they need, it's still much cheaper for them to go with natural gas and figured that it would continue for some time (though... I suppose he might be biased given his job ;-) ). Unfortunately my Japanese isn't quite good enough to understand what they were using the waste heat for. Fuji film makes a lot more than film -- they do a lot of electronics too, so I'm not quite sure what they are doing. I also know a few people who work for automobile parts manufacturers (suppliers for the big car companies here) and most of them also use primarily natural gas, apparently (which surprised me greatly). I did notice that a few years ago quite a few factories in the area have covered their roofs with solar panels, so I think it's moving slightly.

I suspect that in many parts of the US, the national grid is so cheap that it makes sense to use it. But at least here in Japan it seems to be common to generate at least some of the energy yourself.

Note that he's not using a carbon price. It's definitely the case that using waste heat from a thermal plant is a big plus. But using natural gas in Japan, which imports all of its natural gas under high-priced long-term contracts, is not cheap.

Energy wise, nothing is cheap, which is why I was quite surprised that Fuji Film weren't already moving over to renewables. Japan basically has no other energy resources. Natural gas, oil, coal, uranium: basically whatever small supply they had is already gone. I suspect the reason for factories using natural gas is because it is on demand and the capital cost for the generators is relatively small. Probably long term Japan will use geothermal for baseload, but a lot depends on how the recent test plants perform and especially how they are perceived by the public.

Solar energy is land-intensive, and Japan is not exactly known for its wide-open spaces.

Dumb question: How can an electric furnace get hot enough to melt steel, but not melt itself?

Consumable graphite electrodes.

(edit: also, there are plenty of materials that can deal with sustained molten steel content with acceptable service life.)

The electrodes are made of graphite and the lining of the furnace is lined with a ceramic material. Both have melting points higher than the molten steel.

and if you (OP) continue asking "well how was the ceramic material made?": it is produced by dry dust pressing.

There's an xkcd what-if that says, paraphrased, "little is known about the properties of molten tungsten, because -- and this might sound stupid -- we don't know how to make a container that will hold it".

The question was valid. ;)

> Since 2010, Bloomberg New Energy Finance data show, the price of lithium-ion battery packs have fallen 79 percent.

But aren't Li batteries irrelevant for power plants? The advantage of Li is power/weight, but weight and size are no issue for power plants.

They're not for the plants themselves, they're for the grid storage that is being installed to replace "peaker plants" (the ones that supply energy when demand is unusually high)

Size and weight is still not an issue for such a purpose. Only capacity and cost.

Presumably it is cheaper to build one big factory to mass produce a single battery type than multiple smaller factories each with their own specialised battery technology.

With the 79% decrease, Li-Ion batteries are now cheaper per cycle than lead acid. They still have greater installation cost, but lower lifetime cost. This means any further reductions in Li-Ion cost make battery storage more competitive compared to on-peak generation.

This may be a kind of “consumer electronics” dividend that is now paying off in EV and grid storage use cases.

[1] https://medium.com/solar-microgrid/battery-showdown-lead-aci...

[2] https://www.powertechsystems.eu/home/tech-corner/lithium-ion...

Key thing, consumers prioritize initial capital cost. Where for utilities it's all about total cost.

Utilities probably also like that you can do continuous maintenance on battery systems. Servicing involves two men and a forklift vs multi day/week shutdowns. Friend is a millwright. Worked on a 7F gas turbine installation. They fired it up and it threw it's blades.

That’s an excellent point about consumer versus utility behaviors.

The Tesla/SolarCity model, of basically renting out solar panel installation in exchange for a cut of the future energy value, is an interesting approach to incentivizing a different consumer behavior.

This article https://www.fool.com/investing/2017/05/20/teslas-powerwall-s... describes a similar program applied to home energy storage.

Tesla is abandoning that model. And note that the overwhelming majority of their grid battery business is selling to power companies, not consumers.

The model made sense when residential systems were much more expensive, beyond the reach of the average homeowner even with the 30% tax credit. With the cost of systems declining so quickly, the PPA/lease model is no longer necessary.

I think what's happening to lithium ion technology is it's moving from a premium technology to a non-premium.

I think for utility grade stuff what they care about is actual cost per kwh of storage. Meaning how much does it cost to cycle a kwh or power in and out of the system. If it's low enough you make money.

I think the issue with other technologies is they wear out too fast under full discharge cycling.

Solar is not going to work in many states the way it can in say CA, AZ or NV. Beyond that though, I really wonder how they are going to find enough resources to build a robust enough system of backup/peak use storage not just in CA but the entire country? I thought this was already going to be a challenge as electric car/truck share grew.

Why shouldn't it? It works just fine for Germany which gets the same amount of sunshine as southern Alaska.

They only get like 6% of their total energy from solar.

https://www.forbes.com/sites/jamesconca/2017/10/10/why-arent...

Germany has among the highest electrical prices in the world.

https://en.wikipedia.org/wiki/Electricity_pricing#Global_com...

Only some isolated Islands were higher.

Too close to the equator and/or lack of regular rainfall and you get problems with dust accumulation on the panels. Also, heat does not really help PV efficiency. The latitudes in Germany may not be perfect for PV, but they seem to be much less bad than one would initially expect.

(I do find PV-covered landscapes visually less appealing than wind farms though, but of course PV must be much less annoying to live close nearby, haven't tried either. PV is competing with agriculture in a way that wind does not, so maybe we shouldn't overdo PV buildup on arable land..)

Have you seen how much sunlight a place like Kennewick, WA gets in one year? Yes it is considerably north of CA, not as much kWh production in December, but it is a sunny, dry, desert climate.

Season shifting doesn't have great economics.

I was convinced of solar when I read the solar efficiency is >60% of the output in the Sahara in most states, which is enough.

https://upload.wikimedia.org/wikipedia/commons/d/db/Solar_la...

Isn't it interesting that solar/wind was dismissed because it was erratic, and now it is being proposed (with battery storage) instead of "peaker" plants?

Proposed by who? The Sierra Club?

It's still far less efficient that fossil fuels, harder to store, and more expensive to collect.

This has "rolling blackouts" written all over it.

From the article:

> change the way it supplies power when demand peaks. Instead of relying on electricity from three gas-fired plants run by Calpine Corp., PG&E will have to use batteries or other non-fossil fuel resources to keep the lights on in the most-populated U.S. state. The shift is possible in California partly because there’s a surplus of solar power,

> The shift is possible in California partly because there’s a surplus of solar power

IDK where they get there's a surplus, there's enough that it makes the "peakers" sit idle enough of the time they're not economically feasible to operate without a guaranteed payday.

Honestly, I could be wrong since the only information I have on the subject is this article which doesn't support the claim they're making. I suppose if you counted the plants that have to generate a certain amount of power + solar and wind at its peak then maybe there's a surplus in there somewhere, dunno?

What is easier to store than electricity in batteries

Didn't Tesla install batteries in Australia to fix rolling blackouts?

Different situation. That was for transient conditions. The parent comment is probably just trying to say you can't go all battery yet. I'd also like to know who is going to build enough batteries for peak load of > 150 GW. Batteries do have a place, but a lot of people think we're at a spot where we can completely skip gas/coal...we're not there.

The parent comment didn't say that, so who knows what they meant.

US Army at the Redstone arsenal in Alabama.

Less efficient by what measure? In some sense it's all solar power; the efficiency of

    sun -> plants -> fossil fuels -> extraction -> burning -> electricity

can't be particularly high.

Fun fact - this was Buckminster Fuller's argument for why petrol should be a million dollars a gallon, a long time before anybody knew anything about global warming.

You forgot the

-> take 500 million years to make, burn it all in 300 years

step that seems to be missed by the solar isn't efficient enough club.

Not to mention that solar PV is more efficient at converting photons into stored energy than plants. Photosynthesis is typically around 1% hitting perhaps 10% for algae that's got less structure to maintain. Looking at solar PV in that context makes clear how amazing the technology really is.

But you can't beat self-replicating plants in capex!

He clearly meant a something like a human centric EROI. Fossil fuels still have an EROI advantage for now, especially if you force renewables to have enough storage capacity to act as baseload.

Fossil fuel EROI is falling all the time, and renewables are creeping up.

It seems to me that "clearly meant a something like" is a contradiction in terms, but let that pass.

If they did mean EROI, then I'm not sure that's the measure we should be using. It specifically ignores waste products: https://en.wikipedia.org/wiki/Energy_returned_on_energy_inve...

Which makes it not so good when thinking about global warming and public health impacts, things the CPUC takes into account when setting policy.

But even if we just use that, it appears that they're wrong about the EROI of electricity generation. Per Scientific American, the EROI of natural gas, the main competitor in California, is 7. Photovoltaic is 6 (and, as you say climbing), wind is 20, and hydroelectric is 40+: https://www.nature.com/scientificamerican/journal/v308/n4/bo...

But even if they were right and the EROI of renewables were "far less efficient", I still don't see how that leads to rolling blackouts.

Um, given that criminal behavior by Enron on the "open market" was the only time California ever had rolling blackouts, you've got a bit of work ahead of you to justify that statement.

Decentralized generation with local storage is a great way to prevent this kind of blackmail from ever happening again.

That's the whole point - the erraticness was a big disadvantage (unless they have a tiny proportion of the total power generation) just a few years ago, but affordable battery storage is the missing link that makes it feasible for large scale use.

One thing I noticed about "Insta-pubs" in the Midwest in the early 2000's: Well over half of them seemed to be converted gas stations. Maybe a new era of batteries means even more instant Irish Pubs? (Which, long term, actually means more sports bars with Irish pub decor.)

I'm thinking of Irish Pubs in NatGas peaker plants... it's very post apocalyptic!

That's really interesting. I've oddly only seen higher end "whimsical" restaurants in former gas stations.

I'd love to see gas go. But the reality is, at least for now, Cali is an outlier. Cars are cars everywhere. But weather and sunshine and wind are different everywhere.

Fusion will be the ultimate game changed. Some say we're closer than most realize.

Fusion doesn't have a proven track record of getting cheaper with every year like batteries and renewables do.

These two technologies are already available today and their primary flaws are disappearing over time.

Bloomberg is now measuring energy in Megawatts? How comes almost all of the pro-renewable articles are written by buffoons? 10 years ago I would never guess that a dumb trend would go as far as destabilizing the entire western economy. And no, I'm not "denying climate change", hold down your pitchforks, I'm denying irrational economics. I'm not willing to pay $400-$800/month for electricity (including heating and cooling, since I guess gas is out of the equation now as well), and neither should you.

I don't know why Californians put up with this mess from their politicians.

In Texas, one company maintains the infrastructure and a variety of companies compete to provide service to customers. Separating these concerns means cheap, reliable electricity. Power is quickly restored after natural disasters and we don't have brownouts during the summer. Electricity is affordable and we don't pay extra during peak hours.

I pay $0.10/kWh for a plan 100% provided by wind power. When power is in demand, the smart meter my electric company provided for free (with free installation) will adjust my thermostat and give me a credit on my bill (under a program I opted into).

If my state made me pay $0.40/kWh for unreliable energy, I'd be furious.

If my state made me pay $0.40/kWh for unreliable energy, I'd be furious.

I would be, too! Fortunately, here in Santa Clara, California, we're paying about $0.11/kWh to Silicon Valley Power, as opposed to the $0.23/kWh that PG&E charges residential customers on average. Even that's sure not anything like $0.40/kWh.

I think we've only lost power maybe twice in the eight years I've lived in Santa Clara, so I'm not too concerned about reliability issues. Since I'm in an apartment complex, I don't have the option to switch to Santa Clara's "green power" option for 100% renewable energy sources, although they've recently gone coal-free for all their generation sources.

http://www.siliconvalleypower.com/svp-and-community/about-sv...

California used to be just like you describe.

Then a bunch of criminally negligent politicians, of both political parties, in the pockets of Enron "deregulated" the industry out here without sufficient safeguards and sold off a bunch of power plants in the name of "efficiency and competition".

The current kerfuffle with Calpine is fallout from those actions almost 20 years ago. Since CA doesn't control any power plants directly, anymore, they don't have a lot of negotiating leverage. This is a transient problem because as the article points out, renewables and batteries are wiping out the ability of these producers to exert too much influence as the spot price of electricity gets increasingly controlled by supply rather than demand.

And, to be fair, California hasn't really had any electricity problems since Enron died.

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