Megapack: Utility-Scale Energy Storage
tesla.com
tesla.com
Tesla is not the problem, the 30 minute bidding model, and the state/federal divide on energy policy, and the monopoly capital rent-seeking behaviour of encumbent privatized generators using coal and gas, and guaranteed yields on capital investment, and weak regulatory oversight, and a lack of national coordination, maybe they are the problem.
But Tesla exposes the problem: the Neoen battery stack has been fantastic, but needs to be kept in perspective: To use this for more than FCAS (frequency stability services) nationwide, means re-building the national transmission grid to favour battery models. Parliamentarians got up on their hind hooves and brayed about how it couldn't keep lightbulbs on for more than 20 minutes and was a waste of money: They didn't for one minute admit it wasn't designed as a longterm power store, but as a frequency-control store, stability, and for peak-price bidding to cap off supply-price disfunctions, its working fine: Something like 60% of its capacity is for private bid to earn money, 40% contracted to the state for their goals. It is a real game changer but needs to be understood, its not like a Pumped Hydro unit, or a synchronous condenser (although it is more like that, than PHES) It is its own beast. Its response speed is so fast, the regulatory behaviour models have to adapt to cope with it.
A Five minute bid pricing model is coming in under 2 years I think. I hope the majors don't work out a way to "game" it because my hope is, other mega-scale battery and PH systems will be onstream then, and be able to survive in it, and drive some more coal and gas out of the system.
We have a fictional belief in "base load" power here rather than responsive power. We also lack useful tools like demand management which can be used to bid alongside supply for pricing to avoid having to turn on nasty dirty generators, when the option to time-shift load exists (supermarkets and places with huge thermal mass can time-shift their AC and cooling or heating budget, and so avoid load)
Meantime, people are arguing for a de-centralized model using household batteries where resilience is kept in the customer distribution net, as well as at the transmission net level. There are competing pressures around "how shall we fix it" which are not simple.
If you want to read a good overview of this, look for stuff written by John Quiggin, an economist in Queensland who has written on the stuff-ups in privatized energy supply in Australia and the market failure.
My guess is that without storage systems, wind and solar and distributed power will always be "regulated away" by wealthy incumbents.
But with storage systems, new forms of power will be valid participants and maybe there is a chance of an efficient energy market.
But while it is definitely a valid concern, and probably applicable to energy markets, it is unlikely to be the single reason for any and every problem with energy markets and production.
Using it as a highbrow euphemism for "corruption" probably causes more harm than it is useful: it gives license to ignore actual technical problems and the painstaking search for solutions, opting instead for an all-encompassing, nihilistic, and cynical narrative where nothing really can be done, except trying to tear down ever more existing institutions.
I also don't quite understand how storage systems are supposed to bypass problems arising from "regulatory capture". If incumbents get to write the rules in their favour, they could just as easily keep newcomers using storage out of the market as those without.
The electric grid is the product of a century of technical and regulatory co-design. If you were starting from scratch with an eye to accommodating renewables, you wouldn’t design either the grid or the regulations the way they are. But you’re not. You’re slowly evolving the system from point A to point B. You’re dealing with expensive physical infrastructure built on 30 year planning horizons, in many cases with express guarantees about revenues (because at the time, you needed that capacity and sought to induce someone to build it).
A friend in texas pays about .06/kwh for residential power. In California, PG&E gets power at 0.03/0.04 per kwh, and resells it to residential customers for .22/.28/.49 per kwh. (you pay more when you use more, unlike any other commodity)
I hope these markets benefit from robust competition, and maybe projects like this help. Allow alternative energy, route around distribution problems and shake things up a bit.
(yeah, "throw out the old code, rewrite it")
I'll counter that I believe the energy systems are moving in the right direction and will likely get to a better spot over the next 5-20 years as the infrastructure upgrades are necessitated and alternatives products that are more cost-effective options become more viable / pressure builds on policy makers.
And yes, energy markets are incredibly complex - especially in highly dynamic areas with fluctuating demands and supply possibilities. I believe the CA-ISO was integrating electricity for 10,000-35,000 MW every 3 seconds about 7 years ago -- probably way faster at this point. It's amazing and humbling what our grids operators are able to do.
https://www.themonthly.com.au/issue/2014/july/1404136800/jes...
Quoting:
"Since 2009, the electricity networks that own and manage our “poles and wires” have quietly spent $45 billion on the most expensive project this country has ever seen. Allowed to run virtually unchecked, they’ve spent vast sums on infrastructure we don’t need, and have charged it all to us, with an additional fee attached. The spending was approved by a federal regulator, and yet the federal government didn’t even note it until it was well underway."
As you intimate, the whole AU vs state vs private interests approach to power supply leads to a breathtakingly poor result for citizens / consumers.
Anyway, I wonder how the grid will cope after the lion-share of the generation is done by synchronized inverters, instead of high-inertia rotational generators. I am concerned we move too fast and make our grids instable worldwide, with generators amplifying deviations instead of absorbing them.
No, that is referring to capital investment in the distribution assets, not generation.
https://www.aemo.com.au/Electricity/National-Electricity-Mar...
What are the time-frames to qualify as 'responsive power'? I can imagine a battery acting like a capacitor and smoothing out supply on a second by second basis, but big pumped hydro like snowy 2.0 can (will) provide 'base load' within 90seconds of being turned on.
Edit: Yes you can. Click your profile and click favorite comments at the bottom.
To add a comment here, click on its timestamp to go to its page, then click 'favorite' at the top.Low demand starting at night into early morning. e.g. https://energymag.net/daily-energy-demand-curve/
You literally can't store enough energy in batteries to power the network. Yesterdays demand for SA was [0] 218,247,760 kWh. At even the most optimistic battery price no one has ever managed to achieve as scale of $100 USD per kWh betteries that's $21,824,776,000 (21 Billion Dollars) for one state, in Australia.
You need to double or triple that to deal with summer heat waves, having enough storage to deal with intermittent renewables etc. You'd be looking at $200 billion for SA alone, with 1.7mil people, to move to battery power, without any of the infrastructure change.
Oh and lithium ion batteries lose half their charge every 10 years or less. So you will need to invest $100 billion every decade. That's $128,381 per person in SA to move to battery power once, and then $6,419.05 per year to replace the lost capacity.
This is a pipe dream wilder than cold fusion.
Most Teslas sold today will still be driving with their original batteries and well over 60-70% of their capacity well beyond ten years. Tesla warranty actually covers them up to 8 years up to 70%. Meaning they are fully confident they can promise that and keep their money in the bank.
> even the most optimistic battery price no one has ever managed to achieve as scale of $100 USD per kWh
Cost keeps dropping: https://about.bnef.com/blog/behind-scenes-take-lithium-ion-b.... Ten years is a lot of time and Tesla just announced the desire/goal to increase production capacity to about 1 Twh/year (i.e. about a 35x change relative to production today). Whatever the cost is going to be in ten years, it's going to be nowhere near what it is today. Well below 100$/kwh in ten years certainly.
> Yesterdays demand for SA was [0] 218,247,760 kWh.
You seem to assume a complete lack of wind and solar on a day (unlikely) is going to require 100% battery reserve. That scenario is very unlikely. It might happen locally a couple of times per year but you could simply import power for regions elsewhere in Australia via a cable. Or you could install some over capacity solar to ensure that even at reduced efficiency you still get some power and use the surplus that you end up having for other purposes (clean water, producing hydrogen, etc.).
In any case, nobody is talking about rolling out that much battery. So we're talking way less battery that will cost less than you assume and lasts much longer than you assume and that will allow for the retirement of some very expensive aging coal/gas plants (which you should factor into your numbers).
Also, 21 billion is actually not that much. Coal power costs about $2k per kW (or more[1]), so having enough coal plants to satisfy that demand would cost about 18 billion.
[1] https://www.synapse-energy.com/sites/default/files/SynapsePa...
For 29/7/2019 (midnight to midnight), total energy demand was 34,700 MWh.
(Go to https://www.aemo.com.au/Electricity/National-Electricity-Mar... and download the SA data for Current Month. Divide the TOTALDEMAND in each half hour settlement interval by 2 to get MWh, then add them up for 48 intervals for the day in question.)
You need that only when renewable production goes to zero, that happens pretty much never. Your PV production goes to 0 at night but demand is lower at this time.
So yes, it is completely feasible to do battery load averaging if you do the math correctly
Wonder where I've heard that before.
When you look at product lines like this it makes you realise the scale and breadth of Elon Musk's influence and even if only half of his endeavours prove to be as successful as they seem like they will be he will be written about extensively in history books.
[1] https://electrek.co/2019/07/25/tesla-plans-massive-productio...
https://cleantechnica.com/2019/07/24/liveblog-tesla-q2-2019-...
Most of Musk's company goals are aspirational, and the means to the end often change. For example, Falcon 9 first stage was supposed to be reusable by landing it in the ocean with a parachute, but they found it didn't work. Instead, they lengthened the first stage booster dramatically so it would have the propellant margin to land propulsively.
[1] https://twitter.com/elonmusk/status/1156005185656782848?s=20
Dan Telvock, a local reporter in Buffalo who covers the solar gigafactory which taxpayers bought for Tesla, is already calling out Musk on his "aspirational" BS. https://mobile.twitter.com/DanTelvock/status/115621452719479...
Regardless of which one is correct, the fact remains that they are scaling up a new technology. Both 200 and 1000 are ambitious goals, and both contradict your implication that the solar department is "a shell of its former self". It has dramatically shifted directions (from market standard solar panels on roof, to integrated solar roof tiles).
Of course normal companies, with a level of corporate governance ranking somewhere above "drunken frat house," publish these sorts of production forecasts in official channels after careful vetting and consideration. It is neither admirable nor acceptable for a public company CEO like Musk to simply pop off on Twitter with "ambitious goals" on which investors might rely for trading decisions if they have no basis in fact. Which is why questions are already being asked about whether Musk's tweet violated the terms of his amended SEC settlement agreement, which requires legal pre-approval for any public statements he makes about matters relevant to Tesla, including production forecasts. https://www.bloomberg.com/news/articles/2019-07-30/musk-twee...
First let me say Musk has a habit of doing big, new things that the experts and the fossil-fuels-forever gang said were absolutely impossible.
That being the case, what are your views on global climate change? Do you think it is a huge danger and it is urgent we get off fossil fuels as soon as possible? Or do you think it is the greatest hoax in the history of the human race? Or what?
With the essential help of enormous government subsidies, Musk succeeded in creating a cult brand around EVs and little else. It's an achievement of celebrity and branding, not engineering or manufacturing. Which is not to take away from it necessarily, he has proved the EV concept, but he has yet to show that EVs can be financially sustainable over the long run without constant public money injections.
Meanwhile, his application of Silicon Valley management techniques to industrial manufacturing is a total disaster of scrapped alien dreadnought plans and cars being taped and zip-tied together in a tent. The machine-learning-on-wheels he calls "Autopilot" is dangerous and undercooked, and could be easily rolled out by any of Tesla's competitors if not for the fact that they have at least some scruples about beta testing their software on public roads. His impact on home solar generation has probably been net negative as Solar City was a debacle which had to be bailed out by Tesla shareholders and has been in a tailspin ever since, despite massive subsidies forked over to build the Buffalo Gigafactory by the state of New York.
If the whole point is to build a green energy future, why has Musk used Tesla as a piggy-bank to prop up his celebrity billionaire lifestyle by borrowing enormous sums against the value of his Tesla stock? It has created perverse incentives harmful to the long run health of Tesla itself. A restructuring to shed debts and shore up its balance sheet would be the best possible move they could make if the goal is to remain a viable entity replacing ICE vehicles with EVs into the indefinite future. But Musk will never do this voluntarily, because his goal is to keep the stock price propped up.
The problem was the EV's at the time were not remotely up to the job. Where Musk comes in is that, thanks to his brilliant efforts, we are getting there many years earlier than we would have otherwise.
The people who nonetheless are screamingly angry at Musk and Tesla seem to fall mostly into three classes. One is global climate change deniers who think we should stay on fossil fuels forever. The second is shorters who don't care if the world goes to hell, and only want to make money. The third is haters, by which I mean people who are not happy unless they have someone to spend their life hating.
My impression from your comment is that you are in the third class.
And where the only bad person is Elon Musk.
>could be easily rolled out by any of Tesla's competitors if not for the fact that they have at least some scruples about beta testing their software on public roads.
Their plan can fail, but I don't see any better plan.
It's based on a novel battery. One of the interesting claims about XNRGI's battery is that it can be manufactured at scale for a much lower capital cost because you can use existing semiconductor wafer manufacturing infrastructure:
So let's see if Cross Border Power's grid battery works. It'll be good if it does.
He is piloting and testing them all as colonization building blocks here first.
However - I wish that he would start by building a moon base first...
https://waitbutwhy.com/2017/04/neuralink.html
As an aside, they have some really wonderful long form content. I love the 1 to Graham's number posts (a two parter) https://waitbutwhy.com/2014/11/from-1-to-1000000.html
https://en.wikipedia.org/wiki/Battery_storage_power_station#...
There are other tech than lithium ion (namely, Sodium-sulphur) that seem more appropriate for applications where weight is not an issue.
... to achieve significant cost and time savings compared to other battery systems and traditional fossil fuel power plants.
> heated water
How does that work (specifically for storing electricity)?
Do they? If their casing is solid enough, the worst that they can do is damage themselves internally and heat up a bit. There is no buildup of pressure, leakage of chemicals or risk of a chemical fire.
https://en.wikipedia.org/wiki/Energy_density#Table_of_energy...
Their biggest success, I am told, was however single use batteries and the (unverified) rumour that I was told is that they built a matchbox sized singe use battery that in theory could power a car for 400 kms.
[1] https://www.batteriesinternational.com/2016/09/22/battery-pi...
Unless it was run off of antimatter this is just flat out made up. Even if you start with the assumption that that matchbox sized battery was 100% solid aluminum that was oxidized to aluminum oxide to release energy and 100% of that energy was usable power that still only gives you 2.2MJ of energy. To put this into perspective a 15 gallon tank of gas contains ~1940MJ worth of energy and while an internal combustion engine is relatively inefficient, it's not like it's going to use almost a thousand times as much energy to go the same distance.
Man I wish HN had reply notifications.
Well, from your link, they indeed _are_ the biggest player by power ?
Energy is the more informative metric here. You can easily construct a low-energy storage solution that generates huge amounts of power for a very short time.
The power column is only a result of the number of households and outage duration that the plant was designed for.
Energy is good, but power is also very important. You can stabilize the frequency (with active power) and the voltage (with reactive power). Both are traded and needed.
Tesla seems early in the grid storage market. Probably some companies are trying to come up with cheaper ways to do that. So, long term, I think cost will go down by quite a bit. Ten years from now, there will probably be a few companies cranking out cheap batteries for grid and domestic use that are optimized for $/kwh instead of kg/kwh.
Is that really true?
There a a LOT of lead acid batteries out there, considering there's been at least one sold alongside nearly every internal combustion engine larger than a handheld tool.
But I think they can also produce the battery packs in huge amounts and sell them in multiple products - Powerwall, Powerpack and now this one.
And I suspect these ones are more easily manageable.
This leaves the grid battery manufacturers with no market so they don't expand production.
This is not merely a theoretical technology. A company has been created around this technology: http://www.ambri.com
(I am not connected to any of this, but I am quite excited by it.)
https://www.ge.com/renewableenergy/hybrid/battery-energy-sto...
I may agree with you in part, but overall your tone is just so overwhelmingly positive it makes me curious where you have dissonance?
Who & what did you have in mind, exactly? The only example which comes to mind is the skabooshka lawsuit, which Tesla had to drop when their megacorp legal resources finally ran up against an opponent with some funding, thanks to crowdsourced donations.
Given that essentially every major executive (other than Elon Musk) and huge chunks of the Tesla board have all left the company and furiously dumped their stock, I'd say there's plenty of naysaying coming from within as well. Not exactly the signs of a vital corporate "life force" at work.
This seems like a win-win-win to me. Tesla gets paid, the utility gets to show off how cool they are (and how they are investing in going green) without breaking the bank, and the rest of us (hopefully) experience less carbon emissions.
Ideally, that utility runs the battery for a while and it proves to be useful/profitable enough that they decided to change some of their future plans to include more renewable/battery tech.
I think Tesla already has enough on it's plate.
But the OP's question was why don't Tesla install MegaPaks that they own themselves, into diverse energy markets around the world - and become a traditional utility.
In terms of actually bidding MWH in to the market when supply is tight so the price is high, it will end up lowering the price by increasing supply, and the intervals of high prices are few. By virtue of existing the system will reduce frequency of high price intervals since the market participants will know that capacity will come on at some price so if they try to bid really high their is will not be accepted. So batteries at this scale is nice for the system operator and politicians to put a lid on high price intervals but won't actually sell enough MWH back to the grid to amount to much.
Due to certain tax credits, utilities can break even and even make a little money off of these devices, but it is certainly no slam dunk.
One of the most recent FERC orders deals with directing all the ISO/RTOs to add energy storage participation to markets as long as the battery is 0.1 MW or greater if I recall correctly.
A lot of folks are interested, but there isn't much money in ancillary services or energy for the reasons you described above.
The large-scale storage is pretty sweet though.
Tesla needs cash, and lots of it.
If you're concerned about stock price, sell for cash.
If are able to make slightly less ROI (due to cost of capital, cost of servicing debt) at larger scale, it's worth having debt and will have positive effect on stock price.
The relationship is not as simple as you claim.
Is there a reason these installations are always shown laid out very flat? Is there a disadvantage to stacking them up or at least putting them on different floors of an appropriately-reinforced building?
I'm sure if they ever saw need to place this in a city they would construct a building. But for now, it's probably cheaper to just build out where land is cheap (and possibly closer to generation source) and then transport the energy to where it's being used.
In California, the Puente gas plant made headlines last year because they found it was cheaper to create battery storage than an equivalently-sized gas peaker plant. A large part was permitting and land rights. People don't want an emissions-spewing gas plant in their backyard, but an array of batteries in what looks like every other industrial warehouse is much more palatable. (Time-to-go-live was another factor: battery arrays are modular and can be distributed across multiple sites to further minimize risk, a gas plant is a massive multi-year centralized organizational challenge with all the associated costs and all-or-nothing risks)
https://www.greentechmedia.com/articles/read/sce-picks-major...
Underprovision? Pour some more concrete, truck a couple more batteries in.
Overprovision? Load em up again and resell them to someone who wants them. Can't quite do that with a gas plant.
Sure there will be some overhead lost, but it just make soooo much sense to go with battiers from a risk perspective.
They also look (but I'm a layman) easily maintainable, more like server racks than high tension electricity stations. I wonder if the batteries would be hot swappable.
But, if something starts to go wrong it should have monitoring systems and an engineer can swap out the faulty module, and if it does go wrong I hope they have good containment.
But, not much you can do against a proper lithium battery / electrical fire I suspect.
You can ask the same question about car parks. Same answer. Building up or down is expensive.
Building up is a lot more expensive, and there is no shortage of available land on Earth at the moment.
https://qz.com/1355672/stacking-concrete-blocks-is-a-surpris...
I’d just love to see it in action.
More efficient (and less mechanically complicated) would be pumping water up a hill into a lake.
On the other hand, if you overbuild for your needs, you increase the total lifespan of the installation and your emergency capacity but at the cost of greater initial investment as well as the inescapable fact that even the unused portion of the capacity has a finite lifespan which is always (very slowly) expiring regardless of whether it's being used, so your per-dollar lifespan could be lower with a larger capacity.
I'm also interested in how well real-world installations are matching the expected figures when it comes to amortized cost and life expectancy. Does the operating budget for something like the Hornsdale Power Reserve include the cost of replacing the entire thing when its cells are worn out in 10-15 years?
Also, who knows where battery technology might be in ten years; given that these are modular batteries, they could replace them over time with higher capacity ones.
I'd be happy if we end up seeing more inexpensive battery production.
I'd guess that for a big install they could probably get closer to $350/kWh these days, but that's a WAG.
AFAIK Switzerland in particular has exactly zero, thanks to all that lovely hydropower that can be turned on and off to match solar/wind fluctuations.
In fact, Switzerland alone has hydropower equivalent to 10 000 Megapacks. This basically means you can install all the renewables you want.
In France and Germany, nuclear reactors are configured and permitted to run in load following mode. It's harder on the valves and similar equipment, but it can and is done. [1]
> unless the renewables become incredibly overprovisioned.
Which is the likely outcome, as solar and wind are still declining in cost and in some places the cost is as low as 2 cents/kwh. The generation will be cheap (what's the old saying? "too cheap to meter"?), and it'll be the storage that'll cost a bit more.
[1] https://www.oecd-nea.org/nea-news/2011/29-2/nea-news-29-2-lo...
When designing for grid-scale capacity, there are companies looking into flow batteries and chemistries that use cheaper (non-lithium) materials.
Tesla however built out tons of lithium manufacturing capacity for their cars, and given the design constraints of this project, their existing products were a good enough fit for the job at hand.
Oddly enough, you can get a lithium ion car battery jump starter for less than the cost of a car battery.
The amount of effort spent reducing Lithium Ion costs has resulted in dramatic price reductions. Technologies that looked extremely promising just 10 years ago are having a hard time keeping up.
Would make sense if Tesla kept a life-time score of subjected G-forces and vibration for the pack so they could bin salvaged cells.
Oh. My. God.
pow(What_could_go_wrong, 2);
That just leaves the common attack-vector concern for any grid adding this into their ecosystem.
(pi * ((4 meters)^2) * (10 km)) * (1 (kg / liter)) * (9.81 (m / (s^2))) * (2 km) = 2.73946879 gigawatt hours
You might be able to get away with some sort of remote actuated pump head like that used in an oil well (energy for pumping provided by a reciprocating metal rod) but the efficiency of such schemes is never going to get anywhere near the 80% you were targeting. Better hope that the pumps don't fail while the hole is full!
I'm not sure about the technical issues regarding narrowness and depth, though a quick search indicates the deepest hole was a Russian made a 9 inch diameter hole 40,230 feet deep and had to stop because it was too hot. Anyway, I bet that offshore gravity batteries can also scale up very cheaply once you get over the HVDC cable fixed costs (this almost certainly means building 10GWh level capacity to justify a $100M cable to a place where ocean depths are 2-4km)
I don't think lithium ion batteries, which are optimized for their energy density (mass per joule), belong in grid storage situations where we should care mostly about lowest cost total capacity (regardless of round-trip losses) and lifetime.
They also last much longer, can regularly use a wider range of their capacity, and take less maintenance than lead acid while being easier to transport and install. Part of this is better power management, but it’s also because they are useful even after significant reductions in capacity.
Beyond that “The round-trip energy efficiency of PSH varies between 70%–80%.” That’s a major ongoing cost, at say 6c / kWh * .25 * 365 * 15 years = 82$/kWh which is a large fraction of the Lithium Ion batteries costs. Though this increases if it’s used more than once a day, and decreases with unused reserve capacity.
Your point about the efficiency is interesting, although I didn’t understand it at first. I think you’re saying that the capital cost of the lithium-ion battery storage is partly defrayed by the higher efficiency of the storage system? Like, for each kilowatt-hour of Li-ion storage (with, let's say, a round-trip efficiency of 95%, although I think that's too high), you “get back”, say, 0.25 kWh every time you use it, that you would have lost if you'd stored that energy in pumped storage instead? So over, say, 15 years, you “get back” US$82 or so, at US$5.48 per year?
https://electrek.co/2018/11/20/tesla-gigafactory-battery-cel... claims that the battery cell cost is US$111 per kWh at the moment (though other manufacturers are still stuck around US$140), so that would work out to about a 5% annual IRR if the cells were the only cost; I think that in fact they are on the order of half the cost (though Tesla's blog post here doesn't actually list prices!) and so that would be a 2.5% or so IRR. Not enough to justify the battery investment on its own, but it would definitely be a significant boost to the project's ROI.
I have a couple of objections to that line of reasoning, one trivial and one serious.
The trivial objection is that the wholesale cost of electrical power, although it varies a lot, averages about half of the 6¢/kWh you're imputing. https://www.zmescience.com/ecology/climate/cheapest-solar-po... talks about the just-signed Atacama project at 2.9¢/kWh, which I think includes the cost of some storage. So the numbers are more like 1.25% IRR rather than the 2.5% I suggested above or the 5% you suggest.
The more serious objection is that, when you're filling up your utility-scale storage during hours of excess power production, you're not paying 6¢/kWh or 2.9¢/kWh. In fact, due to non-dispatchable “baseload” plants like coal and nuclear, it's common right now for the power plant to pay you to take the power, with the price typically around -4¢/kWh, which is the cost of burning it up in giant resistors. When instantly-dispatchable solar plants come to dominate power production, we can expect to see a price floor of 0¢/kWh. Maybe if a storage-plant operator is paying a solar-plant operator to leave their PV plants running, they'll have to pay 0.01¢/kWh or 0.1¢/kWh. But they won't be paying anywhere close to the average price of electrical energy. They'll be paying the marginal price of generating electrical energy when it is cheapest.
So that means that the amount of money you make from a utility-scale energy storage plant isn't going to be determined by how much energy you need to charge it up. Your round-trip energy efficiency could be 10% or 5% and you still wouldn't pay a significant percentage of your revenues to obtain that energy. What determines your revenues is how much energy you can release once you are selling energy rather than buying it. (And the quality of your trading strategy, of course; if you decide to wait to sell your energy until your LMPs go above US$45/MWh, and they sit at US$42/MWh all night long, you don't make any money.)
Round-trip energy efficiency only matters at all in the sense that it diminishes your effective storage capacity — if theoretically you have “1 MWh” stored, but when you turn it on, only 0.9 MWh flows to the grid, you only get paid for that 0.9 MWh, and that's what you need to pay your capex and opex with. But it only matters very marginally whether you had to buy 1.1 MWh or 2 MWh or 5 MWh or 10 MWh to charge up your storage facility.
Price inversions are also generally rare and location specific, pumped storage wants to operate every day and can’t wait for unusual events thus increasing their average prices. Further as you increase storage you change the local market reducing price swings. More to the point a company that’s building both generation and storage for say an island needs to build extra production to be guaranteed to fill up that storage. It’s only useful with surplus generation and guaranteed surplus is not free.
As to solar production prices that’s completely independent of wholesale prices. These deals involve low prices specifically because of the intermittent nature of solar power and it’s close correlation with other solar production. The fear for these operators is the wholesale market changing over the next 20 years with ever more and ever cheaper solar not how the current market operates.
Nothing I wrote was specific to a single kind of storage resource.
I haven't been involved with any of these solar IPPs or seen the terms of the PPAs, but while I think your characterization of the PPAs is mostly right, I don't think it's accurate to say that they're “completely independent of wholesale prices”. You've addressed the reasons for the IPP to seek a PPA, but those same reasons are disincentives for the counterparty. The buyer is specifically betting on the PPA price being lower than the LMPs over the life of the PPA, or at least not too much higher. That's why some of these PPAs include storage—it reduces the buyer's risk.
Also, BTW, negative LMPs are a different phenomenon from price inversions. Not sure if you're confused about the phenomenon or just the terminology. Negative LMPs are not rare; they happen nearly every night in some markets.
Thank you for exploring these questions with me!
Areas with significant elevation drops conducive for pumped storage also tend to have a lot of hydro which is generally very dispatchable. The Great Plains have a lot of wind and are in significant need for energy storage, but they don’t see a lot of elevation drops.
Thus negative LMPs being rare for pumped storage.
http://www.thinkgeoenergy.com/drilling-finlands-deepest-well...
You forgot to subtract energy losses due to drag which cancel out your exponential advantage.
No, that's the raw potential energy calculation.
For power, you use the basic relationship that P=FV (force times velocity). The system would operate in a steady state for any given rate of power input/output, but that potential energy calculation governs how long it would take to charge/discharge.
The acceleration due to gravity only matters if you're trying to discharge all of the energy of a parcel of water on impact at the bottom (via smashing it into something). A potential energy storage system would instead want to charge and discharge close to steady state, with very little acceleration throughout.
I’m curious, what’s the environmental damage of this overall? These battery packs likely degrade, lithium has to be mined, etc. Natural gas also has a cost to mine, to burn (though if I recall, the off gases are co2 and water vapor, lower levels of NO2, etc)
Looking from the outside it looks like both options honestly may pollute or have the same environmental impact long-term. One is just a cost we don’t see immediately (or is don’t me in another country)
Not sure how you come to that conclusion. Lithium is not a fuel that is consumed in the process. It is a recyclable component. And there is no dangerous imbalance in the global lithium cycle. Which can't be said about the carbon cycle.
Just because every technology entails some environmental impact does not not mean all impacts are the same.
In theory, batteries are not currently recycled in any scale equivalent to these proposals. Plastic is also recyclable but most of it ends up in landfills due to it being uneconomical.
I do wonder (and a quick google search didn't turn much up) how the rates of industrial plastic recycling compare with consumer rates.
I hope Tesla has a plan for recycling the batteries they manufacture
https://www.greencarreports.com/news/1122631_tesla-launches-...
[1] https://www.recyclingtoday.com/article/battery-council-inter...
They're already recycled at >50% https://www.pv-magazine.com/2019/07/12/lithium-ion-recycling... although there's still no need to recycle them in volume (since we are only starting to deploy Li-Ion batteries for EV and stationary storage, which last for more than a decade)
But lithium is only 5%* of the value of a battery, so it's the other 95% of the impact of battery production that matters.
* the market for mined lithium raw material may be worth $20 billion, compared with $43 billion for refined products and $424 billion for battery cells - https://www.bloomberg.com/news/articles/2019-07-28/the-lithi...
Interesting, I had never thought of a "global lithium cycle" before – can you elaborate?
In other words, does Tesla saying they’re the better option than gas make it so?
Natural gas is extracted and then burnt. Because it is consumed it requires continual extraction, i.e. endless mining.
Furthermore, batteries are of course energy storage, while natural gas is generation. If you couple batteries with renewable energy generation (solar, wind, etc) you no longer require the use of an extractive fuel, nor do you incur combustion pollution costs. This has to be where we end up because it is the only sustainable way for us to operate. Better we get there sooner rather than later.
Tesla batteries put in cars are estimated to last 800-1000 cycles to 80% capacity[1].
Given these figures batteries add around 138g/kWh of CO2 on top of whatever source was used to charge them(say wind at 14g/kWh).
Meanwhile natural gas plants emit around 550g/kWh. The battery would have to last less than 250 cycles to match that.
[0] https://www.sciencedirect.com/science/article/pii/S136403211...
[1] https://electrek.co/2018/04/14/tesla-battery-degradation-dat...
Tesla is in Enron's business?
https://www.ferc.gov/market-oversight/mkt-electric/californi...
The California Independent System Operator (CAISO) operates a competitive wholesale electricity market and manages the reliability of its transmission grid. CAISO provides open access to the transmission and performs long-term planning. In managing the grid, CAISO centrally dispatches generation and coordinates the movement of wholesale electricity in California and a portion of Nevada. CAISOs markets include energy (day-ahead and real-time), ancillary services, and congestion revenue rights. CAISO also operates an Energy Imbalance Market (EIM), which currently includes CAISO and other balancing authority areas in the western United States.
CAISO was founded in 1998 and became a fully functioning ISO in 2008. The Energy Imbalance Market launched in 2014 with PacifiCorp as the first member or EIM Entity. The EIM serves parts of Arizona, Oregon, Nevada, Washington, California, Utah, Wyoming and Idaho.
I recall in january or feb of 2001 - right when Enron was at their peak douchebag-ness... I lived in San Jose ca - and my energy bill jumped to $900!
Interestingly, their broadband trading thing doesn't look as insane a decade or so later. They tried to do a deal with Blockbuster for on-demand video streaming but couldn't get it to work.
A decade or so later and we've got Netflix, which can make the technology work. Now we just need to wait one more decade and someone will figure out the "make money" bit.
As far as losing cash hand over fist goes, the only thing that's really changed is you boast about it instead of hiding it with an elaborate system of frauds these days.
I hear people say Netflix isn't profitable all the time, and I believed them until one day I decided to look it up. They are very successful judging by their net income.
https://www.statista.com/statistics/273884/netflixs-quarterl...
I hear people say they're losing money so often though that I wonder if I'm misunderstanding something.
A tweet (which I now can't find), once said that "the ability to sustain losses indefinitely is the 'moat' of this economic cycle"
Can you give me some hypotheticals with numbers to help me understand?
Ultimately their bank account is growing, and it's not like their war chest is so small they can't ride out some oscillations.