Giant batteries drain economics of gas power plants
reuters.com
reuters.com
> Developers can no longer use financial modelling that assumes gas power plants are used constantly throughout their 20-year-plus lifetime, analysts said.
> Instead, modellers need to predict how much gas generation is needed during times of peak demand and to compensate for the intermittency of renewable sources that are hard to anticipate.
> "It does become more complex," Nigel Scott, head of structured trade and commodity finance at Sumitomo Mitsui Banking Corporation, said.
> Investors are putting increased scrutiny on the modelling, he added.
- so basically, maintaining a large-scale grid is an optimization problem. And batteries merely shift the answer to "how much of which each type of equipment should we have?" around some. Kinda like someone architecting a DC-scale system has to understand trade-offs between L1 cache / L2 cache / L3 cache / local-to-core RAM / more-distant RAM / SSD / HD / Tape - vs. what equipment is actually available - at what prices, lead times, configuration limitations, ...
Batteries are kind of the RAM/cache in the system: - Big merchant batteries like Hornsdale are kind of like more distant ram RAM - Batteries co-located with renewables are kind of the local to core ram - UPS and similar are cache - Pumped hydro is probably Tape ;)
It feels like we might still be lacking a good/widely deployed HD/SSD equivalent in this space, hopefully new/emerging technologies (maybe the sodium chemistries others are mentioning) will be able to fill that in.
Hydro would be more like your RAM.
It makes much more sense. They are the ones that can choose what part of the grid they plug on, and they are the ones choosing if they provide the service or not.
Typically electric companies pay for the grid infrastructure and operation currently. Electricity producers like solar plants out in the desert is not paying to maintain the poles to your house.
What I think is indisputable is that it is the retail electric company who manages and maintains their grid, and manages it's demand and stability.
>sellers are the ones directly paying for the grid infrastructure.
This is absolutely not the case for the vast majority of that infrastructure. You just mentioned small connections. If you look at the grid, it is basically all retail companies[1]
https://www.researchgate.net/figure/California-electric-grid...
Tesla power wall does that.
In the time before renewables all of the rate-of-change limitations came from sudden increases or decreases in consumption, never from the supply side and this has subtle implications for the structure of the power grid and how much power companies can do to control the match between the two.
Think of it as a person walking across a rope with a balancing pole: you can overbalance for a short while because you can correct for that with the mass of the pole. But if the overbalance is too large for the mass of the pole then you will inevitably fall (brownout, blackout).
There is a company in the United States that has been making these for almost 20 years now, they are used for ride-through in hospitals and for windfarm output stabilization.
https://en.wikipedia.org/wiki/Superconducting_magnetic_energ...
https://www.amsc.com/gridtec/renewable-interconnectivity-sol...
Enjoy the read. It's interesting stuff.
Her's a nice article:
https://www.pv-magazine.com/2022/07/27/tesla-big-battery-beg...
Okay, solar doesn't generate at night, so you would need to charge some batteries during the day and discharge them at night. Maybe that's fine.
But solar also generates less in winter. If we want to transition heating from oil and gas to electric, we need a lot of generation in the winter. If we build some more solar to do that, now there's way more than enough in the summer, so anything that can make up the shortfall in winter is only going to be used in winter. Duty cycle for whatever that is just got cut in half or worse.
Then sometimes it's cloudy for a week. Having enough battery capacity to make it through the night is very different than having enough to make it a whole week, or two. By the second or third day you need enough traditional generating capacity to run the whole grid at night -- but that capacity only gets used one week out of the year.
Now you want to say that gas is too expensive if it can only amortize its costs in those limited circumstances. But what do you want to do instead? You need something that can run the whole grid the week that it's cloudy, none of the options for that are cheap, but the alternative is everybody loses power that week.
Kinda like the BMW i3 with Rex. You charge it at home (solar), but when it gets low the on-board generator (gasoline 2 cylinder) can trickle charge your battery until you get home (where you have solar again).
The power grid doesn't work like that. The base load is around half of the peak load. It never drops to 5%.
That doesn't mean the batteries can't be useful. If the average load is 150GW but that's because it's 100GW at night and 200GW during the day, the batteries let you get away with having only 150GW of average generating capacity instead of 200GW, because during the times when the generation exceeds the demand you can put the surplus in the batteries.
But you still need to maintain an average of 150GW of generating capacity or the batteries will get empty and the power goes out.
But wait, in most places hydroelectricity availability has always been a factor. And THAT was already variable depending on the season (and anomalous seasons). So anyway, both production and consumption have always been seasonal and weather-dependent.
With sometimes chaotic results when a winter is exceptionally mild like last winter in Europe, or strong. Not new either.
And then on top of that, in places like the American West, the prices to import electricity from neighboring regions or states have sometimes been chaotic. Also something that had to be taken into account for peaking gas-powered generation.
The difference is the scale. Traditionally you had a particular amount of base load that would run all the time. Nuclear and coal. The load never dropped below their generation capacity so they never had to stop generating and making money to recover their construction costs.
Then you would have natural gas peaker plants that only ran for part of the day, but they still ran pretty much every day. And these would also allow you to shut down base load plants for maintenance during the lower demand season. So they still got plenty of use.
Now you want to have solar and batteries which can satisfy the demand 98% of the time -- meaning some backup system has to recover its costs out of the remaining 2% of the time. But that backup system doesn't just have to pick up the extra 10% load because it's extra hot today. If it's cloudy long enough for the batteries to run down and it's night, your output from that system is now zero, but you still have the entire load of the power grid to satisfy. Where does it come from? An entirely parallel generating system that only gets used 2% of the time?
The alternative is to keep something like nuclear as e.g. 40% of the grid, and have it generate all the time as it does now. At which point that 40% of the generating capacity is more like 80% of the nighttime load and you're in much better shape to have to make up the last 20% than the entire 100%.
But this is the problem, right? They don't serve the same purpose.
The battery plant allows you to store surplus solar generation during the day and use it at night. That's useful, but it's not the same thing -- because if it's cloudy for an extended period of time, you don't have surplus solar generation during the day, and your batteries are empty. What then?
I worked around a small model with rather optimistic assumptions with zero concern for cost and a focus on efficient consumption to determine what would be required to make a single 1–2-person habitation completely sustainable off grid but with most of the modern confort. I used past weather data and sunshine/wind values. It doesn't work. The number of batteries you need is ridiculous and unrealistic when you scale up the model, that's before considering costs that are just insane.
I think renewables are a good technology especially because we can use the peaks to our advantage and work/organise society around that. In particular car battery charging and air conditioning are 2 very good candidates. Realistically we still need reliable technology to ensure baseload at all times, especially at night. Personally, I think nuclear is just that but just saying that word is so political that people lose all rationality it seems, so we get sucks in meaningless debates and projections...
In a weird twist, most pro-renewables are also anti electric car, I swear ideological people are really unbelievable. I think the world became too political in general (a feminine way of "solving" problems) but in particular the field of energy is overrun by politics; which is kind of funny when you consider that the core skill to make everything work is rationality.
But I guess when we will get grid shut down like in South Africa they will agree that batteries don't work. It will be too late though...
The point is to do that use case planning (and fund a plant based on the results.)
Hopefully nobody is really getting themselves in that situation.
For those with their ear on the track when that sound resonates they will see the light, everyone else will be in the dark without energy storage. Costs are spiking everywhere and the U.S. government is having meetings near weekly exactly about this coming fun. Those meetings reflect frank direct statements about coming derailments and the grid has not changed since its inception and remains to be centralized to this very day. There are enough smart technologists here that can put together exactly what I infer, significant opportunity.
For those further interested check out YT: "Environment Hearing: Clean Power Plan 2.0 Will Jeopardize Reliable and Affordable Energy". As with anything making significant revenues however those threatened with revenue loss will play the dirtiest games to preserve their position, this includes increasing the pollution output that is making that revenue.
Stay Healthy!
In comparison, scaling from 0% to 100% load on battery storage takes 0,1 seconds, according to Tesla.
But yes, the batteries can respond much faster and are way better at this kind of support. It does lead to some situations that felt slightly weird to me where a battery will be selling a "spinning" reserve product. Luckily the weird linguistic artifact did not require us to actually rotate multi-ton batteries ;).
You are right that load isn’t independent of frequency, though. For those who are interested, in a simplistic and hand-wavy explanation, the torque imbalance between generation and load causes a change to the frequency. The net torque = torque of generation - torque of load = I*alpha, where alpha is the derivative of omega, or the angular frequency of the grid, and I is analogous to the inertia of the grid. If there is more generation torque than load torque on a generator (and the grid), the frequency increases and vice versa. Keeping the net torque constant, increasing the inertia makes the grid frequency derivative smaller for the same imbalance between generation and load, which is why it was typically desirable to have higher inertia synchronous generators.
What you were describing around changing fuel to maintain speed is typically frequency droop, which is where generators change their power as a function of the frequency, which is a distributed scheme for all generators to independently act to drive the torque imbalance to 0, with some insensitivity proportionality constant. For example, in California, gas turbines are assigned a droop value within the range of 3 to 5%, which means a 3 to 5 % reduction in frequency should result in a 100% increase in power, and vice versa. The total power should be provided in less than 30 sec typically.
For those that are really motivated to understand the interplay between generation, load, and frequency, look up the swing equation in the context of power system stability.
There is another aspect of synchronous generators that enable them to act to stabilize frequency independently, called the inertial response, which also has to do with their rotational energy. A generator at some frequency has KE = 0.5*J*omega^2 where J is rotational inertia and omega is angular frequency. If the frequency changes, it has a change in kinetic energy = 0.5*J*(omega1^2 - omega2^2) which is equal to some power for some period of time (= P*delta_t). This shows that as a generator sees a change in frequency, the shorter the duration, the larger the amount of energy is converted to power. Essentially, generators have an inertial response that act to inject power the faster frequency is falling, and vice versa, which is a self stabilizing function for grid frequency.
This loss of synchronous inertia as generators are replaced by inverter based resources (IBRs) is why managing grid frequency stability becomes more difficult. Various techniques are used to abate the loss of inertia, including emulating the swing equation within inverters to make them behave as synchronous generators and provide that inertial response. This is typically called grid forming with virtual synchronous machine.
https://www.frontiersin.org/articles/10.3389/fenrg.2022.9717...
https://www.sandia.gov/files/ess/EESAT/2002_papers/00015.pdf
https://www.pv-magazine.com/2022/07/27/tesla-big-battery-beg...
https://www.energy-storage.news/batteries-earn-big-in-europe...
The regulations have some work to do catch up to allowing batteries to operate in a straightforward manner. For example, the big battery we launched in Texas had to be registered as both a generator and a controllable load with all sorts of weird issues around switching from discharging (being a generator) to charging (being a load) that a battery wants to do all the time. We found engineering solutions to them, but it's even better that the market operators are working on properly recognizing batteries as their own unique asset with their own advantages and challenges.
This is the crucial point. Political uncertainty about the future energy system is jacking up the rate of return investors are demanding of gas plant projects without contracted revenues. This is the main reason why gas projects are falling through. At the same time, there is currently no scalable storage system for time-shifting surplus renewable generation over weeks-to-months, so that it can offset renewable troughs. This means surplus renewable generation is simply being wasted, and for that reason, is so low cost that even hours-to-days battery storage - which is a mature storage system - is economical. It's far less clear this is a long-term proposition for at-scale storage, as the longer you can store energy for the higher the efficiency of matching surplus to deficit. Hydrogen and pumped hydro can store energy for far longer.
When renewables are in excess, the spot (instantaneous) energy price will drop to near zero (or sometimes negative in weird situations). That is good for existing (short term) batteries (they can recharge cheaply), but it will also provide price signals to people considering investing in longer term storage (since their cost of energy could be near zero, they only have to recoup the costs of building and operating the storage).
If cost of storage and operation is lower than battery operators can sell it for, then eventually the cost producers will sell at will increase. It will be interesting to watch
Yes, and that means generation will become unprofitable.
We seem to be a decade or so away from the point where the investment on generation can't be decided by direct ROI. And nobody is preparing for this. Governments need a long time to regulate that kind of thing... so we can expect some problems on the near future.
For that time period. At the same time, using energy becomes supremely profitable. This isn’t a weird quirk of the power markets; compute time is also instantaneous. It’s just less noticeable because we haven’t unified a market for it. These are amply solvable problems.
For the time period that the most common generators generate the most energy. By itself, that guarantees that there won't be enough investment to create excess renewables. Or at least that markets won't make that investment.
If you want excess renewables (and they are a safety and security necessity), you need to fund it by something that isn't interested on direct ROI.
Sure, agreed. I don’t think this is something we should necessarily want. But if it is, it would require subsidy.
My understanding is that this can be true in some regions but requires fairly aggressive use of, not only overbuilt renewables (which may pose challenges in land use and siting), but also long haul transmission (also difficult to site), demand response, etc. And then there's the scary possibility of an extended weather anomaly (several weeks with no wind and minimal solar).
Having some long term storage in the mix, probably in the form of green hydrogen or another e-fuel, greatly increases our options for building a robust fossil-free grid.
Putting more clean firm sources such as nuclear or advanced geothermal in the mix also helps, but I am not optimistic regarding nuclear, and advanced geothermal is still pretty immature.
> Governments plan to double renewable capacity by 2030, and tripling is within sight, according to a newly released report.
> Many countries are already on track to exceed their national targets, and more ambition is achievable to bring a tripling of global renewables within reach, according to an analysis of national targets by energy think tank Ember.
> The report analyzes renewables targets for 57 countries, plus the EU, that collectively represent 90% of global power sector emissions. According to these targets, global renewable capacity will reach an estimated 7.3 terawatts (TW) in 2030, more than doubling from 3.4 TW in 2022. More than 75% of renewable capacity in 2030, where stated, will be from solar and wind.
> However, the current renewables boom is already outpacing governments’ planned growth. The world could achieve a doubling just by continuing the deployment achieved in 2023 throughout the rest of the decade – yet all signs point to a more rapid growth curve.
> If the countries analyzed by Ember continue the growth rate of 17% achieved since 2016 throughout the rest of this decade, it would put the world on track for a tripling of renewables.
https://www.theguardian.com/business/2023/nov/13/chinas-carb...
> The most striking growth has been in solar power, according to Myllyvirta. Solar installations increased by 210 gigawatts (GW) this year alone, which is twice the total solar capacity of the US and four times what China added in 2020.
> The analysis, which is based on official figures and commercial data, found that China installed 70GW of wind power this year – more than the entire power generation capacity of the UK. It is also expected to add 7GW of hydro power and 3GW of nuclear power capacity this year, said the report.
https://www.theccc.org.uk/publication/delivering-a-reliable-...
This is a simplification of what is a highly complex, interdependent, path dependent and regulated system, with long lead times, and more priorities than just least-cost. The energy system's development isn't the unfolding of an endogenous economic rationality - it's very messy! For all those reasons, it's usually best understood through the lens of political economy.
Also, I don't know why you think there's an anti-green sentiment implicit in my comment. My own views are precisely the opposite.
I'm assuming this is because so much of the energy market is directed through political mechanisms like subsidies, research funding etc. It's the political uncertainty that undergirds the economic uncertainty.
One way to start thinking about the question is to benchmark society before gasoline.
Mass use of gasoline kicked off around 1900, with the popularization of the automobile.
You can compare life now versus 1900 to get one estimate. The world definitely had problems and Wars before 1900.
What the world would look like today had gasoline never been discovered is a lot more tricky, but my gut feeling is that we would be worse off than today.
>You can compare life now versus 1900 to get one estimate.
I think this is probably too broad because it assumes a causal connection between gasoline and all of those differences. The industrial revolution had been decades underway before cheap oil, and would have continued if oil was never found in Pennslyvania. But cheap oil definitely helped speed it along faster.
That is certainly true. I meant using it a benchmark to extrapolate from. In many ways it seems to me that the industrialization at that time had a pretty negative trajectory, with a heavy basis in coal and brutal industrial towns. It is quite possible that we are living one of the best possible timelines from 1900.
In other words, if you think it's hard to implement a new energy policy in part because of monied interests, those monied interests are providing certainty in policy. To ground it in more real terms, I may not want to bet on new energy tech if the have an economic advantage based on who's in the White House. By contrast, betting on fossil fuels has more certainty because those interests are protected almost regardless of who's in the White House.
Your argument about lobbyists creating certainty doesn’t follow. Not all people in an industry have the same interests (gas generators and gas producers both like gas but price impacting regulation will create divergences). Lobbyists may reduce certainty because, for example, a super convincing lobbyist might instigate changes to an staid regime. The cumulative impact of different, less effective lobbyists over time may wash out or it may cause branches.
"future energy systems" means, in this case, battery and EV tech. Had it said "legacy energy systems" I agree that it does not follow. However, as stated, they are saying "we just don't know what's going to be on the political horizon. Maybe a ultra-conservative will be in the white house and all of these subsidies that help foster future energy systems will go out the window." Again, it's about the volatility of less-entrenched, prospective industries that are more reliant on policies to make them viable.
Entrenched lobbyists, almost by definition, want to keep the status quo. So I don't think we can agree that they are likely to institute massive changes. Put differently, do you think it's more likely that fossil fuel subsidies or that renewable subsidies will be dramatically reduced if the WH changes parties in the next election?
Eventually, the system will land in a semi-stable equilibrium. Getting there may be quite painful, though.
Capitalism is NOT an inherently stable system when the time scales of production and consumption have a mismatch. Look at farming and the feast/famine cycles it goes through. Practically all "developed" countries stabilize their agricultural sector, somehow, precisely for this reason.
Capitalism will happily take plants offline faster than new investment can replace. The grid needs a certain amount of base production or it becomes unreliable--which defeats the whole point of a "grid" in the first place.
Batteries are not enough by themselves. You need a combination of batteries, solar, HVDC links over larger areas (to give you diversity to ride out weather), gas plants, and nuclear plants. Many of these will be unprofitable to build but are necessary.
Eh... The only one on your list that is currently a problem is planes. It's expensive powering semi trucks with them, that's why people mostly don't, and it's almost trivial for trains.
There is also no fundamental reason why planes should be impossible. There are several well understood possibilities for them, but very few people have focused on solving this problem.
My lazy googling suggests that 40% of freight movement is via rail in US. I can't find a full breakout, but the same site goes on to claim rail is only 1.7% of GHG, which means most of the rest is traveling by road, since waterborne freight is generally more efficient than rail.
In my head, semi-trucks (and maybe all cars?) only need 50-100 miles or so of range for low-speed (where batteries shine) warehouse/ports/downtown deliveries (or garage-charged commutes?).
Almost every trip I've ever taken beyond ~20 miles included at least some portion on a highway. Electric interstates could allow NY to LA in one shot and pulling off the highway with 100 miles to make the round-trip to wherever a load needed to be dropped off.
If attaching and detaching was automatic, there would be no need to electrify onramps or intersections or underpasses or anything expensive, just find the cheapest, straightest, easiest to electrify 80% of roads and slap up wires there.
If paved roads, then you're forgetting the enormous wear that heavy vehicles put on road surfaces (which would get much worse as labor costs were taken away as a downward pressure on road freight volume.)
If rail, then I think you could see some version of that as a logical upgrade to a high-utilization rail network in a high-trust society with a strong safety culture. I see the US becoming lower-, not higher-, trust.
Towns and cities are too large and too dense and too insanely expensive in terms of property prices to get new lines into or even close to.
(This might be less of a problem for freight compared to moving people, but many lines are mixed freight/passenger use, aren't they?)
In reality, such a series of actions could only exist in a society that got seriously focused on moving away from private auto, and that means density would increasingly be in style. As soon as the NIMBY floodgates came down, property prices would plummet in all but the smallest cores of desirable areas, since it would be readily apparent that you can't build all expensive areas to the level of intensity that justifies insane land values seen in sprawling cities.
Again, we could, but I recognize that we don't. Let's just not say that we can't.
This reminds me of many high GDP parts of Europe where there are towns of 500-1000 people every few km, connected by rail and busses.
But, yes, you would expect to see significant clustering. Nonetheless, the most effective clustering since the advent of indoor plumbing is the cluster of clusters, the city, and I doubt that would change. The connectivity is just so much better than a lineal expansion of small towns along a corridor.
I agree time wouldnt change that much, but presumably that time would translate to greater distances with better throughput and speed.
FWIW, I agree that electric trucking is the future, just disagree how close we are to that as a reality. My main gripe is how the problem tends to get oversimplified in people's assessment. "All you gotta do is.." is usually a red flag when talking about complicated problems. I'd argue that if it were simple, it would have been done already.
Trucks spend a lot of time loading, unloading and on mandatory driver rest breaks. Charging can and will be done during those times.
The biggest expense in a trucking operation is diesel. Trucking has cut-throat margins. Once electrification starts in the industry, everyone will switch quickly, or go bankrupt. Some routes will be hard to electrify, but the cost savings on the rest will be worth a lot more than a little bit of inconvenience.
It's not easy, but the savings will incentivize overcoming the obstacles.
The point is, it's a lot of money and that money has to come from somewhere. Most economists would say it makes the most sense to get that money from the people who most use the roads. That sounds like a mileage tax, tolls, or some other mechanism. I don't see why EVs would get a (literal) free ride here.
If California wanted to collect similar revenue, that 0.15 would be about 35% of the operational fuel cost.
It'll be more likely if a high amperage grid connection is also expensive at the charger location. A battery and a low amperage connection can replace a high amperage connection for an infrequently used charger.
The more conditionals that get levied the farther off the solution seems to be and the less of a slam dunk electrification appears. They're solvable, but I think it's reasonable to expect a cost and timeline for each of those before we start touting electrification as a great solution just on the horizon.
The original claim was: out of planes, trains, and automobiles, the only one that's a problem are planes.
Short answer: It's solvable, but a heck of a lot more complicated than that statement lets on.
Even if you insist that big-box retailers represent the peak of retail capitalism, is it so difficult to imagine that these might be placed along a central corridor with rail running along the back, each store able to pluck the intermodals off the flatbed car, and load empties back onto it? Spaced out so that every business could unload at the same time?
Everyone's always bitching about cars and how they've made things awful. But how much traffic/carbon/misery would we eliminate if freight were taken off the highways?
As with the debate between cars vs. trains, semis lose out to trains by a lot, even when trains use fossil fuels. Trains rule.
I'm an absolute supporter of renewables, and I'd love to see support for fossil fuels phased out, but it's been a long climb to reach the point where that's feasible.
My uneducated guess is that we could have moved the timelines forward at least a decade, and that matters a lot when you're dealing with exponential cost/deployment curves (not to mention possible climate feedbacks.)
I'm not really sure it would have gone faster instead of just having been a very large waste of money. A lot of the reason that renewables are cheaper now has to do with 30 years of advancements in electronics and power storage and semiconductors and solid state materials etc etc etc that just _took that long to invent_. It's not like people decided a few years ago that 'oh it's time to invent better batteries'. There's always been motivation to build better batteries and people have been working on that non-stop since electricity was discovered.
That counterfactual is like: What if we had invested more in building neural networks in 1970, where would we be today. Well, the problem is we didn't have cheap powerful GPUs back then, so it probably wouldn't have mattered?
We sort of got cheap renewable energy "for free" from a lot of technologies that we invested in for other reasons.
Now, there could have been technical solutions for these issues found in the 80s or 90s, but more probably than not the engineers back then would not have thought about this beyond the obvious corporate aspects - after all, it's much more "practical" to focus on connecting the big power plants together and just vaguely estimate the required consumption.
It's probable that, if you sat at a design meeting in the 80s and proposed, as "an energy-efficient solution", to have a small computer in every consumer's breaker box that monitors the incoming electricity, sends the info through a combination of radio and country-spanning wires to a central server, and then do analytics on it to predict when the power is needed, you'd have been laughed out of the room. And yet, that's how smart grids work nowadays and it is the correct solution to this problem.
The improvements in energy storage and solar/wind renewables would have started decades earlier, sure, and that would have mattered. But I don't think anybody would have been able to use them the way we can use them today if it was done twenty or thirty years ago, and the technology might have died down instead. It's hard to know for sure, but it's a very plausible outcome.
Premature investment doesn't lead to early results, just wasted money. There is an optimum time for such, and it's almost certainly true that this time wasn't in the 1970s, the technology simply wasn't possible.
The 1970s do not represent a point in time in which investment/research became feasible, they represent a point in time at which it became obvious to everyone that the-then current energy technology was disappointing for a variety of reasons.
I don't think you could have gotten much of a head start. Maybe 1-2 years. I don't see you getting an extra 10 out of it, even in the best possible circumstances. Half of what makes it possible now simply didn't exist. Changes in global logistics, materials science, manufacturing capacity, and a hundred other things.
If time travel were possible, and you could go back with all the knowledge and plans from today, even then 10 years is about all you could hope for. Some things can't be rushed. Sure, you've eliminated all the false paths, the bad decisions and backtracking, but booting up this part or that part of the supply chain is a slow process.
Then I fed it into a battery simulator that I wrote.
Based on my estimated cost of a grid-scale battery, I estimated a payoff in ~2 years; and then a lot of profit.
The biggest challenge is the politics and red tape of connecting something to the grid. The grid operators are used to power plants being multi-year projects.
Is this applicable to the South Australia Powerwall installation?
I couldn't tell you if you'll save money with a powerwall in Australia. You'll need to look up local incentives for that. Understanding the economics of a power grid, it's only worth it if you have solar and don't have typical American-style "net metering," or you have solar and need backup for power outages.
What I can tell you is that, in the US, in 2019, I got a rebate for my powerwall that made it price competitive with a standby generator. (Cost a little more, but I don't pay for annual maintenance or fuel.) I don't feed into the grid with it. The incentives would need to be pretty lucrative, though, because if there's a power outage overnight, it'll drain fast! (All my outages since I got it happened during the day.)
What I can also tell you is that Tesla made a lot of headlines hooking up a grid scale battery to balance out an Australian wind farm. It prevented a frequency drop when a coal plant went offline.
This is what I was referring to; I was wondering whether your calculation would apply to it.
A battery can only solve a local issue: a system for locally produced and consumed electricity, If the sourcing solar or wind is transformed to fuel, you also have storage, probably a gas or liquid. And you catch two birds with one stone: storage and distribution. That could be shipping, pipelines but also gas stations. Infrastructure we already have.
That would be enough to buy 80000 cars with 100kWh and provide 8gWh and would be 8x more than Germans biggest water energy storage.
Did I miss something?
Sounds absolutely doable in a few years to have massive more energy storage available.
Combined with a lot more and cheaper renewable energy
[0] https://news.ycombinator.com/item?id=38361094
At some point we may still need small gas power plants to charge the batteries but how many days a year would we have to do that?
It may be a touchy subject, but to me Nuclear power is absolutely not the future because for the money you can deploy so much renewables, including batteries, it just doesn't make sense. And they are never on time and on budget.
So the writing is on the wall for fossil fuels.
What's also important is that gas combined cycle kind of represented the end state of maximum power for minimum cost from fossil fuels. Wind and especially solar (perovskites, etc) and storage (sodium chemistries, etc) have lots of runway for further cost drops. So you might squeeze a couple percent out of gas combined cycle for LCOE in the next decade, but solar/wind may still drop by 50%.
So if you have a ten year view (which is what you have fore investment in power projects) fossil fuel projects (and alas nuclear, which is 6x more expensive than wind/solar) simply don't balance the sheet.
Lots of hope. Lots of work to do.
EDIT: response to "why do you think solar/wind have bigger runway to drop in price:" (I hit my post limit)
Wind can simply scale up more, and there are other designs coming online. Wind I don't have the holy-crap-this-is-still-coming thing.
Solar however has made its gains with silicon, but perovskites are simply dirt cheap to manufacture, IF they can eliminate lead and get them to last long enough. I'm spitballing, but perovskites will probably drop the cost by 50% long term in solar.
Solar also really hasn't developed large scale multijunction, and perovskites + silicon may enable that. Multijunction is how you get the higher efficiencies by capturing more wavelengths and the like.
As for gas turbine, they already are exceeding the carnot efficiencies by capturing downstream heat cycles and other tricks. And I think the other thing as an energy financeer I'd worry about is that any fossil fuel power generation has to be worried about an eventual carbon tax imposed.
As the political power of oil companies wanes as their economic strength withers away as EVs and alternative energy undermine their economic value proposition, their ability to keep the environmental lobby from imposing a proper externality tax on carbon emissions with falter.
So any gas generation power plant could overnight have their costs increased by 10-50% or maybe worse. Best case: you have to pay for bullshit offsets, which will probably increase costs 10-20%. Medium case: they have to explicitly pay for the carbon scrubbing/removal, probably 50% increase or more to the generation cost. Worst case: we realize that fossil fuels carbon taxes should include a cost to remove PREVIOUSLY UNTAXED carbon that is sitting in the atmosphere. So then the cost could be exhorbitantly increased.
Likely SOMETHING is coming that will increase the cost of fossil fuel power and fuels due to carbon removal. It will start small and increase as the political strength of oil / gas wanes.
Could you tell on what you base this assumption?
sodium batteries have the potential to be dirt cheap and thus might be able to be rolled out for less of what lipos cost at scale especially in non-mobile applications where size and weight aren't that important.
This will cause renewable energy to become somewhat less attractive financially, but the alternative is a grid that becomes unreliable over time as gas power plants are decommissioned and don't get replaced.