
Battery Power's Latest Plunge in Costs Threatens Coal, Gas - matt4077
https://about.bnef.com/blog/battery-powers-latest-plunge-costs-threatens-coal-gas/
======
matt2000
The decreases in battery cost in this report are pretty spectacular, but it's
missing comparisons to costs for traditional generation. As best as I can tell
from
[https://www.eia.gov/outlooks/aeo/pdf/electricity_generation....](https://www.eia.gov/outlooks/aeo/pdf/electricity_generation.pdf)
\- the LCOE for gas generation is around $40/MWh. So this article's cost of
$187/MWh for batteries is still a lot higher, but the battery cost has dropped
35% in one year so it could get there soon. What I'm still not sure about is
if you need to include the LCOE of the original generation method in the cost
of the battery system? In that case the total LCOE for say wind+battery would
be ~$210.

~~~
philipkglass
$40/MWh is for combined cycle gas turbines that operate at high capacity
factors. According to this BNEF report, gas _peaking_ capacity is now
threatened by battery replacement:

 _Electricity demand is subject to pronounced peaks and lows inter-day.
Meeting the peaks has previously been the preserve of technologies such as
open-cycle gas turbines and gas reciprocating engines, but these are now
facing competition from batteries with anything from one to four hours of
energy storage, according to the report._

The report itself doesn't give a $/MWh figure for these peakers. Lazard's 2017
report puts the lower end of CCGT generation at $42/MWh, close to the EIA
number, but gas peaking starts at $156/MWh and goes as high as $210/MWh:

[https://www.lazard.com/media/450337/lazard-levelized-cost-
of...](https://www.lazard.com/media/450337/lazard-levelized-cost-of-energy-
version-110.pdf)

Note that they put gas reciprocating engines no higher than $106, so I don't
think that batteries at this price threaten gas reciprocating engines yet.
Mostly they threaten open cycle gas turbines.

 _Diesel_ reciprocating engines show a cost of at least $197/MWh and are also
threatened by battery-backed renewables. Diesel generators have been heavily
used to supply electricity for small remote villages, islands, and off-grid
mining sites. For a few years now there has been a trend to reduce consumption
of diesel at such sites by partially substituting generator output with
renewable electricity. It's possible to make deeper cuts in diesel use with
added battery storage, and the payback period is shorter than you might guess
from looking at the local gas station's diesel price. Getting the fuel to
certain locations can cost nearly as much as buying it in the first place.

~~~
dragontamer
I'm not sure if these numbers being quoted are good for analysis.

The "Nessie Curve" shows that power at 5:00pm is worth more, especially in
sunny environments (like Hawaii). Solar energy is taking over those areas, but
solar power begins to drop dramatically as the sun sets.

5:00pm to 8:00pm is still quite warm, so you need to turn on the gas turbines
to provide electricity. But solar's efficiency has dropped dramatically, so
you can't really rely upon solar power in those hours (well... you can... but
at dramatically lowered efficiency).

I'm not sure any analysis is worthwhile unless it includes the time-of-day, as
well as the number of hours that the batteries can load-shift power. 5:00pm to
8:00pm power is going to cost more in the future than 12:00pm power, simply
due to this whole solar energy thing going on.

~~~
Jedd
> I'm not sure any analysis is worthwhile unless it includes the time-of-day,
> as well as the number of hours that the batteries can load-shift power.
> 5:00pm to 8:00pm power is going to cost more in the future than 12:00pm
> power, simply due to this whole solar energy thing going on.

A big part of the problem talking about these things is that people conflate
photo-voltaic with solar thermal (CSP).

What you're talking about when you say 'solar' is just the first one.

Solar thermal plants provide power into the night.

Arguments that it's just solar + storage are _perhaps_ valid, but a) it's
still solar, and b) nuclear MSR's aren't called 'nuclear + storage' (ditto
anything else using latent heat in fluids, flywheels, etc).

~~~
dragontamer
It does seem that Solar Thermal plants are better for the expected future of
energy demand. I wasn't thinking of them for some reason.

But yes, people need to be mostly aware about the time-cost of energy. Even if
Solar Thermal is less efficient than photo-voltaic cells, the fact of the
matter is that 5:00pm to 9:00pm power is the REAL problem that people need to
focus on. That's when America uses most of its electricity right now, and is
likely the main driver of peaker plants at the moment.

------
hinkley
The history of battery tech has been a very steady drum beat of small, slow
improvements in battery capacity of a few percent per year, slowly working in
the opposite direction of inflation.

The bad news of that 'law' is that you're not going to get a device with 2x
battery time next year. The last time I remember Apple pulling off a 2x it was
due to a 30% larger battery with 30% higher power density (itself a
combination of smaller packaging and better power density) with OS
improvements to reduce average power draw.

The good news is that eventually there will be a battery that stores 2x as
much charge for the same price. So if storage batteries can be profit neutral
now, in 5 years you could be looking at a 25% reduction in material costs. And
if you can improve labor and installation overhead you might be looking at a
profit margin you can sell.

~~~
skybrian
The comparison to Apple seems pretty unhelpful? Utility-scale batteries are a
very different market than batteries in electronics, even if they use some of
the same technology.

If you can add capacity by making batteries bigger or heavier without
increasing cost, that would be fine for storage batteries.

~~~
hinkley
Because these conversations happen all the time, have been happening for at
least twenty years, will continue to happen for at least the next twenty, and
somehow always feature the same whataboutism responses.

It's my preemptive retaliatory strike to bring up a high profile case of
someone looking in the press like they pulled of a 2x improvement in 4 years
and really they did no such thing at all.

------
wesammikhail
A friend of mine (CEO of Enerpoly) recently got his PhD in this space and have
made a breakthrough in the battery space (extreme life cycle extension). His
most recent prototype can reach less than 40euro / kWh. The space certainly is
exciting and will be fun to watch over the next few years!

[http://enerpoly.com/technology/](http://enerpoly.com/technology/)

~~~
tim333
Glad to see that sort of stuff is coming along. I was thinking there must be
something more cost effective than LiIon when you don't need to worry about
the weight.

~~~
webninja
NiMH takes up more space than LiIon but costs less for the same amount of
energy storage capacity. Toyota uses them in their hybrid cars primarily for
cost reasons.

------
shaki-dora
It‘s most fascinating when you realize that wind & solar will, very soon after
being competitive with new coal and gas, become cheaper even than existing
fossil fuel plants.

That’s because renewables are almost entirely front-loaded: upkeeps is
somewhat neglible in comparison to construction. For fossile fuels, the fuel
itself is a dominating cost.

Meaning: in some countries, we are on the brisk of an inflection point, after
which growth of clean tech will be limited only by our ability to increase
production. I saw a graph, which I can unfortunately not find now, predicting
2021 for some European countries and some regions in the US. There isn’t much
speculation in a time frame of only two years.

~~~
beefield
As solar is growing globally something like 30% p.a., one could argue that we
have already been limited by the ability to increase production. Just for
comparison, Apple has never had a 100% y.o.y increase of iPhone over two full
production years, and that was a consumer device with explosive growth. I
would not expect that it could be feasible to have similar growth numbers in
energy infrastructure than iPhone.

~~~
dependsontheq
The limit is mostly investment, PV has no resource limitations currently.

------
hamilyon2
Just make sure we don't make same mistakes again, ending with a lot of non-
recyclable non-reusable obsolete batteries no one cares about and wants 50
years later.

The last thing we need is a dumpster full of toxic waste... all in name of
green and "renewable" energy generation!

~~~
ausbah
>The last thing we need is a dumpster full of toxic waste... all in name of
green and "renewable" energy generation!

that reminds me more of pushes to bring back nuclear power

~~~
BurningFrog
If you had any idea how much nuclear power you can generate before you've
filled a single dumpster with spent fuel...

~~~
trickstra
are you including the exclusion zone around the radioactive waste?

~~~
xyzzyz
The “exclusion zone” around the radioactive waste is either a few dozen feet
to the surface of the water pool, or less than a feet of a container wall.

~~~
tchaffee
From memory, the exclusion zones around Fukushima and Chernobyl are somewhat
larger. Humans err. And always will.

~~~
BurningFrog
The willful ignorance here is not worth trying to disentangle.

~~~
tchaffee
Neither is your willful ignorance. See how little that adds to a discussion?
Either make the effort, or don't bother to comment.

------
louwrentius
For stationary purposes, why wouldn't Lead-Acid batteries work for distributed
power storage?

I'm aware that those batteries should not be deep-discharged, but you can just
add more to compensate.

Lead is toxic but those batteries seem to be very recyclable.

Any comments?

~~~
mchannon
Have given this a fair amount of thought and it comes down to a few things:

Cycle lifetime of lead is good as long as you don't deep-discharge it, but
then if you don't deep-discharge it you need a lot more material.

Eventually the lead is going to degrade and then you need a battery changeout,
or you need the wherewithal to refurbish the plates and the paste. No one goes
to the trouble.

Lead-acid doesn't tolerate the cold as much as lithium does.

But the big enchirito is the fact that lithium batteries at 100% max capacity
are great for cars. After they wear down to 75% max capacity they're no longer
suitable (you want a pack with 20 miles' range?) and junk. At that point
they're ideal for grid-tie because there's literally not much other use for
them.

Lead acid requires purpose-building, which I believe would be cost-
competitive, but also require a substantial raise for what many consider to be
a has-been technology.

~~~
Gibbon1
My company was designing a product that was solar powered with a battery to
keep it running at night. We originally were designing in lead acid batteries
and the size of the battery needed for that kind of service was too large. De-
rate because you're cycling daily and suddenly you need 3X the battery. De-
rate again for environmental conditions and add another 2X.

We punted and switched to a lithium iron phosphate battery. Because we could
get away with a 2.5 amp-hr lion battery vs a 12 amp-hr lead acid. It's cheaper
and we don't have to worry about a workman trying to lug 15-20lbs up a ladder.

------
dylan604
Is it better to try to build city-wide battery storage or per house storage?
Not knowing the economy of scale of these things, it seems like it would be
more affordable to build the smaller per house units like the one Tesla
builds. After all, it is the homes that primarily need power at night. Big
commercial buildings close at night, and need much less power. Or am I just
really naive on the subject?

~~~
dragontamer
I would expect city-wide storage to be cheaper. The electricity I use on a
day-to-day basis changes (ex: Dishwasher, Cooking, Laundry). Average it out
across a neighborhood, or city, and things become far more consistent.

A typical electric dryer is 3000 Watts. If you do 2-hours of laundry one
night, you'll need 6kWhr storage JUST for drying (not even laundry) !! You
might typically need 15 kW of storage per day, but you'll need 20kW or maybe
even 30kW of storage to be comfortable and cover all possible use cases.

A city can take advantage of this in several ways. City-scale can allocate the
average 15kW-hrs of storage needed for a typical night, and then maybe 2.5kW-
hrs of "non-typical" storage that's shared between the whole neighborhood.
Across 100-households, this +2.5kWhr "excess" can be allocated to ~40
households... and each of those 40 households can go +6kW-hrs above typical
(ie: decide to do laundry that night).

\-------------

Some things will scale better on a per-house level. Air conditioning is almost
certainly better per-house, because its somethings the whole neighborhood
needs at the same time. But there are better technologies out there than Li-
Ion batteries, such as Ice-Bear's thermal energy storage. ([https://www.ice-
energy.com/](https://www.ice-energy.com/))

Store 50F water during the night inside of a highly insulated tank. Blow cold-
air (from the 50F tank) to cool the house during the day. Modern insulation
can keep a tank of water cold for many, many days, and water is about as cheap
of a "energy storage" mechanism as you can get.

This "demand-shift" technology is best served by a smart-grid: if the city can
provide a floating-cost of electricity, and also inform appliances that the
cost of electricity is changing... then those appliances (ie: Air
Conditioners) can turn on when the price of electricity is cheapest.

~~~
bluGill
I agree with your analysis, but I'm going to take the opposite view because of
one factor that you didn't consider: power outages. People want to have some
standby storage at their house anyway, and once they have it they may as well
use it to keep rates down.

(I think the real answer is somewhere in the middle, but disagreeing is more
fun)

~~~
lukeschlather
This is also a density problem. If you've got enough people living nearby it
becomes easier just to make sure the power never goes out.

------
tonyedgecombe
I wonder if we could end up in a situation where solar and wind power kills
traditional generation but still isn't able to provide continuous power. That
we might end up with intermittent power by accident.

~~~
xbmcuser
I personally am seeing 2 distinct systems. 1\. Outside the cities people will
have their own storage and power generation. 2\. Inside the cities power
companies start renting out batteries when you contract with them. And they
only provider the power with solar and the battery they provide stores it for
the nights and sun less days.

------
acidburnNSA
This says that if you take ~~free~~ (see edit) energy, store it in batteries,
and pull it back out later, you will have to pay $187/MWh.

Meanwhile natural gas turbines cost $40/MWh to generate power whenever,
wherever. To say batteries are competing with gas in the US is very
misleading. Reliable electricity is worth an incredible amount to customers.

Unfortunately natural gas is very high carbon and cannot continue in a carbon-
constrained world.

In any case, it's obviously time to roll back tax incentives on wind and solar
generating capacity alone. They worked perfectly, bringing prices of advanced
tech down near market levels. Now let's incentivise deep decarbonization
schemes that can handle seasonal intermittency and decarbonize the heating,
industrial, and transportation sectors.

Edit: The $187/MWh number includes an extremely low battery charging cost of
around $0.033/kWh (it's reasonably assumed that charging will occur during
energy oversupplies, so it's nearly free).

~~~
ddingus
The cost of gas does not include the now massive externalities.

If it did, the financial case would already favor a mix of more planet
friendly, renewable energy.

People are going to be living very differently 50 years from now, maybe
sooner.

~~~
acidburnNSA
Excellent point. What's the insurance policy for global warming look like?

I'd say the favor would be towards planet friendly, low-carbon energy. Biomass
is renewable but high carbon while nuclear fission is low-carbon but not
considered* renewable. Is nuclear fusion considered renewable? Renewability
doesn't matter in itself. It's anything that's long-term sustainable given our
current understanding of the world.

*though known resources will last at world-scale for at least 10s of thousands of years, and more likely billions of years.

~~~
AnthonyMouse
> though known resources will last at world-scale for at least 10s of
> thousands of years, and more likely billions of years.

"Billions of years" is about how long before the sun burns out, so in that
sense solar wouldn't be renewable either.

------
outside1234
On this topic: Does anyone know why we haven't started to utilize electric
cars as a mechanism for nighttime home energy?

It seems like having these batteries centralized is actually not the right
solution, but instead that they should be at the edge, and connected to the
home grid, such that they can be charged during the day, and decharged during
the night to some maximum amount specified by the user.

A Tesla has 50kWh capacity and I typically use 6kWh at night - it seems like
an obvious place we could leverage batteries already in existence to reduce
the demand on central generation.

~~~
qqqwerty
One of the main reason is concerns about degradation. Battery capacity and
performance degrades as the number of discharge cycles increases. And EV users
are particularly sensitive to that degradation (see issues with early Nissan
leafs for example). And replacing an EV battery is currently really expensive
(often exceeding the entire value of the used vehicle).

It does look like with good battery management, the lifespan can be
considerably lengthened however. Particularly, if you cap the max charge to
80% and min charge to 20%. This, plus active cooling is probably how Tesla has
managed to achieve such good battery longevity. I wouldn't be surprised if in
a few years, EV owners get more comfortable with it.

Another thing to consider is that right now the 'peak' grid usage (when EV
discharge would be most useful) usually occurs in the evening, probably when a
lot of folks are still using their EV for commuting. So rolling out the
infrastructure to do two way charging is probably not worth the cost because
utilization might be pretty low. I.E. What % of EV drivers would have enough
spare battery capacity to discharge a non-trivial amount right after their
commute. Probably not many, at least not until we either see a big increase in
EV capacity (which will probably happen as batteries get cheeper).

~~~
AnthonyMouse
> What % of EV drivers would have enough spare battery capacity to discharge a
> non-trivial amount right after their commute.

It would probably still be pretty high. Total ranges are in the hundreds of
miles, but the average commute is 16 miles, so most of the capacity would
still be there when you get home.

The real question is going to be whether it's cost effective. If you do that
and then have to replace the battery twice in ten years instead of once, is
that actually more profitable than having one battery for your car that lasts
ten years and another which is purpose built for grid storage and also lasts
ten years? Basically a question of time value of money vs. whether being built
for purpose is sufficiently more efficient.

~~~
qqqwerty
The point I was trying to make was that 2 way charging infrastructure is not
cheap[1]. And right now battery storage is really only cost competitive as a
peak flex provider largely because you need to pay for the electricity that
goes into the battery, i.e. a battery does not generate electricity, it merely
allows for price arbitrage. So you would have to try and make your money back
by only selling during a 2-3 hour window each day, and that window happens to
coincide with prime commuting hours. So even if you weren't commuting during
that time, ever, you would be making about ~$1 per day[2] and $365 per year.
Assuming $5k in infrastructure costs you are looking at 13 year payback, and
this ignores battery degradation entirely, among other things[3]

[1] Lets say $5000, which is pretty reasonable considering you would need a
new charger, an inverter, and would probably have to modify your vehicle.

[2] You are arbitraging, so lets' say you but at $0.08/kwh and sell at
$0.16/kwh. And in 2 hours you can discharge 10-15 kwh, which puts you in the
$1 dollar per day range.

[3] Also assume the utility will pay you retail rates for you kwh.

~~~
AnthonyMouse
> Lets say $5000, which is pretty reasonable considering you would need a new
> charger, an inverter, and would probably have to modify your vehicle.

That would presumably be a lot less if the cars start having that designed in.
They're already using AC motors, so they already have inverters, the question
becomes how feasible (and efficient) it is to have them produce mains power.

(The obvious step before they do that would be to add a "number of charge
cycles" maximum to the battery warranty, if they don't have that already.)

> So you would have to try and make your money back by only selling during a
> 2-3 hour window each day, and that window happens to coincide with prime
> commuting hours.

This is also likely to change somewhat with the rise of solar. Right now the
demand peak starts around 4PM, but the sun is generally still out then. If a
significant fraction of generation capacity becomes solar then that means no
lack of supply at that time and the real price surge happens as the sun sets,
i.e. once most people are already home. So the number high demand hours
decreases, but that moots the commuting issue. Meanwhile the remaining demand
is even higher because not only do you have high demand, you have a reduction
in supply due to the loss of solar capacity, which means the price
differential to arbitrage may increase from what it currently is.

------
tomohawk
Cobalt supply seems a bit uncertain. One of the main sources is DR Congo.

[https://www.greentechmedia.com/articles/read/the-truth-
about...](https://www.greentechmedia.com/articles/read/the-truth-about-the-
cobalt-crisis)

~~~
Gibbon1
Yeah a lot of people point at lithium as the scarce input. But Cobalt for
common lion batteries is problematic because it's produced almost entirely as
a by-product of copper and zinc (I think) mining. For the other metals used
current production dwarfs the supply needed for batteries.

However there are lithium iron phosphate batteries.

------
Iv
Wait... It costs only $187 to store a MWh? Why isn't there a 200$ device in
every home that stores energy for the night?

~~~
yojo
I assume these are the costs at scale. There are likely fixed costs that
dramatically increase the unit price of a single home installation.

~~~
Iv
Still, 1MWh is the average monthly consumption of a single household. That
means that for a fixed cost of less than 200$ per family we could solve
intermittency problems by building, probably one battery per village or city
block.

It is cheaper than storing water to put pressure in the network.

Something seems off in these numbers.

------
mbostleman
What’s the lifetime of these batteries and what’s the environmental impact of
their manufacturer and disposal?

------
asaddhamani
One argument that I often hear is that even if we go with batteries, they then
need to be replaced every few years, and the electricity is mostly coming from
non-renewable sources either way.

~~~
imtringued
Germany has almost no hydro power compared to the 24% average in the EU.
Biomass, PV and Wind Power alone produce 38% of the electricity in Germany.
This percentage is growing by 3-4% a year. Combined with nuclear and other
zero emission technologies it produces 45% of the electricity without emitting
CO2. If Germany had hydro power it would already be at 69% but it wouldn't
matter.

Despite this massive success the total CO2 emissions haven't changed. The
electricity sector is obviously only responsible for around 24% of the total
energy used in Germany. Therefore the renewable strategy only amounts to a 12%
reduction.

One of the biggest problems that Germany suffers from is that the
transportation sector still uses gasoline. Over the last 10 years people have
started buying more cars and driving them for more miles. Less efficient
diesel (which is taxed less than gasoline) cars also resulted in a minor
increase in CO2 emissions. This completely negated the CO2 decreases thanks to
renewable electricity.

If anything what holds back renewable energy is the total lack of mass market
electric cars that can compete with ICEs and lack of charging infrastructure.

Battery technology is currently improving at such a high pace that we might
never even need anything better than lithium ion batteries. Tesla has managed
to reduce the cobalt content down from 14% to less than 3%. The yearly cost
reductions even make cheap flow batteries which basically are just sulfuric
acid with vanadium mixed in uncompetitive.

~~~
miskin
Less efficient diesel regarding CO2 emisions? One of the reasons diesel
engines were pushed in EU was due to better CO2 emmisions by diesel engines
compared to petrol engines.

~~~
chopin
The average car has gotten bigger.

