
A New Era of Batteries Spells Trouble for Gas in America - toomuchtodo
https://www.bloomberg.com/news/articles/2018-01-11/a-new-era-of-batteries-spells-trouble-for-natural-gas-in-america
======
niftich
"A New Era of Batteries Spells Trouble for Gas in America" is the article's
actual title, but the text does not back up this assertion.

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

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

[1]
[http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M200/K6...](http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M200/K602/200602742.PDF)

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

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

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

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

[2] [https://www.bloomberg.com/news/articles/2017-12-07/ge-is-
sai...](https://www.bloomberg.com/news/articles/2017-12-07/ge-is-said-to-
plan-12-000-job-cuts-as-new-ceo-revamps-power-unit)

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

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

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

[1] [http://energytransition.umn.edu/wp-
content/uploads/2017/07/W...](http://energytransition.umn.edu/wp-
content/uploads/2017/07/Workshop-Report-Final.pdf)

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

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

~~~
toomuchtodo
Replying here because I can no longer edit.

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

[https://www.bloomberg.com/view/articles/2018-03-11/china-
s-g...](https://www.bloomberg.com/view/articles/2018-03-11/china-s-giving-
batteries-a-second-life)

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

------
Gibbon1
One thing not touched on in the article is the marginal cost of wind and solar
is near zero. Meaning when supply exceeds normal demand the price falls to
near zero. This usually presented as a problem, but for some businesses this
is potentially a big opportunity. If you consider a electric furnace
processing scrap steel can easily use 10-100 MW of power for thirty minutes at
a time. Potentially zero margin electricity can be used to decarbonize other
industries as well.

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

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

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

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

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

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

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

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

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

[1] [https://medium.com/solar-microgrid/battery-showdown-lead-
aci...](https://medium.com/solar-microgrid/battery-showdown-lead-acid-vs-
lithium-ion-1d37a1998287)

[2] [https://www.powertechsystems.eu/home/tech-corner/lithium-
ion...](https://www.powertechsystems.eu/home/tech-corner/lithium-ion-vs-lead-
acid-cost-analysis/)

~~~
Gibbon1
Key thing, consumers prioritize initial capital cost. Where for utilities it's
all about total cost.

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

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

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

This article [https://www.fool.com/investing/2017/05/20/teslas-
powerwall-s...](https://www.fool.com/investing/2017/05/20/teslas-powerwall-
showing-path-for-home-energy-stor.aspx) describes a similar program applied to
home energy storage.

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

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

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

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

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

[https://www.forbes.com/sites/jamesconca/2017/10/10/why-
arent...](https://www.forbes.com/sites/jamesconca/2017/10/10/why-arent-
renewables-decreasing-germanys-carbon-emissions/#6766188868e1)

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

~~~
trentnix
Proposed by who? The Sierra Club?

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

This has "rolling blackouts" written all over it.

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

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

can't be particularly high.

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

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

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

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

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

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

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

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

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

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

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

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

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

~~~
chipotle_coyote
_If my state made me pay $0.40 /kWh for unreliable energy, I'd be furious._

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

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

[http://www.siliconvalleypower.com/svp-and-community/about-
sv...](http://www.siliconvalleypower.com/svp-and-community/about-svp/area-
rate-comparison)

