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So this is only financially viable because of Californian risk aversion after last years gas leak. If you have a reliable natural gas distribution network, like

So this is only financially viable because of Californian risk aversion after last years gas leak. If you have a reliable natural gas distribution network, like the rest of the world, batteries don't make any financial sense versus gas power plants. I mean, this entire plant can supply 20 MW and will cost somewhere around $20 million. For that price you can buy two General Electric LM2500 gas turbine generators that can supply 47 MW and will fit in the same space as three 40-ft shipping containers. (These are basically just aircraft engines modified to produce electricity.) So while this particular sale is of course good for Tesla, I don't see how one can justify this as Tesla "transitioning to a clean energy company". They saw a profitable, but likely one-time, opportunity localised to CA and they took it.

greglindahl 10y ago
Gas power plants and batteries have different timescales. Grids with a lot of renewable energy need a slice of capacity that can ramp up faster than a gas turbine. "The fastest loading gas turbine models produce 30% load delivery after 7 minutes" -- http://www.wartsila.com/energy/learning-center/technical-comparisons/combustion-engine-vs-gas-turbine-ramp-rate http://www.wartsila.com/energy/learning-center/technical-com... If you've driven a Tesla, you may have noticed that they can reach peak a bit faster than that.
toomuchtodo 10y ago
I'd encourage you to spend 15 minutes researching what the costs are of running a peaker plant. There's a reason they're the most expensive generation method per MWh (peakers run for under 100 hours per year). Revenue is revenue. If Tesla is able to cannibalize the peakers to contribute towards its enormous capital expenditures, and continue to reduce costs with the Gigafactory, it only makes utility battery storage more affordable. There is no scenario where the cost curve per kWh of battery storage goes up.
- semi-extrinsic 10y ago
  Sure peakers are expensive, but they are profitable, otherwise no-one would build and run them. Supply and demand etc. I'm not sure what you mean by Tesla cannibalizing the peakers? Do they already own traditional peaker plants? I agree revenue is revenue, I'm just saying this is perhaps unlikely to provide more revenue from sales outside CA.
  - toomuchtodo 10y ago
    Batteries are now cheaper than peakers everywhere, not just CA. That's what I'm saying. Tesla's PowerPack installs (battery storage receives federal incentives, nat gas does not) will replace peakers, leaving them as stranded assets (the cannibalization I refer to). Edit: unepipe: Tesla packs perform the exact same role as a peaker plant: energy on demand. They are distributed, dispatchable loads and generators, available to draw or release energy from/to the electrical grid as needed, when commanded to do so by a grid operator. I assume I used "cannibalization" improperly in this context. Mea culpa.
    - unepipe 10y ago
      Tesla is not producing peakers, correct?
      - manicdee 10y ago
        Tesla is producing battery storage, which is either a peaker plant or backup for failed transmission lines, take your pick.
    - itissid 10y ago
      Could you share a reference for "Batteries are now cheaper than peakers everywhere"
      - toomuchtodo 10y ago
        Bookmarked to come back to show my math in the morning. The gist is they can absorb power at a cost that is pretty close to free (when there is excess power flowing through the grid) versus burning a fuel whose price is volatile, a steep declining cost curve for batteries, and aggressive federal government tax incentives.
        forgetsusername 10y ago
        >aggressive federal government tax incentives. I'm not sure that should be included in the cost analysis, otherwise anything can be subsidized to the point of being "cheaper".
- crdoconnor 10y ago
  >There is no scenario where the cost curve per kWh of battery storage goes up. Lithium shortage.
  - kwhitefoot 10y ago
    Lithium is a common element. The difficulty is always that it is rather even distributed making it expensive to concentrate. It's the kind of thing that is solved simply by scaling up. It is in fact more abundant in the Earth's crust (17ppm) than lead (10ppm) and according to Wikipedia <https://en.wikipedia.org/wiki/Abundance_of_elements_in_Earth%27s_crust> https://en.wikipedia.org/wiki/Abundance_of_elements_in_Earth... 2012 production of lead was 5.2MT while lithium was 37kT.
    - planteen 10y ago
      Abundance in Earth's crust doesn't help at all during a supply crunch. Bringing a mine up takes at least 5 years. And your mine is going to be on an orebody, not just processing random rocks. Cobalt is another critical element for batteries I believe.
      - kbenson 10y ago
        Lithium is "mined" by pumping underwater brine to a surface pool and letting it evaporate. The cost effectiveness of this apparently caused most Lithium mines to shut down inthe 90's because they couldn't compete[1]. Lithium is also present in seawater, but they apparently don't have a cost effective way to extract it from that yet. Apparently the evaporation process is 18-24 months per batch though, so there is some lead time, just not 5 years (good), and it doesn't necessarily lesson by all that much if you have the facility already set up (as in you can't necessarily throw more people/machines at it for a short term increase, which is bad). A commercially viable way to extract it from seawater would likely solve any supply problems indefinitely. This, of course, doesn't address the need for Cobalt, but I'm not sure how much is required for the process. 1: https://en.wikipedia.org/wiki/Lithium#History https://en.wikipedia.org/wiki/Lithium#History
    - 10y ago
jakub_h 10y ago
> "If you have a reliable natural gas distribution network, like the rest of the world, batteries don't make any financial sense versus gas power plants." "The rest of the world" also has measurably more expensive gas. ($10/mmBTU for large scale users around here).
semi-extrinsic 10y ago
Just to inform the discussion wrt. timescales and magnitudes of power variability, here is a real-time plot of power generation in the UK showing daily/weekly/monthly variations in consumption and in production from nuclear, coal, gas turbines, wind, bio and (pumped) hydroelectric. This is with zero battery storage on the grid (I believe). http://www.gridwatch.templar.co.uk http://www.gridwatch.templar.co.uk
- poooogles 10y ago
  Pumped and normal hydroelectric are split on this. <3 Dinorwig. The tour there is pretty cool if you get the opportunity.
cowsandmilk 10y ago
> If you have a reliable natural gas distribution network, like the rest of the world, batteries don't make any financial sense versus gas power plants. In the US, gas companies seem to be having issues expanding natural gas distribution recently. Plenty of cancelled projects, lots of protests on construction sites, etc.
paulyg 10y ago
Why are people comparing and debating "batteries vs combustion turbines"? Batteries only store energy and you still need to generate it somewhere. Probably from a CCGT plant. And it's not risk aversion. Its buried subtly in the article but part of SoCal's gas infrastructure is shut down because of the leak. They literally can't provide enough gas to generate enough electricity for peak demand. So they will generate over capacity at night, store in the batteries, and discharge during the day. Also what seems to be lost here is that Tesla created it's utility battery products as a renewables play, but are just taking advantage of extra-ordinary circumstances in this case.
- mikeash 10y ago
  People are comparing them because they serve the same purpose here. Base and peak loads on the grid can be wildly different. Without storage, if you want to avoid brownouts or blackouts, your generating capacity needs to match the peak load, even though you might only hit peak load a few times per year. The traditional way to handle this is to have power plants that can be spun up rapidly but sit idle 99% of the time. Because they're idle most of the time, the electricity they produce is extremely expensive. Storage (including batteries, but also many other technologies) can substitute for these plants. You fill the storage when demand is low, then drain it when demand is high. Yes, the energy still needs to be generated somewhere, but you can generate it using existing plants during periods of low demand. If this is cheaper than maintaining peaking plants that mostly sit idle, it's a win.
  - garretraziel 10y ago
    Or you can use PHS: https://en.wikipedia.org/wiki/Pumped-storage_hydroelectricity https://en.wikipedia.org/wiki/Pumped-storage_hydroelectricit...
    - toomuchtodo 10y ago
      You can't build and install pumped hydro in 3 months.
    - sachinag 10y ago
yessql 10y ago
I wouldn't say it's one time. There are many islands (like Hawaii) that have to import diesel to run their generators, which is very expensive. Replacing diesel generation with renewables + storage will be very attractive for a long time.

greglindahl 10y ago

Gas power plants and batteries have different timescales. Grids with a lot of renewable energy need a slice of capacity that can ramp up faster than a gas turbine. "The fastest loading gas turbine models produce 30% load delivery after 7 minutes" -- http://www.wartsila.com/energy/learning-center/technical-comparisons/combustion-engine-vs-gas-turbine-ramp-rate http://www.wartsila.com/energy/learning-center/technical-com... If you've driven a Tesla, you may have noticed that they can reach peak a bit faster than that.

toomuchtodo 10y ago

I'd encourage you to spend 15 minutes researching what the costs are of running a peaker plant. There's a reason they're the most expensive generation method per MWh (peakers run for under 100 hours per year). Revenue is revenue. If Tesla is able to cannibalize the peakers to contribute towards its enormous capital expenditures, and continue to reduce costs with the Gigafactory, it only makes utility battery storage more affordable. There is no scenario where the cost curve per kWh of battery storage goes up.

semi-extrinsic 10y ago
Sure peakers are expensive, but they are profitable, otherwise no-one would build and run them. Supply and demand etc. I'm not sure what you mean by Tesla cannibalizing the peakers? Do they already own traditional peaker plants? I agree revenue is revenue, I'm just saying this is perhaps unlikely to provide more revenue from sales outside CA.
- toomuchtodo 10y ago
  Batteries are now cheaper than peakers everywhere, not just CA. That's what I'm saying. Tesla's PowerPack installs (battery storage receives federal incentives, nat gas does not) will replace peakers, leaving them as stranded assets (the cannibalization I refer to). Edit: unepipe: Tesla packs perform the exact same role as a peaker plant: energy on demand. They are distributed, dispatchable loads and generators, available to draw or release energy from/to the electrical grid as needed, when commanded to do so by a grid operator. I assume I used "cannibalization" improperly in this context. Mea culpa.
  - unepipe 10y ago
    Tesla is not producing peakers, correct?
    - manicdee 10y ago
      Tesla is producing battery storage, which is either a peaker plant or backup for failed transmission lines, take your pick.
  - itissid 10y ago
    Could you share a reference for "Batteries are now cheaper than peakers everywhere"
    - toomuchtodo 10y ago
      Bookmarked to come back to show my math in the morning. The gist is they can absorb power at a cost that is pretty close to free (when there is excess power flowing through the grid) versus burning a fuel whose price is volatile, a steep declining cost curve for batteries, and aggressive federal government tax incentives.
      - forgetsusername 10y ago
        >aggressive federal government tax incentives. I'm not sure that should be included in the cost analysis, otherwise anything can be subsidized to the point of being "cheaper".
crdoconnor 10y ago
>There is no scenario where the cost curve per kWh of battery storage goes up. Lithium shortage.
- kwhitefoot 10y ago
  Lithium is a common element. The difficulty is always that it is rather even distributed making it expensive to concentrate. It's the kind of thing that is solved simply by scaling up. It is in fact more abundant in the Earth's crust (17ppm) than lead (10ppm) and according to Wikipedia <https://en.wikipedia.org/wiki/Abundance_of_elements_in_Earth%27s_crust> https://en.wikipedia.org/wiki/Abundance_of_elements_in_Earth... 2012 production of lead was 5.2MT while lithium was 37kT.
  - planteen 10y ago
    Abundance in Earth's crust doesn't help at all during a supply crunch. Bringing a mine up takes at least 5 years. And your mine is going to be on an orebody, not just processing random rocks. Cobalt is another critical element for batteries I believe.
    - kbenson 10y ago
      Lithium is "mined" by pumping underwater brine to a surface pool and letting it evaporate. The cost effectiveness of this apparently caused most Lithium mines to shut down inthe 90's because they couldn't compete[1]. Lithium is also present in seawater, but they apparently don't have a cost effective way to extract it from that yet. Apparently the evaporation process is 18-24 months per batch though, so there is some lead time, just not 5 years (good), and it doesn't necessarily lesson by all that much if you have the facility already set up (as in you can't necessarily throw more people/machines at it for a short term increase, which is bad). A commercially viable way to extract it from seawater would likely solve any supply problems indefinitely. This, of course, doesn't address the need for Cobalt, but I'm not sure how much is required for the process. 1: https://en.wikipedia.org/wiki/Lithium#History https://en.wikipedia.org/wiki/Lithium#History
  - 10y ago

jakub_h 10y ago

> "If you have a reliable natural gas distribution network, like the rest of the world, batteries don't make any financial sense versus gas power plants." "The rest of the world" also has measurably more expensive gas. ($10/mmBTU for large scale users around here).

semi-extrinsic 10y ago

Just to inform the discussion wrt. timescales and magnitudes of power variability, here is a real-time plot of power generation in the UK showing daily/weekly/monthly variations in consumption and in production from nuclear, coal, gas turbines, wind, bio and (pumped) hydroelectric. This is with zero battery storage on the grid (I believe). http://www.gridwatch.templar.co.uk http://www.gridwatch.templar.co.uk

poooogles 10y ago
Pumped and normal hydroelectric are split on this. <3 Dinorwig. The tour there is pretty cool if you get the opportunity.

cowsandmilk 10y ago

> If you have a reliable natural gas distribution network, like the rest of the world, batteries don't make any financial sense versus gas power plants. In the US, gas companies seem to be having issues expanding natural gas distribution recently. Plenty of cancelled projects, lots of protests on construction sites, etc.

paulyg 10y ago

Why are people comparing and debating "batteries vs combustion turbines"? Batteries only store energy and you still need to generate it somewhere. Probably from a CCGT plant. And it's not risk aversion. Its buried subtly in the article but part of SoCal's gas infrastructure is shut down because of the leak. They literally can't provide enough gas to generate enough electricity for peak demand. So they will generate over capacity at night, store in the batteries, and discharge during the day. Also what seems to be lost here is that Tesla created it's utility battery products as a renewables play, but are just taking advantage of extra-ordinary circumstances in this case.

mikeash 10y ago
People are comparing them because they serve the same purpose here. Base and peak loads on the grid can be wildly different. Without storage, if you want to avoid brownouts or blackouts, your generating capacity needs to match the peak load, even though you might only hit peak load a few times per year. The traditional way to handle this is to have power plants that can be spun up rapidly but sit idle 99% of the time. Because they're idle most of the time, the electricity they produce is extremely expensive. Storage (including batteries, but also many other technologies) can substitute for these plants. You fill the storage when demand is low, then drain it when demand is high. Yes, the energy still needs to be generated somewhere, but you can generate it using existing plants during periods of low demand. If this is cheaper than maintaining peaking plants that mostly sit idle, it's a win.
- garretraziel 10y ago
  Or you can use PHS: https://en.wikipedia.org/wiki/Pumped-storage_hydroelectricity https://en.wikipedia.org/wiki/Pumped-storage_hydroelectricit...
  - toomuchtodo 10y ago
    You can't build and install pumped hydro in 3 months.
  - sachinag 10y ago

yessql 10y ago

I wouldn't say it's one time. There are many islands (like Hawaii) that have to import diesel to run their generators, which is very expensive. Replacing diesel generation with renewables + storage will be very attractive for a long time.