The Tesla Battery: What it means for Your Future Energy Needs

When Elon Musk stood up and made his dramatic, yet incredibly modestly stated, announcement of the Tesla PowerWall for home installations on April 30th just one month ago, a major tremor went through the boardrooms of the Coal, Gas and Nuclear industry.

A number of commentators have noted that Musk announced nothing technically new. What he did was he packaged up known technology, developed for his car manufacturing program and delivered the missing piece of the alternate power puzzle: A complete system.powerwall_front_angle(Image courtesy of Tesla Energy)

In doing so he followed in the footsteps of Thomas Edison and Henry Ford, by delivering not just the interesting concept of a 7 or 10kWh battery storage device (With Edison it was the better light bulb), – but the necessary system to go with it. A storage system which captures both variable wind and solar energy and delivers it at times when the capture device is not able to generate electricity on its own allows a grid-free ecosystem. Edison had done the same by mapping out a network on how to deliver electricity to homes and industry that would make the better light bulb actually useful. Ford broke down multiple complex tasks and developed a system to make the addition of each of these managed steps capable of bringing affordable cars to the masses, so long as they chose the one colour he initially offered.

In a world where Climate Science is constantly questioned by people with an agenda to defend the status quo, the last remaining hurdle – meeting the needs of peak load, on or off the grid, with storage designed to deliver energy when needed, mainly between 4.30pm and 7.00pm or at midday in the tropics when air-conditioning demand on the hottest days can swamp home-cooking energy levels, is solved with economic battery storage.

The GigaFactory in which these PowerWall storage devices (that can be stacked in multiples for higher stored energy needs) will start churning out these devices later this year and reach capacity production early in 2016. The first year’s production was, reportedly, sold out within the first week after Musk’s announcement. Tesla may even start work on a second such factory, as the land has already been earmarked in the Nevada desert. Ironic that this was the same desert in which thermo-nuclear devices were first tested in the mid-1940’s before Hiroshima and Nagasaki.

Although the Tesla system does offer new price/performance standards, Musk’s team will not be alone in having available solutions. Panasonic, the Giant Electrical Corporation of Japan, who two years ago acquired Sanyo largely for their battery technology, has also intimated that they will be bringing to market comparable offers. China, which now boasts the largest wind turbine and solar panel production capacity (and a rapidly growing installed base of both,) also suggests products about to come to market that will support base load grid-free electricity that is highly competitive, especially in remoter communities. The social impact on Australian remote Aboriginal Communities alone could be ground-breakingly positive.

It seems to be generally accepted that the raw cost of coal-fired power is typically in a range of US$0.04 – 0.06 per kWh. The price we pay is largely determined by the distribution network. In many countries this infrastructure is ageing, or has been recently upgraded at huge cost to consumers, so prices (as opposed to cost) now typically are north of US$0.25 a kWh, a price with which a 10 kWh solar + stored energy system, off-grid can compete with, largely without subsidy.

The IMF (International Monetary Fund) published a fascinating study into energy subsidies this week. The real meat of this 41-page working paper comes after Page 18. In the chart below we see the scale of the subsidy. Mainly to coal and oil. We are talking over 3% of Global GDP. And the reason is that the mitigation costs of pollution and environmental impact have now been added back in.


(Chart from IMF Working Paper: WP/15/105 – How large are global energy subsidies?)

For the Australian government to carve $2B out of the ‘subsidies’ to solar and wind energy in their budget without also fully informing its electorate what costs we are subsidising in the production, transport and export of coal, is both bankrupt and misleading thinking. It’s straight bad economics, regardless of how foolish it is environmentally.

In the 2014 Energy Update from BREE (The Australian Government Bureau of Resource Economics) the 3 following facts on electricity generation caught my eye.

  • “Total electricity generation in Australia continued to decline in 2012–13, by 0.3 per cent to 249 terawatt hours (897 PetaJoules). This reflects the fall in electricity demand in the industrial and residential sectors in recent years in the National Electricity Market, although has been partially offset by continued growth in off-grid generation.
  • Despite a 7 per cent decline in coal-fired generation in 2012–13, coal remained the largest source of electricity generation in Australia at 64 per cent. Natural gas accounted for 20 per cent of the electricity mix in 2012–13, with gas-fired generation rising by 5 per cent.
  • Renewable generation rebounded in 2012–13 to rise by 26 per cent, to comprise 13 per cent of total generation in Australia. Most of this growth is attributable to increased hydro energy generation, although wind and solar energy also continued to grow strongly.”

Energy efficiency in household lighting and electronics is clearly contributing to reduced electricity demand. But so is the decline in manufacturing, which is long- term less desirable for existing jobs. If we are to make a meaningful impact on improved environmental outcomes to mitigate Climate Change in the world, we have to be clear what the true costs for each factor of energy production are. With efficiencies in solar capture rising each decade by several percentage points (Best practice efficiency in Solar PV is in the 21-22% level, with over 25% in labs), and integrated new generation systems from Panasonic and Sun PV, we should begin the debate on which subsidy is most consistent with the environmental outcomes we need for the future.

As Tesla now gives us real base load solutions, and others will be following soon after, the future for not only achieving the RET (Renewable Energy Target), but logarithmically surpassing it, is increasingly bright.

But it will also need an informed community. And to do that community funded organisations like Australia’s The Climate Council will need to be resourced. Funding is vital to ensure that agenda-driven media and existing Energy financial vested interests do not out-vote informed discussion and priority setting. Since the current Australian government is so hell-bent on placing it’s head somewhere clearly where the sun does not shine on environmental action, it’s up to you and me to ensure we play our part in moving minds for real action on Climate Change, now, while there’s still time.

In a future article I will explore ten quick steps most households and businesses can undertake to ensure a 15-20% reduction in their energy consumption and release of Carbon Dioxide and other human impacts stimulating temperature rise. Such low-hanging fruit frees up other resources to gain up to another 10% through use of new insulation and preventive losses, all with very fast payback.

© Copyright John Swainston, 2015