Interest in battery storage systems has grown rapidly following the announcement by Tesla’s visionary CEO Elon Musk of its Powerwall and Powerpack systems, respectively for home and commercial and utility applications. [Engerati-Tesla Batteries Trial In US]
Although deliveries have yet to start – they are due anytime now – the batteries are reported to be sold out through 2016, even with production expected to ramp up during the coming year as it gets under way at the company’s new Gigafactory near Reno in Nevada.
Industry reconsiders strategies
These developments have had two main impacts. First, it has forced companies to reconsider their strategies. For example, GE is now reinventing its approach and believes it can become a “sizeable player” in the market, according to a recent Reuters interview with the company’s general manager for energy storage, Jeff Wyatt.
Second, it has highlighted the potentially significant role of the automotive manufacturers in battery storage delivery.
Tesla’s batteries use the same technology as in the batteries for its electric vehicles (EVs). Since then, Daimler has also outlined its intentions in the market through its subsidiary Deutsche ACCUmotive, indicating that its first industrial-scale lithium-ion storage unit is already on the power grid in Germany. The unit is operated in cooperation with The Mobility House and GETEC, and there are plans for cooperation with EnBW in the private customer segment.
Daimler’s batteries are used in the Mercedes-Benz and Smart brands. For use in the private sector, up to eight battery modules can be combined to produce an energy storage plant with a capacity of 20kWh. This move, which includes intentions to enter into cooperation with other sales and distribution partners both in Germany and at international level, offers “fresh opportunities for growth,” according to a company statement.
Auto manufacturers see the home energy opportunity
With the moves to renewable energy, both at utility and residential scales as carbon reduction targets come into play and the technology costs drop, the move by auto manufacturers into the storage market makes a lot of sense.
Most, if not all, are involved in the development of electric vehicles and thus have batteries available. Some of the Japanese makers, including Toyota and Honda, are also involved in smart home and smart city development. Toyota City, for example, is one of Japan’s four top smart city initiatives.
Auto manufacturers also have an edge on awareness, as they are all well known among the public, many of whom have strong loyalties to particular brands. They also have an existing distributed supply chain and dealership in place, which can be exploited to ensure ready supply and availability.
Second use battery opportunities
There are also the second use opportunities of EV batteries, which can have typically 70-80% of their original capacity.
Various initiatives are under way to test the use of these for grid storage. [Engerati-Grid Storage Brings Second Life To Electric Vehicle Batteries] A recent study from the US National Renewable Energy Laboratory (NREL) found that the batteries would become available at the end of the service life of the vehicle (estimated 15 years) and could provide a second use service life of 10 or more years.
The most promising applications include grid-connected combustion turbine peaker plants replacement, and peak-shaving services where the duty cycles are relatively benign, generally much less than one cycle per day with discharge durations of greater than one hour.
Battery costs are rapidly dropping, which together with the declining renewable energy technology costs, will enhance the distributed generation proposition and further strengthen demand.
Given these factors, other manufacturers are expected to enter the market – and for them not to do so would be a lost opportunity.