Thứ Tư, 23 tháng 11, 2016

Tesla Stationary Storage Investors Thread part 5

  • Jul 20, 2015
    jhm
    It may be worth considering the strategy of pricing the Powerpack so low. I think they are trying to shock the market and impact the multi year planing cycle of utilities and other business and also impact policy formation. With such a low price this will create a substantial back log. This may also drive less serious competitors out of the market. Additionally, any firm considering investing in a new gas peaking plant had better revisit their assumptions. So stalling new fossil fuel plant project may be one policy objective. But with an excruciating long back log, they may be able to motivate some buyers to enter off take agreements to help finance the rollout of gigafactory capacity. Becoming an off taker would be a way to get around waiting for years on a back order. So I'm not sure exactly what motivated this pricing, but there are many interesting consequences to consider.
  • Jul 23, 2015
    pz1975
  • Jul 23, 2015
    jhm
  • Aug 5, 2015
    Johan
    Elon on Q2 conference call bringing up the fact that the Powerpack doesn't necessarily have to be coupled with renewable energy sources, that it can increase greatly the value of a traditional fossil fuel powered generation plant, that "it makes sense everywhere". Basically he is confirming the idea we've had in this thread - that adding Powerpacks to any powerplant greatly increases it's dynamic range of energy delivery.
  • Aug 5, 2015
    Foghat
    elon was saying they can close down half the world's peaker plants with powerpacks. His point is we can cut fossil fuel use by half just with the implementation of Powerpack in current utility structure.

    Traditional Utitlities do no like this since they have such significant investment in peaker generation in the United States and many seas around the world. However, this does not mean there are big utilities not going to buy a crap load of powerpacks.

    Powerwall is going to be massive with the advent of aggregation. Elon not taking about this because he wants to court big utitlies. Two pronged attack: Solarcity with DG storage, Elon and tesla on big utitliy storage. The combination will change the entire energy economy in an accelerated manner. End goal is fully sustainable energy production (and consumption) economy.
  • Aug 5, 2015
    ggr
    Sorry, disagree. Ignoring (as he was at the time of the answer) further deployment of renewables, what he said was that you get to shut down half of the peaker plants, or not build them anyway. But that doesn't cut the fossil fuel use by 50%, by any means. It will still mostly take a certain amount of fossil fuel to produce the same total MWh of energy. I say "mostly" because peaker plants tend to be less efficient than plants optimized for continuous power production, otherwise it would still be the same amount of fuel.
  • Aug 5, 2015
    Johan
    This is correct. But any new peaker plants not built is a good thing for the environment. Running existing powerplants at steady levels may increase efficiency which over-all is positive for the environment. The economical aspect, for the plant owners, is grim: many newly built peaker plants may never generate enough revenue to down-pay their own build and run costs.

    As Powerwalls get applied at an exponentially increasing range 2016-2017-2018 it's going to really stir the pot in the power plant market.
  • Aug 6, 2015
    bonaire
    Not completely. You can possibly cut down some cold standby plants (those which are not running "hot" but offline) and also drop some synchronous standby (peaker plants running but not on the grid). But you cannot cut fossil fuels used by base-load plants. Actually think about the overnight. The baseload plants will run harder - charging both batteries in cars and in storage devices. Then 10-18% of the battery charge loaded into the stationary storage is lost to round-trip efficiencies. That is offset by the power not demanded mid-day during the peak cycle which can lead to lessened peaker plant demand. That is in "today's world" of 7 billion. What is happening in Asia, primarily, is a humanity bloom of population which requires more power plants. Population will reach 9 billion by 2050. Peaker plants are one thing but many dozens of base-load plants are being built now. We are talking "peaker plants" which are used a much lower amount of time versus baseload which is the 800 pound gorilla. Cutting some peaker plants is not going to do much for the overall power picture.

    But what is not discussed is how much fuel is used by peaker plants in sheer volume compared to the fuel used by base-load plants. Many plants which are baseload are both coal, nuclear, natural gas and then hydro and renewables. Remember too that H20 vapor (water vapor) is the #1 global greenhouse gas, not C02. Most power plants turn river water into steam to turn generators and thus are a cause of their own pressure on the environment in terms of loading it up with water vapor, C02 and other chemicals. The steam off a nuclear plant is not helping with global warming by loading additional water vapor in the air (as a base-load plant). Shutting down that plant would also help as well even though Nuclear is not using much fossil fuels at all. But batteries are not an energy producer; rather a net energy consumer and thus batteries are in-turn needing renewables to offset their extra use of the baseload plants. Adding batteries alone without an offsetting renewable input source to supplement them is not going to do much overall for fossil fuel decrease.

    So, ggr is correct. Talking about shutting down peaker plants is somewhat minimal in the overall global power production picture. Some peaker plants are required by regulation of the FERC to be kept running even if not connected to the grid. The reason is because some plants need to go into service with short notice. Imagine a nuclear plant running two turbines gets an alarm and must shut a turbine down with little notice. FERC regulation states that they alert local suppliers to bring generators online to the grid to offset the loss of the nuclear turbine. That is the real reason for peaker plants along with freq. response to hot afternoons or other demand spikes. Peaker plants are an insurance policy to offer grid users a smooth experience. Otherwise, we'd be more like the Caribbean where some islands experience 3-4 power failures per day for short periods. The North American grids are actually very stable due to peaker plants and there's nothing wrong with them - maybe they can be changed-over to batteries if the price is right. In fact, batteries would last decades as a peaker plant because they'd not be called into depletion status very often - maybe 30-50 full cycles a year compared to a daily discharge as a peak load shaving solution.

    Some reading: Natural gas-fired combustion turbines are generally used to meet peak electricity load - Today in Energy - U.S. Energy Information Administration (EIA)
  • Aug 6, 2015
    JRP3
    I don't think increased H2O vapor has an overall effect since it will be returned as rain.
  • Aug 6, 2015
    dalalsid
    And also has global humidity been on the rise like CO2 levels? If so, it would make sense. But quick google shows dropping humidity levels
  • Aug 6, 2015
    bonaire
    I am not saying that water vapor is or is not a factor - but that the scientists state that it is of course the leading greenhouse gas in our atmosphere which is hardly ever discussed.
    When water vapor gets angry, though, it is the major cause of much of our problems. Hurricanes. The energy in a hurricane is a localized vortex feedback loop within the molecules of air and water vapor entrapped. People hate hurricanes mainly because they want to live by the water - and when the weather is nice, not many places are better than a seaside location. In a way, isn't this a form of "real-estate greed" - where living in the nicest of spots should be protected in ways that include our own attempts to change the planet's climate cycles? It's a form of saving face because we (silly us) built big expensive cities on the waterlines in various spots like Beijing, NYC, London, Amsterdam, etc, and fixing those cities to support a large oceanic rise of up to 5-10' is a cost we may not be able to easily bear? Maybe we have to face that we were pretty ignorant of the long-scale of ice history until the past century's scientists discovered what they did in the antarctic ice. Sea levels were 20-40' lower a couple thousand years ago. But no records really exist. They haven't risen that much in the last 100 years, actually. How much is sea level rising? The graph there shows that rise was happening in the early 1800s and the slop is not really as much of a ramp as you'd expect with the industrialization since 1900. But the slop is an increasing slope, and that is visible in that graph. It seems to be a gigantic gentle uptrend and that means it takes a gigantic amount of effort to reverse the trend. Rather than pushing an ocean-liner with a tug-boat, this is like trying to push the island of Kawaii with a a speed boat. I believe such large and long trends of such a graph shown in this sea level rise chart may be impossible to change by slightly altering our emissions alone. We have to look further into the earth's axis angle as it has wobbled over the last 24,000 years and some of that comes into play with the amount of sun hitting some parts of the globe over time. Axial precession - Wikipedia, the free encyclopedia and Ice Ages and Earths Wobble - Astrobiology Magazine

    Anyway - here's something to check out. Thanks To The IPCC, the Public Doesnt Know Water Vapor Is Most Important Greenhouse Gas | Watts Up With That?

    There are really multiple angles in this environment model and perhaps many of them are not conflicting but constructive of each other. But can our distributed humanity and various culture really come together to fix things or are we fighting a horrible uphill battle of hope?

    There are a whole lot more things that can come into play longer term. One is the moon's location is continuously getting farther from the earth by just under one inche a year (I am taking a very long term view on that). This can lead to rotation and axis changes for the planet longer-term and less tidal pull as well. We want less tidal pull if the oceans are going to be rising slightly. Who's got all the answers? Nobody, really. I think science and its discoveries are just helping focus on the bigger macro picture of the inevitable long-wave changes on a dynamic planet. I think our biggest problem as humanity is everyone thinking they have all the answers and the infighting when each group want to be right.
  • Aug 6, 2015
    Johan
    This is stupid. Sorry Bonaire, it's cool to keep an open mind, to question things, to think outside of the box. But you don't think the climate scientists pretty much have it nailed down by now? At least the big strokes? Let me give you the short version: CO2 is at the core of the issue, the rest is secondary.

    This talk about water vapor is just obfuscation, something the deniers have been very good at until recently. Don't get in to it. They love to play with smart people's minds, make smart people think they're clever for bringing up new ideas, for being a little contrarian. Well, guess what, this whole global warming thing is complicated of course, but in another way easy: too much CO2 is the issue, in practice not much else matters.
  • Aug 6, 2015
    dalalsid
    I ran into another article at the whatsupwiththat site which "intelligently" spoke about how solar panels and renewable energy are no good and will not solve any problem. Within that is also pointed out how Google has given up on renewable energy and how it would take a 1000 years to go 100% solar and concludes that proponents of renewable energy have entrenched business interests and cannot solve any energy problems except on a very small scale and are deluding the public or some such.. I refuse to read anything on that website anymore simply because I might get motivated to start responding to the nonsense there and get entangled in battles with online trolls. I already face that on seeking alpha enough.
  • Aug 6, 2015
    JRP3
    In fact much of what bonaire posted has been thoroughly discussed, and debunked, in the global warming thread here on TMC.
  • Aug 6, 2015
    Ampster
    I am aware of two types of aggregation, Community Choice Aggregation and NEM Aggregation. Tell us more.
  • Aug 6, 2015
    Foghat
  • Aug 8, 2015
    Ampster
    Good article. Thanks.
  • Aug 8, 2015
    AudubonB
    Gaak! Bonaire, I'm hoping to keep this post from bouncing over to snippiness, but, quite frankly, just about all of it is on the same level of accuracy as its assertion that Beijing is "on the waterline" (ie, coastal). Crikeys.
  • Aug 9, 2015
    MitchJi
    Hi,
    No. He said that it's possible to close down half the world's power plants with powerpacks. It is great to know that this is possible, it will be a big help with the transition to wind and solar but it isn't economically viable now.
    http://rameznaam.com/2015/04/14/energy-storage-about-to-get-big-and-cheap
    OTOH replacing 100% of the world's peaker plants with powerpacks is economically viable now.
  • Aug 9, 2015
    Johan
    That's right Mitch. This, as jhm has speculated, is going to be a real problem for utilities/companies that have recently built and presumably financed new nat gas peaker plants. The owners, as well as the financiers, have likely calculated a timeline for down payment and profitability based on getting paid some quite high peak (premium) rates for electricity generated. These profits may never materialize, at least looking only a few short years ahead.

    In fact, if someone knows of some publicly traded company in California whose business is highly dependent on peaker plants I'd be seriously interested in learning about them and considering shorting them in the market.
  • Aug 9, 2015
    Foghat

    Thanks, that's what I actually meant(writing that post right after conference call)... Half of the power plants are seemingly all peaker plants. The interesting thing is Elon said at utility conference that powerpack can literally fit at presumably all substations right now in a nearly plug and play situation. That is astonishing and quite shocking to many utilities. I think there is a lot of back room discussions going on at investor owned utitlity board rooms right now how they can do this. Unfortunately, many are just too far down the line on future natural gas investments they are more inclined to try and stall tesla momentum then accept them. However, this provides big oportunities for other utitlies to invest in powerpack full tilt. I think we'll see big investments in New York and Hawaii very soon. California as well. Surprisingly, I feel some utitlies in Texas will also be among the first. It's funny how net metering is not policy in Texas, but Solarcity has a partnership under net metering model with a Texas utility. So, I think good business is good business and we may well witness massive shift toward powerpack (and DG) as soon as 2016.
  • Aug 10, 2015
    jhm
    I'm glad you guys resolved the question of how batteries shut down half of the fossil generation capacity without even accounting for wind and solar. The basic observation is that the globe has 6 TW of beneration capacity and generates about 60 TWh per day. That's just 10 hours per day of utilization. With sufficient batteries the least efficient generators (mostly peakers) can be shut down while the most efficient generators run 20 or more hours per day. That knocks out about 3 TW of capacity.

    The next kick in the pants for the remaining 3 TW is the continued intrusion of renewable energy. With sufficient battery storage solar and wind become fully dispatchable. So every TWh that solar and wind produces in a day offsets the need to spend fuel generating a TWh of electricity in the 3 GW thermal fleet. Year after year more solar and wind are added, which displaces more and more fuel that would otherwise be spent. So demand for fossil fuels within electricity markets falls as quickly as renewables can be added to the mix. This reduces fossil fuels to playing a niche role to balance out seasonal and emergency backup gaps in renewables.

    Another thing to understand about fully dispactable renewable energy displacing fossil fuels is that the price of renewable energy will put a cap on the price for natural gas and coal. Combined cycle natural gas generation has a levelized cost in range of $61/MWh. But we see that utility scale solar and wind are approaching $39 and $25 per MWh respectively, and these costs will continue to fall. So as the inclusion of batteries effectively makes solar and wind fully dispatchable, there is little to protect CCNG and coal from direct competition with lower cost renewables. That is, natural gas will have to fall enough that the levelized cost of CCNG generators drop below $40/MWh. So over time the price of natural gas must fall another 50%. Demand will dry up for any significant market above that half price. Note that the price of natural gas and coal have fallen about 75% in the last 5 years, and I figure that it must keep falling another 50% over the next 5 years. I believe this squeeze of fossil fuels is also what has been driving down demand for crude. Petroleum fuels used in generation power and heating are taking a beating by natural gas. WhIle this may not seem like a huge share of the barrel, demand for crude historically grows at less than 2% annually. So disrupting smaller markets for oil products and modest increases in fuel efficiency can kill off sufficient demand to halt growth. So we see the oil producers struggling to hold onto market share in the face of declining demand. Batteries will enable renewables to better compete with natural gas, which in turn will continue to force out oil and coal. Oil continues to have a huge advantage in transportation, which is why the price of crude has only lost 50% in the last 5 years, but of course batteries are key to disrupting transportation fuels.

    So my view of fossil generation in the next ten years is quite bleak. I don't see how anyone will be able to make money in that business. This means the utilities must get out of the power generation business. They need to locate themselves elsewhere in the power supply chain. This will be a radical shift grommets generation as a profit center to service and distribution as a profit center. Buying into batteries could give utilities what they need to survive this transition. But what if they refuse to take that way out? Suppose they think they can forestall the collapse of the generation business by resisting batteries just as they resist distributed solar. I belive some will take this tact, but it will be a disaster. Basically, if the utilities do not load up on batteries, their customers will. This is the option of mass load defection. The economics of distributed solar and batteries will continue to improve while the battery resistant lose massive market share. Moreover, these utilities become vulnerable to DG strikes, for example a coordinated effort to charge batteries at times of peak wholesale power prices to force a utility to buy power at a loss, and other political decay. If utilities allow ratepayers to get the upper hand on batteries, ratepayers will have greater ability to manipulate the grid than the utilities, and utilities will be forced to pay for aggregated services. So from a purely strategic point of view, I think the utilities cannot afford to let ratepayers get more storage than them. So utilities must buy more Powerpacks than ratepayers buy Powerwalls. It's a veritable arms race, and we'll be able to see who's winning just by observing the split of packs versus walls.
  • Aug 15, 2015
    bonaire
    The point is you won't build new peaker plants. You will create a distributed battery storage "environment" out at sites around the country. A peaker plant may take up say 50 acres. While batteries installed at businesses, college campuses, factories and more can act as the peaker plant - and signaled by regulation signal for output (ie. "generation") should there be a call for raised output. Islanding a hospital or university on their own power generation capacity has also been done during peak loads. One further benefit is that some standby-tubes at a hydro plant can be kept shut instead of opening during peak load periods - thus saving some hydro resources from flowing downstream. Critical in areas like California and other western locations. But the other issue is "who pays for the battery storage"? Should it be taxpayers or the rate-payer? We all pay for the peaker plant through the market forces of energy generation wholesale and distribution. But when a battery system is installed at a university, should we really be paying for that if primarily the benefactor is that university and their ability to lower their peak demand rates paid to the utility? The same benefit occurs when they draw less from the grid and thus our energy company doesn't need to pay the peak-demand market rates (up to a few hundred per MWh on the spot market, at times). Distributed power storage means distributed benefit and less of a community-common system.

    Once cheap enough, energy distribution companies (who buy power from regulated market generators) will buy their own battery subsystems and be able to manage their costs better - this also helps all rate payers due to the lessened need to pay-through to the higher-cost peaker plant generators.
  • Aug 15, 2015
    jhm
    Bonaire, I'm right with you on this. I think the cost storage will actually be far less than most would expect. Five reasons why: They can be widely distributed everywhere power is used or made and thus minimize the cost of locating. They produce the auxiliary benefit of backup power, so certain users are willing to pay more than the rate arbitrage value of battery for installation. While distributed geographically, they can be aggregated through the internet, so coordination provides operational efficiency and added revenue streams for those paying to install. Distributed batteries can reduce transmission and distribution costs to the grid, and should be compensated for distributional efficiencies they create. And finally, they are modular and can be redeployed for one location where the return may be low to another where the return is low. This substantially de-risks the investment. Just install and redeploy as needed to optimize. By contrast, a gas peaker plant is a long-term investment, with tight sighting limitations, does not all users to pay for backup benefit, and cannot be redeployed should the investment prove suboptimal. So basically batteries can dance circles around peakers.

    It's a little bit like the competition between truckers and railroads. Rail carriers can provide cheap bulk shipping of goods. But trucks are much quicker, more nimble, even if they cost a little more. The breakdown of this analogy is that batteries will be both cheaper and more nimble. The key problem is that production of batteries has yet to scale up.

    Whether you like that analogy or not, the key point that I would like to make is that the price storage will be offered to the grid could easily be very close to the cost of the battery. For example a Powerpack at $250/kWh with nominal 5000 cycle life works out to a evelized battery cost of just $50/MWh. Now what about all the other costs of siting, installation, inverters, maintenance, taxes, insurance, etc, and profit? Would anyone actually offer storage to the grid at a price of just $50/MWh, or would it get grossed up to say $100/MWh? I actually think the price of storage will go quite close to the battery cost. Why? Because the most economically efficient locations for batteries will take advantage of smart co-location (like using an existing substation), leverage existing power electronics (such as using the same inverter as solar panels), provide added value such as backup power to owners, and aggregation services will provide multiple streams of revenue (such as voltage regulation in addition to storage). So if batteries are finding all sorts of ways to minimize incremental cost and add value wherever they may be distributed, this goes a long ways in covering the non-battery costs of selling storage to the grid. So my view is that as a sophisticated storage aggregation market emerges, the price of storage offered to the grid will be quite close to the cost of the batteries alone.

    Why this matters is that the price of storage offered to the grid places an arbitrage bound on the range of daily prices in the spot market. So if there is sufficient wind and solar to drive the spot price down to say $20/MWh and the price of storage is $50/MWh, then spot prices are bound above by $70/MWh for the next 24 hours or so. Thus, the price of storage does two very important things: it prices expensive peak power out of the market, and it provides a floor price for wind and solar. Only those generators which can turn a profit in a market bounded between $20 and $70 per MWh will be economically relevant going forward. This is really bad news for most fossil fleet operators, but very good news for renewable energy and batteries.
  • Aug 16, 2015
    bonaire
    I always want to add in the demand must actually be addressed and hopefully lowered through a concerted effort. Whether it is institutions moving to lesser-demanding lighting (LED over incandescent) which itself can lead to less A.C. load in buildings and in turn less demand, use of more LED televisions over CRT types or just general deployment of Solar PV.

    Remember years ago when the big calling card of Solar PV salesmen was "the reasons for all the incentives of the states and federal tax credits for Solar PV are to cut the need for peaker plants". It was a line said to me in 2010 when two installers were talking with me about doing a project. I waited two more years to do it with another local installer who I contacted and wasn't trying to be "sold to". Since Solar PV itself was "supposed to" help cut the demand for peaker plants but has not really done that, now we look to batteries as a way to avoid peaker plants. The combination is needed, actually and not just one or the other. Hundreds of GWhs of batteries alone can help a bit by charging at night off of baseload plants and dumping during the peak hours. However, FERC-regulated regional operators still need to rely on some level of peaker plants and synchronous standby until the regulations change. Even if they are never called upon, the grid relies on synchronous standby being ready in case a plant needs an emergency shutdown action (ie. nuclear plant trouble-alarms going off would be one). With many dozens of GWh of batteries out there, there is still the unknown of how long the baseload plant will be down for and could other baseload be brought online quick enough to not use-up any regulated aggregated battery ecosystem. The grid is designed around the worst-case conditions and blackouts and black-starts are something they really need to avoid at almost "all costs".

    Trimming the "peak load" has sort-of happened in many ways "by attrition". This attrition has been a lot of this nation's factory operations ceasing where the thousands of factories and millions of jobs have gone overseas. In turn, it has not come back directly but indirectly through things like new home construction, vacation homes kept cool (even if vacant) with their AC load (including homes bought by overseas interests) and general growth of the US population. I've heard that there are possibly 10 Million surplus homes in the USA (ie. vacant or part-time use). I know of numerous within 2 miles of my home. And at the same time, the growth of the Solar PV industry has kept demand down in some ways during mid day to mid-afternoons. But peak load is still "the problem" and in places like California, that is 5pm through 9pm. Solar isn't cutting it for that window except a small benefit from West-facing arrays and tracker systems allowing for late day solar generation. But throw in a hot, muggy day and a weather front moving in with clouds and all of that solar pv benefit is lost for that day and the outlier condition occurs.
  • Aug 16, 2015
    jhm
    I'm trying to remember what the capacity standby fee in California was. I think is was something like $190/kW/year. It seemed high, but this may be because the revenue from generation has been declining. Basically as utilization of peakers decline, if their standby capacity is still needed, then standby fees will go up sufficient to keep capacity online. This sort of situation shows the falacy solar putting peaking plants out of business. Solar can reduce the utilization of peakers, but contribute to needed standby capacity.

    The big difference with batteries is that batteries can contribute standby capacity. In fact, batteries can earn standby fees which also drive down price of storage. Consider that new gas plants cost about $1000/kW to install. The standby fee of $190/kW/year goes against the capex of a peaker. By contrast, the capacity cost of Powerpacks is $500/kW plus costs of installation. So Powerwalls should be able to compete well in the standby capacity market. Three years worth of standby fees could fully pay for the battery.

    With the new economics and the superior performance of batteries, I expect the regulatory needs for peaking plant will be adjusted to allow batteries to provide those same services. I'm not really worried about that barrier. It will come down after the economics for gas peakers have been fully trashed.
  • Jan 14, 2016
    MikeC
    PowerWall definitely shipping: electrek.co/2016/01/14/tesla-shipping-powerwall-crate-spotted/

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  • Jan 14, 2016
    Ampster
    What is also needed is some communication protocol so that lots of small storage batteries can be summoned quickly. I think the California ISO recently put out and RFP for that. I also read that Green Mountain Power is packaging small systems so they must have designed a communication system.
  • Feb 23, 2016
    stealthology
    I'm a little bummed out that in recent quarters, Elon has shied away from analyst questions regarding his previous statements of 'over $500m in stationary storage revenue in 2016 and maybe 5-10x that for 2017' ($3B+).

    Is anyone concerned about competition in regards to Tesla Energy? I.e. Panasonic, LG, or other asian battery manufacturers undercutting Tesla due to lower labor costs, etc. I remember over a year ago Elon saying that he expects stationary storage revenue to be roughly double that of car sales revenue in the long term.
  • Feb 23, 2016
    Fallenone
    I think it's still the cost and scale. With the current phase I GF, they cannot get a decent gross margin on TE (per 2015 Q4 letter) and most likely have a negative net profit on it. Personally I think they already gave up the 400m-500m sales target for this year.

  • Feb 25, 2016
    hobbes
    teslamag.de reports powerwalls have arrived in Germany for delivery this week - here is a translation of the web site of the company selling them in Germany with a pic of the powerwalls they received:

    Google Translate ?
  • Jun 16, 2016
    Gerardf
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