Tesla, the electric car company, is announcing today that it will begin providing batteries to power households and utilities. Already, the blogosphere is catching fire with excitement over the new PowerWall product. But many articles on Tesla’s new battery system miss an essential detail: Just how do you charge a mega-battery pack?
Some people assume Tesla’s PowerWall system will lead to a mass exodus of people from traditional utilities – millions of people essentially going off-grid in suburbia. To go off-grid with the Tesla battery, you’ll need a solar panel system or at-home wind turbine that can provide slightly more than your total daily energy needs. The batteries would charge up mid-day, and discharge during the night.
But Tesla’s isn’t only looking at its marketshare as off-grid systems. Major utility companies could buy into a grid-tied Tesla system. For a grid-tied system, the batteries’ greatest benefit is by shifting nighttime power generation (when electric demand and prices tend to be lowest) to peak demand periods in the afternoon (when electric demand and prices tend to be highest). Some utility companies already store nighttime power with pumped-hydro storage. In order to “charge” the pumped-hydro stations, utilities have relied heavily on coal and nuclear reactors – baseload power plants that typically do not turn off at night and have difficulty following hourly loads. But, since no new coal-fired power plants are being built (and a flurry of coal-fired power plants are expected to be retired in the next few years) and a nuclear renaissance appears to be on hiatus, PowerWall’s success depends on a different low-cost nighttime energy resource: wind power.
On the evening of February 19th, wind power in Texas reached a new record: the statewide capacity factor for all wind farms reached 83%. So much wind power was being supplied that Texas’ grid operator that the Electric Reliability Council of Texas (ERCOT) reported wholesale electricity prices reached near zero and, in some cases, rates went negative. Using the lowest cost energy resource available is vitally important to battery economics. Without low-cost wind power, utilities may shy away from Tesla’s PowerWall.
Historically, the argument has been that renewable energy resources (like wind and solar) desperately need batteries in order to be viable energy resources; but that’s no longer the case. While PowerWall is likely to be dependent on cheap wind power, battery storage is not needed to accommodate higher levels of wind energy. The American Wind Energy Association notes in its blog, Into the Wind, “Large amounts of wind energy are already being reliably integrated….In the U.S., numerous peer-reviewed studies have concluded that wind energy can provide 30 percent or more of our electricity without any need for energy storage.” Some states already receive more than 25% of their annual electricity from wind power and the United States generated 4.4% of its total electric demand from wind power last year.
So, just how expensive is wind energy? The answer will probably shock you.