The Renewable Energy Puzzle is Complete
How Lithium-Ion Batteries Are Enabling Unprecedented Solar and Wind Deployments
The last six months have seen some big developments for alternative energy. 2016 US solar power production surpassed the 100GW-per-day mark and two landmark offshore wind farms have been permitted off the Atlantic coast that will generate over 500 MW of power. This is all great progress, but what is perhaps most exciting is the movement we have seen in the energy-storage market. Two separate California utility companies have brought nearly 80 MW of energy storage online — surprisingly with two different vendors. In just under a year, the State of Hawaii has seen the consumer cost of battery-backed solar power plants fall from $0.13/kW-h to $0.11/kW-h, showing just how quickly economies of scale are improving (for reference, the average American paid $10.3/kW-h in 2015 while the average Hawaiian paid $0.27/kW-h.) The oft-touted “range anxiety” of the renewable energy grid is finally losing traction, just as we have seen in the electric-vehicle market.
Lithium-ion batteries have received widespread coverage for major safety concerns, most notably for the Boeing and Samsung Galaxy Note 7 combustion issues. At the same time, global production and consumption of lithium-ion batteries is on the rise, with some estimates showing a 500% increase in global lithium demand over the next decade. We are, counter-intuitively, all clamoring to use a seemingly dangerous technology.
The reason lithium-ion batteries are the frontrunner in energy storage is simply that they are the best option currently available.
Addressing the safety issue first, consider the history of natural gas. In 1937, around 300 children were killed in Texas schoolhouse when a spark from a sander ignited an undetected gas leak and caused a massive explosion. We have not abandoned natural gas; in fact, it is more widely adopted than ever before. In the intervening years, the government, companies and other regulatory bodies have figured out how to use natural gas safely and reliably. Lithium-ion, a technology that has been in mass production for only 25 years, is facing — and will continue to face — some of these same challenges. However, the availability of highly accurate real-time monitoring devices is foreshortening this learning curve and is already leading to safer, more reliable lithium-ion solutions in the market.
The reason lithium-ion batteries are the frontrunner in energy storage is simply that they are the best option currently available. Lead-acid batteries have been around since the 1860s, but lack the energy density (the amount of available power per cubic inch or pound) and longevity to be economically viable as energy-storage solutions. Lithium-ion, on the other hand, has three times the energy density and up to eight times the cycle life. It is hands-down the best mass-produced battery technology available and it continues to improve as engineers understand the technology. While there are some intriguing non-lithium battery technologies in research labs, they are not currently repeatable or scalable. This is why big companies like Tesla are working to make incremental improvements to lithium-ion technology that we already have, while driving down the cost and improving the economies of scale. As for other technologies like fuel cells, the current reliance on natural gas as a fuel source (due to lack of pure hydrogen infrastructure) still results in CO2 as a bi-product. Lithium-ion batteries are the best solution currently available at a volume and cost that is digestible for standard consumers in the United States and abroad.
Timing Is Everything
It is common knowledge that solar, wind and other renewable-energy sources can be made more palatable if 100% uptime can be assured. Since I first learned about the concept of solar electricity in fifth-grade science class, this hurdle has always been used as tacit excuse for infeasibility of renewables. In more recent years, however, the energy landscape has changed and integration of renewables into everything from RVs to data centers is currently on the table.
The first and most obvious change is heightened awareness of climate change. As unseasonable and unprecedented weather events stack up, the facts and figures touted by scientists are converted into a more personal and economically-fraught threat. Over fifty-percent of 1,800 global CEOs surveyed by PriceWaterhouseCooper in 2016 reported climate change as a major risk factor to financial growth and stability for their respective firms. As I write this, residents of the drought-stricken Indian state of Tamil Nadu are boycotting the local Coca Cola bottling plant for using 400 liters of water to produce one liter of soda while local farmers protest and even take their own lives in a plea for government relief. “Green” initiatives are no longer limited to crunchy granola-types; reducing carbon dioxide emissions and grid fallibility has become a pressing business concern if not an urgent moral imperative. The post-2008 recession financial incentives and photovoltaic cell inventory glut whet consumer appetites and showed the market what was technologically possible. Hurricane Sandy, the California droughts (and subsequent record-setting rainfall), and devastating wildfires around the world have heightened our fears and shown citizens around the world what needs to change in standard consumption cultures. We need robust, future-proof grid that pairs solar and wind with battery backup for a flexible, scalable infrastructure.
Beyond the human-emotional element bolstering renewables, the economics have changed quickly in the last few years. Our traditional grid desperately needs to be updated. The number of annual outages increased nearly 10% from 2015; outages are 285% more frequent than thirty years ago. The American Society of Civil Engineers estimates that current power outages cost the US economy between $18 billion and $33 billion per year. It is only going to get worse — the majority of our power-distribution systems are decades beyond designed life. The bottom line is that heavy capital spending is required to shore up the grid. This is a golden opportunity for renewables, as economies of scale, maturation of technology and widespread demonstration of feasibility have made alternative-grid infrastructure a viable contender for utility upgrade.
For perspective, 2015 US energy emissions tied to natural gas were on the order of 584 million tons; this would result in a staggering annual operational cost increase of $284 billion.
Further bolstering the economic argument for renewables is the consideration of life-cycle impact of infrastructure projects. In 2015, the Obama White House assigned a number to be used for total-cost-of-ownership analysis of future government projects: $36/ton of CO2. For perspective, 2015 US energy emissions tied to natural gas were on the order of 584 million tons; this would result in a staggering annual operational cost increase of $284 billion. And natural gas accounts for only 28% of our electricity-produced CO2. While domestically-produced natural gas is undeniably price competitive right now, the sun and the wind have a fixed cost of zero and incur no penalties for harmful bi-products. Even with the additional cost of batteries-as-energy storage required to provide 24-hour uptime, the scales are tipping quickly towards renewables.
Since the 2008 recession, we have seen great advances in the adoption of renewable energy sources. The current cost and supply-chain status of the lithium-ion battery market has finally enabled a companion energy-storage solution that can take solar and wind from the power plants of the future to the power plants of today. As municipalities, utilities and even homeowners consider energy infrastructure projects, we should consider lithium-ion batteries as a key component to a resilient, low emission energy system.
Emilie Stone is a mechanical engineer and business leader with a keen interest in our shared energy future. She currently leads the lithium-ion battery research and development division for Methode Electronics in Boulder, CO.