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Who's Reserving All Those Tesla Batteries and What Do They Plan On Using Them For?

When Tesla Motors CEO Elon Musk announced the advent of Tesla Energy’s new line of stationary batteries on April 30, you couldn’t actually buy them. The company is just gearing up to make the batteries and, according to news reports, the batteries won’t be available for shipping until later this year—but Tesla is taking reservations. In fact, Musk claimed that Tesla has taken nearly a billion dollars of reservations for batteries, which is more than it can deliver in all of 2016 (Figure 1). It’s currently unknowable how many of those reservations will turn into actual sales, but if most of them come through, the launch of the Tesla stationary battery line will rank as one of the leading product introductions in the history of American industry.

FIGURE 1: They are standing in line

FIGURE 1: They are standing in line

These people aren’t standing in line for the new Tesla batteries; that line is electronic, and much longer. If customers who reserved a new Tesla battery had to stand in a physical line, part of it might look something like this.

Undoubtedly, few new product introductions have been as extensively reported as the Tesla batteries’. Much of this reporting has focused on the potential of the batteries to be used for residential solar storage. That’s not surprising, given that the temporal nature of solar power combined with the lack of economic technologies to store it are two of the biggest obstacles to achieving widespread use of increasingly inexpensive photovoltaic technology. In some countries, such as Australia, Tesla is targeting the solar storage market in a big way. But in the US, the company isn’t targeting this market. Here, it’s unlikely that little more than a trivial number of homeowners will purchase batteries from Tesla, or its competitors, to store solar electricity. Indeed, I’ve written several times about why this application is so unattractive. For one example, see the E Source blog posting Utilities, Cheap Batteries Won’t Hurt You. You Have Much Worse Things to Worry About. For another, see the Utility Dive article Why Tesla Won’t Disrupt Utilities.

Another battery application that’s been widely discussed—the practice of storing inexpensive off-peak electric power and selling it to the utility during high-priced on-peak periods—also is unlikely to find many US customers. Time-of-use (TOU) arbitrage, as this practice is known, simply can’t produce enough revenue to pay for the batteries during their useful lifetime.

If the prospects for these two applications are so dismal, how is it possible that so many people are lining up to buy Tesla batteries? There are three additional major applications proposed for the Tesla stationary battery line, and they have excellent market potential. They are residential backup, commercial demand-charge management, and grid-scale storage. These applications are not limited to Tesla batteries; products from other manufacturers—such as LG Chem, BYD, and Samsung SDI—are also competitive in some of these markets. Look to these applications to drive lots of sales in the US for Tesla and its competitors for many years to come.

Don’t Invest in TOU Arbitrage

It’s widely hypothesized that utility customers who participate in TOU rate plans will use Tesla batteries to store off-peak power, either from the utility or from solar panels, and sell it to the utility during peak periods. The 7-kilowatt-hour (kWh) Tesla Powerwall battery, designed for daily charging and discharging, is a good choice for this application, at least in the residential and small commercial markets. Despite the widespread attention it’s gotten, this application—which is known as TOU arbitrage—is unlikely to be a big hit any time soon, for two reasons. First, few utilities allow it. Second, the revenue it can produce is minuscule compared to the cost of the battery.

One reason TOU arbitrage produces small benefits is that TOU pricing isn’t available from utilities every day. Utility TOU rate plans feature higher prices for on-peak power than they do for off-peak power, but on-peak power periods are restricted to nonholiday weekdays. As a result, TOU arbitragers can only produce revenue 260 days a year, at best.

But wait—it gets worse. Peak rates are often much lower during the winter than in the summer (in the utility TOU world, there are only two seasons: summer and winter). In the winter, the spread between on-peak and off-peak power is typically only a few cents per kWh. That’s not even enough to pay for the wear and tear on the battery for a charge-discharge cycle, which limits this application to the summer season, or about 130 days per year (Figure 2).

FIGURE 2: No peak rates on weekends and holidays

FIGURE 2: No peak rates on weekends and holidays

This figure shows when peak prices are available from a typical time-of-use utility rate program.

Summer TOU peak-period rates just aren’t high enough for potential arbitragers to make enough money on those few days. In the summer, some programs offer a spread between on-peak and off-peak prices of about $0.25 per kWh. For the 7-kWh Powerwall battery, that works out to $1.75 a day of revenue, or about $227 per year. Those benefits would then be diminished by numerous parasitic losses, including battery and inverter inefficiencies. This battery costs at least $5,000 installed, which yields a simple payback period greater than 20 years. That’s longer than the expected lifetime of the battery. Few people are likely to find this application attractive, at least at current battery prices or at current TOU pricing levels and rules.

Residential Backup Power Will Go Forward

Residential backup batteries store power, either from the utility or from solar panels, to be used when utility power is unavailable. The Tesla Energy 10-kWh Powerwall battery, which is designed to be discharged weekly, is a good choice for this application (Figure 3). Tesla sells the battery for $3,500, but SolarCity offers it installed retail—including inverter—for $7,140.

FIGURE 3: How Tesla recommends the Powerwall be installed

FIGURE 3: How Tesla recommends the Powerwall be installed

Tesla recommends the Powerwall be installed on the direct-current side of the inverter, combined with solar panels. Because these installations are more economical, Tesla plans to give such customers priority when batteries ship.

The market for residential backup power isn’t huge, but it’s big enough to interest Tesla, which excels at marketing products to early adopters. According to the Wall Street Journal article A Sales Surge for Generator Maker, in 2012, about 2.5 percent of US homes had backup generators. At the time, this market was growing rapidly in the aftermath of Hurricane Sandy, so it’s probably even bigger today. The dominant product line in this market is a variety of small natural gas generators manufactured by Generac, a 50-year-old company with a solid record of innovating in this sector. The 16-kilowatt (kW) Generac generator available from Home Depot is priced similarly to the Powerwall. It sells retail for about $3,700, but installation adds a few thousand dollars. At first glance, the Generac product has quite a few advantages over the Powerwall.

For one, the generator provides much more power. When the Powerwall was originally introduced, it was specified to exhibit 2 kW of power, but Elon Musk recently announced that its capacity had been boosted to 5 kW. Even at the higher level, the Powerwall provides less than a third of the power that the generator does. That difference in power is associated with far more convenience. In a home powered by the generator, occupants can pretty much use any electrical device they choose, whenever they want. They can run the air conditioner, blow-dry their hair, use the microwave, and turn up the volume on their large-screen TV. Powerwall users have to be much more careful. No simultaneous air conditioning, hair drying, microwaving, and TV watching for them.

Secondly, the generator can supply far more energy than the Powerwall. At full power, the Powerwall can energize a home for two hours. The generator can operate indefinitely, as long as it’s in good working order and has a natural gas supply.

Despite these two advantages, I can see lots of people choosing the Powerwall over the generator. The battery is quieter. It’s also more reliable and requires little attention. Maintaining a generator takes a lot of time and diligence. Few homeowners have the time or patience for it. If small generators aren’t rigorously tested and maintained, when the big catastrophe occurs and the grid goes down, there’s a good chance they won’t immediately start humming away. With no moving parts, the Powerwall is far more likely to be functional in an emergency.

The Powerwall is certainly more attractive than the Generac. More than that, the Tesla name carries cachet. After dinner parties, Powerwall owners can take their guests and their cognacs downstairs and show off their battery. They’re much less likely to take their guests out into the backyard to show them their generator. Lastly, for those homeowners with both solar panels and a backup battery, during a grid emergency, when all their neighbors’ homes are dark, they can light up their own home using solar electricity generated by their own panels, at least for a few hours. How cool is that?

The Tesla Powerwall offers simplicity, reliability, and prestige. I anticipate many people will find those attributes compelling enough to overlook the energy and power advantages of generators. Although backup batteries are certainly not going to become as ubiquitous as toasters, I do expect Tesla to become a major competitor in this sector. Even more so, I expect the company will expand this market.

Demand Grows for Demand-Charge Management

Tesla Energy’s Powerpack product is designed for large-scale commodity markets and features a capacity of 100 kWh. Demand-charge management is one application the Powerpack is well suited for, but there many other battery products that can be used in this application as well. To reduce monthly demand charges, these batteries charge up during times of low demand and discharge during peak times, when monthly demand levels are set. Demand charges vary widely, from just a few dollars to more than $20 per kW-month (one kW-month is the price per kW per month). In some markets, such as California, utilities offer rates with multiple demand-charge periods that can be effectively added together to reach as much as $50 per kW-month.

Reducing demand charges requires more than a battery and power electronics. A facility also needs predictive software that knows when the building is on a trajectory to hit peak demand, as well as when it should start and stop injecting power into the electrical system. A few vendors offer such combined battery and software systems, including Stem, CODA Energy, and Green Charge Networks (Figure 4). And Tesla offers such systems through its partnership with EnerNOC.

FIGURE 4: Sleek battery enclosure from Green Charge Networks

FIGURE 4: Sleek battery enclosure from Green Charge Networks

Demand-charge management system vendors make it easier to install their batteries in commercial buildings by enclosing them in attractive cases.

The economics of these systems are approaching the point of acceptance in markets with high demand charges. Assuming a relatively high demand charge of about $20 per kW-month, the potential savings would be equal to about $240 per kW of battery capacity annually. In reality, a facility is not going to get all of those savings. Battery energy capacity is limited (typically one or two hours of discharge energy at full peak load) and the demand-anticipating software doesn’t work perfectly. Usually, such systems get about half the potential demand savings. There are also parasitic losses that need to be adjusted for, including battery roundtrip energy losses and inverter inefficiencies. Customers on TOU rates can overcome those losses and then some by buying electricity during low-priced off-peak periods and discharging it during on-peak periods. Sometimes customers make a little money this way, but such gains are tiny compared to the savings achieved via demand-charge reduction.

Given that the installed cost of these systems runs from about $1,000 to $4,000 per kW, purchasers at the lower end of this spectrum, who manage to get about $120 per kW per year of savings, would see their systems pay for themselves in about eight years. Such economic calculations are likely to produce more-attractive results in places like California and New York, where state and local utilities collaborate to offer incentives. Realistically, the results will improve everywhere as the cost of batteries continues to decrease (see my blog posting Utilities, Cheap Batteries Won’t Hurt You. You Have Much Worse Things to Worry About. Part I: Assault and Battery for more on this subject). Also, some vendors are forging partnerships with auto manufacturers to give a second life to used electric vehicle power packs.

With its high demand charges and state incentives, California is an excellent market for demand-charge management systems. There, several battery manufacturers offer no-money-down financing. As battery prices decline, look for these vendors to expand their operations to other states.

Utilities Will Utilize the Most Batteries

Utilities use large-scale batteries for a wide variety of applications, such as shifting excess supply to times of higher demand, regulating frequency, supporting voltage, deferring transmission and distribution upgrades, and relieving congestion. Although many electric storage products are available to utilities, lithium-ion batteries are becoming more popular.

Well suited to being grouped into banks of tens or hundreds of units, the Tesla Powerpack battery is competitive for grid-scale markets. Tesla sells the Powerpack batteries for $250 per kW, but with associated power electronics and installation costs, the batteries will probably cost at least $500 to $1,000 per kW installed. According to Sandia National Laboratories, the least expensive technology for grid-scale storage is hot thermal storage, at about $110 to $300 per kW (Figure 5). One of the most popular technologies for grid-scale storage is pumped hydro, which comes in at $1,800 to $2,200 per kW. Cavern compressed air, another utility classic, is pegged by Sandia at $700 to $1,300 per kW. If Tesla can actually deliver batteries at an installed price of $1,000 per kW or less, it has a good chance of competing in this market.

FIGURE 5: Lithium-ion batteries are among the cheapest grid-scale storage technologies

Lithium-ion batteries are among the cheapest grid-scale storage technologies

Lithium-ion high-power batteries cost between $800 and $1,200 per kilowatt. If Tesla can keep the price of its Powerpack batteries in the low end of this range, the company can be a serious player in the grid-scale storage market.

Grid-scale storage is a commodity business, and Tesla, which until now has sold premium products to early adopters, will have to demonstrate that it can compete in this sphere. Judging from the partnerships the company has forged so far—including agreements with Southern California Edison, AES, and Oncor—it seems the company is well on its way to building the capabilities needed to compete for utility sales. Indeed, on a revenue basis, it appears that utilities are going to be Tesla’s biggest battery customers. Tesla chief technical officer JB Straubel estimates that about 70 percent of the billion dollars of battery reservations Tesla has taken so far are for the Powerpack industrial-sized battery that utilities will use for grid-scale systems.

As with so many things associated with Tesla, gearing up for this business is requiring the company to make huge investments. It remains to be seen whether Tesla can produce stationary batteries at a high volume and do so profitably.

Jay Stein's picture

Thank Jay for the Post!

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Discussions

Spec Lawyer's picture
Spec Lawyer on Oct 9, 2015 3:50 am GMT

Here is what you need to know about the Tesla PowerWall and PowerPack . . . they have already served their purpose.  Investors were worried about Tesla building this MASSIVE GigaFactory out in the desert.  Would this supposedly largest building in the world (eventually) be white elephant or a useful asset?  So Tesla created some batteries for home use, commercial use, and grid use.  They then put on their big dog & pony show.  They then bragged about the zillions of customer orders.   Investors in the GigaFactory were placated.  Mission Accomplished.

For now, only a few people will actually be able to buy PowerWalls or Powerpacks.  Mainly Tesla’s sister company SolarCity for their customers.  Maybe when the GigaFactory gets up & running, they’ll start delivering.

BTW, they didn’t really get zillions of orders . . . they just got a lot of website clicks from interested people like me.   But no one has put down any deposit or committed to any purchase.  And that’s good because they don’t have the batteries anyway.  

Willem Post's picture
Willem Post on Oct 9, 2015 12:02 pm GMT

Jay,

Here is a calculation that gives some insight regarding using batteries for storing energy at night and using it during the day.

http://www.theenergycollective.com/willem-post/2264202/reducing-us-prima...

Chevy-Volt and TESLA: The Chevy-Volt has a 16.5 kWh battery, but it uses a maximum of about 10.8 kWh (about 65% 0f its capacity), because the battery controls are set to charge to about 90% of capacity and discharge to about 25% of capacity. GM does this to minimize costs of its 8-yr/100,000 mile manufacturer’s warrantee. That warrantee is for manufacturing DEFECTS, does NOT cover performance. According to GM, the battery is expected to have a performance loss of 20% over its 8-yr WARRANTEE life, and more beyond that 8-yr life. The 10.8 kWh gives the Chevy-Volt an ELECTRIC range of about 38 miles on a normal day, say about 70 F, less on very cold and on very warm days, less as the battery ages.

TESLA has a 10 kWh, Li-Ion, wall-hung, battery unit. I assume TESLA is as capable as GM, i.e., no magic, no hype. There are battery charging losses and discharging losses, and AC to DC and DC to AC conversion losses. The TESLA 10-year warrantee is for manufacturing defects, does NOT cover performance!! The INSTALLED cost of the 10 kWh unit = $3,500 + S & H + Contractor markup of about 10 percent + $2,000 for an AC to DC inverter + Misc. hardware + Installation by 2 electricians, say 16 hours @ $60/hr = $7,100, or $7,140 per this URL.

http://www.bloomberg.com/news/articles/2015-05-01/solarcity-taking-order...

Assuming a 65% charge/discharge, and a 90% AC to DC inverter efficiency, and allocating half of the 8% DC-to-DC loss to the charging side (the unit has a round-trip DC-to-DC efficiency of 92%, per spec sheet), it would take 0.65 x 10/(0.9 x 0.96) = 7.523 AC kWh of off-peak grid energy to charge up the unit. During on-peak hours, one would get back 0.65 x 10 x 0.96 x 0.90 = 5.616 AC kWh to use in the house, for a minimum energy loss per cycle of (1 – 5.616/7.523) x 100% = 25.4%!!

If we GENEROUSLY assume the battery would have NO performance loss over its 10-yr WARRANTEE life, and one cycle per day, i.e., 3,650 cycles, and night-time cost of charging at 10 c/kWh and day-time avoided cost at 18 c/kWh, then 3,650 x (5.616 x 18 – 7.723 x 10) = $943.76 would be the gain over 10 years. The cost of financing, PLUS any costs for O&M, PLUS any capacity degradation due to cycling, PLUS the cost of depreciation are ignored.

THAT IS A VERY MISERABLE PAYBACK TO SAY THE LEAST.

Bob Meinetz's picture
Bob Meinetz on Oct 10, 2015 4:32 pm GMT

Jay, as usual in these pro-battery-Powerwall-distributed-storage nonsensical hypefests, not a word about emissions.

As Willem has aptly demonstrated, the efficiency of all such arrangements is horrible in comparison to straight utility generation coming down the pipe. Powerwall customers think they can charge their batteries from the grid and get back what they put in, willfully ignorant that the best Li-on battery with inverter will leave 5-10% of the energy they purchase trailing off into their garage as heat from resistance losses. Assuming their utility is centrally located, line losses are doubled, adding ~8% inefficiency. Throw in the abysmal efficiency of a home battery paired with natgas generator – the inevitable result of the solar enthusiast’s discovery the sun can’t magically power his electric oven at night – and we’re effectively degrading the CO2 emissions profile of natural gas to that of coal. With widespread adoption, an environmental catastrophe.

Utility power is, by far, the most efficient way to distribute electrical energy, and it’s upgradeable en masse. It doesn’t count on the financial self-interest of individuals to do the right thing for everyone else (should it?). I’ll be fully on board with the “distributed energy” movement when activists take full responsibility for the emissions attributable to their selfish and innumerate philosophy. Not holding my breath.

Bob Meinetz's picture
Bob Meinetz on Oct 10, 2015 3:30 am GMT

Spec, you write 

Here is what you need to know about the Tesla PowerWall and PowerPack…they have already served their purpose

You’re confounding hype with product. “They” can’t have served any purpose, because for all practical ones “they” don’t exist.

Nathan Wilson's picture
Nathan Wilson on Oct 10, 2015 5:46 am GMT

Jay, as indicated in your energy storage cost chart, thermal energy storage (TES) is by far the cheapest type of energy storage, so it’s clearly worth a mention.

There are only two energy sources which can use TES: Concentrating Solar Power (CSP) and high temperature nuclear.

Solar Reserve’s Crescent Dunes 110 MWatt CSP plant has completed construction, and is expected to complete commissioning this year.  It is a power tower design with 10 hours of storage (perhaps for 5 hours at full power and 10 hours around half power, for 24 hour operation).  Trough style CSP plants have also been built with thermal storage, such as Spain’s Andasol plants (50 MWatt for each of the three).  CSP technology was considered very promising until only a few years ago, but recently it has consistently been under-cut in prices by PV and nuclear.

Conventional light water nuclear reactors, with their 300C outlet temperature are not well matched to thermal storage, which is cheapest with a salt blend called “solar salt”.  Solar salt works best when heated to around 500C, which is just what comes out of sodium cooled fast reactors (SFRs).  SFRs have been built in small numbers since the 1950s; a few recent ones are: the Russian BN-800, the Indian PFBR & FBTR, and perhaps in a few years the US/Chinese TerraPower TWR.  Gas cooled reactors such as the Chinese HTR-PM also operate in the right temperature range, and their damage-resistant TRISO fuel should give them excellent safety.

Complementing solar PV with energy storage which is integrated with nuclear plants provides the added advantage of supply diversification, to minimize loss of output (and therefore fossil fuel consumption) on cloudy days. 

Joe Deely's picture
Joe Deely on Oct 10, 2015 5:07 pm GMT

Nathan,

“Complementing solar PV with energy storage which is integrated with nuclear plants provides the added advantage of supply diversification, to minimize loss of output (and therefore fossil fuel consumption) on cloudy days. “

That sounds good.

Any utilities in US looking into projects like this?  APS in Arizona? Southern in Georgia?

 

Jay Stein's picture
Jay Stein on Oct 10, 2015 7:25 pm GMT

Thanks for this clarification, Weapon Zero. Some grid-scale Li-ion batteries do feature response times of 20ms, but I don’t know if the Tesla Powerpack does.

Jay Stein's picture
Jay Stein on Oct 10, 2015 7:26 pm GMT

Thanks for your comments, Spec Lawyer. I do think your skepticism is well founded. Tesla has never made a profit and it will be many years before it does, if ever. Until then, the company needs continued investment to survive. I also agree that Tesla exaggerates its capabilities to those investors. For another example, the Model X, which was long ago promised to go into production at the end of 2013, still is not available outside of a limited group of premium customers.

 

That said, if we give credit where credit is due, the company has succeeded at driving down the cost and improving the quality of lithium-ion batteries, and has likely inspired other companies to do so. Those improved batteries (from Tesla and others) are driving new buyers for applications that, as recently as a few years ago, were limited to niche markets. 

Jay Stein's picture
Jay Stein on Oct 10, 2015 7:37 pm GMT

Thanks, Willem, for adding some rich technical detail to support my assertion that time-of-use arbitrage is unlikely to be a cost-effective application anytime in the foreseeable future. My only quibble with your calculations is your assumption that you would get time-of-use pricing 365 days a year. As I noted in my posting, all the utility time-of-use programs I’m familiar with only offer on-peak pricing during weekdays and non-holidays. That means, at the most, such pricing would only be available 230 days a year. Perhaps you’ve some specific utility program in mind, in which case, I’d be interested in knowing which one it is. Again, thanks for your support here.

Jay Stein's picture
Jay Stein on Oct 10, 2015 7:42 pm GMT

Thanks, Jarmo. I’m glad you enjoyed my posting.

Jay Stein's picture
Jay Stein on Oct 10, 2015 8:22 pm GMT

Thanks, Nathan. I agree with you that an interesting feature of that graph is that it shows that thermal storage is the least expensive technology. Perhaps you’ll be interested in learning about another form of thermal storage: grid integrated water heaters. Some electric utilities use oversized water heaters to store excess wind power generation as thermal energy. My colleague Dave Podorson has written about this application in his white paper titled Battery Killers: How Water Heaters Have Evolved into Grid-Scale Energy-Storage Devices. You can read it here:

 

http://www.esource.com/ES-WP-18/GIWHs

Willem Post's picture
Willem Post on Oct 10, 2015 9:35 pm GMT

Jay,

My analysis is BEST case. Actual results are much worse, i.e., terrible.

Jay Stein's picture
Jay Stein on Oct 11, 2015 4:05 am GMT

Bob, I’m not sure whose post you’re commenting on, but it certainly isn’t mine. I’ve written many times, including above, on why the application you’re concerned about (using residential batteries to store rooftop solar power for daily use) is unlikely to achieve more than a trivial amount of uptake in the US anytime in the foreseeable future. 

Bob Meinetz's picture
Bob Meinetz on Oct 11, 2015 4:22 am GMT

Jay, what qualifies a battery as “grid-scale”?

The largest-capacity commercial lithium-ion battery (to my knowledge) is the Advancion 100MW Li-Ion being built for Southern California Edison. Peak demand on the California Independent System Operator grid is in the neighborhood of 40 GW – so the $100 million battery being bought by SCE would be able to shave one-fourth of one percent off CAISO’s peak demand, while providing energy which is 5-10% dirtier from efficiency losses.

A bank of 400 similar batteries, with significant load-balancing hocus-pocus, would be able to completely power California should all conventional generation suddenly cease. But the batteries would cost $40 billion, and after four hours all of California would go dark again.

What’s the point?

Bob Meinetz's picture
Bob Meinetz on Oct 11, 2015 2:48 pm GMT

Jay, the focus of my post was any application of batteries except those requiring portability (electric vehicles, flashlights, cellphones, television remotes) and some emergency applications.

They waste energy. They can make “grid scale” renewables marginally more effective. They make power plant owners happy by shaving off peak demand requirements, They save customers a few cents/kWh with demand charge management (distinguishable from TOU arbitrage in name only). And they waste a lot of energy. Except when storing pure renewable/nuclear energy, they increase emissions.

Building out coal would achieve our goals much more effectively if the priority is saving money. With owners of Tesla PowerWalls, that’s obviously not a major concern.

Nathan Wilson's picture
Nathan Wilson on Oct 11, 2015 6:34 pm GMT

Grid Integrated Water Heaters (GIWHs) are interesting in certain circumstances.  The problem I have with them is that they are not well suited for today’s fossil-fuel-dominated energy system, nor are they well suited to the zero carbon energy system I think we should be building.

When electricity is mostly made from fossil fuels, then running the heaters directly on gas is much better for the environment than using electric heaters.  If the electricity was all gas generated, then the energy savings from a gas heater would be about 50-70%.  If part of the electricity comes from coal, then the emissions due to the electric water heater get enormously worse, due to particulates, sulfur dioxide, mercury, etc.

For the future, I advocate a mix of electric heat pump technology in rural areas and district heat networks in urban and dense suburban areas, based on a non-fossil electric grid which includes dispatchable fuel synthesis.

According to the Podorson GIWH paper you’ve linked, heat-pump water heaters are much less attractive for grid integration because they are much more efficient than resistance heaters (thus the power and energy involved are less), and because they can’t be cycled on and off as quickly, thus they are less useful for frequency control.

District heat networks would certainly involve thermal energy storage in water tanks, but they would be utility scale, which makes them much cheaper than the distributed residential equivalent (and also much more easily hardened against grid-crippling cyber attack).  This storage would mostly help on the time scale of day/night load leveling, due to the slow response of the electric heat-pumps and combined-heat-and-power nuclear plants that would drive them.

The dispatchable syn-fuel plants would be a very potent tool for electrical supply/demand matching on all time scales, from sub-seconds to seasonal.  One potential implementation of a fuel synthesis module is just a fuel cell operated in reverse (power-to-fuel).  Such a device could obviously also operate in the forward direction (fuel-to-power).  This means that the syn-fuel plants can provide frequency regulation, “spinning” reserves, and off-lines reserves, year around.  

So I don’t see enough of a long-term role for GIWHs to justify over-coming the institutional inertia that would be required to get them into and later out of the energy system.  In contrast, supply-side systems like utility batteries can be introduced without first selling the idea to the public, can be selectively deployed where most valuable, and can easily be decommissioned as soon as they reach the end of their service lives.

 

Nathan Wilson's picture
Nathan Wilson on Oct 11, 2015 6:09 pm GMT

Nope, in the US, the NRC is only currently allowing nuclear plants to use light water reactors, hence no energy storage.

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