🔋Watt In The World
Batteries are vital to the feasibility and reliability of wind and solar electricity generation, but at what cost.
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For many of us, electricity is just the magic that works behind the scenes when we turn a light switch or charge our phones with. In wealthy countries this is a luxury often taken for granted in terms of access and cost. With electricity costs/shortages appearing troublesome in Europe as of late, and with the concern about which sources of electricity production are harmful for the environment, I thought it be useful to review where exactly out electricity comes from.
Globally, there is an extensive mix of sources for electricity production. In many of the top western countries, there has been a concerted effort to decarbonize the grid via renewables and sometimes nuclear power. This has been a relatively new trend as fossil fuels still dominate the mix globally, however there are extreme differences in electricity mix depending on which region or specific country. As it stands, more electricity is still produced from coal than nuclear, hydropower, wind, and solar combined.
It is worth noting that there is a difference between electricity and energy production, as energy for transportation, heating, and industry are much of the time not powered electrically. Electricity is one of the easier sectors to decarbonize from fossil fuels as I discussed last week in Fossil Fuels Are Here To Stay.
To highlight the vast differences between countries, below I show Denmark, France, Norway, and South Africa. Denmark generates most of its electricity from wind, France from nuclear, Norway from Hydropower, and South Africa from coal. This shows on a country by country basis there is not always a “mix” of electricity production.
Some of these countries are relatively small, and as demand and or land area increases it becomes more difficult and/or less advantageous to rely solely on one source. In some of the larger economies around the world, there is generally a more diversified mix of electricity production. Russia and the United States both have large reserves of natural resources, especially oil and natural gas. The United Kingdom has gas reserves but choses to import most of their natural gas. Overall they have a fairly mixed array of production. China appears to have lopsided mix but that is deceiving just because they burn A LOT of coal. If you take nuclear for example, China still has the second most operational nuclear power plants at 55. The US has 91, Russia has 37, and the UK has 9. Percentage charts do not show the whole picture because the quantity of generation varies between countries like I point out here.
As far as renewable sources go, the biggest factor affecting their production is storage capability, not buildout quantity in my opinion. Due to intermittency, battery storage has emerged as the leading candidate for grid storage of wind/solar power. Many countries have aggressive buildout plans for wind and solar projects. The problem as many critics point out is that even if capacity for electricity generation is extensive, the low capacity factors (basically the % of time that the source is producing electricity) mean that generation of electricity from those sources won’t keep up. Below is a snapshot of Germany’s electricity generation with grey bars indicating capacity. It appears it is neither a sunny or windy day thus coal is what is being used.
This problem only improves marginally if there is even more capacity brought online. To protect against these off periods, storage is necessary. Unfortunately, this is often neglected in buildout and in cost. In the United States, the utility-scale battery power capacity has increased substantially in recent years up to 15GWh storage capacity. This is still a drop in the bucket as the Castaic Power Plant, a single medium sized US pumped hydro facility has a storage capacity of 12.5GWh.
Even if we spent the money building battery storage heavily, would it be able to power the grid? David Osmond has been modelling Australia’s grid as it stands with a theoretical amount of battery storage. This is in Australia where it is quite sunny all year around and he assumes 90% round trip efficiency, but it is a good framework nonetheless. He assumes 5hrs of storage, 24GW, and 120GWh (storage capacity duration, power capacity, storage capacity). Using his calculations 98.8% of the Australian grid could be powered by renewables under this scenario.
This regardless of how correct it is just a model, but shows the importance of battery (or any) storage to get the full potential of renewables. Battery storage could also be used to save nuclear power for times of extra demand or in case of grid issues. The problem is lithium ion batteries are still expensive and to add this much requires a cost. This cost is not usually factored into cost estimations for wind and solar when they are advertised as the cheapest sources of electricity.
In addition, Australia is a lot smaller than the US. The US generates 16x more electricity than Australia, which means more battery storage would be necessary. If we assume apples to apples for simplicity, this would mean the US would need 384GW and 1920 GWh of power and storage capacity respectively. At current prices of ~$500/kwh this would equate to 960 billion dollars for the US. Many in the industry believe costs for battery cells on the grid will come down, so estimations for $100/kwh it would be 192 billion dollars, and at $20/kwh it would be 38.4 billion.
At current prices it is a hefty price tag. To put it into perspective, the entire infrastructure bill was 1.2 trillion which is not far off of 960 billion. If the model is slightly off and/or battery prices actually increase, the price tag would be well over a trillion. On the optimist side, as grid scale battery prices fall, the price tag becomes fairly reasonable. For example, 192 billion is the equivalent of only two months of the government’s social security payments. This is assuming it is government funded, which it may end up having to be if the projects are not profitable on the current market.
Either way, batteries are going to add significant costs to renewables effectiveness and reliability which will be something governments and utilities will have to contend with. Otherwise we face issues like those seen in California recently, or larger scale issues like what is being seen in Germany and much of Europe with reliance on renewables. Advocating for a 100% renewables grid would take significant battery materials, and any large scale project would certainly put strain on the supply chain on top of the demand for batteries in electric vehicles. It may be possible in the models, but it will be more difficult to do it on the large scale while keeping costs low.
This is why alternative battery technologies are so important to take over the brunt of the grid scale market. With factors such as material supply, other battery technologies, other clean electricity generation methods, electric vehicle demand, political policies, and more it is difficult to estimate if it is worth it for the climate, economically, or even practically feasible to reach 100% renewables electricity generation or what the correct mix is. All I know is the more wind and solar that gets built, the more important batteries become for the safety and reliability of the grid. Hopefully this puts into perspective the scope of what would be necessary for battery storage buildout in a renewables world and what it would cost. Until next week,
-Grayson
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