Renewable Energies, Storage, EVs & Batteries

Posted on May 31, 2012 in tips and tricks

The adoption of Renewable Energies, including Photo Voltaic and Wind, is very much interconnected with and dependent on the development of Smart Grids, of Energy Storing and of Electrical Vehicles.

Apparently 2001 marked a discontinuity in the EVs market both in Europe and US. In Europe  the french PSA and Renault started  to sell their EVs in thousand of units. The same are doing Mitsubishi and Nissan. In California EVs are sold in thousands of units and the State has announced investments of 120 million USD in infrastructure.

“As you may have seen, California Governor Jerry Brown announced a $120 million settlement last week with utility company NRG. The funds will be used to develop a large scale infrastructure effort for electric vehicles. This statewide charging network will include at least 200 fast-charging stations and another 10,000 plug-in units at 1,000 locations across the state.

(….)

California Public Utilities Commission President Michael R. Peevey said, “The settlement will launch a virtuous circle in which ever more Californians will feel comfortable driving EVs, and growing EV sales will in turn attract ever more investment in charging infrastructure to our state. It will create jobs in California, help clean our air, and support attainment of our greenhouse gas reduction goals.

(…)

The private sector was quick to respond, however. We received this statement from Mike Calise, Director, Electric Vehicles, Power Business, Schneider Electric, shortly after Governor Brown’s announcement came through.

“Schneider Electric applauds California State leader’s decision to appropriate recent settlement funds to invest in the State’s increased deployment of widespread Electric Vehicle (EV) infrastructure.  Schneider Electric is strongly committed to helping people make the most of their energy and this decision will significantly reduce California’s energy consumption and greenhouse gas emissions. This unprecedented action between NRG and the State of California will rapidly increase the amount of available charging stations within key public, private, fleet and residential segments and make it easy to charge practically everywhere.

This deployment will also remove EV adoption barriers by supporting California’s city residents who may live in multi-unit dwellings by promoting charging options at work or in new public parking locations. A project of this magnitude will not only educate California’s driving community, but will serve as a global model of what’s possible to manage energy in smart Cities, States and Nations in the future.”

Schneider Electric is a major provider of electric vehicle charging equipment, producing everything from commercial fast-charging stations to small household sized units available at Home Depot.”

Tesla Motors, the California Premium EVs manufactures, has just started selling its Sedan S series at a very attractive price. What is even more interesting is that the 85 KWh version is sold at an extra price of  $ 10.000  with respect to the 60 KWh version (respectively 59,900 and 69,900). That means selling an extra KWh for $ 400, while up to a few month ago the reference selling price in Europe was around 700-800 Euro. This represents a real revolution.

If you consider that a city car is normally equipped with a 15 KWh battery and that nowadays batteries can be guaranteed for 5 years and that charging is less than 0,01 Euro per km what yo get for five years at an average of 15.000 km per year (50 per day) sums up  (at Tesla prices) at 750 Euro (recharging) plus 6.000 for the battery which means 6.750 Euro in total for 60.000 km so around 1 Euro per 10 Km, competitive with endothermic vehicles cost at present europeans gasoline prices.

Question is: are these batteries prices sustainable in the long run or do they represent a lunch offer for Tesla?

We have analysed very carefully this issue and we have reached the conclusion that the manufacturing methodology used by Tesla to produce their battery pack is compatible with these prices.

The secret is quite simple: using standard Lithium Cells that are produced in billions units and pack them together appropriately.

The trend toward price reduction seems to be clearly set:

“During its recent fourth quarter 2011 financial results Q&A conference call, CEO Elon Musk had, of course, lots to say about Tesla Motors and its various products. One statement though, concerning the falling cost of batteries, spoke to the broader electric vehicle (EV) market and bears repeating. The high price of energy storage is, after all, one of the major barriers to lower EV prices and, consequently, faster consumer adoption.

We’ve heard in the past different estimates of battery costs. When the first Chevy Volt battery came off the line it was said to be around $500 or $600 per kWh. For its part, the Nissan Leaf pack was reported to be as low as $375 per kWh. Now, two years down the road what is Tesla saying about the price of its batteries?

A participant from JP Morgan asked (in torturous analyst-speak, using “dimension” as a verb) something to the effect of, “Could you speak about how certain you are of a $200-per-kWh battery price and where you see that number going?” Musk began his response by seeming to deny that figure represented the company’s current cost but went on to say, “I do think that cost per kilowatt hour (kWh) at the cell level will decline below that, below $200, in the not-too-distant future.”

So, how soon is the “not-too-distant future”? Perhaps 2015. That’s the year Tesla is now aiming to begin production of its Gen 3 vehicle – what was historically code named “Blue Star.” Tesla had originally planned to make the new Roadster after the Model X, but decided it could make a mass-market vehicle with a price tag in the $30,000 range sooner than it had previously thought.

For what it’s worth, Elon isn’t the only one talking about a significant downward price trend. Makoto Yoda, president of Mitsubishi’s battery supplier, GS Yuasa, says that due to mass production, the price of its lithium batteries will soon be a quarter of what it was in 2009.”

Summarizing the decrease in battery pack cost will boost EVs sales and that will clearly create new challenges for the grid efficiency. On the other hand EVs can represent themselves an important component of smart grids being a scattered storage device. No doubt that vehicles will be recharged predominantly during night when sun is not shining but when at least wind is blowing.

Moreover price reduction of EVs battery packs could represent an opportunity for affordable home storage devices coupled with PV solutions. In this case a “double pack” easily removable from the car could represent a great solution.