By John Deede, Shale Plays Media | Google+
Decreasing costs and increasing efficiency in solar panels and power storage may soon spell the end of traditional fossil fuel-generated electricity.
The biggest problem confronting the solar industry has been how to store the power. When the sun is shining, photovoltaic solar panels are able to generate a surplus of electricity, but so far creating an economical way to store this energy has remained elusive.
In the past ten years, the use of lithium-ion batteries has surged. In everything from cameras and phones to e-cigarettes and electric cars, the batteries have seen a considerable decrease in price and size. However, the cost of the batteries due to scarcity of rare-earth minerals has kept the cost of the batteries as a storage option prohibitively high relative to the retail price of electricity from utility companies.
According to a report published by the Rocky Mountain Institute called “The Economics of Grid Defection,” the point when solar electricity becomes cheaper than traditional power is just around the corner. It explains that, because of costs moving over time, customers will choose to vote with their wallets and not purchase traditional power to instead provide their own in a move called grid defection.
One energy market where solar generated power is already becoming widespread is Hawaii. Hawaii has the highest cost of electricity in the United States, where customers pay more than triple the cost of electricity than the mainland states. Because of this cost, and the state’s abundant sunshine, Hawaii is the first state to reach grid parity. Right now, the state gives a 35% tax credit to solar projects to encourage solar adoption. Hawaii has a regulation requiring a renewable energy standard of 40% of its energy portfolio.
The report claims that California will reach grid parity in 2025. In California, the Public Utilities Commission is mandating the state’s three energy providers to incorporate 1.3 gigawatts of storage onto the grid by 2020. On April 15, the PUC made a preliminary ruling to allow customers who have solar systems with storage to be included as counting towards the 1.3-gigawatt requirement. The ruling also allowed for consumers to participate in net metering, or selling back excess electricity to utility companies. They also estimated that New York would reach grid parity by 2031, and Texas and Kentucky by 2047.
Cornering the market on energy storage
Electric car manufacturer Tesla Motors is currently preparing to break ground on a $5 billion lithium “gigafactory” at a location in the U.S. yet to be announced. The factory is being built to keep up with the company’s growth. However, the gigafactory’s capacity is planned to double the current level of lithium-ion battery production worldwide.
Tesla CEO Elon Musk sees more possibilities in the factories than as just fuel cells for vehicles. Musk is currently a chairman of SolarCity, a solar panel leasing company. SolarCity has started a pilot program in California to install battery packs connected to the solar panels, which hopes to eliminate the sticker shock of installing a solar power system. Producing a lithium battery in the gigafactory is estimated to reduce the cost of production 30%.
Graphene seems to be the the most important material developed in past decade, and researchers at Monash University have developed a new way to engineer graphene-based supercapacitors. Graphene consists of a layer of carbon arranged in a hexagonal pattern in a layer only a single atom thick. “It has long been a challenge to make SCs smaller, lighter and compact to meet the increasingly demanding needs of many commercial uses,” said Professor Dan Li. Li and his researchers were able to create a supercapacitor with an energy density 12 times higher than currently available units.
Another new type of carbon-based battery is being developed by a startup company called Power Japan Plus. Employing Dr. Kaname Takeya, who has previously worked at Sumitomo where he helped to develop the batteries used in Tesla vehicles and the Toyota Prius, has developed a battery with both the anode and cathode consisting of carbon. They have developed a new type of carbon fiber that modifies the carbon structure of cotton fibers to give the material unique properties that have not yet been observed in carbon fiber.
Power Japan Plus says that their battery could last for 3,000 charge cycles, while a normal lithium battery’s lifespan is only 500 cycles. The battery is also able to charge 20 times faster. They say that the battery doesn’t deteriorate over time, and there is also no threat of overheating or catching fire due to its inert content. The organic nature of its design means that disposal and recycling of the batteries will be less harmful on the environment. If the battery becomes mass-produced, it may bring about grid defection much sooner.
With rapid advances in solar and battery technology being developed, many utility companies can see the writing on the wall.
With advances in technology making solar more accessible to the broad population, the demand for electricity generated from fossil fuel plants will weaken. Fewer people purchasing electricity will likely cause the companies to raise utility prices in order to cover their costs. This increase in retail electricity cost will then make solar power an even more attractive option, forcing the power companies to go into a death spiral, leading to the erosion of companies’ profitability.
In order to embrace the eventual transition to renewable energy, utility companies should see solar power and energy storage as an asset to their businesses. Solar power systems could be leased through the energy companies so that the solar panels could work in concert with the power plants to add value to the grid while also providing income. Transitioning to solar technology will also help the companies meet emission standards in a regulatory environment increasingly hostile towards carbon.
Most power plants have a lifespan of approximately 30 years. According to the Rocky Mountain Institute, much of the country will reach grid parity with solar power in that amount of time. Fossil fuel power will likely always be needed as a source of backup power, but utility companies should work towards streamlining their operations to gradually wean themselves off traditional power sources.
According to a 2008 study by The Brattle Group, U.S. utility companies will spend between $1.5 to 2 trillion between 2010 and 2030 in order to maintain the current levels of energy supplied nationwide. Along with replacing old power plants, companies will have to spend a considerable amount of capital in upgrading transmission and distribution systems nationwide as the electric grid ages and requires maintenance.
In order to maintain their market share in the power market, utility companies must embrace the eventual transition to renewable energy. The obstacles laying just down the road just may be too significant to overcome, even with an army of lobbyists.