Grid Storage vs Transmission: Will Batteries Win?

silhouette of electric post during sunset
Photo by Andrey Metelev on Unsplash

Batteries and transmission are in direct competition. Both enable electricity arbitrage – the profitable repricing of a resource by matching different levels of supply and demand. Transmission moves power through space (technically null space, at the speed of light) and batteries move power through time. And while batteries have a fixed cost per MWh delivered (that is falling about 10% per year), transmission lines get more expensive as they get longer.

Intuitively, we should expect that for a given market, local energy generation landscape, demand profile, historical weather variability, etc, a grid storage battery would be competitive against a transmission line longer than a certain length, and this is true. The challenge for transmission is that as batteries get cheaper and NEPA lawsuits get more expensive, the competitive length for transmission lines is falling fast – the outcome is not in doubt.

Grid Storage: Batteries Will Win

This is a provocative line of thinking from Casey Handmer. It caught my attention because it dovetails with an idea rattling in my brain for a long time: what if every aspect of the economy currently built on an “industrial scale” is transformed into a “peer-to-peer” scale? As a small town, clean energy is likely more efficient, and you are plugged into the national energy network for backup and extreme situations. Give Casey’s piece a read, and let me know what you think!

Technology
4 comments

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Om Malik is a San Francisco based writer, photographer and investor. Read More

4 thoughts on this post

  1. This is certainly a thought-provoking take on the future of the electric grid. I’m no expert, but the article seems to assume that there will be a very significant transition to wind/solar, and because energy production is so variable with those technologies, energy storage is absolutely essential. But existing power production technologies will be around for many more decades, and their output is much less variable, so perhaps the energy storage only become more critical as renewable energy production becomes more prevalent.

    Battery durability also has to be a factor. Batteries are only good for so many cycles before they have to be replaced. While that cost is decreasing over time, it is not an insignificant cost and we will eventually reach the limits of technology.

    1. Carlton

      There is a fairly significant shift to solar and alternative sources happening already. Directionally the momentum is with solar and other sources, mostly in places where it is difficult to think of other options. On the batteries, the sheer size of the market opportunity is why we are starting to see a significant amount of investment — both for-profit and for scientific purposes is going to happen.

      The interesting aspect that no one wants to touch is the role of micro-nuclear. In other words, why do we have to build mega-plants, and where can innovation lead on that front? I, for one am very curious.

      1. I’m tangentially aware of Canada focusing on micro-nuclear reactors, though there could be other countries. It’s an ideal solution for Canada’s Northern Territory, where there are very few viable options due limited ice road transport windows for stored fossil fuel. Information about Canada’s Small Modular Reactor (don’t call it nuclear!) initiative is available at smractionplan.ca.

        I had no idea what the source split was for the US. According to eia.gov, about 60% of electricity generation is from fossil fuels (40% natural gas, 20% coal), 18% is from nuclear, and 22% is from renewables (10% wind, 6% hydro, 4% solar, 2% bio and geothermal.) My guess is that it will be a very long and gradual transition to renewables. Perhaps battery storage can help expedite that process?

  2. The thing that will really blow this thing wide open is when someone makes a battery the size of a shipping container then puts it on an EV Semi truck which runs on the charge in the container and then drops it off somewhere where transmission lines don’t reach. Picks up an empty from the previous trip. But it’s not really empty only 75% empty because you need some charge to drive the EV back.
    Once we get the container sized batteries charged from Solar or hydro we can extend the reach of power in a flexible elastic fashion. Especially useful in disasters and emergencies.
    Now instead of single EV trucks put these on railways – and you can extend the reach.
    You heard it here first.

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