Investing in Energy Storage

I attended a presentation last year where a number of alternative energy technologies were discussed, and I was asked whether any major topic had been missed. I responded that I felt like the single most important topic had been missed: The enabling technology of energy storage. An efficient and cost effective energy storage solution is critical for smoothing out the intermittency of solar, wind, and tidal energy. This is the one advantage that biomass does have over these sources: Biomass may be inefficient at gathering solar energy, but it does store nicely.

How important is energy storage? I think it is absolutely crucial, but largely overlooked in alternative energy discussions. It simply isn’t as sexy as solar, but without a good storage solution, solar will never fulfill its potential. And it just hasn’t seemed to me that we are attacking the storage problem with a sense of urgency. So I was really glad to run across this story a couple of days ago:

Energy storage nears its day in the sun

MONACO (Reuters) – Energy storage is an unglamorous pillar of an expected revolution to clean up the world’s energy supply but will soon vie for investors attention with more alluring sources of energy like solar panels, manufacturers say.

The article sums up the problem:

While the supply of the wind and sun far exceeds humanity’s needs it doesn’t necessarily match the time when people need it: the sun may not be shining nor the wind blowing when we need to cook dinner or have a shower.

Soaring production of solar panel and wind turbines is now spurring a race to develop the winning energy storage technologies which will drive the electric cars and appliances of the future.

The race is heating up as manufacturers with entirely different solutions near the moment of commercial production.

Then it discusses a couple of storage solutions that are vying for supremacy, such as:

For example, UK-based ITM Power sees the future of energy storage in the explosive gas hydrogen. The company is developing a piece of kit called an electrolyzer which uses solar or wind power to split water into hydrogen and oxygen.

The hydrogen is then stored in a pressurized container until it is needed, whether to drive a car, produce electricity or for cooking.

“With batteries you’re taking enormous quantities of basic raw materials,” said Chief Executive Jim Heathcote, referring to cadmium in nickel cadmium varieties. His company won an award for research at the Monaco conference, organized by corporate finance advisers Innovator Capital.

“Two things we’re confident of is the supply of renewable energy and water,” he said.

ITM Power aims to start production later this year of electrolyzers and next year of hydrogen fuel cells which generate electricity.

“The one problem everyone’s had is how to store. The ability to take (surplus) renewable energy and make useful fuel out of it is almost priceless,” Heathcote said.

Investment Opportunities

The remainder of the article describes the investment opportunities in energy storage companies, which look attractive. I think in this next phase of my life, I will be more active at seeking out and acting on opportunities such as this. I have not done this in the past, even when I felt strongly about the direction of commodities or stock sectors. For instance, I just saw this comment from yesterday at The Oil Drum:

About four months ago Robert Rapier suggested that investors looking at energy commodities consider gasoline futures as a likly profit maker. That day I checked the price on www.bloomberg.com at $1.92 per gallon. I suggested to a relative that is heavy in the market to get into gasoline futures then as that commodity looked under priced. The person said it looked riskey and required too much diligents to handle.

Today gasoline closed at $2.55, up 33%. A $5000 investment in futures would have netted over $100,000 in following RR’s advice.

Did I act on my own advice? No. (I can already hear my wife asking “Why didn’t you act?”)

Did I act last spring when I was convinced gasoline prices were headed higher? No.

Did I invest in corn futures when I was predicting that because of the ethanol mandates they were headed much higher from their (then) $2/bu price? No. (Corn futures have more than doubled since then).

Did I short ethanol stocks when I wrote that they were overvalued? No. (I do know some who did just that based upon what I had written, and they made out quite well.)

And probably the best (worst?) example of all, did I short Xethanol when it was at $12 and I knew that a devastating exposé was about to be released by Sharesleuth? No. (XNL is now worth less than $0.50 a share).

I always advise people to invest in what they know. I got burned in 2000 investing in technology stocks that I didn’t properly understand. It is hard to do the proper due diligence if you really don’t grasp the important issues in the sector. In technology, it was hard for me to say which companies were poised, and which ones just thought they were poised (and fooled the analysts). But I do understand the energy sphere. I just have to start acting on my convictions. (I haven’t totally twiddled my thumbs on this issue. I have invested my 401K shares per my conviction on higher oil prices, and that has paid out quite well.)

Disclaimer: If you do act on anything you read here, you are on your own. I may change my mind tomorrow about whether something is still a good investment (with gasoline inventories where they are, gasoline futures are starting to look a lot riskier), and I don’t send out warnings to take profits and run. I am obviously not writing an investment blog, although clearly there are numerous financial implications based on developments in the energy markets.

58 thoughts on “Investing in Energy Storage”

  1. Good luck with the investments Robert, about the storage:

    Sharp just yesterday announced a partnership with a Japanese housing company and an electrode maker to develop (larger) lithium-ion batteries for domestic solar systems. The company they all invest in is Eliiy Power – which I hadn’t heard before.

    It’s “only” a few millions and lithium-ion will pose some problems but they could potentially find other applications, too.

    With a local, large battery I would be able to use the energy from my own roof without feeding it back into the grid with all the losses and contract issues. But who would give me my feed-in incentives??

    -thomas-

  2. Robert

    Be very careful of insider trading laws.

    If you knew that a devastating expose of a stock was about to be published, that would push the price down, you could have been in possession of ‘material non public information’.

    Dealing on that information, or advising someone else to deal, would count as insider trading, a crime punishable by fines and imprisonment.

    The SEC does use automated tools to check stock boards, blogs etc. So does the UK equivalent (the FSA).

    You are on safer ground re commodities prices, because it’s less likely you would have access to information that is non public (unless you work for OPEC, or a body that, say, publishes gasoline inventory data).

    See ‘Trading Places’ with Dan Akroyd and Eddie Murphy for some talk of insider trading (what they do in the film with orange juice futures in Philadelphia is entirely illegal, but they are stealing from fraudsters). Also ‘Wall Street’ which was based on the true cases of Ivan Boesky and Michael Milliken.

  3. Large scale non-mobile energy storage, either large deployments of small systems or large scale deployments is something that will happen, but the timeline for a return on investment is probably outside of a lifespan. Probably that statement includes my SHPEGS idea.

    Currently, solar electrical systems are in the 4x-10x $/kW vs. fossil fuel powered systems. This is without storage and based on peak usage pricing. Adding storage drops the peak output and adds capital cost. Fossil fuels are still much too abundant and cheap for mass energy storage from renewable systems to be feasible. The receding horizons problem kicks in and as fossil fuel prices rise, so do construction/fabrication/shipping costs of renewable systems. It will take a while before base load renewable systems can compete with coal, but it will eventually happen.

    With coal fired generation systems tied to the grid that can’t realistically be powered down quickly, energy storage that saves electricity during low usage periods and releases during peak usage periods has a huge value. The problem is that it’s still much cheaper to add an NG peak load plant than to build any kind of mass storage system and probably why we haven’t seen that many Compressed Air storage systems deployed in gas turbine power stations.

    With current economics, you could still make a much better profit signing up for a renewable program like Ontario’s Standard Offer which is paying $0.42/kWh and rather than actually install PV, put up a field of cardboard panels painted to look like PV and run diesel generators. The fossil fuel storage capability and price just doesn’t align with storage from renewable systems yet and won’t for a while… but tell your kids to invest in energy storage.

  4. Mury, an even better reference is the NSSO interim report.

    However, as the report points out, cheap ground to orbit capability is an absolute necessity, otherwise the expense makes Space Based Solar Power (SBSP) unaffordable. It’s going to be bloody expensive anyway.

    The upfront costs are so high I doubt we’ll see it until after we’re better established in local space.

    (Subject change) I remember reading about flywheel energy storage decades ago, I don’t know how well it scales. And then there are pumped storage facilities (like the Storm King project, killed by environmentalists)

  5. Damn “Scenic Hudson and Hudson River Fisherman’s Association” … they should be happy with whatever they get.

    (oh, that was a Bright Shiny Object.)

    On investing, that’s a big interesting question. It maps to where you are in life’s arc of course. As a semi-retired guy I’m looking for stability and low risk. I’ve stayed away from things that looked like bubbles to me, and that forced me into CDs. I got good interest last year but of course had to book it and pay taxes. That probably resulted in a small real loss, but that was a better alternative to me than joining a late-stage asset bubble.

    The market may boom again, which would make index funds a good vehicle for me, but the market still looks bubble-like.

    Commodities were a good investment, but now they too look bubble-like.

    We live in this time where we have too many people operating on debt, credit markets seizing up, and yet money still runs looking for returns. It is one asset bubble after another.

    And so this morning I was just thinking that it’s still a good time to stay FDIC insured. It may be a small 2008 investment loss, but looking for a 2008 gain might entail too much risk.

    Sometimes you’ve got to be tough and take the hit.

  6. Robert — great to see that you have got the word about the critical nature of affordable large-scale energy storage. Great that you are spreading the word. “Renewable” energy without energy storage is like a bicycle without wheels.

    As always, beware of the unanticipated consequences of technological advances.

    The major real problem with nuclear power today is the difficulty of cycling power output to follow demand — which is why nuclear these days is used for base load. If/when large scale energy storage becomes feasible & affordable, then a nuclear power plant (or even a coal plant) will be able to run at a relatively steady output while charging/discharging storage to follow demand.

    Good news is that means the cost of electric power should come down. Bad news for “renewable” enthusiasts is that their costs will have to come down even more to be competitive.

  7. Bright Shiny Object #2 (for this thread):

    “Great that you are spreading the word. “Renewable” energy without energy storage is like a bicycle without wheels.”

    Did you really say that Robert?

    I’d think that without storage renewable would have an upper limit of applicability, but that the overwhelming number of regional power companies are well below that limit.

    (Note also that “renewable” includes some kinds of geothermal, which do not require storage … the medium is the storage in that case.)

  8. Storage schemes I’ve considered:

    Batteries: expensive and need too many raw materials to scale up.

    Ultra-capacitors: ditto, and not yet ready for prime time anyway.

    Pumped hydro: inefficient, and won’t scale (site-specific).

    Compressed air: ditto.

    Flywheels: a possibility, though currently expensive.

    Thermal mass: a possibility, though doubtless quite lossly unless your renewable source was heat in the first place.

    Hydrogen: extremely lossy, but at least it would scale.

    I’ve probably missed a few. The bottom line for me is none of these look likely to arrive as scalable commercial solutions in anything under decades. While we wait, IMO we need to start building nukes and shuttering coal plants. Anything we can get in the meantime by cutting consumption and tapping into renewables just means we can shutter coal plants faster.

  9. RR has stellar insights. He should be involved in an energy-investment website.

    By the way, I have been consistently wrong in my investing in the last year, as I was ever contemplating a fall in oil prices.

    A story in yesterday’s WSJ hints at the involvement of soveriegn funds in commodities markets.

    That may explain some of the levitation in crude prices. Imagine, as an oil producing nation, you can not only somewhat control world production, but then apply pressure on the NYMEX.

    Of course, this is rank speculation — and yet, and yet. If you wanted to maximize revenues, and no one could ever put you behind bars, what would you do?

    You wold limit oil production, and play on the NYMEX.

  10. IMHO renewable storage is a better discussion topic than investment opportunity. Even with aggressive ramp rates it will be many years before intermittency is an issue in the US. And there are cheaper ways to deal with intermittency than dedicated storage. For example:

    1. Solar matches well with Sunbelt peak loads. The first 50-100 GWp of solar deployments will mostly offset natgas peakers. 2007 US solar deployment is estimated at less than 0.2 GWp, so we’re decades from needing significant storage. Remember, those natgas peakers aren’t going anywhere and will be available for backup.

    2. Wind is now our cheapest source of electricity, but also the most sporadic. PHEVs don’t care about intermittency — they can plug in 23 hours/day with smart chargers that only draw current when the wind blows. With V2G they can even feed electricity back into the grid and provide stabilization, peaking power, etc. (A couple million PHEVs with V2G could even help avoid blacking out half of south Florida when a nuke decides to drop offline).

    PHEVs could soak up the first 200 GWp of wind turbines. We installed 5.2 GWp of wind last year so even with rapid growth we’re a couple decades from needing dedicated storage.

    3. Geothermal, hydro, etc. don’t really need storage, and in some cases can serve to fill in gaps opened up by solar and wind. Existing hydro can convert to pumped hydro, postponing the storage issue another decade or so.

    4. Demand management will grow. Smart chargers for PHEVs as mentioned above are an example. HVAC thermal mass (e.g. Ice Bear) is another

    5. Thermal mass technically IS energy storage, but is much cheaper and lower tech than batteries, CAES, etc. Thermal mass is featured in low energy designs, but it’s especially useful with intermittent energy sources.

    I have not run the numbers, but I bet we could convert all existing hydro to pumped hydro and run 40% nuclear, 30% wind and 20% solar with almost none of the exotic storage technologies being kicked around today. (The other 10% would be biomass, geothermal and existing natgas peakers filling in gaps).

  11. What about the solar-ammonia route? Some people are keen on that.

    As for investing, energy storage looks like a very logical next step.

  12. Scientific American did an article a few months ago about a solar-power “Grand Plan” targeting the year 2050 for substantial conversion to solar. They advocate the use of compressed-air storage:

    “Studies by the Electric Power Research Institute in Palo Alto, Calif., indicate that the cost of compressed-air energy storage today is about half that of lead-acid batteries. The research indicates that these facilities would add three or four cents per kWh to photovoltaic generation, bringing the total 2020 cost to eight or nine cents per kWh.

    “Electricity from photovoltaic farms in the Southwest would be sent over high-voltage DC transmission lines to compressed-air storage facilities throughout the country, where turbines would generate electricity year-round. The key is to find adequate sites. Mapping by the natural gas industry and the Electric Power Research Institute shows that suitable geologic formations exist in 75 percent of the country, often close to metropolitan areas. Indeed, a compressed-air energy storage system would look similar to the U.S. natural gas storage system. The industry stores eight trillion cubic feet of gas in 400 underground reservoirs. By 2050 our plan would require 535 billion cubic feet of storage, with air pressurized at 1,100 pounds per square inch. Although development will be a challenge, plenty of reservoirs are available, and it would be reasonable for the natural gas industry to invest in such a network.”

  13. Jeez, we can just grow biomass, and burn it at night to turn steam turbines, and generate electricity.
    The key is PHEVs. Once we move to PHEVs, then our problem becomes electricity generation, and that is easy (I think).
    Anyway, PHEVs recharge at night, when the grid is fine, not overtaxed (although I think a lo of people wil want to recharge at work, during daytime, so maybe this will not be true).

  14. Doug,

    You listed several storage schemes and one was batteries. It is important to distinguish between a traditional static single or multi-cell battery, and an electrochemical flow-cell “battery”, of which there are several technologies. Flow cell batteries do not have the same scalability issues and material requirements as traditional batteries. There are several already in use at the utility scale.

  15. “Bad news for “renewable” enthusiasts is that their costs will have to come down even more to be competitive.”

    That’s been happening with photovoltaics for 30 years now kinuachdrach. They ran $100 a watt back in 1975. $4 a watt in ’06. $3.25 last year. Another drop to $2.00 is expected in the next 18 months or so. Oil and gas aren’t getting any cheaper barring a major recession. But,that still leaves coal,and we won’t see peak coal for at least 25 years.

  16. Pumped hydro: inefficient, and won’t scale (site-specific).

    Site-specific, oh H@&& yes, but it does scale in terms of capacity. And yes, you have losses both on the pumping side and on the regeneration side. Con Ed tried to do a pumped storage project over forty years ago (Storm King), but environmentalists stopped it.

    By 2050 our plan would require 535 billion cubic feet of storage, with air pressurized at 1,100 pounds per square inch.

    Has anyone actually tied to pressurize a natural reservoir to that pressure? The article mentions systems running in Huntorf, Germany, since 1978 and in McIntosh, Ala., since 1991, but it’s short on details.

    The key is PHEVs. Once we move to PHEVs, then our problem becomes electricity generation, …

    1) PHEVs need energy storage too.

    2) We have to be able to support the current electrical usage too. Energy storage is needed to be able to switch from the current generation mix to more solar, wind, etc.

    I’m still hoping that Dr. Bussards Polywell fusion pans out.

    Flow cells, already commercially available, right.

  17. larryd – today there is LEAPS . It is also opposed by environmentalists and some concerned about electric rates.

    Riverside County looks like a good place for thermal or PV solar. I’ve read that the overall efficiency for pumped water storage is 88%.

  18. My crystal ball says time of day pricing will alleviate much of the generation-load mismatch. Charge a nickel for night electricity and fourty cents for summer afternoon watts and people will find ways to load shift all on their own.

  19. Good afternoon Odo!

    DId I make a mistake? Are not environmentalists opposed to LEAPS? Yes, it is in a National Forest. The upper reservoir covers 132 acres. The power house and main tunnels are all underground. The biggest objections seem to be the transmission lines.

    You can build things in National Forests. Here is an example in the San Bernadino National Forest.

  20. I was annoyed with the insinuation that only “environmentalists” would object to power projects in a national forest.

    It is a rhetorical trick as old as the hills to play it that way of course.

    Never mind that we have no idea how the opponents to this thing self-identify, or how they react to other environmental issues.

  21. Odo – OK, I thought for a minute you were a BANANA advocate.

    I would be against certain kinds of development in national forests as well. But some mining, logging, electrical transmission, roads, ski areas, and other kinds of things are perfectly compatable with national forests. There are a number of municipal water reservoirs in national forests. I don’t see LEAPS as any different.

    The discussion here is on energy storage. I was pointing out a specific example of an energy storage project which some people oppose. LEAPS happens to be located in an area that might also be good for PV or thermal storage generation.

    I really don’t get people who say they are environmentalists and then oppose EVERY kind of energy development. If AGW is the threat that some would have us believe, then aren’t some kinds of energy development (nuclear, pumped water storage, CCGTs) better than others (pulverized coal, oil fired generators)?

  22. FWIW, I was on a Sierra Club hike about 5 miles from that valley. Some of the nice old folks (fast hikers for 70-somethings) were mobilizing to fight it. I think I expressed the quiet opinion that we were in a bad spot already, with water and power.

    So I guess I’m roughly neutral. I think it’s a minor tragedy (there aren’t many valleys like that) but so cal is kind of screwed anyway.

  23. To get back on topic: The main idea in the SHPEGS project is to build massive energy storage, in this case thermal, and then make it feasible by utilizing some of the heat for structure heating. The storage idea came first with base load as a design requirement. The solar energy capture came later with the focus on the most efficient and feasible way to capture massive amounts of solar heat. Generating power is almost an afterthought to the seasonal energy storage and structure heating, functioning the same a traditional binary geothermal system. A combination of Drake Landing Solar Community, Binary Geothermal and air coupled heat pumps (in this case solar powered).

    Any investors?

  24. Actually, I don’t see much need for energy storage.
    Aside from solar, many other power sources can ramp up or down. Natural gas-fired plants, clean coal, hydro, nuke, etc. can ramp up or down.
    Geothermal I guess is steady, and wind variable. My fave, biomass-fired steam turbines, can be ramped up or down. My real fave, which is thousands of criminals pumping on electricty-generating stationary bikes, is also variable. Sentence the miscreants to watts produced, not time. Safer streets and more power.
    Moreover, look for electrical demand to fall in the USA going forward. New buildings use half the juice of older buildings, and retrofitted buildings use less too.
    The switch to PHEV promises to be easy, to yield higher living standards and a cleaner environment. What is not to like?
    There is no doom in our future, unless we elect another string of dunces. Okay, so maybe there is a chance of doom.

  25. Robert,
    Good luck with your energy storage investments. Be careful though. It seems to me that they resemble technology stocks more than they resemble commodities like oil, gasoline and corn. And while you understand ethanol (and other biofuel) technology very well and can feel comfortable trading Xethanol, how well do you understand energy storage technology?

  26. The inexplicable Odograph scribbled:
    “Great that you are spreading the word.
    “Renewable” energy without energy storage is like a bicycle without wheels.”

    Did you really say that Robert?

    Odograph — Really! Get a life. Or at least read the articles that our host posts. From Robert Rapier’s article:

    “I responded that I felt like the single most important topic had been missed: The enabling technology of energy storage. … How important is energy storage? I think it is absolutely crucial, but largely overlooked in alternative energy discussions.”

    So, we can conclude that:

    (a) Robert Rapier is indeed, by his own assertion “spreading the word” about the crucial importance of energy storage.

    (b) Robert Rapier did not say “Renewable energy without energy storage is like a bicycle without wheels” — but it is indeed a rather pithy summary of his thesis. Feel free to use it in conversation around the water cooler.

  27. Something else to keep in mind about energy storage — stored energy inevitably is hazardous.

    Explosives, forests, flywheels, hydro dams are all forms of stored energy. All of them have under certain conditions released their energy rapidly and resulted in fatalities & damage.

    Of course, lack of energy is also hazardous — and has probably resulted in more deaths over human history than stored energy.

    Point is that we live in the real world. There are no zero-risk solutions out there.

  28. The interesting thing King, is that folks above talk about adaptive load to make use of adaptive power. From your article it looks like some people signed up to be adaptive sources, and they were the ones affected:

    “System operators curtailed power to interruptible customers to shave 1,100 megawatts of demand within 10 minutes, ERCOT said. Interruptible customers are generally large industrial customers who are paid to reduce power use when emergencies occur.

    No other customers lost power during the emergency, ERCOT said. Interruptible customers were restored in about 90 minutes and the emergency was over in three hours.”

    Is that a good design? It might depend on how often such contractual terms are invoked, and if the customers still think they are getting a good deal on their power.

    How often? How much of a discount … spreadsheet work.

  29. Odo – yes, some businesses are better able to adapt to power losses than others. An assembly line manufacturing facility might be able to handle it. But you get about $20 /MWhr discount for interruptable.

    This is worrisome to us in ERCOT. Three years ago in early March 2005 we had real rolling blackouts. Power producers try to take planned turnarounds in the spring to get ready for peak summer A/C load. We got a hot day when about 12,000 MW of power was off line and ERCOT had to start shedding load to keep the grid up.

    I’m concerned that with as many people moving into the state and additional businesses, while at the same time ramping up wind power that we could have more shutdowns like this.

  30. My real fave, which is thousands of criminals pumping on electricty-generating stationary bikes

    Unfortunately it takes a lot more energy to feed the criminals than you get in electricity. You get the fat they came in with “for free”, but at a little less than 1 kWh per pound that doesn’t take you very far.

  31. I think the headline was inflammatory. Part of it was perhaps that this is categorized as an “emergency” in the terminology.

    But when “No other customers lost power during the emergency, ERCOT said. Interruptible customers were restored in about 90 minutes and the emergency was over in three hours.”

    It really strikes me as the way things are supposed to work.

    Or as we acknowledge they must work with current state of the art.

  32. i was wondering how did you come up with the math:

    gasoline futures go from $1.92 to $2.55, w/ a $5K investment = $100K of profits?

    my calcs show only about a $26K profit…

    yea…(2.55 – 1.92) x 42,000 gallons of gasoline per future = $26K. and w/ $5K, you can only really speculate on 1x gasoline future.


  33. New battery packs powerful punch
    by Paul Davidson in USA TODAY on July 4, 2007
    :

    The NaS battery is the most advanced of several energy-storage technologies that utilities are testing. …

    An NaS battery … uses a far more durable porcelain-like material to bridge the electrodes, giving it a life span of about 15 years, Mears says. It also takes up about a fifth of the space [of PbAcid batteries]. Ford Motor pioneered the battery in the 1960s to power early-model electric cars; NGK and Tokyo Electric refined it for the power grid.

    ***

    The biggest drawback is price. The battery costs about $2,500 per kilowatt, about 10% more than a new coal-fired plant. That discourages independent wind farm developers from embracing the battery on fears it will drive the wholesale electricity prices they charge utilities above competing rates, says Christine Real de Azua, spokeswoman for the American Wind Energy Association.


  34. “System Relies on Ice to Chill Buildings” By Colleen Long of the
    Associated Press on July 16, 2007
    :

    … some office towers and buildings have found a way to stay cool while keeping the AC to a minimum – by using an energy-saving system that relies on blocks of ice to pump chilly air through buildings.

    The systems save companies money and reduce strain on the electrical grid in New York, where the city consumes more power on hot summer days than the entire nation of Chile.

    … water is frozen in large silver tanks at night when power demands are low. The cool air emanating from the ice blocks is then piped throughout the building more or less like traditional air conditioning. At night the water is frozen again and the cycle repeats.

    In the basement, three main cooling rooms house chilling machines and 64 tanks that hold 800 gallons of water each. Credit Suisse has a traditional air conditioning system, but engineers use the more efficient system first.

    Construction on the system took about four months, and company engineers say it is extremely efficient.

    “The concept is the same, but when you make something mechanical, it can break, but a big block of ice four floors below grade level isn’t going to do anything but melt,” said Todd Coulard of Trane Energy Services. The company built the Credit Suisse system and is one of several that work with ice storage.

    Ice storage at Credit Suisse lowers the facility’s peak energy use by 900 kilowatts, and reduces overall electric usage by 2.15 million kilowatt-hours annually …

    … costs are considerable: Credit Suisse spent more than $3 million to renovate its cooling system; …

  35. solarbuzz.com charts the retail price of solar power for the past several years. Contrary to the hype, the price has barely come down at all. Demand is increasing as fast as supply and the price of modules is the same or higher now than it was five years ago.

  36. Contrary to the hype, the price has barely come down at all.

    PV’s long, downward price curve was interrupted the last few years by wafer shortages. For decades PV basically used waste and surplus wafers from the IC industry. Very cheap. But a few years ago PV finally grew to the point where it consumed more silicon than the entire IC industry, thus outgrowing the waste/surplus stream. The almost-free lunch ended.

    The good news is you can manufacture dedicated ‘solar-grade’ wafers much cheaper than IC-grade. The bad news is it took a few years to build dedicated plants. They’re now coming online and I’ve read the polysilicon shortage should end late this year. We’ll see.

    The next leg down will be driven by thin-film, anyway. First Solar manufacturing cost is a little over $1/W. Their aggressive expansion should start to drive market pricing by late 2009. Nanosolar is coming hard on their heels with even lower claimed costs. If successful they’ll drive pricing by 2010-11. The silicon shortage created a huge window of opportunity for these thin-film guys to ramp faster than would have otherwise been possible.

  37. i was wondering how did you come up with the math:

    I don’t know what assumptions he was making. I just reported what he wrote. He must have been assuming a higher level of leverage. But I can’t say for sure.

  38. The next leg down will be driven by thin-film, anyway. First Solar manufacturing cost is a little over $1/W.

    15 year lifespan, 10 years to get back the electricity it took to refine the silicon (if the panel gets installed in an area with good solar insolation). The low price will come by getting the silicon and panels manufactured in China. China is building 50 new traditional coal fired plants a year to keep up with the electrical demand. Now it just needs some Chinese batteries to be useful when it’s dark outside.

    PV has a place, but on a grand scale it has a lot in common with ethanol and it stops making sense if you start looking at the whole picture. There is money to be made (because of the retail market) and that’s why there has been growth. It’s not because there is any real value in lowering greenhouse gases, they are just going to get produced on the other side of the world.
    Keep on Rockin’ in the Free World.

  39. First Solar manufacturing cost is a little over $1/W.

    15 year lifespan, 10 years to get back the electricity it took to refine the silicon…

    First Solar doesn’t use silicon. Neither does Nanosolar. I haven’t seen energy payback for First Solar, but Nanosolar claims 3 weeks.

    Even for silicon the refining energy claims are bogus. Solar-grade refining (not used until recently) uses a fraction of the energy of IC-grade refining.

    PV has a place, but on a grand scale it has a lot in common with ethanol and it stops making sense if you start looking at the whole picture.

    At $2/Wp PV makes great sense for sunbelt peak-shaving. If Nanosolar delivers on their $1/Wp claims it will make sense elsewhere. Not baseload, though.

  40. I was totally off and didn’t know First Solar was using cadmium/tellurium based semiconductors. Something still smells bad to me in thin PV.

    First Solar was picked as Worst Stock for 2008. Having been in IT and lived through the dot-bomb, I don’t necessarily believe press releases from a recent IPO on things like total EROEI that they wouldn’t be accountable for. I wish that PV would be developed to the point that it’s on every rooftop, but anything I find in real examples conflicts directly with press releases and the $/W banter.

    The Toronto Horse Palace PV project has a good live data website. The 100kW system came in at $11/W (installed last fall) and so far the best average real output for daylight was last August with 7100kWh for 360 hours of daylight for the month, which is about 20kW average in the daylight, which is a long way from the nameplate 100kW. The real output puts the installed cost at $55/W. Although this was a mix of currently available panels and not thin film, $55/W is a bit off the $2/W the PV IPO’s are claiming. Caveat Emptor. I still hope I am wrong and I totally am not against solar PV, just scams.

  41. doggydogworld writes:
    The next leg down will be driven by thin-film, anyway. First Solar manufacturing cost is a little over $1/W.

    Bob Rohatensky replies:
    15 year lifespan, 10 years to get back the electricity it took to refine the silicon

    Where do you get a mere 15 year lifespan? I’m seeing 25 years from First Solar.
    http://www.alfasolar.de/firstsolar_fs2.html?&L=1
    power output warranty of 90% of the nominal output power rating during the first 10 years and 80% during 25 years following the installation.

    And where do you get a 10 year energy payback time? Studies from 30 years ago? Based on real data from First Solar in Ohio, (not China)

    http://www.nrel.gov/pv/thin_film/docs/cdte_ghg_energy_fthenakis_mrs_11-21.pdf
    The life cycle of the thin film CdTe PV modules in the U.S. have been investigated based on actual production materials and energy inventories and recorded performance data…. The energy payback time of the studied system is 0.75 years …If combined with the state-of-the-art BOS for a central (utility) system… we obtained 1.2 years for a ground-mounted, grid-connected system under average U.S. insolation conditions.”

  42. I made up the expected lifespan based on what happens to stuff I have left outside. The real outside, not the “lab” outside.

    What does a random hailstorm or a gale force wind do to a PV farm? What are the chances that will happen over 20 years?

    Due to the amazing inability for anyone to predict the future at any given location, my guess on the real average lifespan is just as valid as anyone else’s. Best guess would be about the same as an asphalt shingle. That’s about 15 years. Thinking that a “thin” film product is going to outlast gravel and tar on a roof in real weather is naive.

    The real EROEI isn’t something that is going to be known when large scale manufacturing scales up. In current limited quantities they can force processes to give promising results. Again that doesn’t happen in “boom” times.

    Take a look at ethanol scale up. There were many studies that hyped ethanol with high EROEI and “green” banter. It didn’t work out that way once it scaled up.

    The best PR Solar PV could do is to “clean room” the entire manufacturing process and power it all with their own PV. That’s usually the test with any “free energy” scams, and it’s a valid one for PV. Nobody is going to go up on fraud charges for miscalculating EROEI.

  43. Yes, it’s hard to really trust laboratory accelerated life testing. Nothing quite compares to the real thing. But Florida Solar Energy Center (fsec) and NREL has been testing thin film PV in the real outdoors since 1988, 20 years. The lastest report I’ve found only goes to 2005, but at that time the thin film panel had lasted 17 years. See Figures 45 and 46 of
    http://www.nrel.gov/docs/fy06osti/40242.pdf

  44. Again: My comment was projecting PV on a grand enough scale to make any real difference in the energy pie chart, not what is happening now. I think PV has a place, but concentrating on it as some sort of solution to our energy problems is a mistake. The potential retail market is pushing research and investment. It would be nice if I was totally wrong.

    Ausra backed by Khosla Ventures is building their plant in Nevada relatively quietly. I can see solar thermal scaling to be significant, I can see utilizing solar thermal to power an air coupled heat pump in the summer, store thermal energy seasonally and utilize the heat in a binary geothermal power plant. These things could all scale to be significant baseload generation, PV can scale to some niche markets, past that it’s going to be about controlling IP and making money, not sense.

  45. These things could all scale to be significant baseload generation

    Spot on, Bob. Scale is the real issue, when we are facing the prospect of inadequate fossil fuel supplies.

    Some think tank guys (SRI?) are reportedly preparing a book about global energy needs — using as a unit the “cubic mile of oil”. A staggeringly large unit!

    The world today consumes about one cubic mile of oil per year, and about two cubic miles of oil equivalent in coal, gas, nuclear,& hydro.

    One issue that often gets missed is the energy demand of the energy supply industry itself.

    With high energy amplification/Energy Return On Energy Investment sources like fossils, the energy demand of the energy supply industry is quite a modest component of total demand.

    With low energy amplification sources (like most “renewables” today once energy storage is added in), we could easily see global energy demand doubling or more simply to provide the same amount of useful net energy.

    Bottom line — we need to focus on non-fossil energy sources which can scale up to give us very large amounts of supply. And within a reasonable time frame.

  46. Our global dependence on fossil fuels and our urgent attempts to free ourselves from this dependence have revealed a significant deficiency in our current energy generation and supporting infrastructure. We are making great strides in the energy generation field with a nuclear renaissance on the horizon and the emergence of new and innovative ‘green’ technologies; nonetheless, these gains are offset by the inefficiencies inherent in our infrastructure. Unless we invest in and develop our capabilities to store efficiently the energy that we are producing, we are only going to add to the problem. We need a cost-effective, reliable and efficient energy storage platform to 1) transfer energy into, 2) store the energy, and 3) release it when needed. If this ideal platform existed today we would be much closer to true energy independence. The consequence of such a break-through in energy storage technology would truly change the face of the globe and help us realize our dreams.

    In order to gain a better perspective on what a universally desirable energy storage device should comprise, we should look at each of the processes above. This may be an overly simplistic view of energy storage, but it does provide insight into what we are up against. Of the three processes, numbers 1) and 3) are the biggest culprits when it comes to wasting the energy we are trying to conserve. These losses are repetitive and additive and are a consequence of the inability of the energy storage device readily to accept energy and its reluctance to release it when needed. For example, if you take an ordinary lead acid battery, the amount of energy required to recharge it is always greater than what is actually stored, and you can never get as much out of it as it can store. These inherent short-comings have been accepted in the industry and design philosophies have followed suit. The industry as a whole has adopted a design philosophy that compensates for energy storage device inadequacies rather than trying to fix the problem. In other words, the industry accepts the energy storage device ‘as-is’ and then designs its systems to work around the problem. This line of thinking is wrong and it is not an acceptable approach for those interested in energy conservation. AGT has identified, and is targeting the root cause for these energy losses by attacking it at the most fundamental level.

    AGT’s patent-pending technologies (protections held in the US, Canada and Europe) offer customized Ultrasonic Energy Efficiency Improvement (UEEI) solutions for all battery based applications. AGT uses high-frequency, low-level ultrasonic energy to alter the electro-chemical conversion process within the energy storage device. Specifically, the ultrasonic signal is tailored to enhance the energy storage devices internal electro-chemical diffusion characteristics. By doing so, the energy losses (waste) associated with this limiting characteristic during the transfer of energy to and from the energy storage device are significantly reduced. AGT recaptures the wasted energy and uses it for its intended function. Until now, this energy storage device characteristic was considered fixed and dependent on the chemical make-up of the energy storage device—AGT recognized that it is also dependent on the influence of ultrasonic energy. Thus, the energy storage device becomes an integral part of the solution, an active and controllable component of the system, rather than part of the problem. AGT is not settling for the energy storage device in its manufactured (as-is) form; we take a commercial product, we modify it, and we control it to fit our application.

    -1-

    Benefits of AGT’s Patent-Pending Technology and Process

    • The size of a battery pack can be greatly reduced, to 1/3 of 1/2 of its original size
    • Higher peak currents are available during discharge (power), up to 3X greater
    • Faster charge times to 100% State of Charge (SoC), as much as 5X faster
    • It will last 5-10 times longer, sharply reducing the need for battery pack replacement
    • Its charge acceptance at lower currents is significantly increased (Solar)
    • Its internal impedance can be adjusted to compensate for less than ideal wind speeds (Wind)
    • The level of control is limitless and it is real-time, thereby allowing for compensation for load changes, environmental changes, etc
    • The level of control can be altered via customized software solutions: A programmable battery pack
    • Less weight compliments the plug-in hybrid initiative (40 miles on single charge)
    • Lowered impact on the environment, fewer batteries being discarded
    • Less gassing and at lower charging potentials, less sensitive to the cold (Fork-Lift)
    • Industrial and residential applications
    • Truly revolutionize energy storage without disrupting current production and distribution channels
    • Cost effective and scalable solutions for energy storage worldwide

    If we truly want to minimize or eliminate our dependence on fossil fuels and move toward a ‘green’ environment, we are going to have to change the way we think about energy storage. AGT has dedicated itself to solving these problems and will pave the way for others to follow. The gains achievable with the application of AGT technology are boundless.

    comments/suggestions
    shawnkel@gmail.com

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