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Energy Storage (Distributed)

A Tesla Powerwall unit

There is an energy transition under way. The world is shifting away from carbon-based fuels to renewable energy. With distributed renewables, such as rooftop solar, a utility’s customers become producers and can sell power to the grid. Another part of the transition is distributed energy storage—the ability to retain small or large amounts of energy produced where you live or work and use it to meet your own needs.

The wind and sun have their own timetables, making generation variable. Storage can ensure electricity is available, even when sunshine or breezes are not. There are two basic sources of small-scale storage: stand-alone batteries and electric vehicles. If they are used to enable more reliance on renewables, there will be substantial climate benefits.

Creating a distributed energy storage system, or grid independence, requires affordable storage, and until now, prices for batteries have been prohibitively expensive. That is changing. From $1,200 per kilowatt-hour in 2009, the cost dropped to roughly $200 in 2016. Companies are predicting $50 per kilowatt-hour in a few years. For $1,200 per kilowatt-hour, you can purchase a 24-kilowatt-hour energy storage system and get a car thrown in for free—the all-electric Nissan LEAF.


batteries…cost has dropped: Nykvist, Björn, and Måns Nilsson. “Rapidly Falling Costs of Battery Packs for Electric Vehicles.” Nature Climate Change 5, no. 4 (2015): 329-332; Knupfer, Stefan M., Russell Hensley, Patrick Hertzke, Patrick Schaufuss, Nicholas Laverty, Nicolaas Kramer. Electrifying Insights: How Automakers Can Drive Electrified Vehicle Sales and Profitability. McKinsey & Company, 2017.

2012…McKinsey & Company predict[ion]: Hensley, Russell, John Newman, and Matt Rogers. “Battery Technology Charges Ahead.” McKinsey Quarterly, July 2012.

General Motors and Tesla…in 2016: Voelcker, John. “Electric-Car Battery Costs: Tesla $190 per kwh for Pack, GM $145 for cells.” Green Car Reports. April 28, 2016.

[savings from] peak-demand utility billing: Dyson, Mark, James Mandel, et al. The Economics of Demand Flexibility: How “Flexiwatts” Create Quantifiable Value for Customers and the Grid. Boulder: Rocky Mountain Institute, 2015. 

Battery cost could halve: Nykvist and Nilsson, “Falling Costs.”

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