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Saturday, May 23, 2015

Did Tesla Just Kill Hydro Electric Power?

 Cross-posted from Energy Trends Insider

Thanks to Tesla's new battery packs, can we not only stop building more hydro electric dams, but remove the existing ones to save what remains of the last river ecosystems, restore the world's salmon runs? Unfortunately, the answer is no. My sarcastic title was inspired by an article written by Jeff McMahon for Forbes titled: Did Tesla Just Kill Nuclear Power?


The inanity of debating the displacement of nuclear energy (which provided 63% of our low carbon electrical energy last year) instead of coal with wind and solar ...boggles the mind.

Tesla's new packs come in three flavors ...and many attractive colors. The 7kWh pack for solar panel storage can purportedly be charged 5000 times. The 10kWh pack meant for emergency use can be charged 1000-1500 times. These are both called PowerWalls. There is also a 100kWh, $250/kWh, industrial version called the PowerPack.

Being able to buy retail, what is essentially a giant power tool battery pack, is a first. What use they will be put to, only the market can tell. Whether or not Musk can create a market for them, only time will tell.

An acquaintance of mine asked what makes Tesla's new batteries so great and was surprised to learn that Tesla does not make batteries. They assemble Panasonic (or batteries from one of the other battery manufacturers in Japan, Korea, or China) into packs with battery management circuitry to control charging and discharging, very much like the power tool battery packs found at Home Depot ...writ large.

He then asked why they are so much cheaper than any other battery pack and was surprised to hear that they aren't. The battery pack in the Nissan Leaf sells for about 34 and 64 percent less4) per kWh than the 7 kWh and 10 kWh PowerWalls respectively.

When I told my neighbor that it would cost me well over a million dollars to use Tesla's packs to go off grid he didn't know what to believe, and I don't blame him. You'll see why later.

Below I parse transcripts of Elon Musk's PowerWall presentation. Like most things in this world, reality is a matter of degree. Rather than rate Musk's comments as true or false (a step function), I will give each one a veracity (conformity with truth or fact, accuracy) score. I'll calculate the average score at the end of the post. For example, a typical politician may average a veracity score of about 3 out of 10 any time his or her lips move, a televangelist, maybe a 2 out of 10. A score of zero indicates not a grain of truth to be had. A score of 10 would indicate a cold, hard, fact. They are of course, arbitrary, so feel free to make up your own.

"And if you look back against that wall you'll see a whole bunch of them as well in different colors so you can pick your favorite color, and it looks like a beautiful sculpture on the wall."
Veracity score = 8 out of 10.

The $71,000 Tesla Mosel S sedan is, by dint of its price, a coveted status symbol. Few, if any, of the individuals who signed up for a Tesla PowerWall to hang on their wall, have a need or use for it, other than as a status symbol by proxy. I gave this remark an eight because beauty (as well as its close cousin, status) is in the eye of the beholder. To me, the PowerWall looks like what it is; a shiny plastic cover over a pack of Panasonic batteries that are about as practical in an American home as a bowling trophy. I'll explain why, later.
"You can actually go, if you want, completely off grid. You can take your solar panels, charge the battery packs and that's all you use. So it gives you safety, security, and it gives you a complete and affordable solution. And the cost of this is $3,500 (wild applause) ... So, this is a good solution for homes and perhaps for some small commercial applications."
Veracity score = 1 out of 10.

This is where Tesla devotees will begin twisting the definition of "completely off grid" and possibly "affordable." But, assuming we mean "disconnect the two wires coming to your house" consider that it would take about twelve of these packs, worth about 12 x $3,000 = $36,000 (sans loan interest, cost of solar system, and subsidy) just to back up a solar powered average American home for three consecutive rainy days. And because all of your neighbors are also being rained on, the grid and all of its power plants have to be there ready to supply everyone if there are four consecutive rainy days.

 You can't disconnect from the grid without risking running out of power and somebody has to pay to maintain that grid. It would take well over a million dollars worth of Tesla's battery packs (in addition to tens of thousands of dollars worth of solar panels) for me to replace the power flows that I currently receive from those two wires attached to my house. That's because solar panels on my roof can't generate enough power for my house for half of the year and I would need enough batteries to store six months worth of short fall. See the spreadsheet below.


After seeing the results of my above spreadsheet, I went looking on the internet for corroboration and found it here. His calculations showed a $780,000 cost at my latitude for a roof with optimal inclination big enough to hold the necessary solar panels. See also Footnote 6.

One problem with solar is that there is no "one size fits all" solution. Location, total electricity consumption, how much is used at what times of day (home load profile), the orientation, size, and shape of roof, are different for just about every house.

I live in a modest sized home by American standards, at approximately 50 degrees latitude and consume roughly the American average amount of electricity annually. Even though I own an electric car, our electric bill is slightly lower than the American average.


There already is a system that uses the battery pack in the Leaf for the same purposes as the PowerWall. I wrote about it three years ago. Read: First Vehicle to Home Power System in North America.

The Leaf system provides a large DC to AC  inverter needed to use the batteries to power your home, as well as the ability to charge the car from either solar panels or the grid, and of course, instead of buying extra batteries, you use the ones you already have in your Leaf.
"So, with 160 million PowerPacks you can transition the United States [to use solar with Tesla battery packs for all electricity generation]."
Veracity score = 1 out of 10.

Holy cow. 160 million PowerPacks is one for every other American. At $25,000 per pack1), these batteries alone would increase the average annual residential electric bill from about $1,322 to $2,9272), and that's without taxes or installation costs. And because "...most of that area is gonna be on rooftops" I would need to add the $73,0003)/25 = $2,934 per year annual cost of having solar installed on my roof to charge those battery packs. I would be paying annually $5,861 per year, which is quadruple the average American electricity bill.

And all of those calculations are assuming that the 160 million PowerPack number has any bearing in reality, which it doesn't. As I showed earlier, it could actually cost hundreds of thousands per household (depending on latitude) to go off grid using these batteries.
"You can basically make all electricity generation in the world renewable and primarily solar ...And then, going a little further, if you wanted to transition all transport and all electricity generation and all heating to renewable you need approximately 2 billion PowerPacks."
Veracity score = 1 out of 10.

OK, that's one $25,000 PowerPack for every 3.5 people and never mind what it will cost them to purchase the solar panels, inverters and on and on as well. According to the World Bank, "Almost half the world — over three billion people — live on less than $2.50 a day." Who is going to pay for all of these batteries, assuming Tesla's estimate has any bearing in reality, which, as I said earlier, it doesn't.
"Now that may seem like an insane number"
Veracity score = 10 out of 10.

 "The number of cars and trucks that we have on the road is approximately 2 billion and every 20 years approximately that gets refreshed because of a hundred million new cars and trucks made every year.  So the point I wanna make is that this is actually within the power of humanity to do. We have done things like this before. And so, it's not impossible, it is really something that we can do."

Veracity score = 2 out of 10.

He's asking everyone on the planet who can afford a car, to come up with enough money to buy the equivalent of several more cars in addition to the one they can afford, and again, this is assuming Tesla's estimate has any bearing in reality, which, it doesn't.
"The fact that it's wall mounted is vital. Because it means you don't have to have a battery room."
Veracity score = 2 out of 10.

 Being wall mounted may be vital to displaying a trophy, but certainly, it could also sit on the floor in a closet somewhere, or in the case of the Leaf home power system mentioned earlier, in your car.
" panels and batteries, it's the only path that I know that can do this and I think it is something that we must do and that we can do and will do."
Veracity score = 1 out of 10.

Considering that virtually all grid storage today comes from  pumped hydro, obviously, selling billions of his batteries isn't the only path (assuming that it even is a path). It all comes down to cost.
"Now the issue with existing batteries is that they suck. They're really horrible. They're expensive. They're unreliable. They're sort of stinky, ugly, bad in every way, very expensive."
Looking around my shop, I found ten power tool batteries (six of which power my electric bicycle) and a dozen or so batteries in the rest of my home for cell phones, cameras, laptops, etc, etc. Not a one of them fit his above description. They are mostly lithium chemistry. He is referring to lead acid batteries, which, other than for starting cars, have already been replaced for pretty much every other application. They are still used in cars because they are still the cheapest for that use (intermittent bursts of high current with no deep discharge).
"So we have to come up with a solution. That's the missing piece, that's the thing that's needed to have a proper transition to a sustainable energy world."
Veracity score = 5 out of 10.

We don't yet have an affordable non-fossil fueled power source that can fill in the gaps for wind and solar. We do have a non-fossil fueled power source that could do that if it were cheaper than using fossil fuels--nuclear with hydro storage. The whole key here is the word affordable, of which, his batteries are not.
"If you're thinking about buying a battery, what does this provide you? Well, it gives you peace of mind so if there's a cut in the utilities, you're always gonna have power. Now you don't have to worry about being out of power if there's an ice storm."
Veracity score = 5 out of 10.

One of these $3,500 battery packs (+ installation and inverter) = $6,000 can keep your lights on for part of a day in the event of a power outage. But then, there are dozens of much less expensive ways to deal with temporary occasional power outages.
"And very importantly, this is gonna be a great solution for people in remote parts of the world where there's no electricity wires. Or where the electricity is extremely intermittent, or extremely expensive. So people in a remote village or an island somewhere can take solar panels, combine it with the Tesla PowerWall and never have to worry about electricity lines."
Veracity score = 3 out of 10.

Solar with batteries is already a solution of sorts for some of those people, who live in sunny enough places. Will a modestly lower battery cost than the lead acids they now use make much difference? Those impoverished communities might be able to afford to keep the lights on later at night, or watch television longer, but because this is such an expensive means of producing energy compared to what we pay for energy today (as demonstrated earlier in my post), it can't scale to create economy-growing, industrial levels of energy.
"And in fact I think what we'll see is something similar to what happened with the cellphones verses landlines where the cellphones actually leapfrogged landlines."
Veracity score = 5 out of 10.

There is nothing new here. Solar with batteries are already being used in these places. Replacing $150 worth of lead acids in a village with say, ($428/$600) x $150 = $107 worth of lithium will not make much difference in their lives.
  Average veracity score = 3.9.
Hotel Greenwashed laundry card
Tesla is trying to create a market for its battery packs under the auspice of saving the environment. It's a tried and true technique called greenwashing.


The $100,000 Roadster and the $70,000 Model S were not conceived as a means of saving the environment. The big battery makers will sell to anyone they want, not just Tesla.


The tens of thousands of orders for these packs are actually tens of thousands of people curious about what happens when they click the "order" button on the Tesla website. You are then asked to leave your contact information (as I did) so they can get back to you in a year or so to see if you really want to buy a pack when they have one to sell (which I don't).

This "click a button to order" idea was used by Nissan for the Leaf but you had to put a $90 deposit down to show that you were serious.

Lithium batteries have already become ubiquitous. Tesla has had nothing to do with that fact. As my spreadsheets show, the PowerWalls have little practical use in a typical American home, with or without solar, but, like the Hummer, or any big, shiny, red truck that never hauls anything, this won't stop some people from buying them. Tesla's current business model can be summed up as selling expensive electric sports sedans to the wealthy. It's a niche market that no big automaker has bothered to enter. Without a competitor for market share, Tesla has been able to charge whatever it costs to produce the car. The fact that I can purchase a Nissan battery pack for a third to tw0-thirds less per unit energy than the PowerWalls suggests that if a market for large battery packs emerges, Tesla will face real competition for the first time.

Footnote 1): $250/kWh x 100 kWh = $25,000.

Footnote 2):

Interest on $25,000 loan for 14 years at 4% = $7,263
  • 5000 cycles/365 cycles/year = 14 year battery lifespan.
  • $25,000 + $7,263 = $32,263
  • $32,263/14 year lifespan = $2,305 per year paid by every other American for those 320 million Americans/2 = 160 million batteries.
 160 million PowerPacks is one for every other American. Assuming that the cost is born not by every other American, but by all Americans, that would equate to about $2,305 /2 = $1,152 per person. Using 2.54 persons per household leads to an annual bill per household of 2.54 x $1,152 = $2,927. The average residential annual electric bill today is about $1,322.

Footnote 3):


NREL solar cost estimator

Footnote 4)

Cost of a 21 kWh Nissan Leaf battery pack = $5,500.
Cost of two 10 kWh PowerWall battery packs connected in parallel for a total capacity of 20kWh~ 2 x $3,500 = $7,000.
Cost of three 7 kWh PowerWall battery packs connected in parallel for a total capacity of 21kWh ~ 3 x $3,000 = $9,000.

This isn't an exact apples to apples comparison because the PowerWall also contains a circuit board to control DC flows into and out of the pack (just like any lithium power tool battery pack does).

Footnote 5)

Average  American home uses 10,000 kWh per year.
10,000 kWh per year / 365 days per year = 27.4 kWh per day.
27.4 kWh per day / 7 kWh per battery pack = 3.9 battery packs per day
3.9 x 3 rainy days = 12 battery packs.
12 x $3,000 = $36,000

Footnote 6)


  1. alain2:51 AM

    Hi Russ,

    You should read both links herunder, you may have a good laugh.

    I did put some comments at the bottom (10-34) of under the second article, under the name Alain.



  2. ...excellent links, Alain. I read both and the comments under them. Thanks.


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