Even as Tony Abbott spruiks reactionary about coal’s benefits to humankind, a massive revolution is undoubtedly underway in the world’s energy sector–whether he cares to acknowledge it or not. Renewable energy sources like wind and solar are gaining increasingly prominent footholds in the global energy sector, and analysts from a number of major financial firms are predicting that they will become the norm in the next decade or so.
Renewable Energy World recently ran a piece via Bloomberg New Energy Finance (BNEF) reflecting on what the upcoming construction of Tesla Motors’ ‘Gigafactory’–which the company announced last month would be built in Reno, Nevada–indicates about the the future direction of how the world produces and consumes electricity. Similarly, Sydney Morning Herald’s National Affairs Editor Tom Allard waxed skeptical about the Prime Minister’s zeal for coal and evident distaste for renewables, particularly in light of Tesla’s plans and the overall forward momentum of the renewables industry and international thinking about climate change policy.
The Gigafactory, slated for completion by 2017, will change the game for renewables, which–as famously pointed out by Mr Abbott–suffer from the problem of ‘intermittency’: they do not produce power in the absence of wind and sun, and their energy cannot (yet) be affordably stored for later use. Cheap energy storage is a dream that will be made attainable by the sort of economies of scale that the Gigafactory promises to usher in, with UBS, HSBC and Citigroup anticipating that battery costs will fall such as to make renewables cost-competitive with conventional fossil fuels by the end of the decade. UBS goes to far as to say that the dollar-per-kilowatt-hour ($/kWh) cost of energy storage will drop to the $100/kWh mark in the not-too-distant future.
Tesla Motors, of course, is a high-end electric automobile manufacturer based in California. The company is virtually writing the book on how to make electric vehicles viable competition against conventional petrol-fuelled cars, and although it still has a long way to go in this goal, the steps the company has taken in recent years have been phenomenal (building a network of innovative ‘supercharger’ stations across the US) and at times bordering on sensational (like opening all of its patents to the public–including its competitors in the auto industry). Its track record of success to date (not to mention its well-performing stock) also give many hope that the company’s factory will indeed be a game-changer, not just for the automotive industry but also for the distributed renewable energy industry as well–particularly rooftop solar PV.
More and more homes and businesses are interested in generating and consuming their own electricity in light of historically high grid power prices. Rooftop solar power on its own already makes sense, even in the absence of strong feed-in tariff incentives; affordable energy storage would make it even more compelling. Although highly influential and undoubtedly a groundbreaker, Tesla is still just one of many companies getting involved in the energy storage game. And while Tesla is concerned mainly with EVs, many of the others are moving to cash in first on growing interest in battery-backed solar.
The advent of affordable energy storage has paved the way for two of the world’s biggest economies are vocally making moves to get away from coal; both India and China have very big solar plans. And while this by no means indicates that coal plants are going to go extinct anytime soon, as Mr Allard points out, what does seems for certain is that more and more homes and businesses will source a bigger part of their electricity from self-generation and storage. In the next 15 years or so, we will all be living in a very different world.
Top image: Mockup of the Tesla Gigafactory, via Tesla Motors
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