The Business Times

The 'Holy Grail' of solar, wind energy storage

Published Sun, Oct 19, 2014 · 08:59 AM
Share this article.

San Francisco

At a windy mountain pass on the edge of the Mojave Desert, North America's most potent collection of batteries used for storing unused power is humming its way toward an electricity revolution.

Southern California Edison has more than 600,000 lithium-ion battery cells - enough to power 2,000 Chevrolet Volt hybrids - at a substation in Tehachapi, Calif. The US$54 million, two-year test project aims to collect power generated from the area's 5,000 wind turbines and store it for future use.

Cost-effective storage for wind and solar energy is the industry's "Holy Grail," Morgan Stanley says. That's because times of high output during sunny days or windy nights don't always match up with peak demand.

Right now, batteries are too expensive for large-scale use. But improvements in technology are cutting costs, which means storage systems could replace some plants and avoid the need for new ones, according to UBS and Citigroup.

"We're at the infancy of this," Ron Nichols, the senior vice president of regulatory affairs for Rosemead, Calif.-based SCE, said Oct 1. "The technology is important. I don't know if it's a game-changer yet, but it has the potential to be, particularly if it gets implemented more deeply and the costs come down." In the next seven or eight years, the price of batteries used for storage may fall by about half, to US$230 a kilowatt hour of generating capacity, said Sofia Savvantidou, an analyst at Citigroup in London. Policymakers are setting more targets for renewable energy and demand is increasing from companies including electric-car maker Tesla Motors, she said.

Electric-car battery prices already have fallen by 50 per cent since 2010 to about US$500 per kilowatt hour, and "by drawing on auto-battery technology, battery makers may also be able to supply storage batteries at a lower price," Citigroup said in a Sept 25 report. Tesla Chairman Elon Musk said in July that battery packs for electric cars will drop to US$100 in the next 10 years. The Tehachapi batteries are supplied by LG Chem and are the same type used in General Motors' Volt.

The project by Southern California Edison, a utility that serves about 14 million people, is part of a push for more wind and solar power in the state, which is among the nation's sunniest. A third of California's electricity must come from renewable sources by 2020, and mandates also require that the three biggest investor-owned utilities store 1,325 megawatts by 2024. California already has more than 12,000 wind turbines, the most of any state, according to the American Wind Energy Association.


BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to

Energy & Commodities


Get the latest coverage and full access to all BT premium content.


Browse corporate subscription here