Energybiz sat down with Tesla’s CTO and co-founder JB Straubel. In the past Straubel has been vocal about the realities that Tesla’s battery packs are markedly cheaper than the competition, giving the company a significant advantage. In this interview he speaks to Tesla’s partnership with SolarCity in which Tesla is trying to provide energy storage to pair with solar systems so as to reduce dependence on the grid.
Straubel skirts the issue of the eventual impact on utilities, saying, “Our long-term goal is to invent ways to solve storage problems to facilitate a 100 percent renewable grid. That shouldn’t threaten utilities. It’s the logical and future evolution of the grid.”
But his thoughts on the possibility of a 100 percent renewable grid were interesting:
We are surprisingly close to reaching an economic point that would make reliance on a 100 percent renewable grid compelling or, at least, cheaper. It will take a long time to change out the infrastructure, replacing, upgrading and retiring old assets. The first thing that will happen is the cost will cross the economic threshold where it is cheaper to install renewables and storage than to install new fossil-fuel generation. That’s already happening in island grids and in island nations. That’s where 100 percent renewable grids will happen first. We are a few decades away from seeing a major shift and the adoption of storage sufficient to drive renewables higher.
Straubel is pointing to the evolution of a renewable grid in which the locations with the highest fossil fuel power costs like islands become most vulnerable to disruption. Wherever power is expensive, there’s vulnerability to being taken over by a renewable plus storage solution. We’ve ironically seen this in Germany where utility power running on renewable energy got so expensive that third parties decided they could do renewables themselves at a cheaper rate. The irony is that it doesn’t matter what the grid source is, it’s vulnerable to third party disruption once it crosses a certain price point if for the most basic engineering reason that you can put a solar system on a roof but you can’t build a natural gas plant in someone’s back yard.
As for Straubel’s suggestion that we’re “a few decades away” from having sufficient energy storage to get more widespread 100 percent renewable, that’s probably in the ballpark. Though if we see spikes in fossil fuel prices which isn’t impossible with the development of the middle class in India and China, renewables may look more attractive sooner.