Tesla’s use of clean power for its battery factory would be unprecedented

Amid the news that Tesla and Nevada have come to an agreement over a deal that would see Tesla’s massive battery factory built in the state was another head-turning bit of information. Tesla CEO Elon Musk said that the factory will produce its own energy through a combination of geothermal, wind and solar, and it’ll produce all of the energy that it needs — Musk described it as “a self contained factory.”

Tesla's image of its clean powered factory. Courtesy of Tesla.

Tesla’s image of its clean powered factory. Courtesy of Tesla.

In Tesla’s communications materials, the company called the factory “a net zero energy factory” that will be “powered by renewable energy.”

If [company]Tesla[/company] builds — or even buys — enough clean power to run the entire 10 million-square-foot factory, which will be filled with energy-intensive battery manufacturing machinery, it would be unprecedented in the history of industry and manufacturing. Energy-intensive manufacturing factories don’t often build their own power, and never say they’re going to do it entirely with clean power.

Some countries that have substantial naturally-occurring baseload clean power (“baseload” means it runs all of the time) like Iceland can run their aluminum smelting industry off of hydropower and geothermal power. But Tesla said it will meet its energy needs with not just geothermal (baseload) but also solar and wind, which are variable sources of power (meaning, they only occur at certain times of day).

How it is going to do this is not entirely clear. Will Tesla actually build and own the solar, wind and geothermal assets around the factory? If it did that, would it work with a power developer via a power purchase agreement?

Or will it buy power from clean power projects around the state, some potentially already under development, and connect the factory to the grid? If Tesla did that it would use the same amount of power from the grid as the power from the clean energy projects that it’s buying from (Apple uses this model for its data centers).

Solar Farm in Tucson, Arizona. Image courtesy of IBM Research, Flickr Creative Commons.

Solar Farm in Tucson, Arizona. Image courtesy of IBM Research, Flickr Creative Commons.

If it builds its own power around the factory, will it overcome the variable nature of solar and wind using its own batteries for energy storage, storing the energy during the day to be used at night or when the wind dies down? Tesla would need some kind of way to overcome the solar and wind fluctuations, whether that’s the grid, generators, or energy storage.

If Tesla does meet all of its needs with new solar, wind and geothermal power generation, that’s going to require a whole lot of panels, turbines and geothermal wells. Navigant Research analyst Sam Jaffe told me he would expect a 10 million square foot battery manufacturing factory to have a peak electricity consumption of over 100 MW.

For comparison’s sake, Apple has a 500,000 square foot data center in North Carolina that could be using around 60 MW (it doesn’t disclose the actual energy consumption). Battery manufacturing is usually more energy intensive than running servers and keeping them cool.

Apple has built out two huge solar panel farms (the largest privately owned in the U.S.) that each stretch out across 100 acres and together produce 40 MW. Now Apple is building another 100 acre solar panel farm to make another about 20 MW. So Apple will have 300 acres of solar panels to power its data center (also a small fuel cell farm). That’s three hundred acres of clean power for a 500,000 square foot data center, which is less energy intensive than making batteries.

And Apple doesn’t power the data center directly from the panels; its solar farms put the energy onto the grid and then the data center draws the equivalent power from the grid. Apple didn’t want to invest in energy storage tech for the solar sites, as that would bump up the cost of clean power considerably.

So, the solar panels that will be on the roof of Tesla’s “Gigafactory” are just a drop in the bucket for the type of clean power it would need. If Tesla builds out its own clean power, the area around the 10 million square foot factory will be covered in clean power farms.

Ormat's Steamboat Complex that produces enough geothermal power to run the city of Reno. Image courtesy of Katie Fehrenbacher.

Ormat’s Steamboat Complex that produces enough geothermal power to run the city of Reno. Image courtesy of Katie Fehrenbacher.

If Tesla builds out geothermal power for a big portion of its factory energy needs, that would be an unprecedented high-profile use of geothermal power. Geothermal power plants use drills to tap into the somewhat rare earthly occurrence of hot underground rocks meeting significant water or steam, which can be pushed to the surface and then recirculated to keep a geothermal plant running. Nevada has substantial geothermal resources, but many places don’t, and thus geothermal power has long been a very small portion of the world’s energy mix.

The biggest expense for geothermal power is the expense of getting the wells drilled, since a portion of the wells drilled don’t successfully tap into the right place to extract geothermal power. But if Tesla, or a power producer, is willing to invest in these initial upfront costs, geothermal power is then a very low cost and baseload form of clean power once it’s up and running. However, Tesla might also be buying geothermal power from sites that are already under development and drilled.

Since Tesla said the factory will be “net energy zero,” the company might end up buying renewable energy credits (RECs) to cover any clean power that it can’t buy or generate itself. All of these energy details will need to be worked out pretty soon, as clean energy power plants can take many months and even years to build, and Tesla wants its battery factory delivering batteries by 2017, with the ability to produce enough batteries to power 500,000 cars by 2020.

At this point it’s not clear how Tesla will power the world’s largest lithium ion battery factory with just clean power — and clean power it says it will produce itself. But once again Tesla stands alone in terms of creating an entirely new vision, and its willingness to take really big risks. And if done right, its methods for powering battery manufacturing with clean power could be a lesson for other companies to do this too.