The luxury electric carmaker Tesla has made a business announcement that has all the trimmings of a major bid to shape the nation’s climate change policy.
Tesla CEO and billionaire Elon Musk announced the “Missing Piece” Thursday night — or Friday morning, depending on what coast you were on — detailing a push to sell lithium-ion batteries that can power a house and others that can power much bigger entities like cities.
The home versions would hang on a wall like a well-intentioned piece of $3,500 “art,” providing electricity 24 hours a day, seven days a week.
The business strategy behind his bid is to sell U.S. consumers on the idea that they can be free from the utility industry, its aging infrastructure and ugly transmission lines, and enabling them to produce their own electric power at limited cost.
The idea drew cheers from those who packed the Tesla office building in Hawthorne, Calif., which resembled a dimly lit nightclub more than a corporate stronghold. He added that the batteries would come in an array of colors and would be stackable to add more storage capacity depending on the size of the home.
But electric power analysts and policy professionals in Washington were skeptical about Musk’s plan.
“Frankly, I will believe it when I see it. Tesla is teasing us with more rich man’s toys. I do not see a market for this product with people whose real priorities are housing, health care and sending kids to college,” said one industry source who didn’t want to be cited by name so as to not be attributed to the companies he represents.
“During my entire adult career in the energy field there has been this expectation that affordable and practical electric storage batteries are ‘just around the corner,'” the source explained in an email. “In the 1970s and 1980s, utilities routinely assumed that electric vehicles would account for 10 to 15 percent of future sales.”
Beyond the pains he took to glamorize the idea of giving the power to the people, Musk makes no bones about the decision being about a larger vision for freeing the nation from fossil fuels by combining his battery technology with the power of the sun. Many scientists say the burning of fossil fuels is the root cause of manmade climate change which is causing the Earth’s climate to rise.
“What we are here to talk about is the solution,” Musk said. “Part one” of the solution is “the sun,” which he described as a giant fusion reactor that “shows up every day.” It can be used to “get the U.S. off of fossil fuels” when combined with either the home battery called the “Power Wall,” or a much larger version called the “Power Pack” for utility applications. For example, he said the large battery could power the city of Boulder, Colo.
He challenged myths surrounding solar power, one of which is that to replace fossil generation, one would need to take up the land mass of several states covered in solar panels to accomplish the task. But in fact, “very little land is needed to get rid of all fossil fuel use in the United States” because “it’s going to be on rooftops,” Musk said.
That leads to part two of his clean energy strategy: using the batteries. “The obvious problem with solar power is the sun does not shine at night,” he said. Yet, by installing a battery at $3,500 a piece, the solar energy that is generated during the day is stored, allowing a residence to exploit the power of the sun throughout the night.
The much larger batteries, the Power Pack, can be scaled up unlimitedly to provide gigawatts of electricity. He said with 160 million Power Packs, the U.S. can transition completely from fossil fuels used for everyday electricity. Nine hundred million would be needed to transition the world from fossil fuel-based electricity use. Musk adds that with 2 billion of the devices, all heating and transportation, in addition to basic electricity, can be transitioned from fossil fuels to solar power.
But grid analysts say Musk’s vision should be taken with a much-needed grain of salt. One analyst said, at best, the impact of the devices will be for consumers. What that means is they will affect mostly residential and some commercial facilities, but will never migrate far enough to replace large power plants completely.
Others say that natural gas being at historically low prices could hurt Tesla’s bid to curb fossil energy use. More natural gas plants are being built to supply electricity at highly competitive prices, which is out-competing the dirtier coal in many cases. “This suppresses the economics of batteries unless subsidies are involved — which is what I think Tesla is counting on,” the industry source said.
Observers say most of the immediate market for the Tesla batteries will be in California, which has policies and mandates requiring certain amounts of energy storage. Musk said the batteries are available now, but at limited quantity. Next year, Tesla will be able to produce more when the company’s so-called “Gigafactory” opens in Nevada, Musk said.
The factory is supposed to produce about 500,000 batteries a year, and some of those will go toward the production of Tesla’s vehicles. Musk said many more of the factories would have to be built to reach his goal of curbing fossil fuel use.
