Tully Blalock

The Georgia Public Service Commission (PSC) has voted to approve a solar resource plan that should result in an increase in Georgia Power’s solar energy procurement by 6 to 9 GW through 2035 and add 500 MW of battery storage to the energy grid. When paired with solar, energy storage can keep the lights on reliably, even during extreme weather conditions and spikes in electricity demand.

In addition to the solar and storage buildout, the PSC voted unanimously to create a collaborative Distributed Generation Working Group. The group – which will be composed of representatives from utilities, the solar industry, and PSC staff – will develop recommendations for growing the distributed energy market in Georgia.

“It’s extremely heartening to see the Commission prioritize growth of distributed renewable energy through the establishment of a working group,” says Tully Blalock, senior vice president of SolAmerica Energy and policy co-chair of the Georgia Solar Industries Association (SEIA). “Distributed generation is the clear path forward for Georgia’s economy, workforce, and public health. We’re excited to see the commission recognize the crucial role of distributed generation in such a tangible way.”

Also before the PSC was a vote to expand Georgia Power’s monthly netting program by as much as 1%5, bringing rooftop solar within reach for 75,000 Georgia households. Commission Vice Chair Tim Echols – who has been a champion for net metering expansion – brought the measure forward, before it failed in a 3-2 vote.

The program, which was introduced as a pilot in 2020, fairly compensates rooftop solar customers for excess electricity produced by their solar systems. The popularity and success of the program were quickly apparent, with thousands of Georgians signing up to receive the benefits of affordable rooftop solar. When the pilot reached its 5,000-customer limit in mid-2021, advocates began urging the PSC to lift the cap and expand solar access across the state.

“We applaud some of the Commission’s decisions, and are optimistic that the commission will address net metering in the upcoming Georgia Power rate case to bring affordable rooftop solar within reach for tens of thousands of Georgia families,” says Allison Kvien, Southeast regulatory director at Vote Solar. “Monthly netting empowers families to lower their monthly bills and contribute to a cleaner, more resilient energy grid through rooftop solar. We thank Vice Chair Echols and Commissioner McDonald for their leadership on this critical issue, and will continue our efforts to make solar affordable and accessible to all Georgians.”

“Georgia took significant steps in expanding renewable energy development across the state today,” says Will Giese, Southeast regional director at the Solar Energy Industries Association (SEIA). “The solar and storage additions to Georgia Power’s integrated resource plan will help ease the inflation pinch on Georgia families through the procurement of stable, low-cost clean energy. While the Commission missed an important opportunity to expand the state’s net metering pilot, it’s encouraging to see them create a distributed generation working group. In the face of rising energy prices, we will continue to advocate for solutions that expand clean energy access to all Georgia ratepayers.”

Continue reading

Power lines operated by Southern California Edison. Image: David Prasad.

Battery storage deployments on the California ISO (CAISO) grid slowed in the lead-up to the peak summer season, with no new battery energy storage connected in May and only 65MW added in June.

CAISO has published the amount of utility-scale battery storage connected to its grid since August 2021, when it stood at 1,500MW. Since then, with the exception of one month when the operator’s methodology changed, the average monthly deployment has been around 260MW.

But May 2022 saw no new battery storage units connected to the grid while in June only 65MW was added. Low monthly figures have been seen previously, with only 87MW added in November 2021 and 12MW in January 2022, but the latest figures show that CAISO’s expectation that 4,000MW would be online by summer may not be achieved.

Like any data reporting with a complex topic like energy storage, singular figures should not be taken entirely as gospel. CAISO counts battery storage based on those that enter commercial operation with the figure generated at the end of each month.

But sometimes, a unit might be reported to come online before or after it has reached commercial operation, so the monthly figures are subject to change, and CAISO has frequently updated figures after publication (clearly stating so).

The Golden State’s grid is still comparatively better placed with – at last count, 3,124MW as of end June – well over double the battery storage connected compared to last summer. With 1,000-1,500MW connected, battery storage still had a huge role to play in helping CAISO deal with several outages during the Bootleg wildfire of June 9, 2021, as Energy-Storage.news reported.

And, much to the relief of all so far, this summer’s wildfire season has gotten off to a slow start according to CAL FIRE, the California Department of Forestry and Fire Protection. At the end of June, there had been fewer fires and acres burned than the previous five-year average, partially thanks to lower temperatures than expected. But the hottest and least rainy months of the season are July, August and September.

Continue reading

RWE’s Texas Waves II, a 30 MW battery storage project in Texas. Image: RWE.

Energy company Enel Green Power has completed a wind-plus-storage facility while RWE just installed all inverters on one of its own, both in Texas.

Enel Green Power has completed the Azure Sky wind-plus-storage plant in Texas’ Throckmorton County, which combines 350MW of wind power and a 136.5MW/204.6MWh battery energy storage system (BESS). It is the company’s first large-scale hybrid wind project globally, it said.

The Italy-headquartered company will also add 57MW/85.7MWh of BESS to its largest operating projects in Texas, the Roadrunner solar PV farm and the High Lonesome wind facility. The BESS units mentioned here are all one-and-a-half-hour systems.

It said the projects will strengthen the Texas power grid during periods of peak energy demand with clean generation and dispatchable storage resources.

The company began construction on the plant in March last year, and is building three entirely new wind-plus-storage units in the state too. It is also not far away from a ‘companion’ solar-plus-storage project, Azure Sky solar-plus-storage, which Enel Green Power is developing in Haskell County, which includes 284MW of solar PV and 95MW of battery storage.

Meanwhile, Germany-based global energy company RWE has completed the installation of all inverters on the site of its Texas Waves II, a 30MW/30MWh BESS project which is adjoining the existing Pydon Wind Farm. The project is expected to come online by the end of 2022, and will be the company’s largest AC-coupled battery in the Americas.

RWE said the project will provide ancillary services to the ERCOT (Electric Reliability Council of Texas) grid as well as participate in the energy market through load shifting. The proportion of revenues for BESS projects is roughly split evenly between the two.

It is also part of a series of moves by the company to add storage to wind assets, although RWE has already done this at RWE Pyron and Inadale wind farms in the Lone Star State in 2018 (with 9.9MW BESS units at each).

Co-location of energy storage and renewable generation has to-date mostly focused on pairing with solar PV rather than wind. This is because wind projects are have a large minimum size meaning a bigger battery is required. Wind power is also much more intermittent than solar, meaning potentially much more cycling of the battery and faster degradation, whereas solar generation is predictably tied to a daily generation profile.

The latter has led flow battery companies to argue that their technology is better placed than lithium-ion to provide this firming for wind. However, most installations of this type to date including RWE and Enel Green Power’s latest endeavours, use the more common lithium-ion technology set.

Continue reading

Ambri liquid metal battery cells, housed in steel. Image: Ambri.

Ambri, the US technology startup commercialising energy storage systems based on a high temperature liquid metal battery, has received key UL 1973 certification.

The certification verifies that batteries used in stationary energy storage and auxiliary applications for mobility can safely withstand tolerance to simulated abuse conditions.

It is considered essential for energy storage technologies to have in many markets, particularly the US, and affords developers as well as their investors and lenders some confidence in their choice of equipment. Ambri’s testing was carried out by UL Solutions.

The tests involved do not assess performance or quality of batteries or systems, but instead evaluate their safety and resiliency to abuse. Other key standards applicable to battery storage include international fire codes, the UL9540A thermal runaway test and the US National Fire Protection Association’s NFPA855.

Ambri said it is now working to obtain other key certifications.

“By assessing, validating, and confirming key elements that take into consideration the entirety of a battery system, UL Solutions is helping support Ambri’s commitment to battery system safety and performance. We thank them for putting their trust in us to deliver on that promise,” UL Solutions product manager Maurice Johnson said, adding that UL 1973 includes battery safety criteria for many commercially available chemistries and is not technology specific.

Indeed, the standard has been updated a few times to encompass different types of battery technology and the latest iteration was published in February of this year.

Ambri’s battery components include liquid calcium alloy anodes, molten salt electrolyte and solid particles of antinomy in the cathode. The tech company was a spin-out from labs at the Massachusetts Institute of Technology (MIT), where its founder Professor Donald Sadoway is based.

Housed in stainless steel enclosures and integrated into containerised DC-coupled battery energy storage systems (BESS), the batteries operate at a temperature of 500°C but unlike lithium-ion batteries are not at risk of thermal runaway, electrolyte decomposition or off-gassing, which makes them safer, the company claims.

Sadoway said he began developing it as a low-cost technology using widely available raw materials as a possible solution to climate crisis mitigation, as the professor accepted an inventor’s award in June.

In 2021 Ambri secured US$144 million funding in a Series A, at the same time securing a long-term supply deal for antimony with an investor’s affiliate. It is currently expanding its manufacturing site in Massachusetts as well as adding an innovation centre to the complex.

The company has also claimed some big deals are on the table with customers: most recently renewable energy power producer and retailer Earth & Wind in South Africa ordered 300MW/1,400MWh of Ambri systems in June. In November 2020, Ambri announced a deal to put 250MWh of its liquid metal batteries into a new data centre development in Nevada, US for sustainable infrastructure developer TerraScale.  

Continue reading

Image: esVolta.

Generate Capital has acquired US large-scale battery storage developer esVolta, marking the sustainable infrastructure investment firm’s first step into the front-of-the-meter battery market.

Generate announced the deal yesterday which adds the developer’s portfolio of over 900MWh of operational and contracted projects in the US and Canada to the investor’s pipeline.

That includes the 75MW/300MWh Hummingbird battery energy storage system (BESS) project in development in California, which is contracted to help utility Pacific Gas & Electric (PG&E) reduce its reliance on gas-fired peaker plants.

Most of esVolta’s listed completed projects are in California, although the company was behind the largest BESS in Canada at the time of its commissioning, an 8.8MW/40.8MWh system in Stratford, Ontario.

The company’s projects in development are spread across eight US states including leading energy storage markets like California, Texas and Arizona as well as up-and-comers like Virginia, Washington and New Mexico.

Generate Capital meanwhile has invested in a wide range of clean energy and other sustainable infrastructure asset classes since its founding in 2014 by a group of entrepreneurs that included solar industry veteran Jigar Shah, who is now leading the US Department of Energy’s Loan Programs Office for the Biden-Harris Administration.

The firm invests in and partners up with technology and project developers, with areas including clean water provision, waste management, energy efficiency and many more. Its involvement in battery storage to date has however been behind-the-meter, through things like electrification of buildings and clean energy retrofits for schools and hospitals.

In July last year, Generate Capital secured US$2 billion funding to scale up its activities, enabling it to add to an existing asset base already worth about that much.

Since that fund raise, the group’s investments have included a US$240 million equity investment into US community and distributed solar developer Nexamp and US$500 million for large-scale renewables developer Pine Gate Renewables. Both Nexamp and Pine Gate work on projects that pair solar PV with energy storage; the latter has notably signed contracts for the multi-gigawatt supply of non-lithium battery technologies, with metal-hydrogen startup Enervenue as well as zinc battery players Urban Electric Power and Eos Energy Enterprises.

“We have long believed that battery storage is critical to building a sustainable energy system and ensuring grid reliability as we scale up renewables and accelerate the energy transition. That is why we have been investing money and effort to grow this market since we started the company,” Scott Jacobs, CEO and co-founder of Generate Capital said.

“Our partnership with esVolta today highlights the enormous potential for battery storage projects to rebuild our energy system.”

The news comes hot on the heels of another US grid-scale battery developer acquisition by a major player earlier this month. Norwegian state-owned power company Equinor acquired East Point Energy, which has developed and sold on three large-scale projects in Virginia to date since its founding in 2018.

As that deal closed, Equinor said it was looking for an early adopter foothold into the utility-scale BESS market. Unlike esVolta, East Point Energy only develops projects, it doesn’t own and operate them as well, and Equinor said adding this capability would be among its plans for the company.

esVolta: Quick background of Generate’s new acquisition

esVolta president Randolph Mann described the company’s new owner as the “ideal choice” to support its long-term growth, sharing a vision “of a modernised and decarbonised grid and the comprehensive approach to building it out”.

Here’s a quick run-through of esVolta’s background, as reported by Energy-Storage.news since the company was founded in 2017.

December 2017: Powin Energy sells a 116MWh portfolio of project assets and future development opportunities to esVolta, which helps fund Powin’s pivot away from development activities to focus on the system integration and energy storage system manufacturer role it is better known for today. The pair retained joint ownership of some projects in the portfolio.

October-November 2018: California investor-owned utility (IOU) Southern California Edison (SCE) awards esVolta three projects totalling 38.5MWh capacity, which are shortly afterward approved by the regulatory California Public Utilities Commission (CPUC). Collectively, they will help SCE manage its electricity networks, serving as non-wires alternatives (NWAs) to expensive transmission infrastructure buildout.

July 2019: Wholesale power provider Southern Power announced it was working with the developer on 86MW/345MWh of BESS across four sites in California.

February 2020: esVolta closes a senior secured credit facility that the company said was worth “around US$140 million” and would be put towards developing a California portfolio of projects it dubbed ‘esFaraday’, totalling 136MW output and 480MWh capacity.

April 2020: esVolta is selected to provide a 15MW/60MWh BESS for California Choice Energy Authority (CalChoice), a Community Choice Aggregator (CCA) supplying electricity to several cities in the state.

August 2020: India-headquartered software and data analytics company ION Energy is selected by esVolta to improve operational efficiency of the developer’s 580MWh fleet of battery storage in California, including assets in operation and development.

January 2021: Financial services group Macquarie’s Green Investment Group invests an undisclosed sum into esVolta, identifying that it had “significant growth potential”. Investment was in the form of a bridge loan that converted later into equity stake.

March 2021: Appearing at an online edition of Energy Storage Summit USA, hosted by our publisher Solar Media, esVolta president Randolph Mann discussed some of the complexities and potential for solving big energy problems and making money with battery storage.

July 2022: Acquired by Generate Capital.

Continue reading

Stephen Sidwell

Nexii Building Solutions Inc. has entered a non-binding letter of intent (LOI) to purchase Solar Earth Technologies Ltd., a manufacturer of hardened solar power panels that transform sidewalks, parking lots and other elements of everyday infrastructure into a new source of solar energy.

Nexii believes that the proposed acquisition of Solar Earth by Nexii, if completed, would accelerate the integration of solar technology in Nexii’s low-carbon buildings and products, supporting Nexii’s 2025 target of net zero operational carbon buildings.

Solar Earth has more than a dozen live projects globally, with installations at Thompson Rivers University in Kamloops, Stellenbosch University in South Africa, Daxing Green Village in Beijing, China, and the City of Tampa in Florida generating clean electricity from Solar Earth’s power-generating sidewalks. The company has more than 50 projects in development and is seeing increased market demand to transform existing infrastructure into a clean-energy source.

“With our shared vision to create a net zero future and by combining our technologies, we believe we have the opportunity to make net positive energy buildings a reality,” says Stephen Sidwell, CEO and co-founder of Nexii. “We look forward to working with Solar Earth to rapidly scale, and meet the market demand for smart pavement technology.”

“Delivering renewable energy infrastructure solutions to a global market is what we strive for, and we could not think of a better partner than Nexii,” states Douglas Matthews, CEO and director of Solar Earth. “Our mission is to help create a net zero future for our cities and communities, and fight climate change by transforming everyday infrastructure into a source of solar energy to replace fossil fuels.”

Continue reading

Large solar system Skyta Solar and Roofing

To help installers meet the growing demand for more complex solar and storage systems, Sungage Financial is providing residential solar financing for up to $200,000 per project. The need derives from increasing demand for large solar systems with significant energy storage capacity often found in multigenerational households. These extended family households are not only using more energy, but they are also pursuing solar energy and storage autonomy.

The number of people living in multigenerational housing has quadrupled in the past 30 years, reaching nearly 60 million, or 18% of the U.S. population, according to PEW research. Sungage Financial, a residential solar finance company operating in 45 states, first noticed this emerging trend and need for higher solar financing options in Hawaii.

Financial savings, caregiving for both elderly and children, sharing of chores, and rising property prices are among the key reasons cited for choosing multigenerational living, which most adults find very rewarding. In Hawaii, this idea goes even deeper with historic roots dating back to the concept of ohanas – families helping raise each other’s keiki (children) to give them a more complete cultural background.

“Ohana is a very important part of our culture,“ Kim Keahiolalo of Sungage Financial’s Hawaii office explains. “It’s about fostering love and lasting relationships with our extended families in addition to the economic and social benefits. Having all these people and so many kids in the household means that they are all going to cook, do laundry, and go about life’s business, which uses a lot of energy.”

“Financing to meet the energy needs of our extended family homes makes their switch to solar more easily attainable, helping families offset Hawaii’s high utility bills with manageable fixed solar loan payments that are not subject to ever-increasing rates,” says Tyler Erickson of Skyta Solar and Roofing, one of Hawaii’s solar companies and a long-time Sungage Financial partner.

Continue reading

Detail of cell stacks at the completed demonstration system at VRB Energy’s project in Hubei Province. Image: VRB Energy.

Commissioning has taken place of a 100MW/400MWh vanadium redox flow battery (VRFB) energy storage system in Dalian, China.

The biggest project of its type in the world today, the VRFB project’s planning, design and construction has taken six years. It was connected to the Dalian grid in late May, according to a report this week by the China Energy Storage Alliance (CNESA) industry group.

The system is in Dalian City’s Shahekou District, which is in Liaoning Province in northeastern China. It will contribute to lowering the peak load on the grid in Dalian City and could even play a role at provincial level, improving power supply and the capability to connect new generation sources like renewable energy to the grid.

VRFB developer and manufacturer Rongke Power supplied the battery technology. The company is a spin-off from the Dalian Institute of Chemical Physics of the Chinese Academy of Sciences and the institute has overseen the project through doctoral supervisor and head of its energy storage department Li Xianfeng.

Rongke Power had been cited to be working with US-headquartered flow battery technology company UniEnergy Technologies on the project previously, but that company’s Chapter 11 bankruptcy was widely reported late last year and even its website now appears to be offline.

An update on the project’s progress which was issued in June by the trade group Zhongguancun Energy Storage Industry Alliance from Beijing said the VRFB technology was developed by the Dalian Institute of Chemical Physics team.

Together, the academics have worked with Rongke Power on almost 40 commercial demonstration flow battery projects already, the alliance said, including projects both in China and overseas, such as a 10MW/50MWh system which was the world’s biggest when completed in 2013 and a 10MW/40MWh project at a wind farm.

Previously, the biggest flow battery installation in the world was a 15MW/60MWh system deployed in 2015 in northern Japan by Sumitomo Electric. Sumitomo Electric brought online a second, 51MWh large-scale system in April this year, which again would still rank among the world’s biggest for a technology which is regarded highly for its technical capabilities but has so far largely been unable to scale up.

However, the Dalian project is, as well as being a demonstration project and part of a wave of large-scale VRFBs China is looking to deploy, only at its first phase of construction. A second phase will bring it up to 200MW/800MWh.

Scale of China VRFB projects dwarf anything else in the world so far

It was the first project to be approved under a national programme to build large-scale flow battery demonstrations around China back in 2016 as the country’s government launched an energy storage policy strategy. It is thought that various factors including unexpected volatility in the price of vanadium and demand for the metal in other industries like construction had slowed the programme somewhat according to sources Energy-Storage.news had spoken to previously.  

Elsewhere, in China’s Hubei Province, another (very) large-scale VRFB is being built in phases that was approved through the same programme. Canada-headquartered VRB Energy is constructing that 100MW/500MWh facility, with a ceremony held to signal the start of construction in August last year for an initial 100MWh phase.

VRB Energy and its local partners had already built a successful 3MW/12MWh demonstration project in Hubei and a VRFB factory with 1,000MWh annual production capacity could be built at the site at a later date too.

The Hubei project’s cost for 500MWh of VRFB, along with a combined 1GW of solar PV and wind generation from which it will charge, was cited as around US$1.44 billion.

The first phase of Rongke Power’s Dalian project meanwhile was given as RMB1.9 billion (US$298 million) in CNESA’s announcement, equivalent to RMB4.75/Wh (US$0.7/Wh).

Although not on the scale individually of either Chinese project, some megawatt-scale flow battery projects have been completed, announced or begun construction in recent months around the world.

In the UK, the world’s largest battery storage system to hybridise lithium-ion and vanadium flow went officially into commercial operation this summer, pairing 50MW/50MWh of lithium with a 2MW/5MWh VRFB system.

The flow battery company behind that project, Invinity Systems, is also supplying Australia’s first grid-scale flow battery storage, a 2MW/8MWh system co-located with a 6MWp solar PV plant in South Australia. Invinity will also supply a 2.8MW/8.4MWh battery storage system at a demonstration project in Alberta, Canada.

At the larger end of the scale, California non-profit energy supplier Central Coast Community Energy (CCCE) picked three VRFB projects as part of a procurement of resources to come online by 2026, ranging from 6MW/18MWh to 16MW/128MWh and totalling 226MWh.

One thing limiting the size and scale of flow batteries today is access to vanadium pentoxide, which is used in their electrolytes. While vanadium itself is abundant in both its raw primary form and as a secondary byproduct of steel production, not many facilities to process it into electrolyte exist.

This has led some flow battery companies like Austria’s CellCube and others to focus on the commercial and industrial (C&I) and microgrid segment of the energy storage market, at least for the time being.

Continue reading

A map of how the battery storage project will link into the regional power system. Image: PGE Group.

State-owned power company PGE Group has obtained regulatory approval to build a 200MW/820MWh battery energy storage system (BESS) in Poland.

The project, called CHEST (Commercial Hybrid Energy Storage), will target a capacity of no less than 200MW and a power output of 820MWh, making it one of the largest in Europe, PGE Group said. It will use lithium-ion batteries.

So far this year, the project has obtained a Decision on Environmental Conditions, the first promise of a concession for electricity storage, and the first grid connection permits, which the company said were crucial milestones in its development. PGE Group CEO Wojciech Dabrowski indicated the aim is to have the project completed by 2030.

He added: “The energy stores (storage) will ensure safe system integration of new renewable energy sources, will contribute to stabilisation of the power system and will improve the country’s energy security.”

The project will integrate with the existing 716MW/3600MWh pumped hydro energy storage (PHES) plant at Żarnowiec which together will smooth out intermittent generation of nearby wind farms (illustrated in PGE Group’s map above). PGE Group has permission to build 3.5GW of wind near the two sites.

The company, which is stock-quoted but majority-owned by the Polish state, also said the project would help the competitiveness of energy markets and the planned synchronisation of the Lithuanian, Latvian and Estonian power systems with the system of continental Europe.

This is being done through the Harmony Link project, an interconnector using a 300km-long cable between Poland and Lithuania. Although the project predates the Russian invasion of Ukraine, its aim is to allow the Baltic states to transition themselves away from the IPS/UPS system which is centrally controlled by Russia.

The launch of the project may have been made possible by recent regulatory and legal changes enacted by the Polish Parliament around the definition of energy storage, a move covered by Energy-Storage.news at the time.

Another notable energy storage project in Poland is gigafactory company Northvolt’s energy storage system (ESS) assembly and production facility, which recently bagged a share of €1.8 billion in EU funding.

Continue reading

Tesla battery storage at a site in Australia. The company said customer appetite for battery storage remains strong. Image: Elgar Middleton.

Tesla deployed more than a gigawatt-hour of battery energy storage systems (BESS) during the second quarter of this year, but the company has been impacted by component supply issues.

The global semiconductor shortage was the main factor in a decline in year-on-year energy storage deployments, the company said as it announced its quarterly financial results yesterday.

CFO Zachary Kirkhorn said in a conference call to discuss results that production of both Tesla’s residential Powerwall battery units and Megapack 3MWh utility-scale systems “remains component-constrained”. The company hopes the situation will ease in the second half of the year, Kirkhorn said.

In Q2 2022, Tesla deployed 1,133MWh of storage, versus 1,274MWh in the same period of 2021 and 1,295MWh in Q3 2021. It was however an increase on figures from Q4 2021 (978MWh) and Q1 2022 (846MWh).

Tesla quarterly battery storage deployments, from Q2 2021 to Q2 2022, in megawatt-hours (MWh). Image: Solar Media.

Semiconductor shortages are having a greater impact on the company’s energy business than its automotive core business division, although the good news appears to be that customer demand was reported by the company to be strong. With demand continuing to outstrip supply, Tesla is ramping up Megapack production.

Combined with a stronger performance in solar PV deployments (106MW) than at any time since Q3 2017, Tesla said its energy business achieved higher volumes of sales with stronger unit economics, resulting in an overall gross profit.

Tesla’s unaudited revenue figures provided for the quarter do not break out between solar PV and energy storage and are reported together as ‘Energy generation and storage’.

In Q2 2022, revenues from energy generation and storage were US$866 million, against unaudited cost of revenues of US$769 million. Year-on-year, the margin has improved, after US$801 million revenues versus cost of revenues of US$781 million were reported for Q2 2021.

After Q1 2022 results came out in April, the company had said something similar about demand far outstripping production, but that quarter’s reported activity was also constrained to a degree by shipping and other logistical delays owing to the COVID19 pandemic.

This time out, the pandemic’s direct effects were most felt in automotive production at Tesla’s Shanghai gigafactory, with the Chinese city subjected to sporadic lockdowns to limit the spread of infections.

While semiconductors might be the biggest block to energy storage production this time out, CEO Elon Musk noted in the conference call yesterday that the pricing of other commodities has been volatile, describing lithium pricing in particular as “insane”.

Musk noted that mining of lithium is “relatively easy” and that the metal itself is abundant as a natural resource. The refining of lithium into high purity lithium carbonate and lithium hydroxide is “much harder,” the CEO said, but the margins refiners can make are comparable to those for software businesses.

Musk reiterated a previously made call for entrepreneurs to get involved in lithium refining, advising that they would be granting themselves a license to print money, such would be the profitability in a world with accelerating demand for batteries.

Energy storage remains one of the three pillars of a sustainable energy future, Musk said, along with wind and solar for generation and electric vehicles (EVs) for transport.

Indeed, back in October last year, the company noted that it had achieved 96% compound annual growth rate (CAGR) in battery deployments over four years, as its Q3 2021 performance was reported.

In terms of battery technology, Tesla continues to develop its own 4680 format lithium cells with dry electrode technology discussed in its Battery Day in 2020. However, the main source of cells will remain its supplier partners including Panasonic and LG, with Tesla not seeking to displace its outside suppliers but instead add capacity with in-house production.

The speed at which battery production output can grow is, Musk said, “the fundamental limiter” for the global transition to sustainability given batteries’ key role in the transport and storage “pillars” of sustainability he referred to.

The world does not need any further breakthroughs in sustainability technologies, according to the CEO, but instead it needs breakthroughs in the speed and volume of getting lithium from raw material state into finished battery products.

Musk and tech VP Drew Baglino noted, as they have previously done, that they foresee the majority of stationary battery storage systems being made equipped with lithium iron phosphate (LFP) cells, with nickel chemistry batteries to be used for longer range vehicles and perhaps aviation.

Baglino said Tesla is also looking to build up lithium refining capabilities of its own.

“If our suppliers don’t solve these problems, then we will,” Musk added.  

Earnings call transcript by Seeking Alpha.

Continue reading