Energy and Capital editor Keith Kohl takes a closer look at California's new direction toward lithium batteries.
[Energy and Capital editor Keith Kohl takes a closer look at California's new direction toward lithium batteries.]
California Sparks Incredible New Direction for Lithium Batteries
[Keith Kohl Photo] By [Keith Kohl](
Written Thursday, February 23, 2017
Everyone wants to hear that renewables are winning.
Well... [almost everyone.](
Daily, the media spouts news about how solar growth has outpaced coal, how wind is cheaper than natural gas, and how both are killing fossil fuels altogether.
Pro-renewable lobbyists like to insist that solar and wind are “there,” and that if we just replaced all fossil fuel capacity with panels and turbines, everything would turn out peachy.
They’re wrong for a number of reasons. Besides, if they really wanted to see the U.S. prepare for a renewable future, they’d be making this argument instead...
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Peak Energy
At this point, shutting down every coal, gas, and nuclear plant we’ve got just to replace them with solar and wind just isn’t feasible.
And it’s not just because they’re not constant — we’ve got batteries to fix that issue.
What it really comes down to is that they just don’t make enough energy to cover every demand.
Now, I can cite all sorts of percentages at you, but there’s a much simpler way to illustrate this issue.
In 2015, the Nuclear Energy Institute decided to find out how much space a solar or wind farm would need to produce the same amount of energy as an average nuclear power plant.
Here’s what they came up with:
[battery221](Click Image to Enlarge
Because solar and wind have much lower capacity factors when compared to our usual base load power plants, it takes a lot to bring them up to par.
And keep in mind that this is just to cover base load energy. That’s the bare minimum of energy required to cover demand at any given time.
You won’t hear renewable enthusiasts talking about peak energy times because, well, they’re just not “there” yet. But here’s where it gets interesting...
If renewables can’t cover peak demand right now, there is one technology that can... One that, if used here, could pave the way for a much smoother transition into clean energy in the future.
Peaking Batteries
Right now, many places around the U.S. use what are called peaking power plants. These are plants that are turned on at certain times of the day to produce the extra energy needed during peak demand times.
Are you seeing the problem yet?
Let me give you an example...
California, long known as the most ambitious clean-energy state in the U.S., has a number of natural gas peaking plants to cover times of excess demand.
For a state that’s aiming to be 100% clean-powered by 2045, that’s not a good start.
Even though natural gas is the cleanest fossil fuel we have, it’s still extra fossil fuels being burned every day.
Luckily, California’s finally caught on to the real answer to this problem: Just last year, San Diego Gas & Electric chose a battery design by AES Corp. (NYSE: AES) to begin replacing one of its largest natural gas peaking plants with as much as 300 megawatts of battery storage.
The company will also be upgrading the existing plant, but it notes that the end goal is to replace it with renewables later on.
Southern California Edison has also contracted [Tesla](, in a move that should surprise no one by now, to continue building onto its existing 80-megawatt energy storage project in Mira Loma.
The system is already online as of this year and can cover peak energy demand for as many as 15,000 California homes. Right now, it’s the biggest lithium battery station operating in the U.S.
As it stands, electric cars are still set to be the biggest source of growth in lithium batteries in coming years, but that view could shift if this trend gains traction...
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Timing is Key
“If it ain’t broke, don’t fix it,” goes the old saying.
But investors in the energy markets know better. If you’re not looking ahead to a time when your energy sources will be obsolete, you’re already falling behind.
Today, we’re looking ahead to a future without fossil fuels, and replacing peaking plants is an ideal place to start.
Utility-scale energy storage is expected to surpass 1.6 gigawatts by 2020, edging out the old grid system and making it that much easier to integrate more renewable capacity — once the tech catches up!
This is just one more reason to keep an eye on the lithium space.
Battery power isn’t just a matter of convenience anymore; it’s a necessity to our evolving energy landscape.
Until next time,
[Keith Kohl Signature]
Keith Kohl
[[follow basic]@KeithKohl1 on Twitter](
A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of [Energy & Capital]( as well as Investment Director of Angel Publishing's [Energy Investor.]( For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's [page](.
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