Battery sector cleft in twain
Tesla’s second-generation residential battery, the Powerwall 2, carves a slice from the Apple playbook, writes Redflow chief executive Simon Hackett.
The Tesla lithium battery with a built-in AC inverter – announced last year along with the company’s plans for a range of solar roof tile products – is scheduled to begin shipping in Australia shortly.
This latest move, in addition to its merger with SolarCity, positions Tesla as a vertically integrated provider of energy solutions.
As with the Apple product ecosystem, this aims to establish Tesla as a single entry point for energy generation and storage systems in the home environment. Tesla has both the name and the resources to become a strong player in this realm.
Tesla’s vertical stance contrasts with the ‘horizontal’ orientation of the rest of the industry – a commercial ecosystem that offers choice at all layers of the energy storage system, using standardised interfaces to allow mix-and-match assembly of devices in the solution ‘stack’.
This approach sets Tesla in direct opposition to former allies – both existing inverter/charger vendors, which may be cut out of the market by Tesla’s all-in-one play, and experienced energy system installers, who may be undercut by hardware ‘handymen’.
Implications for inverter/charger vendors – polarising innovation into distinct camps
Tesla’s Powerwall battery packs are high voltage devices that are not compatible with most industry battery inverter/chargers, which typically operate at 12, 24 or 48 volts DC.
The Powerwall 2 unveiling must have proved interesting for Solar Edge, manufacturer of the inverter of choice for the original Powerwall, which is no longer required. Likewise, for Fronius, which makes the only three-phase inverter to support the first Powerwall.
The launch also impacts SMA, which recently released its SMA Sunny Boy Storage, a high voltage, Tesla Powerwall-compatible battery inverter.
The bottom line for the emerging energy storage sector is that each time Tesla sells a Powerwall 2 with built-in AC inverter, an existing inverter/charger/energy control system vendor books one less sale. This may tend to polarise the market into two camps over time – Tesla and ‘everyone else’.
Implications for the industry – trading choice for convenience
In the US, Tesla’s sales proposition adds US$1000 (that’s AU$1450 in Australia) to the Powerwall 2 purchase price – to cover installation and associated hardware costs.
One concern is that this presumed margin for installers may not match the actual cost of providing a professional-grade storage solution to the consumer.
Significantly, Tesla’s approach removes the ability for experienced installers to recommend the best equipment, including inverter/chargers, to meet their customer’s needs.
It may also fail to accommodate specialised situations such as two-phase or three-phase installations, or installations that require flexible interconnection with multiple DC or AC energy sources, for example, a grid-plus-backup generator scenario.
AC/DC is more than either/or
While trading choice for convenience by integrating AC into a home energy storage system may suit some customers, this one-size-fits-all approach will not address the diversity of today’s marketplace.
There are many 48-volt DC applications for battery energy storage such as:
- Data centres
- Telco facilities such as mobile phone tower sites, and
- High efficiency off-grid sites based on direct DC power systems, including those in developing countries where pure DC-based energy systems are increasingly the norm.
Another challenge of integrated AC arises when coupling renewable energy sources, such as solar and wind, with battery storage. In many cases, it is more efficient and effective to DC-couple solar panels to batteries than it is to use AC coupling, where the inverters for solar and battery interact using the AC wiring. This is especially relevant in off-grid scenarios where the use of direct DC-to-DC MPPT (maximum power point tracker) chargers allow the solar/battery combination to self-recover from any period where the battery becomes completely empty.
In addition, whereas being completely empty can also damage a lithium or lead-acid battery, it has absolutely no impact upon a Redflow ZBM2 zinc-bromine flow battery (which is designed for discharge to zero volts on a routine basis).
The true cost of lithium-based batteries
While lithium-based batteries offer one core advantage – lower upfront cost – this energy storage chemistry presents substantial negatives including:
- Thermal runaway – the industry euphemism for bursting into flames, which can arise in part from the battery’s very high internal energy density. While advanced control systems can mitigate against this vulnerability, there’s always the risk that damage can impair or shut down these safety systems.
- Human Rights and Conflict Minerals challenges [ https://www.tesla.com/en_AU/about/legal#human-rights-and-conflict-minerals-policy ; http://www.ibtimes.com/tesla-motors-outlines-difficulties-tracking-conflict-minerals-its-supply-chain-1594003 ]
- Economic challenges of recycling [ https://waste-management-world.com/a/1-the-lithium-battery-recycling-challenge ]
- Loss of capacity with age (http://jes.ecsdl.org/content/163/9/A1872.full), and
- Vulnerability to damage if stored uncharged/unmaintained for an extended period.
Redflow’s ZCell zinc-bromine flow batteries
Redflow’s ZCell is a unique 10 kWh zinc-bromine flow battery. Although ZCell batteries cost more than lithium-based batteries, they don’t suffer the same downsides, outlined above.
They also offer unique advantages, such as the ability to be stored fully charged in ‘standby power system’ mode for indefinite periods and then returned to operation within 30 seconds, with its stored charge fully available. This can occur months or even years later – just like a generator set – but without the costs of diesel or generator hardware maintenance.
Visit http://www.zcell.com to learn more about the merits of ZCell’s energy storage technology.
The role of price in the purchase decision
Many industries demonstrate that price is not the only factor when consumers decide to buy. Whether choosing a car, a plane ticket, clothing, Internet access plans, a seat at the theatre, and many other purchases, price is just one decision factor – and often not the most important one!
If price was the sole determinant, we would all drive identically cheap cars, airplanes would have no business class seats and we would wear uniformly utilitarian clothes.
Safety factors such as the inherent risks in lithium-based batteries can drive price entirely from consideration by customers in some markets.
While some people will be driven primarily by price – as is the way of the world – there is plenty of room for genuinely better alternatives, for which customers will willingly pay more than the cheapest options.
The way forward is win-win
The bottom line is that ‘vertically integrated’ one-size-fits-most systems can win in this rapidly expanding market without other energy storage solutions such as Redflow’s ZCell having to lose. Tesla’s announcement will drive interest in energy storage and deliver further momentum to already huge demand, which we all benefit from.
The battery market has started to expand massively, so there’s space in that market for a wide range of energy storage systems to meet diverse customer needs around the world.
For stationary energy storage, we see ZCell as a genuinely better battery – one that delivers long-life cost-effective energy storage for customers, with unique technical attributes that set it apart from all lithium-based energy storage systems.
ZCell-based energy storage solutions work with a wide variety of the most appropriate inverter/charger technology, from a global choice of equipment vendors, configured and deployed by experienced installation experts.