At the beginning of May Elon Musk gave a presentation is which he offered his vision of an alternative to fossil fuels as the future of humanity's energy sourcing and delivery. Musk's long term objective is global carbon free energy for power generation and transportation. He announced Tesla Energy and its first products, lithium-based Powerwall consumer (10 kWh) and Powerpack utility-scale (100 kWh) batteries. He also discussed a third product, GigaFactory, which he described as a gigantic machine to manufacture Powerwall and Powerpack batteries.
Elon Musk is an entrepreneur with a vision for humanity. He is the chairman of SolarCity and his vision for practical carbon-free energy helped start the company. SolarCity has already had significant transformative impact on the traditional power utility business model. He is also the founder and CEO of Tesla Motors, a manufacturer of electric vehicles and batteries. (He is also CEO of Space-X, but that's another discussion.) Musk is proposing a fundamental transformation of how the world works, by developing an alternative model for how energy is sourced and delivered. He believes it is possible with solar and batteries to wean the world off fossil fuels and reduce anthropogenic CO2 emissions to near-zero.
The world's electric power and transportation is powered by burning fossil fuels. The result is that anthropogenic CO2 emissions have pushed atmospheric CO2 concentrations (first recorded by climate scientist Charles Keeling) to levels not seen even in the paleoclimate record.
Musk thinks that collectively we should do something about this, but is has to be practical (and not win the Darwin award). His proposal for a solution has two parts.
Musk pointed out that we have this "handy fusion reactor in the sky" in the sun. We don't have to do anything except harvest the energy. Musk calculated the total surface area needed to generate enough power to get the U.S. completely off fossil fuel power generation. Shown as a blue square on Musk's slide it covers less than 1/4 of the Texas panhandle.
The obvious problem with solar energy is that the sun does not shine at night and even during the day the the power generated varies. Energy captured from the sun needs to be stored. Battery technology has evolved to the point where the size of the batteries needed to wean the U.S. power generation off fossil fuels is the size of a pixel ("the red pixel") on Musk's slide.
In Musk's view what is needed is a battery that simply works. A battery that doesn't require a lot of space, is reliable, works with existing home electrical networks and solar installations, is safe, can be used for years and is affordable. The Tesla Energy consumer battery, the Powerwall, is wall-mounted and comes in different colours so you don't need a battery room. It stores either 7 kWh (priced at $3000) or 10 kWh ($3500) and can be stacked for up to 90 kWh. To put this in context the average Ontario homeowner uses about 800 kWh a month in energy which translates to an average of 27 kWh a day. The Powerwall comes with a 10 year warranty.
What it gives you is peace of mind. You don't have to worry about being without power after an ice storm. It also gives consumers energy independence. Together with solar panels with these batteries consumers can go completely off the grid. This presents a huge challenge to the traditional electric power utility business model, comparable to the impact of cell phones on traditional land-line telephone companies.
Powerwall is targetted for homes and small commercial sites. You can order the Powerwall right now on the Tesla web site. Musk said that shipping will start in 3 to 4 months. Initially the rampup will be slow because the batteries will be made in Tesla's Freemont, California factory. But next year the rampup will accelerate as Tesla transitions to its Nevada Gigafactory.
Tesla is not the only company producing this type of battery. Aquion Energy and Iron Edison are also also producing consumer-scale power batteries. You can see how Tesla's Powerwall and these other companies' products compare from a financial perspective here.
Powering remote locations
Battery power is even more crucial for people in remote locations where there is no grid (remote parts of India and Africa), electricity is intermittent (many urban areas in India), or extremely expensive (northern Canada). Musk thinks that the Tesla Powerwall can scale globally. What he expects to see is what happened with cell phones and landlines. The cellphone leapfrogged the landline. There wasn't any longer a need to put landlines in remote locations. People on islands or remote locations can install solar panels and Tesla Powerwalls and never have to worry about electicity lines.
Utility-scale battery storage
The Tesla Powerpack (100 kWh), which is designed to scale infinitely, can provides gigawatt power. According to Musk Tesla Energy is already working with a utility on a 250 mWh Powerpack installation.
Emphasizing that the Powerpack is a reality, Musk announced that the entire evening event had been powered by Powerpack batteries that had been charged by the solar panels on the roof of the building where the event was taking place. The entire evening was powered by stored sunlight.
Tesla's competitors in this market include Eos Aurora and Imergy Flow. You can see how Tesla's Powerpack and other companies' products compare financially here.
The big picture: transitioning the world to sustainable energy
Musk calculated that 900 million Powerpacks would be required to transition the world to renewable electric power (90,000 GWh). To transition the world to renewable electric power and electric powered transportation would require 2 billion Powerpacks.
Musk made the case that this is something that humanity is capable of by looking at what humanity has already done with transportation. There are about 2 billion cars and trucks on the road. About 100 million cars and trucks are produced every year so that the world's transport fleet gets refreshed every 20 years. Musk's argumemnt is that if we can do it with vehicles, it is within our power to do it with batteries.
This is the reason that Tesla's approach in developing the Gigafactory is to treat it as a product. They are designing a giant machine for making batteries. Musk foresees that there needs to be many gigafactories in the future. He emphasized that this is not something that Tesla is going to do alone. Many other companies need to develop their own gigafactories.
Musk also announced that Tesla's policy of open sourcing patents will continue for gigafactories, Powerwalls, Powerpacks, and other technologies.Musk foresees with this technology a future where the Keeling curve will flatten and where there will be no incremental anthropogenic CO2 increase. The path that he has described based on solar panels and batteries is the only path that he knows can achieve this. In his view it is something that we must do, that we can do, and that we will do. I have to agree with Ed Parsons. This is on the level of Steve Jobs revolutionizing consumer electronics and commercial music delivery, but working on the "slightly bigger challenges" of carbon-free transportation and power generation.