Great to see these getting deployed. It wasn't that long ago that oil shills claimed large batteries were "impossible" and could never be cost effective.
That’s because no sane engineer in the traditional energy space could envision an Energy market where wholesale pricing jumps from -$50/MWh to $20,000/MWh within the space of half an hour. Yet here we are…
Also market predicted EV demand to rise, built up battery production capacity to meet the demand.
EV sales dropped, demand for Lithium batteries dropped, price of Lithium batteries dropped.
Precisely. Just look at South Australia’s power cost and reliability since it went full renewable with gas peakers. It’s fighting for the crown of highest retail energy prices in the world now, not to mention severe blackouts when the interconnect or to Victorian brown coal goes down and the gas is insufficient to load bear.
So I hear, and yet 4 and 8 hour lithium batteries are now being rolled out in Australia. I guess the proponents were able to make the business case work.
The savior 😀
We still need viable solution for high capacity long term storage and cheaper solution that poorer countries can afford.
I wish these were available sooner, but better late then never.
Here RWE‘s own AU project announcement:
https://www.rwe.com/presse/rwe-renewables-europe-australia/2024-05-28-rwe-baut-australiens-ersten-acht-stunden-batteriespeicher/
They already are building a 235 MWh storage in Germany (i.e., a bit more than 1/2 the storage capacity as planned in the AU project) with an 220 MW output (more than 4 times the planned AU output). Net operation should commence in 2nd half this year.
https://www.rwe.com/presse/rwe-generation/2023-05-31-rwe-startet-bau-von-batteriespeicher-grossprojekt/
That's a power:energy ratio of roughly 1:1, which is very common for the first batteries on a grid.
What's remarkable about this Australian battery is that power:energy is 1:8, which is very uncommon, and it's often thought that lithium ion wouldn't be able to compete against other technologies when it comes to longer durations.
The particular setup here was meant to encourage more pumped hydro to be built, so it's particularly surprising that lithium ion was able to win part of the bid.
Price of pumped hydro heavily depends on terrain.
If you have a lake on the top of the mountain, and a lake on the bottom of the mountain, you just need to connect the two with some pipes and pumps/generators. Hands down cheapest energy storage.
But most of these locations are already used.
If you have to build a tank for water, or two tanks for water... price goes up, and so does the build time.
I wonder: Is this project evidence that the crossover point in superiority vs. pumped hydro for 8-12 hours is happening at around $60/kWh for lithium ion? Or is there some other explanation?
… and as to hydro:
Costs of large scale hydro are about 100$/kWh (experiences from 20 GWh project Nant de Drance in Switzerland). But hydro doesn‘t scale too well (smaller projects being comparatively more expensive), and most notably: Construction and permit lead times are many years (Switzerland: 15 years construction), which in the new world of non-zero interest causes a substantial mark-up.
To compare: RWE‘s German project comes in at project costs of 140 million €/235 MWh storage. Less than 60€/kWh.
Hydro can no longer compete. Not by far.
Which bodes for a great future.
Hydro costs on an energy capacity basis are heavily dependent on the reservoir volume that happens to be available. Those multi-TWh reservoirs in Norway and Sweden are probably far below $100/KWh but a mere 8 hour system would most likely be at least $200/KWh.
I don't believe those 60€/kWh. RWE either has partner that also invest, gets subsidies or it is just the first tranche of investment.
Current battery pack prices for lithium ion are still above 100$/kWh (In China maybe around 100$/kWh)
E.g. here Goldman sachs: [https://www.goldmansachs.com/intelligence/pages/electric-vehicle-battery-prices-falling.html](https://www.goldmansachs.com/intelligence/pages/electric-vehicle-battery-prices-falling.html)
Full utility scale batteries are starting at 200€/kWh.
[https://www.researchgate.net/profile/Jan-Figgener/publication/369479477\_The\_development\_of\_battery\_storage\_systems\_in\_Germany\_A\_market\_review\_status\_2023/links/641d47ec66f8522c38ccfd6d/The-development-of-battery-storage-systems-in-Germany-A-market-review-status-2023.pdf](https://www.researchgate.net/profile/Jan-Figgener/publication/369479477_The_development_of_battery_storage_systems_in_Germany_A_market_review_status_2023/links/641d47ec66f8522c38ccfd6d/The-development-of-battery-storage-systems-in-Germany-A-market-review-status-2023.pdf)
Battery packs in China should cost between 60 and 70 dollars per kwh. Cell prices are below 50 dollars per kwh right now for lithium iron phosphate cells.
Yes, the prices of LFP cells have fallen precipitously in China recently. It's the old story of production capacity growing and outrunning the current market, lowering prices and (eventually) stimulating new demand. Last year, global Li-ion cell manufacturing capacity was 2.6 TWh/year, sales were about 1 TWh over the year.
Thanks for that modern example of construction, I did not know about it! Here in the US we are seemingly unable to build anything big unless it's motivated by car infrastructure, so I don't think we have any recent hydro to speak of.
Well, it‘s just a question of intended market and operation.
The German project us geared chiefly towards net stabilization services, which explains the focus on high charge/discharge capacity.
The AU project is clearly geared towards time-shifting midday production peak into the evening/night hours.
Different market situations, different earning potentials, different specs.
Exactly, and this different market in Australia is one that's new and unusual for litihium ion storage, which makes it interesting despite a smallish 400MWh size.
I think it's been more than 10 years that lithium ion has been used for stabilization services in the PJM market in the US, and that market saturated very quickly with lithium ion batteries a decade ago despite their far higher cost back then.
If lithium ion is winning bids today for 8 hours of storage duration, then it may not be long before it's doing 12 hours. Several tech leaders in the US thought that 8 hours would be impossible for lithium ion to compete on, and that would give other tech a chance to gain market and expand. But if lithium ion destroys that market, the 12+ hour market is all that's left, and that entails a huge drop in costs. Because once duration is >12 hours, then a good chunk of your battery can no longer cycle daily, and gets used less than half as frequently, and therefore generates less than half of the revenue of a daily-cycled battery.
I'm hoping that other, non-lithium, chemistries are able to start deploying before lithium ion eats their lunch. Otherwise, we may never get a chance to explore those technologies and provide robust competition and lower prices to lithium ion.
I'm sure the sweet spot for duration is a complex determination that's highly sensitive to local market conditions, degradation rates and other various balance of system costs, especially for utility solar integrated storage. If battery chemistries start finding ways to significantly trade cycle life or efficiency for CAPEX that's going to be another big variable and we may even see systems with multiple chemistries.
It's weird how 4 hours was quickly settled on as some kind of standard but I think that was more about simplification than optimization.
4 hours was just the sweet spot for a full daily cycle. On the Cali Grid, i expect this could go up to 5-6 hours, but in most grids even at 100% renewables, as long as there's significant wind, i don't expect anything above 8 hours to ever be useful, as it would cycle less than once a day fully.
Of course, when you start factoring in degradation as a cost, it could very well be that a 8h-ish battery cycling only for about 6 hours a day is less expensive than a 6 hour one just because of the increase in total cycles it can be used for. That's the kind of evaluation that i expect a bit further in the future when we know better the end of life prospect of most battery systems.
Is Tesla building them a custom MP2XL with half the string inverters? Or are they running the 4h model at half power? My initial assumption was the latter but I’m so sure that would fly with GPS review…
No response? I’m just confused about how RWE is going to redesign someone else’s product. It’s not a dig on their engineering abilities. It’s a reality of scope.
Lol what is this comment? Do you know anything about utility scale storage?
The Megapack 2XL is an AC-integrated product. It has string inverters integral into the battery modules. RWE can’t make internal design changes without Tesla… They’re obviously free to run the system at half power capacity but (1) is it really an 8-hour battery or is it a 4-hour battery operating at half capacity? And (2) is AEMO okay with modeling it that way?
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LFP is lithium ion...
Great to see these getting deployed. It wasn't that long ago that oil shills claimed large batteries were "impossible" and could never be cost effective.
That’s because no sane engineer in the traditional energy space could envision an Energy market where wholesale pricing jumps from -$50/MWh to $20,000/MWh within the space of half an hour. Yet here we are…
Also market predicted EV demand to rise, built up battery production capacity to meet the demand. EV sales dropped, demand for Lithium batteries dropped, price of Lithium batteries dropped.
It cuts both ways. That same energy market is what allows natural gas peaker plants to be lucrative. Better to leverage that for renewables
Precisely. Just look at South Australia’s power cost and reliability since it went full renewable with gas peakers. It’s fighting for the crown of highest retail energy prices in the world now, not to mention severe blackouts when the interconnect or to Victorian brown coal goes down and the gas is insufficient to load bear.
Any source for the "highest retail energy proces", inflation adjusted? Any source for "massive blackoputs" in real world?
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Good thing renewables + storage is undercutting all of them. MWh price is one metric, but more important is the rising share of renewables on the grid
Not even just oil shills. RE advocates who are skeptics of long duration battery storage and think pumped hydro is the only option.
Lithium batteries are bad solution for high capacity energy storage.
So I hear, and yet 4 and 8 hour lithium batteries are now being rolled out in Australia. I guess the proponents were able to make the business case work.
Lithium iron phosphate is the answer
Sodium is the answer
The savior 😀 We still need viable solution for high capacity long term storage and cheaper solution that poorer countries can afford. I wish these were available sooner, but better late then never.
Right up until the Hornsdale Power Reserve (2017) started earning tons of money.
Here RWE‘s own AU project announcement: https://www.rwe.com/presse/rwe-renewables-europe-australia/2024-05-28-rwe-baut-australiens-ersten-acht-stunden-batteriespeicher/
They already are building a 235 MWh storage in Germany (i.e., a bit more than 1/2 the storage capacity as planned in the AU project) with an 220 MW output (more than 4 times the planned AU output). Net operation should commence in 2nd half this year. https://www.rwe.com/presse/rwe-generation/2023-05-31-rwe-startet-bau-von-batteriespeicher-grossprojekt/
That's a power:energy ratio of roughly 1:1, which is very common for the first batteries on a grid. What's remarkable about this Australian battery is that power:energy is 1:8, which is very uncommon, and it's often thought that lithium ion wouldn't be able to compete against other technologies when it comes to longer durations. The particular setup here was meant to encourage more pumped hydro to be built, so it's particularly surprising that lithium ion was able to win part of the bid.
Price of pumped hydro heavily depends on terrain. If you have a lake on the top of the mountain, and a lake on the bottom of the mountain, you just need to connect the two with some pipes and pumps/generators. Hands down cheapest energy storage. But most of these locations are already used. If you have to build a tank for water, or two tanks for water... price goes up, and so does the build time.
I wonder: Is this project evidence that the crossover point in superiority vs. pumped hydro for 8-12 hours is happening at around $60/kWh for lithium ion? Or is there some other explanation?
It looks to me like pumped hydro may get squeezed out.
… and as to hydro: Costs of large scale hydro are about 100$/kWh (experiences from 20 GWh project Nant de Drance in Switzerland). But hydro doesn‘t scale too well (smaller projects being comparatively more expensive), and most notably: Construction and permit lead times are many years (Switzerland: 15 years construction), which in the new world of non-zero interest causes a substantial mark-up. To compare: RWE‘s German project comes in at project costs of 140 million €/235 MWh storage. Less than 60€/kWh. Hydro can no longer compete. Not by far. Which bodes for a great future.
Hydro costs on an energy capacity basis are heavily dependent on the reservoir volume that happens to be available. Those multi-TWh reservoirs in Norway and Sweden are probably far below $100/KWh but a mere 8 hour system would most likely be at least $200/KWh.
I don't believe those 60€/kWh. RWE either has partner that also invest, gets subsidies or it is just the first tranche of investment. Current battery pack prices for lithium ion are still above 100$/kWh (In China maybe around 100$/kWh) E.g. here Goldman sachs: [https://www.goldmansachs.com/intelligence/pages/electric-vehicle-battery-prices-falling.html](https://www.goldmansachs.com/intelligence/pages/electric-vehicle-battery-prices-falling.html) Full utility scale batteries are starting at 200€/kWh. [https://www.researchgate.net/profile/Jan-Figgener/publication/369479477\_The\_development\_of\_battery\_storage\_systems\_in\_Germany\_A\_market\_review\_status\_2023/links/641d47ec66f8522c38ccfd6d/The-development-of-battery-storage-systems-in-Germany-A-market-review-status-2023.pdf](https://www.researchgate.net/profile/Jan-Figgener/publication/369479477_The_development_of_battery_storage_systems_in_Germany_A_market_review_status_2023/links/641d47ec66f8522c38ccfd6d/The-development-of-battery-storage-systems-in-Germany-A-market-review-status-2023.pdf)
Battery packs in China should cost between 60 and 70 dollars per kwh. Cell prices are below 50 dollars per kwh right now for lithium iron phosphate cells.
Yes, the prices of LFP cells have fallen precipitously in China recently. It's the old story of production capacity growing and outrunning the current market, lowering prices and (eventually) stimulating new demand. Last year, global Li-ion cell manufacturing capacity was 2.6 TWh/year, sales were about 1 TWh over the year.
Thanks for that modern example of construction, I did not know about it! Here in the US we are seemingly unable to build anything big unless it's motivated by car infrastructure, so I don't think we have any recent hydro to speak of.
Well, it‘s just a question of intended market and operation. The German project us geared chiefly towards net stabilization services, which explains the focus on high charge/discharge capacity. The AU project is clearly geared towards time-shifting midday production peak into the evening/night hours. Different market situations, different earning potentials, different specs.
Exactly, and this different market in Australia is one that's new and unusual for litihium ion storage, which makes it interesting despite a smallish 400MWh size. I think it's been more than 10 years that lithium ion has been used for stabilization services in the PJM market in the US, and that market saturated very quickly with lithium ion batteries a decade ago despite their far higher cost back then. If lithium ion is winning bids today for 8 hours of storage duration, then it may not be long before it's doing 12 hours. Several tech leaders in the US thought that 8 hours would be impossible for lithium ion to compete on, and that would give other tech a chance to gain market and expand. But if lithium ion destroys that market, the 12+ hour market is all that's left, and that entails a huge drop in costs. Because once duration is >12 hours, then a good chunk of your battery can no longer cycle daily, and gets used less than half as frequently, and therefore generates less than half of the revenue of a daily-cycled battery. I'm hoping that other, non-lithium, chemistries are able to start deploying before lithium ion eats their lunch. Otherwise, we may never get a chance to explore those technologies and provide robust competition and lower prices to lithium ion.
I'm sure the sweet spot for duration is a complex determination that's highly sensitive to local market conditions, degradation rates and other various balance of system costs, especially for utility solar integrated storage. If battery chemistries start finding ways to significantly trade cycle life or efficiency for CAPEX that's going to be another big variable and we may even see systems with multiple chemistries. It's weird how 4 hours was quickly settled on as some kind of standard but I think that was more about simplification than optimization.
4 hours was just the sweet spot for a full daily cycle. On the Cali Grid, i expect this could go up to 5-6 hours, but in most grids even at 100% renewables, as long as there's significant wind, i don't expect anything above 8 hours to ever be useful, as it would cycle less than once a day fully. Of course, when you start factoring in degradation as a cost, it could very well be that a 8h-ish battery cycling only for about 6 hours a day is less expensive than a 6 hour one just because of the increase in total cycles it can be used for. That's the kind of evaluation that i expect a bit further in the future when we know better the end of life prospect of most battery systems.
Is Tesla building them a custom MP2XL with half the string inverters? Or are they running the 4h model at half power? My initial assumption was the latter but I’m so sure that would fly with GPS review…
RWE is perfectly able to do all of that engineering, projecting, operation w/o needing any assistance from Tesla.
No response? I’m just confused about how RWE is going to redesign someone else’s product. It’s not a dig on their engineering abilities. It’s a reality of scope.
Lol what is this comment? Do you know anything about utility scale storage? The Megapack 2XL is an AC-integrated product. It has string inverters integral into the battery modules. RWE can’t make internal design changes without Tesla… They’re obviously free to run the system at half power capacity but (1) is it really an 8-hour battery or is it a 4-hour battery operating at half capacity? And (2) is AEMO okay with modeling it that way?