Ecotards Still Beating Their Heads Against Wall Of Economic Laws — Lithium

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Today, we re-learn the laws of supply and demand.  Great news!!!

SolarCity to back up solar with Tesla batteries

Well, Tesla isn’t using them, so why not? 

NEW YORK (AP) — The solar panel installer SolarCity is beginning to address one of solar power’s big drawbacks: The sun doesn’t always shine.

The solution: big battery packs that will provide backup power while lowering electric bills. The supplier: electric car maker Tesla Motors, whose CEO Elon Musk is also the chairman of SolarCity. …..

The batteries will be offered first to commercial customers because of the way many commercial electric bills are calculated. SolarCity is also conducting a pilot program in California for homeowners, but because residential bills are calculated differently — and the batteries are so expensive — it could be years before batteries make financial sense for homes.

Well, as to whether or not they make sense for businesses remains to be seen. 

For power-hungry businesses battery backup can make financial sense even now. Many businesses are charged not just for the amount of electricity they use over a certain period, but also for the level of electricity they need from the grid at any one time. Think of a car owner paying for gasoline to run the engine, but also for the amount of horsepower needed when the car is loaded with people and climbing a steep hill.

Often, those horsepower charges, known in the electric industry as “demand charges” ratchet up quickly…..  SolarCity’s solar panels can lower those demand peaks when the sun is shining. …..  The company says the battery systems will lower demand charges by 20 percent…..

For traditional electric utilities already struggling with weak electricity sales, this represents yet another threat. …. Now commercial customers may have a way to reduce demand charges, too.

It’s not a threat to the utility business, because it doesn’t replaces the electric providers.  Yes, it may reduce demand, but, what happens when an essential service/supply has a reimbursement rate lower than the cost?  ….. Duh, the rate increases.  You still have to supply electricity and the medium to provide it.  That’s not going away any time soon, not in our lifetimes, anyway.  Most providers are now also paying a higher premium for peak demand, so, they’d probably welcome this development, if it has a realistic chance of being widely utilized.    but, I doubt that it does. 

The batteries offered by SolarCity are the same lithium-ion ones that power Tesla’s electric vehicles, reconfigured for stationary use. SolarCity’s chairman is Elon Musk, founder and CEO of Tesla Motors. Musk is a cousin of the founders of SolarCity, CEO Lyndon Rive and chief technology officer Peter Rive. ….

The battery systems are also extremely expensive. SolarCity won’t say exactly how expensive, but industry insiders put the cost at near $1,000 per kilowatt-hour, which would make typical commercial system well over $100,000.

SolarCity won’t charge customers for the battery, but will instead offer it as a service for a monthly fee. They will be offered first in markets with high demand charges, such as parts of California, Massachusetts and Connecticut.

As per usual, when regarding these pipedream notions, the details of the energy offset and provision is too sparse to do any real math for anyone considering this notion.  The obvious question is at what point does a company achieve the return on investment?  How much does a company save with a 20% reduction in the demand charge? 

For the record, the linked article states that residents don’t have a demand charge, that’s not entirely true.  Many do, and more and more have some sort of demand charge attached.  (Thanks to the econuts who think using electricity is bad.)

But, even if all of this works out exactly like the lunatics think it should, and this idea catches hold and the world starts installing lithium battery backups in their commercial enterprises, we’ve got another huge problem. …….  that damnedable law of Supply and Demand.  Again!!!! 

Lithium has never really been known as a cheap commodity.  It’s always been pricy stuff.  And, it’s not very common in good purity form.  For instance, we have this Canadian company seeking to take advantage of the EV market.  It seems they’ve found a spot with good lithium purity.

There are only a few rock lithium deposits worldwide with purity ratings above 99% which makes it suitable for lithium ion batteries.

The vast bulk of the global lithium supply is extracted from brine deposits often as a byproduct — primarily in South America. It usually end up being used in grease, ovenware or industrial desiccants and not in the electrical storage industry.

Lithium today is used in batteries for everything from cellphones to hybrid vehicles — the electric vehicle market is destined to grow by nearly 40% per annum for the rest of the decade.

The growing demand for lithium is being reflected in the price. The current spot price for battery-grade lithium carbonate is around $6,600 a tonne, that’s up from $5,500 a couple of years ago.

But, even that doesn’t tell the story.  Here’s a graph which shows a price differential, but, most importantly, the price of lithium in 2006.  We’ve doubled to tripled the price of lithium in just a few short years. 

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Let’s say the EV market will increase by 40% per annum for the rest of the decade. And, let’s also say that commercial enterprises also want lithium batteries in their shops to curb peak demand.  What then, would be the price of lithium?  $20,000/ton?  How much would the cars and the commercial battery packs then cost?  When and where is the ROI (return on investment)?  Well, if the price of lithium gets that high, then the ROI doesn’t exist.  But, as a bonus you do get more expensive laptops and cell phones, so there’s that. 

This is exactly like the idiotic wind turbines which use REE.  We can only produce so much at a lower cost.  Once the demand kicks in, then the costs skyrocket. 

But, you know what we have in abundance which, when compared to the cost of lithium is a bargain at any price? 

Oh, a few things, coal, oil, and natural gas. 

The lunatics don’t understand energy, economics, supply, demand, ROI, or anything remotely related to numbers.  They live in a fantasy world which bears little resemblance to reality. 

At what point is society going to say that we’ve had enough of these insane children running amok and screwing up our lives?  It’s well past time for the adults to step in and try to straighten things out. 

My thanks to Dirk for the heads up on the lithium. 

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29 Responses to Ecotards Still Beating Their Heads Against Wall Of Economic Laws — Lithium

  1. philjourdan says:

    The sun don’t always shine, and it is not always hot or cold. But utility companies must meet peak demands. So why don’t they just plan for the average and use batteries to store in low use times?

    You said it. Economics! It costs too damn much!

  2. Latitude says:

    hey goofy…I left you a present on this mornings Gem post
    I know you haven’t read it……because your head has not exploded

    • suyts says:

      LOL, I did read it and my head did almost explode. But, I was already nearing my peak capacity to absorb stupid inanity. It’s really on both sides. The NY Times, obviously, but, even MS’s move is more PR than anything. The feds don’t care if they encrypt their stuff, they’ll just subpoena what they want from MS.

      Will write about it, though. I have to go get my mind right , though. 😉 Beer isn’t just for breakfast, anymore!!!

  3. Bruce says:

    Agree with the lithium analysis, as I say the same every time someone raves about EV’s. Only the price won’t double or triple. Ten or twenty times would be more likely. That’s what happened with the REE’s. Also rhodium when it hit a supply crunch a couple decades ago.

    But the REE issue wasn’t scarcity it was lead time, capital cost and permitting (especially in respect to the radioactives which always appear in REE resources). Once the producers catch up there will be no problem with REE availability or cost – indeed they will be cheap since a big driver of REE price is use of Nd in wind turbines and EV’s, both of which are inflated by subsidies and ideology. When the CAGW scare passes many REE’s willbecome very cheap as some of the minor ones like Eu, Er and Tb are needed for things like plasma screens, so relegating Nd and Sm to byproducts.

    This won’t be the case for lithium, which is irreplaceable for mobile widgets. And is rare for nucleosynthetic reasons which are immutable. So by trying to use lithium batteries for idiot things like load levelling these nutters are raising the cost of their iPad’s. I wonder if they will complain to Obama about this unfair situation?

    On the other hand it might foster a move to methanol fuel cells for hand held electronic things. That would be ‘way cool, since you could carry around enough methanol in one pocket to keep your phone going for months without ever needing to go near a charger.

  4. tom0mason says:

    The battery systems are also extremely expensive. SolarCity won’t say exactly how expensive, but industry insiders put the cost at near $1,000 per kilowatt-hour, …..

    $1,000 per kWh! What! That is a nonstarter as a power supply. Even a Soviet made gasoline powered generator would be better than that!

    Must be good friends of this administration to have this even considered.

  5. Suyts, did you know that: ”large number of lithium batteries fully charged, their radiation makes the driver and passengers sterile?”

  6. DirkH says:

    “$1,000 per kilowatt-hour”

    Ah, so my estimate is still correct. I estimated a while ago that a kWh that goes into and out of a battery, not counting losses, costs you a buck; assuming 1,000 load cycles.
    And, given that a small EV has about 10 kWh storage for 100 km of driving, its battery costs about 10 grand. You don’t really find the prices for replacement batteries but it looks like all of this is still roughly correct.

    Make it 10 times cheaper and I’m game for an EV.

    • DirkH says:

      … I assume here that a Li Ion battery in a car like the Nissan Leaf is designed for 1,000 load cycles or a total car lifetime of 100,000 km/h; 1000 times a distance of 100 km…

      • Bone Idle says:

        You don’t change the batteries in your vehicles at 100,000ks. The wear and tear on the electrical motors and ancillaries reduce their efficiency buy up to 30%. so the cost ratio is increased for the amount of K’s expected.

        • DirkH says:

          I don’t understand. You expend x kWh on a 100 km of driving; for a Chevy Volt 19 kWh AFAIK; for most electric noddy cars less as they’re smaller, let’s say 10 kWh.
          Battery is designed for a certain lifetime.I assume 100,000 km. Might be more but that’s what I would design it for. Now, I’m running my cars for 250 to 350 thousand km before they’re ready for the junkyard, but I replace a lot of parts during that time. As a manufacturer I would have to deliver stuff designed for a certain lifetime and I would go for a minimum of 100,000 km. What does this have to do with wear and tear of the motor? The motor is the cheapest part in an EV.

    • Bruce says:

      Make it 10 times cheaper and I’m game for an EV

      Nice idea but sadly it won’t happen. Not enough lithium. Only feasible alternative to Li is hydrogen, if someone could build a battery based on it. Which is debatable because hydrogen overpotential is huge in aqueous systems, so half your energy goes to heat.

      And if you think Telsa battery fires are fun, you’d just love hydrogen battery fires.

      • DirkH says:

        “Nice idea but sadly it won’t happen. ”

        I know. I’ll take an EV as soon as they have realized that electricity is mobile and doesn’t need to be carried around in tons of batteries.

      • philjourdan says:

        Until there is some “thinking outside the box” the electric car fad will remain just that.

      • Bone Idle says:

        The Germans were fond of Hydrogen. They used it in the Hindenburg.

        • DirkH says:

          Notice that it was in fact a very minor accident. The people who didn’t jump out of the cabin survived. The cabin went down rather slowly. Later airplane crashes had far higher numbers and percentages of fatalities.

        • philjourdan says:

          The US had already embargoed helium to Germany. They had no source of it, so were forced to use Hydrogen. A very costly concession.

    • Bruce says:

      I mean proton based. NiMH systems are already H based, but are hydride not proton. NiMH suffers from the nickel being too heavy.

  7. jimash1 says:

    Wait.
    Aren’t the batteries the part that goes on fire ?
    I’m confused .

  8. jimash1 says:

    I’m holding out for this:
    http://world.honda.com/FuelCell/FCX/station/
    Bet it costs less even with the fuel cell car.

  9. cdquarles says:

    There are other problems with hydrogen (either the hydride form or the proton form). Our bodies deal with this using large, complex carbonaceous systems to shuttle protons and electrons. For our mechanical needs, I am afraid that we’ll be burning hydrocarbons forever. We can use nuclear for electricity but still need ways to deal with the byproducts.

    Like oxygen, hydrogen is too reactive unless diluted. Dilution brings on other problems and trade-offs. TANSTAAFL (thank you RAH).

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