Energy Storage Prices Heading from Low to Ludicrously Low

July 26, 2018


Snip from a 2nd Quarter 2018 NextEra Energy Earnings call Transcript:

Stephen C. Byrd – Morgan Stanley & Co. LLC

Wanted to just follow up on storage. You had provided some good commentary in your prepared remarks around storage. But just stepping back, I know you, at your analyst event, laid out your trajectory on where you see costs going. I guess we continue to get surprised just by how cheap storage is becoming, but I’m just curious from what you’re seeing out in the marketplace for storage, is the trajectory at all surprising to you in terms of the cost reductions? Where can it head from here? What’s your general outlook on where costs may go for storage?

John W. Ketchum – NextEra Energy, Inc.

Yeah. I mean, the way I think about it, Stephen, is how we’ve been pricing it into our PPAs. I mean, roughly on transactions we’ve done over the last six to 12 months, you can think of it as roughly $0.015 a kilowatt hour. That is probably going to move, with what we see with the significant investment being made in electric vehicles and the cost declines that we expect to see on the solar side. Early in the next decade, mid-next decade, it’s going to probably be about $0.005 a kilowatt hour add, maybe $0.01, but probably closer to about $0.005. And so if we find ourselves in a marketplace where we are selling wind right around $0.02, I mean, a combined wind and solar product probably looks roughly around $0.025. Solar, into the next decade, probably looks more like a $0.03 product, sub-$0.03 in some markets. You add half a penny on that on the high end, you’re probably at about $ 0.035 a kilowatt hour. Depends on the market and land costs.

10 Responses to “Energy Storage Prices Heading from Low to Ludicrously Low”

  1. Looks like the distributed grid will be a thing

  2. indy222 Says:

    I’m skeptical of simple extrapolations given without technical justification. So – why? Is there a new breakthrough around the corner, maybe they see the solution to leakage of power from ultra-capacitors? Some mammoth deposit of lithium waiting to be mined? I’ve become wary of promotionals when money’s involved. But, we can hope!

    • dumboldguy Says:

      Read more of the 2018 NextEra Energy Earnings call Transcript—-the finance-speak is interesting, particularly the obligatory CYA:

      “We will be making forward-looking statements during this call based on current expectations and assumptions, which are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect or because of other factors discussed in today’s earnings news release and the comments made during this conference call, in the Risk Factors section of the accompanying presentation, on our latest reports and filings with the Securities and Exchange Commission, each of which can be found on our websites, and We do not undertake any duty to update any forward-looking statements”.

      Translation: “We have some good news right now and would like you to send us more money in the hope that our “extrapolation” comes true”. Sell only some of your Solar Roadway stock, though.

      My biggest problem with Next Era is that the core of its business is Florida Power and Light, and when the salt water creeps up over much of that state, they are going to be in big trouble trying to sell electricity.

    • rhymeswithgoalie Says:

      “I’m skeptical of simple extrapolations given without technical justification.”

      That’s always good.

      Ignoring earnings calls, I see a lot of people with dollar signs in their eyes going after storage technology. Of course, as with so many other early-stage technologies, many will go broke in the gold rush, but the mere increase in volume of installations will increase the population of knowledgeable engineers and lower costs. Engineers from bankrupt companies, or wanting more pay, will move on to other storage-R&D teams in other companies, and the energy storage industry will grow monitonically over the next few decades.

      At some point, the big guys* (like Siemens or Schlumberger?) will pivot away from fossil fuel extraction technology to grid-related tech, if only to keep ahead of the Chinese.

      *Huge companies are often likened to the QE II, slow to turn around but providing lots of competition to the new tech companies once they do.

  3. grindupbaker Says:

    Increases in energy density are a movement along the continuum between an explosive and a piece of silk rubbed with a rod. Li-ion has onboard circuitry to prevent explosion/fire in case of a short circuit, lead acid batteries have the hydrogen/air warnings. Same concept as nuclear power and a thermonuclear bomb. That’s a likely limiting factor.

    Capacitance: +ve and -ve ions are separated by a dielectric material. The thinner the dielectric the bigger the charge. If the dielectric accidentally thins to zero then that’s a lightning strike, the breakdown of dielectric. I expect these things are design considerations in densifying energy and reducing costs.

    • rhymeswithgoalie Says:

      “Increases in energy density are a movement along the continuum between an explosive and a piece of silk rubbed with a rod. ”

      I think some of the biggest storage-tech winners will not be as fixated on energy density as they are on modularity, cost, maintainability, cost, power-shunting hardware, cost, reliable control software, and cost. (Did I mention cost?)

      Density is very important for handheld tech and vehicles, but much less so for grid power management.

  4. redskylite Says:

    While scientists still slog away at designing productive fusion power units, steady advances have been made in both solar and wind technologies and prices are getting cheaper and cheaper.

    For solar generation, install costs have come down 40 to 50 percent in the last five years for which we have data.”

    The systems are also getting more efficient.

    Namovicz: “For wind, in particular, the productivity of the turbines has improved quite a bit over the last five, 10, 15 years, and so that helps reduce the total cost to own and operate the system.”

  5. redskylite Says:

    Japan aim to drop ICE’s and manufacture Electric vehicles only by 2050, no mention of hydrogen fuel cell powered vehicles in the article.

    Japan is aiming to make all new passenger cars electric by 2050.

    The move was announced by a panel of economic ministers, joined by leaders of major automakers including Toyota and Nissan.

  6. redskylite Says:

    Exciting news from the University of Nebraska–Lincoln, where they have beaten the standing theoretical limit of Hydrogen production from biological agents.

    Team shatters theoretical limit on bio-hydrogen production.
    Method increases yield of clean, renewable energy source.

    The team’s highest reported yield — 5.7 units of hydrogen for every unit of glucose fed to the bacterium — easily surpassed the theoretical limit of 4 units.

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