Notes on JB Straubel’s Keynote at the 2014 SEEDZ Energy Storage Symposium

I thought I’d share my crude notes on a very interesting talk about energy storage from Tesla CTO JB Straubel. The slides are available as a PDF.

  • JB Straubel Keynote
    • CTO, Tesla
    • Previously CTO & co-founder of Volcom, specializing in high-altitude electric aircraft platforms
    • Board Member, Solar City
  • Why is Tesla Deeply invovled in Energy Storage
    • EV Battery History
      • Status quo was led-acid in 1995
        • Stagnant performance
      • LiIon made possible Tesla and the rebirth of EVs
        • 4x gravimetric energy density
        • 6x volumentric energy density
        • 2x cycle life
      • Tesla was first to do Li-ion R&D for vehicles in 2003
    • Tesla Roadster 2008
      • Sought to challenge internal combustion vehicles on more than just fuel economy
      • ~2,500 sold
      • Largest battery pack in a vehicle
        • 50kWh +
      • Optimism based on progress of LiIon cells
        • ~2x improvement in energy storage capability of batteries in the decade between EV1 era and the Tesla Roadster
          • 300Wh/litr to 600Wh/litre
          • Accompanying weight reduction as well
        • In talking to companies involved in 2005, they saw no reason for progress to plateau
        • Ten years later, they expect progress to continue for the foreseeable future.
        • 40% improvement between introduction of the Roadster and the Model S
          • ~300 miles range
          • 85kWh
          • Smaller pack than the roadster
        • See this trend continuing for the next 10-20 years
        • Only 10-20% away from being able to compete broadly with the internal combustion engine.
    • Long term goal is to sell millions of cars
      • Energy storage is the biggest factor influencing cost, and therefore, volume.
    • Current offerings
      • Roadster
      • Model S
        • Main focus
      • OEM
        • Toyota RAV 4
        • Mercedes-Benz
          • BClass
    • Model S Battery Pack
      • Scale & Scope have enabled a cost point that is competitive in other markets outside cars
      • Utilities
      • Energy density is a key path to lower cost
        • Automobiles
          • Not intuitive
          • Some automobile manufacturers have tried to cut energy to cut costs.
        • 200Wh/Kg
        • Benefits for stationary storage
          • smaller footprint
          • easier retrofit
      • Current costs and projections are on track
      • Manufacturing volume is important too.
        • Goal to build 500,000 Gen3 vehicles/year
          • using capacity in existing Bay Area Plant
        • Energy storage required to meet that goal is another story
        • In 2013 ~34 GWh of lithium ion batteries were manufactured, but from ~21 GWh in 2010.
        • Tesla’s projects to use 3-4GWh in 2014
          • Approximately 10% of WW volume
        • 500,000 Gen3 vehicles/year will require 10x current, or ~35GWh of batteries in 2020.
        • Gigafactory sized to meet that demand
          • Would still only supply 0.5% of WW new car market.
          • Doubling WW capacity
          • Reengineering supply chain with major opportunity for cost cutting
          • 30% cost reduction by 2017 ramp-up
        • Thinks that the market for non-automotive storage will grow even faster than the electric car market.
          • Grid storage is slow to mature, but once you cross certain price thresholds, it becomes a commodity market that sells on cost savings
        • Approach to cost reductions at the gigafactory
          • Looking at everything, including the sourcing of the raw materials.
          • Materials are a meaningful portion of the cost of cells
          • Plan to use their purchasing power to use demand as leverage for sustainable practices throughout the supply chain (labor practices, energy, etc)
        • Gigafactory
          • 35GWh of cells
          • 50GWh of packs
            • 15GWh for stationary packs
              • 10x of the California mandate
  • Tesla and Stationary Storage
    • ~2012 adapted vehicle pack architecture for residential energy storage packs
      • 5kW/10kWh
      • Originally targeted at people with solar and teslas
      • Slow to scale
        • ~1000 systems
      • People who wanted to play with energy in their house
        • Peak demand management
        • “Islanding” to isolate their system from grid and allow operation in the event of a power outage
      • Experiment with aggregation of systems
        • Coordinated across households
        • Business models are a challenge
    • New experiment is a larger-scale system
      • Module
        • Based on model S pack architecture
          • Different arrangement of modules
          •  Same cooling and management
        •  Two hour-rate pack.
          • 200kW / 400 kWh+
        • “Single skid” unit
        • Roughly the size of a shipping pallet
        • 800Kg
      • Pilot deployment
        • SuperCharger location
          • Big enough to be worth the time
          • Very peaky load
            • Up to 250KWh peak demand from cars
            • <100KW peak from meter
      • Thinks that utility side opportunities are significant
        • Backup power
        • Demand management
        • Scale up of renewables
          • This will be the major driver for storage!
        • Major adjustments needed in rate structures/incentives
        • es- I wonder where trends in peak generation costs vs storage costs cross
      • Large Pilot (2013)
        • “One of the bigger installations”
          • Tesla’s Fremont plant
          • 1MW / 5 modules
          • Manages ~10% of peak demand
          • 100 MW substation with 100kV tie.
          • 1-2% of installed grid-attatched storage
          • In the process of doubling capacity
  • Thinks of Tesla is an energy innovation company, more than a car company.
  • Cautionary note about building for economic sustainability, avoiding dependency on incentive programs
  • Innovation needed in storage management technology and relationship to grid and generation
  • “The stone age came to an end not for lack of stones, and the oil age will come to an end not for lack of oil”
  • Thinks the economics of renewables are already compelling and now constrained by storage
  • Q&A
    • Can the world support the scale up from a primary resource point of view
      • Li-ion are primarily graphite/carbon for anode, nickle for the cathode (for their chemistry). Steel for can, polymers for separators, organics for electrolytes
      • Predictions of shortages of lithium aren’t well founded
      • Thinks there is a bubble in lithium prices, but Li-ion costs aren’t the major contributor to lithium cell costs
    • Have you thought about the policy changes needed to drive this change?
      • They have been building relationships with CPUCs and utities and even state and fed regulators, but it isn’t a big focus.
      • Tesla is an innovation company that focuses on creating products that drive the need for regulatory changes.
      • Utilities are conservative. Automotive experience is demonstrating that this technology is ready for utility use.
    • Recyclability of lithium ion batteries
      • Recycling is being built into the Gigafactory. With enough volume there are great opportunities for materials reuse.
      • Challenge now is that growth is so steep that the volume of cells coming back is so much lower than current production
    • What is the commercial lifespan of Lithium Ion batteries?
      • Lithium ion batteries for the next 5-10 years
      • Not waiting for the next big thing…
      • Lithium ion cells make business sense now, which is why they investing.
      • Looking historically, improvements aren’t necessarily revolutionary.
        • Often it is through incremental improvements to components of the system that can leverage a lot of existing infrastructure for building cells and packs
          • Better cathodes
          • Better electrolyte
          • Better separators
        • Thinks we can double energy densities with better anode and cathode materials over the next 10 years.
    • 18650 vs other formats
      • Thinks people are hung up on form-factor for no good reason
      • At the scale they are dealing in what matters is whats inside.
      • What matters
        • Cost of materials
        • Thermal / Safety parameters
      • Their conclusion is that relatively smaller form factor are a reasonable optimization tradeoff between safety, thermal and cost.
        • Slightly larger than an 18650
        • Cylindrical makes sense from a cost perspective
      • Some applications will have different characteristics
      • Large cells just move complexity inside the cell
    • Deployment plan and pricing metrics for fixed storage
      • Depends on market
        • Residential
          • Leased to customer, bundled with larger offering
        • Mid-market commercial customers
          • Many prefer to buy outright
          • Others want Tesla to provide savings, take care of utility interconnect, etc
          • Some people don’t want to arbitrage their energy
            • He did it at his for a while. Got bored with it
          • Thinks at the end of day, Tesla or a 3rd-party financing company will end up owning most of the packs and be responsible for management
        • Utilities are another matter, given the scale and dollars involved.
    • Have you developed a center to deal with dispatch of modules?
      • They are building it.
    • Failure rate and warranty for modules
      • Quite reliable
      • Automotive application is much harsher
      • Maybe over-engineered for fixed application
      • Warranty rates are great
    • Degradation profile
      • Similar to cars
      • Optimized for 10 year life
      • Avoid paying too much for a product that outlasts the product, or the pack.
    • What are your perspectives on the power converter, are you building it yourself?
      • System design and integration are their major focus, just as with automobiles.
      • The power electronics for Tesla Model S is a very capable starting point for these fixed storage modules.
      • Costs for the power electronics are dropping quickly, will see less than $0.10W very quickly.

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