The traditional automotive industry had been reluctant to embrace the electricity revolution. But Porsche’s recent announcement that it would be doubling its investment in electric vehicles (EVs) to €6 billion (US$7.4 billion) by 2022 can be seen as a wakeup call. The battery vehicles are coming.
And Porsche is not the only one. Other automotive companies are on the same path and investment in EVs from the EU and US automotive industries totals about €90 billion in the next five years. There is no time left to hide.
In short, energy storage technology is set to revolutionise our society, EVs and beyond, with power companies among the most affected – whether they like it or not. The sector needs to wake up to this and decide what it is going to do about it. Education could provide the wake-up call that power professionals need.
Accept the inevitable
When creating the right circumstances for a new technological solution to thrive, three key factors rank above all.
First, the technology itself needs to work, and work well. Storage scores well on this count, with batteries such as Tesla’s Powerwall capable of storing up to 13.5kWh of electricity – enough to sustain the average household for a full day before needing to draw power from the grid or generate its own renewable energy.
Second, the cost needs to come down to a level at which the solution represents better value than those that are already available. And though batteries for households and power plants remain more expensive than for vehicles, investment in storage on the grid would actually save money on the whole very quickly.
For instance, by adding just one kilowatt-hour of storage capacity to every home, we could reduce demand at peak times by up to 40%. That represents a massive saving on not only generation infrastructure but also on investment in the stronger transmission and distribution lines needed to handle higher loads of power. New business models and regulatory modifications can be developed to take full advantage of the savings.
And third, a range of stakeholders must work together to cultivate a regulatory landscape that supports innovation, rather than slowing it down. Here, the European Union is committed to driving progress.
In a recent speech, the EU’s vice president for Energy Union, Maroš Šefčovič, outlined the continent’s ambitions to build up its battery industry along the entire value chain – and quickly. This includes working through the European Batteries Alliance, backed by the European Commission and Investment Bank with the support of InnoEnergy, which exists to provide a framework around which the sector can grow.
So it is clear that the storage solutions are coming, and that they will be here to stay – with or without the involvement of power providers. But will utilities adapt to a new role, or try to hold on to their old monopolies?
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