In June 2023 NREL, a national laboratory under the U.S. Department of Energy, released a report entitled Cost Projections for Utility-Scale Battery Storage: 2023 Update that projected the capital costs of 4-hour duration utility scale battery systems through 2050. In their most aggressive projection the price of storage reached $159/kWh by 2050.
Less than a year after the report was released equivalent utility scale battery prices had dropped to $148/kWh, already eclipsing the most aggressive 2050 price projection.
Cautious prediction is not new to the renewable energy market, especially from public institutions where the bias is always towards seeming reasonable. But cautious estimates that imagine a world where every growth curve immediately moderates are misleading and deceptive even if they don’t trigger the same disgust that we get from a preposterously optimistic incorrect forecast. Quietly destructive is how these reasonable estimates are widely cited and used uncritically in important analysis which constrains the possible with miserly interpretations of the future. 439 papers have cited the report that expects storage costs to remain over $150/kWh past 2050, many of them written after the battery market had eclipsed it’s most optimistic forecasts. Analysis is currently being made citing numbers that were once ‘reasonably’ pessimistic, but are now untethered from reality.
The most famous example of this phenomenon are the IEA reports projected solar growth was going to stall out immediately after the report was published.
Here’s a version of the chart with a crude upward slanted arrow indicating the 2021 actual deployments. That arrow continues shooting up to get us to 2024’s more than 600 GW.
Five years ago solar was a growing niche and utility scale batteries were an expensive side project. Now utility scale solar is the cheapest form of energy that humankind has ever created and batteries are the largest source of grid expansion in North America. The two technologies account for more than 80% of of the energy in the pipeline in the US grid. Here is the growth of the pipeline in Texas’ ERCOT system. Solar and battery tower over all other technologies combined (and half of the Other category is wind).
Batteries provided 30% more to the ERCOT grid in August than in July, grew a couple of percent in September and now looks poised to grow another 20% in October.
We are on the brink of a major change to how we produce, store, distribute and use energy. This isn’t just a process of decarbonization where the world ends up with the same grid we had before but with less carbon and heat pumps. If fully exploited we have the opportunity to exponentially grow our ability to cleanly produce energy and create new industries and lifestyles to capture and enjoy the dividend.
Load Growth is a project to take these growth trajectories seriously without being a naive techno-optimist. It will take incredible work to maintain these growth curves and learning rates. There will be technological challenges, regulatory blockages, social and environmental disruptions. But the potential benefits are so great I think we will over come them. The hope is that the coming decades are when we capture the opportunity to overbuild and create the infrastructure for a future we can’t yet envision.
Reno 2050, if we want it.