Tesla’s Impact Report Forecasts Huge Market Potential for Utility-Scale Energy Storage Solutions

published: 2020-06-25 21:30 | editor: | category: News

The view that it is unprofitable to develop environmentally sustainable technologies and business ventures is outdated and should be discarded, according to Tesla in its Impact Report for 2019.

This global enterprise with core businesses in electric mobility, solar photovoltaics, and energy storage recently released the second edition of its annual report that provides the public with a summary of its operations. Made available in early June, the 56-page report revolves around the following themes: (1) the contributions of Tesla’s technologies to the environment, (2) the commitment to responsible management of the supply chain, (3) the maintenance of a healthy corporate culture through an enhanced HR strategy, and (4) recent activities.

Regarding the effects of the recent coronavirus pandemic, Tesla in its report acknowledges that the black swan event has significantly but temporarily reduced global greenhouse gas emissions and improved air quality. However, it asserts that this trend will unlikely continue once the world economy returns to some degree of normalcy.

A significant portion of the report is devoted to address some of the questions and skepticisms that are often brought up when discussing Tesla’s technologies and products. One of the most frequently asked questions about Tesla’s electric vehicles (EV) is whether they are actually more sustainable than vehicles powered by the internal combustion engine (ICE). While Tesla has branched into many fields and developed solutions for a wide range of applications, the company emphasizes that its main mission is to hasten the transition period in the global shift to renewable energies.

Regarding the comparison between EVs and ICE vehicles, Tesla’s short answer is that the former is definitely more sustainable. However, the report also mentions other variables that need to be considered when making this kind of analysis. Usually, manufacturing process and vehicle usage take precedence in determining a vehicle’s carbon emissions, air pollution, and energy consumption. However, Tesla believes that the entire lifecycle of a vehicle should be taken into account. This means that more factors come into play when calculating the fuel consumption of an ICE vehicle or the electricity consumption of an EV at different stages of the lifecycle.

Based on the data provided by the report, the total amount of carbon dioxide emitted (gCO2e/mi) from a Tesla Model 3 during its lifecycle is estimated to be less than half of the total amount produced by an ICE vehicle of the equivalent size. This comparison only assumes that the EV is always charged with grid electricity, so the difference in carbon dioxide emissions could be much larger if the EV is charged with electricity that exclusively comes from renewable sources.

To make its EVs greener, Tesla aims to have as many of its Supercharger stations as possible powered by solar. An increasing number of the Supercharger stations are now being supported by solar-plus-storage systems, and Tesla will be installing more of this type of green energy solution at its charging and production facilities in the future. The Impact Report also says that by the end of 2019 the cumulative amount of electricity generated by solar panels installed by Tesla around the world surpassed the total energy consumption of its factories by many folds. However, this calculation includes solar panels installed by SolarCity before its merger into Tesla in 2016.

Battery energy storage responds quicker and costs less than peaker plants that use fossil fuels

Tesla in its report states that both large- and small-scale energy storage systems based on the lithium-ion battery technology represent a cost-effective means to modernize many countries’ aging power grids while helping people to become less dependent on the same infrastructure. Tesla’s energy storage products such as the Powerwall for homes and the Megapack for utility-related applications not only improve grid flexibility but can also become a source of green electricity supply when paired with renewable generation systems.

The Megapack, which was launched in July 2019, is the successor to the Powerpack that was developed earlier by Tesla for commercial applications. With a capacity of 1.5MW/3MWh, the Megapack has 60% more energy density than the Powerpack. Tesla claims that it can set up a 250MW/1GWh battery storage plant with Megapacks on a 3-acre area in less than three months, or four times faster than constructing a fossil fuel power plant with the equivalent generation capacity.

The Impact Report naturally brings up the Hornsdale Power Reserve in South Australia as a famous example of Tesla’s energy storage systems in use. Dubbed the world’s largest lithium-ion battery, the Hornsdale Power Reserve can provide emergency backup power to the local grid in less than 1 second in case of a sudden blackout. Moreover, the customers of the Hornsdale Power Reserve saw a total cost saving of more than US$50 million in the project’s first year of operation.

The Impact Report states that large-scale energy storage systems that are charged by wind turbines and solar panels will be more than capable in supplying electricity to the grid during the daily peak-load period. The market potential for this sustainable solution is huge as well. This assertion is validated across the energy industry and by research entities such as Bloomberg NEF. Tesla further points out that peaker plants that consume fossil fuels such as natural gas can emit a large amount of pollution even though they are designed to run intermittently for short periods. They are very inefficient when compared with battery storage plants.

Tesla is committed to responsible sourcing and recycling of battery materials

Tesla has set aside a part of its Impact Report to discuss its efforts in implementing responsible and transparent sourcing with its supply partners, especially when it comes to cobalt. Tesla emphasizes that it has done a lot in minimizing the chance of obtaining the metal from mines employing child labor in the Democratic Republic of Congo (DRC). For instance, its cobalt suppliers that indirectly procure from mines in the DRC are subject to the standards set by the Responsible Mineral Initiative. The report also says that Tesla batteries feature a cathode that contains more nickel and less cobalt. Compared with batteries from other manufacturers, Tesla batteries has a much lower cobalt content.

Another way of reducing the environmental and social impacts of sourcing battery materials is through recycling. According to the report, Tesla recycled 110 metric tons of cobalt, 320 metric tons of copper, and 1,000 metric tons of nickel from its used batteries in 2019. The report also notes that most of the materials inside Tesla batteries are in their original form when reaching the end-of-life stage and can be collected for later use during the recycling process. On the whole, Tesla batteries have a high recyclability.

Although Tesla for now focuses on high-value elements for recycling and re-introduction to the supply chain, the company will attempt to expand the range of battery materials that can be re-used as recycling technologies get better. For example, its Gigafactory in Nevada has unique process lines for recycling scrap materials from battery production and end-of-life batteries. In the long run, Tesla hopes to have a recycling scheme in place with the advantages of high recovery rates, low costs, and minimal environmental impact. The report says that investing more in recycling will result in considerable savings since re-using materials will cut the costs of procuring new materials and transporting them to factories.

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