Global research institute McKinsey & Company has analyzed current energy storage prices and concludes that commercial businesses are getting the economic benefits of cheaper batteries and recent price falls in lithium-ion technology. With battery-pack costs now down to less than $230/kilowatt-hour (vs $1,000/kWh in 2010) storage demand is on the rise across Europe, Asia and the North America. Storage is now playing a more central role in energy markets, moving from niche uses such as grid balancing to becoming a viable alternative to conventional power generators, and a stable support act for renewable energy. More and more commercial businesses are exploring the idea of solar+storage to allow them to consume power on demand and export excess electricity to the electric grid. McKinsey believes that in a matter of years both households and business will be able to pair solar+storage with a small electrical generator and be independent of the grid. McKinsey noted that in advanced storage markets such as Hawaii and Australia. solar+storage customers are managing their energy needs for about 80-90% of the time, but staying connected to the grid in order to have that 24/7 access. The research firm believes this trend is soon going to happen in the US states of Arizona, California, Nevada and New York.

Last September, an epic storm damaged critical power infrastructure in the Australian state of South Australia, causing a state-wide blackout and leaving 1.7 million residents without electricity. Further blackouts occurred in the heat of the Australian summer this year. South Australia is heavily dependent on renewable energy for its power, with wind accounting for almost half of its electricity generation. In response to the crisis, the South Australian Government called for expressions of interest to deploy grid-scale energy storage options with at least 100 megawatts (MW) of capacity. 91 firms bid for the opportunity to provide large scale energy storage facilities and the winner, Tesla, was chosen this week. Tesla will provide a 100 MW/129 megawatt-hour system to be paired with a wind farm near Jamestown, South Australia. Wind will charge the Tesla Powerpack during off peak hours which will then deliver electricity during peak hours to the South Australian grid. Once completed in December of this year, this system will be the largest lithium-ion battery storage project in the world and is designed to provide enough power for more than 30,000 homes, approximately equal to the amount of homes that lost power during the blackout period. The world will be watching to see how successful this project is as abundant energy storage is going to be necessary if the world is to become heavily reliant on wind and solar energy.

According to the Australian Broadcasting Corporation, Tesla’s bid said it would install the energy storage system in South Australia within 100 days of signing a contract or the storage system will be free. The cost of installation is expected to run to A$50 million or more depending upon what is included as part of the installation costs.

The Australian says Australia is entering the “realm of third world countries” with residential power disconnections rising by as much as 140% in six years and the average household paying more than double what it did a decade ago to keep the lights on. Australian Energy Regulator figures reveal some 60,000 households are on electricity hardship payments and another 151,862 customers are on electricity payment plans. Meanwhile, the country’s electricity prices increased up to 20% last week while some states are making harder and harder for cheaper coal and natural gas to be used to generate electricity. South Australian senator Nick Xenophon warned that rising disconnection rates showed the ­nation was at a “crisis point”. He foreshadowed the prospect of even greater government subsidies so people could keep the lights on. “We’re getting to the realm of third world countries where an increasing number of people can’t afford power.” Government data shows a spike in disconnections after the introduction of the carbon tax, with the state of New South Wales experiencing a 38% increase between 2011 and 15, the state of Victoria a 45% increase, and the state of Queensland a 25% increase.

The chief executive of crude oil producer Saudi Aramco said, despite the rise of renewable energy sources, oil and natural gas will dominate the world’s energy for decades to come. Amin Nasser commented:

“There is widespread agreement that even as the world moves to greater use of renewables over fossil fuels, petroleum will continue to be the heart of the energy mix. While expectations for alternatives are through the roof, history shows that energy transitions to different sources tend to be long and complex processes. The renewables still have major challenges, they do not compete with oil. It takes a long time for new fuels to seize market share.”

Royal Dutch Shell CEO Ben Van Beurden said countries in the developing world will still require fossil fuels to grow industries such as steel, cement and chemicals because they need a heat intensity that cannot come from electricity alone. Renewables like solar and wind only produce electricity. He added that the intermittent nature of wind and solar energy means power plants fired by natural gas will have a long-term role in the world.

China has renewed an ambitious commitment to displacing coal with natural gas-fired heat and electricity. A joint directive issued by 13 Chinese government agencies last week specifies that natural gas should rise to roughly 10% of total national energy use by 2020, and to 15% by 2030. Gas is currently just over 6% of the total energy mix. The directive includes building additional pipelines and shipping networks and pushing industry to run trucks, trains and ships on natural gas.

Bloomberg New Energy Finance forecasts electric vehicles will make up the majority of new car sales worldwide by 2040, and account for 33% of all the light-duty vehicles on the road. EVs will displace 8 million barrels of transport fuel per day and add 5% to global electricity consumption (1,800 TWh by 2040 up from 6TWh in 2016). Pure battery electric vehicles will subsequently take over and account for the vast majority of EV sales. EV sales worldwide will grow steadily in the next few years, from the 700,000 seen in 2016 to 3 million by 2021. At that point, they will account for nearly 5% of light-duty vehicle sales in Europe (up from a little over 1% now) and for around 4% in both the US and China. The real take-off for EVs will happen from the second half of the 2020s when electric cars become cheaper to own on a lifetime-cost basis than ICE models; and when upfront costs fall below those of conventional vehicles. BNEF sees EVs accounting for nearly 67% of new car sales in Europe by 2040, for 58% in of sales in the US, and 51% in China by the same date.  The forecasters also say the impact of autonomous driving will be limited in the next 10 years but will play an increasing role after 2030, with 80% of all autonomous vehicles in shared applications being electric by 2040 due to lower operating costs.

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