Three signs that the great energy disruption is already here

Almost 12 months ago, Tony Seba, who wrote the 2014 book, Clean Disruption of Energy and Transportation, posted a video on YouTube in 2016 titled CleanDisruption. Seba predicted that a nearly complete disruption of the energy market would begin in 2020, and be well underway by 2022. He also predicted that 2022 would be the year that distributed solar power with battery backup would fall to below the cost of transmitting electricity.

Tony Seba gives compelling reasons for his conclusions. The problem is that the rate of change he predicted seems to be a bit off – it seems he was much too conservative and change is happening much faster than Seba anticipated. In his video he mentions that the cost of electricity from solar power had dropped below 5c/kWh. Less than a year later it had dropped below 3c/kWh in multiple auctions – this is far faster than he anticipated and would make the disruption happen sooner than 2022.

Lazard’s Levelized Cost of Storage Analysis – Version 2.0 has appeared. While the levelised cost of storage (LCOS) for several types of storage has declined at the rates consistent with what Seba suggested, three stand out:

• In the version 1.0 report, the LCOS of compressed air storage was quoted as US$192.MWh. In version 2.0, the figure had dropped 33% to US$116-$140/MWh, well below what peaking plants normally charge – showing that storage is getting more competitive with nuclear power generation.
• Comparing versions 1.0 and 2.0 of the report, there is a decline of 23% in the costs of lithium-ion batteries. With Tesla’s Gigafactory in production, even though it is only 35% finished, the price of lithium-ion batteries will fall even lower. These changes point to reductions in the costs of storage on the level of 50%.
• US battery manufacturer, Eos, has announced a partnership with Siemens on storage solutions. Eos’ batteries are built on a minimum unit size of 1000MW and 4000MWh, with prices ranging from US$160 to $200 per kWh. The company gives the LCOE of energy stored in the battery at 12c/kWh to 17c/kWh. The LCOE is well below the minimum cost of that of a gas peaking plant, and at a point where it is starting to get competitive with nuclear power.

For more information on the great energy disruption, see full article.