Nikola Tesla, the engineer for whom the Tesla Motor company was named, once worked for Thomas Edison. In 1885, Tesla left Edison's company, prompting the famous "War of the Currents," but it looks like their "descendants" have buried the hatchet in an effort to build a greener, more prosperous future. Tesla recently announced that the company has signed a contract with Southern California Edison. Tesla will provide Edison with twenty megawatts worth of Powerpacks, with a capacity of 80 MWh, to reduce the state's reliance on "peaker" electric plants that run on natural gas. This is part of a larger trend to use batteries in place of peaker plants; California alone hopes to install 1300 MW of battery power over the next four years. This will have ramifications for related industries such as renewable energy, electric vehicles, and even consumer electronics.

Renewable Energy

The power grid represents a complex choreography that continually balances supply and demand. Baseload power plants - coal, oil, hydroelectric, and nuclear - provide a very steady supply of energy. Demand, on the other hand, varies throughout the day. Peaker plants and energy storage are used to give the grid a boost during high demand periods. Due to their high cost and reliance on fossil fuels, peaker plants are going the way of the dinosaur. Instead, massive batteries can be charged during low-demand hours so they can deliver the extra juice when demand is high.

Renewable energy, such as solar and wind, are sources of clean, yet somewhat unpredictable, electricity. Just as batteries can help satisfy short-term spikes in demand, they can also compensate for brief dips in production. Anything that decreases the price of energy storage will also promote the use of renewable energy and nothing decreases costs like economies of scale. As companies make more batteries, it becomes less expensive to produce them. As the cost of batteries tumbles, it makes more sense for utilities to shift to renewable energy sources.

And it's not just utilities that will benefit. When Tesla sells more Powerpacks to the big guys, the cost of its little brother, the Powerwall, will decrease for the consumer. At the moment, most solar PV arrays are grid-tied under net-metering agreements, allowing consumers to sell excess energy to the grid at retail prices, effectively using the grid as "virtual storage." Utilities are fighting this for several reasons, some of them being legitimate and others based on greed, so it won't be long before net-metering will disappear altogether. I suspect that this will happen within the next five years, right about the same time that battery systems such as the Powerwall will become more cost-effective for consumers.

Electric Vehicles

There are two reasons why electric vehicles aren't as popular as their gasoline counterparts: batteries and batteries. Okay, the real reasons are range and price, but both of those are directly related to batteries. Most affordable EVs have a range of less than 100 miles (161 km), which is fine for the daily commute, but lacks the stamina needed for a longer trip. Want more range? Add more batteries. But batteries are currently the most expensive part of an EV, in some cases representing nearly half the cost of the entire vehicle. Selling more utility-scale batteries will help increase the range and reduce the cost of EVs by making batteries more affordable.

Consumer Electronics

They're not big-ticket items like PV arrays and cars, but many of our gadgets are powered by the same Li-ion batteries that make up the Powerpack and Powerwall. Utilities buy more big batteries and EV companies buy more medium size batteries, driving down the cost of the small batteries that power our phones, laptops, tablets, cordless power tools, and other consumer items.

R&D

Finally, the battery companies will see their profits increasing, allowing them to put more money into research and development that will eventually result in batteries that perform better, last longer, and cost less than those of today.

In the 1967 film The Graduate, an elder gave Dustin Hoffman's character one word of advice: plastics. Today I give my engineering students one word of advice: batteries.

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