Distributed + energy storage is the future direction. The era of unified power grid will end.

Tesla launched the Powerwall, a concept that is not new, but it caused a sensation in the industry because of its high price. Clean energy generation is unstable due to weather and other factors, which has a great impact on the power grid and is therefore difficult to connect to the grid. "Distributed + energy storage" is the future direction of clean energy. If energy storage equipment becomes economical and practical, it will undoubtedly have a huge boost to new energy.

For the excess electricity from hydropower generation, pumped storage power stations can be used to "save" the electricity when the power load is low. However, new energy sources such as wind and solar energy are often built in places far away from water sources, and the weather is unpredictable. Even if it is regulated by water energy, it may be difficult to produce stable and continuous current. New energy can only be stored through batteries. The country develops distributed power generation, and energy storage is also an important part of it as a supporting facility. At present, many large-scale energy storage projects have been built in China, including 20MW in Zhangbei County, Hebei Province, 10MW in Baoqing, Shenzhen, and 2.5MW in CGN Nuclear Power Plant. However, due to the high cost, these projects are basically demonstration projects and have not generated continuous orders.

The cost of battery energy storage is much higher than that of pumped storage, about 3 to 4 times that of the former. The State Grid Corporation of China has calculated that only when the cost of energy storage power stations is reduced to 2,000 yuan/kWh and the cycle life of the battery reaches 5,000 times, the cost of purchasing equipment will generate profits for electricity users, and they will consciously store electricity. This conclusion of the State Grid Corporation of China is based on the peak-valley electricity price difference of 0.6 yuan/kWh in Shenzhen. If this is used as a standard, the price and cost of Tesla Powerwall have not yet tempted consumers. Tesla's two models of household battery packs provide 10 kWh and 7 kWh of storage capacity respectively, and are priced at US$3,000 and US$3,500. The price of each kWh of energy storage capacity is US$350, but the promise of 2,000 to 3,000 cycles is still far from the break-even point. Even so, this is already a leap. The unit price of the 24 kWh battery announced by Leaf Motors in the middle of last year was US$6,499, equivalent to US$270 per kilowatt-hour. The energy storage cost of lithium batteries is gradually approaching marketization. When BYD launched the Denza car, it promised a lifetime warranty on the battery, which is a breakthrough in battery life.

But after all, industrial energy storage has not yet entered the practical stage. At this time, Tesla seems to be repeating its vision of entering the electric car manufacturing market with sports cars. In 2014, the average electricity price for residents in various regions of the United States was 12.5 cents, and the average annual household electricity consumption was about 11,000 kWh, and a family had to pay $1,375 in electricity bills a year. Even so, buying Powerwall is not cost-effective, because based on an average annual consumption of 11,000 kWh, at least 30 kWh of electricity is used every day, and one Powerwall is far from enough. In addition to power storage facilities, users must at least purchase an inverter that converts DC power into AC power, and also solar or wind power generation equipment. Added together, the cost of building a closed-loop household power cycle is much higher than purchasing electricity from the power grid. At this time, in order to gain market recognition, Tesla can only appeal to environmental enthusiasts. Tesla designed Powerwall to be ultra-thin and provide a variety of color options for this purpose.

Power storage is not a brand new market. Many companies such as Panasonic, ABB, Bosch, and BYD have dabbled in this field, but the market has never grown. In 2017, Tesla's super battery factory in Nevada will be completed, which is seen by the industry as a hope for lithium batteries to reduce costs through scale. If batteries can follow a cost-effectiveness improvement curve similar to Moore's Law, the world's energy landscape will undoubtedly change dramatically, but the future is unclear, so we can only find a market for the upcoming expansion of production capacity. Under Elon Musk, there are already SolarCity, Tesla electric cars, and Powerwall. Many families in the United States own independent houses. Under the photovoltaic leasing model, SolarCity installs photovoltaic equipment for users free of charge, saves electricity bills for residents, and obtains rent from the fees saved by residents. With these solar users, it is a natural thing for Powerwall to enter the home.

In Jeremy Rifkin's famous book "The Third Industrial Revolution", an important concept of the energy internet he proposed is "supporting the access of ultra-large-scale distributed power generation systems and distributed energy storage systems". Regardless of whether Powerwall is successful or not, it will become a trend for households and businesses to store energy on their own, and the era of unified power grids will eventually come to an end. (Text by Xing Haiyang)