Insights on Tesla's bet on batteries and the potential disruptive force of its "Gigafactory"

A piece up today on Greentechgrid provides some interesting insights into the potential disruptive implications of Tesla’s proposed Gigafactory, a project that would create the world’s largest battery production facility and drive down the cost of energy storage. The author, Chet Lyons, has a background in advanced energy management with companies like Beacon Power, American Superconductor, Evergreen Solar and Johnson Controls, so his suggestion that a realized Gigafactory could disrupt not only the automotive market but also the electric utility and building controls markets carries some weight.

By cutting the cost of Li-ion batteries in half, Tesla can play in the grid-scale storage industry by performing peak power substitution. Li-ion batteries are already used for frequency regulation, and Tesla can do that too. But the market for storage-based peak power substitution is at least twenty times larger and can carry Tesla into the heart of the utility power generation industry. Tesla’s most recent SEC filings seem to support that possibility.

Lyons goes on to describe how using Tesla’s batteries – assuming the Gigafactory will enable the company to produce them with better technology and lower cost – will enable it to offer compelling vehicle-to-building (V2B) systems to offset commercial and industrial buildings’ peak power demands, saving them piles of money.

The question of grid-scale energy storage continues to be one of the most promising and most vexing in technology development right now, and as it cuts across so many sectors of the economy it has some of the greatest potential impact once someone figures it out. Is Tesla’s Elon Musk the one who will make this happen? Lyon’s argument gives some cause for hope. 

Interesting read: "Tesla’s Giga Battery Factory Threatens the Auto, Utility and Building Controls Markets" by Chet Lyons on Greentechgrid.

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