[nekoashide]

The cool thing about batteries is that they are great as an investment. You can charge them when power is cheap and sell back power when you have high demand and market prices for power.

Typically Peaker Plants fill this role but at much higher cost for electricity and emissions. Batteries just make much more sense for this kind of power.

[why_only_15]

This isn't really how batteries make money in the US right now, as I understand it. ~80% of battery revenue in ERCOT comes from what are called "ancillary services" [0] which is payment from the grid for being able to very quickly increase or decrease the amount of generation to ensure stability.

[0]: https://cimview.com/monthly-battery-revenue-in-ercot/

[epistasis]

This revenue will quickly disappear, however, as there is limited need for ancillary services. Lithium batteries served this purpose well in PJM starting long ago (more than a decade?), even with very high battery prices of yesteryear.

New battery additions must be banking on limited ancillary services revenue. Unless Texas investors never bothered to learn the lessons of the storage experience in PJM, which seems unlikely to me.

[Zanfa]

Last time I ran the numbers for this, price arbitrage alone using lithium batteries is not gonna be profitable.

Current lithium batteries are just too expensive, store too little energy and degrade too quickly for true grid-scale storage.

That’s why they typically offer services, other than price arbitrage, that actually makes building them make sense. There’s still no equivalent of a peaker plant using non-hydro storage.

[mdorazio]

Your numbers are likely outdated. The Tesla grid battery installation in Australia was so profitable that Neoen is building more as fast as it can: https://reneweconomy.com.au/neoen-aims-for-big-batteries-in-...

[jillesvangurp]

Lots of energy companies across the globe seem to be disagreeing with you and are installing massive amounts of battery storage. Gas peaker plants are getting used a lot less on grids where this happens.

Reason: your numbers and assumptions are probably wrong.

[chii]

The question is whether such battery's charge/discharge cycle degrade faster than the return on investment.

For home use, break-even is an acceptable outcome, but not for commercial use like above. Is the price of battery low enough atm to make a return for such an investment?

[audunw]

At this point I think you have to take into account battery recycling.

If you build a big battery storage system now, by the time it's fully degraded, battery recycling will be a massive and streamlined operation. Given the number of energy storage systems built today you'll have massive quantities of similar and easy-to-recycle cells going to these recycling operations.

So if you're a big grid operator you'll probably be looking at making a streamlined and efficient loop out of getting your old cells recycled and making new cells out of that material. The cost for the replacement storage system will be much lower, and given improvements in cell chemistries, the storage capacity will likely be higher.

Then again, it's possible that grid energy operators will transition to low energy density but cheap and durable chemistries, like Ambri's molten metal batteries.. which essentially last forever.

[epistasis]

These are all grid investments. About half of the storage is being installed in Texas, which is the closest thing the US has to an open market for investors.

The storage being installed in Texas is all being done purely for profit. Meaning that the investors have run the numbers and find batteries to be the highest return they think they can get for their money.

Storage in other places (specifically California) is being driven both by the profit motive, but also in some cases by legislation that mandates storage (not specifically batteries) be added as part of the grid mix. California has enough solar now that nearly all new installations include storage, in order to profit during the peak evening hours when electricity prices are highest.

[Retric]

It’s currently possible for batteries to be a great investment, but diminishing returns hit hard. The most cost efficient setup is a solar farm where the panels produce DC which directly charges the batteries and the losses from DC>AC conversion only happens once before you send power to the grid. With the added benefit of only paying for a single set of DC>AC equipment.

However, the more such systems come online the less peaking power is worth and batteries aren’t competitive with current ultra low nighttime rates.