Progress in lithium batteries
Just to give you an idea of how fast battery costs have declined, here is a chart (via futurist Ramez Naam) showing how the amount of energy that can be stored in lithium-ion batteries per $100 rose from 1991 to 2005.
That data is from a 2009 study
by Duke University. Nor did storage efficiency stop after 2005;
according to Naam, the cost of electric-car batteries declined by 40
percent from 2010 to 2013. The Tesla gigafactories are projected to drive costs down at an even faster rate.
These declines, unlike the recent 50 percent drop in oil prices, are
not temporary. They are driven by increasing demand, which spurs
technological progress -- not by reduced demand, which lowers the oil
price.
More at Bloomberg View.
I like battery tech just like the next guy, but this bloomberg analyst if full of analyst's bs: The decline in lithium battery price could be undone by higher demand - there are already people out there discussion "peak lithium" and the declince in oil price is of course driven by technology, modern fracking technology to be precise.
ReplyDeleteI don't even want to get into the "what's better for what reason"-argument. Generally I think technological advances are great as are falling prices, but these people could at least get their arguments straight...
I think large scale energy storage is the single most important issue in moving to an energy infrastructure much less based upon hydrocarbon energy, such as oil and coal. However, a couple of points in your comments call for more detail.
ReplyDeleteClassically, price is determined by three fundamental factors – demand, supply and technology. By technology I include what is necessary to produce and supply the product (or service) being sold on the market. For example, if the demand for a product goes down, the price will drop due to competition between suppliers. Similarly, if the supply goes up, the price will go down. In addition, if you have improved lower cost of manufacture of the system the price will go down in a competitive marketplace. And if you bring out better products that can do more with less materials using new methods, then the price should go down as well.
Today we’re seeing oil demand continue to increase (go look at the numbers) – but the rate of increase has dropped. We haven’t seen any sustained, oil demand decreases and the world is using record amounts of oil each year. (https://www.iea.org/oilmarketreport/omrpublic/) The reason we’re seeing prices drop in oil, is that oil supply is increasing rapidly, while growth in demand is low.
For battery storage systems, we’ve seen the demand for battery systems grow dramatically. This has put us into a virtuous cycle where new technologies have allowed packaging of enough energy into vehicles to make them economically feasible in some markets – hybrid and electric cars primarily. As the demand for products has increased, the suppliers of the batteries have invested in new battery production systems, which have led to lower costs. These lower prices, which drive much of the vehicle costs, then ripple back as increased demand as price of vehicles drop, which drives the cycle again for more supply being put in place, and lower costs again in a competitive market.
You really can’t lay lower prices for oil as being caused by lower oil demand. The data just doesn’t support it, even though it’s a common trope in some media. Just look at the data.