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Randy Carlson  

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  • Smashing rating for the Tesla Model S P85D from Consumer Reports [View news story]
    When Tesla stock was selling for $50, the company was delivering Model S cars to customers and had discontinued making the Roadster.
    Aug 30, 2015. 10:18 AM | 1 Like Like |Link to Comment
  • Smashing rating for the Tesla Model S P85D from Consumer Reports [View news story]
    Office Rat,

    As the electric grid shifts from fossil fueled generation to renewables such as solar and wind, the output of which vary with time, independent of the load, the 'value components' of electricity change in their relative economic significance.

    In the case of a grid supplied with variable renewable energy, the final delivered energy has three main value components - 1) the energy itself, 2) the regulation of the energy that makes it available when the load requires it, independent of the moment at which it was generated, and 3) the delivery of the energy from where it is generated to where it is consumed.

    It is with respect to #2 and to a lesser extent #3 that the value increasingly includes 'information'. And Tesla is much much further advanced in coupling information to their energy products (cars, SuperChargers, grid storage products) than others.

    For example, when energy generation is intermittent, there is value in making the load track the generation. If a business or residence can, on command from the grid operator, switch their load from the grid to a locally connected grid storage battery, both the 'ability to do so on demand' AND the 'actual switching down of their load' have value that can dramatically offset the user's energy bill. Information technology is necessary however if the grid operator is to make effective use of distributed grid storage assets in this fashion to stabilize operation of the grid. It is necessary both to know in real time the state of charge of many distributed grid storage assets, the availability of these assets to accept energy from or deliver energy to the grid, AND to deliver commands controlling the generation or charging of these assets. Tesla's grid storage products come with Internet connected telemetry and control capability and Tesla is already operating computer systems that maintain continuous communication with Tesla supplied grid storage systems. As more of these systems are installed, Tesla will be positioned as the 'aggregator' who can interface between the grid operator and distributed Tesla grid storage assets.

    Tesla has recently partnered with ENERnoc to help them exploit this capability. It is important to appreciate that Tesla will be positioned to earn significant revenue from grid stabilization services using capital assets (the grid storage systems) that will be owned, financed, insured, sited, and connected to the grid at the expense of purchasers of Tesla grid storage products. (Tesla will probably need to share some of this revenue with their grid storage product customers.) This is an under-appreciated Tesla business opportunity that will earn Tesla very large returns while requiring minimal Tesla investment in the storage assets. It is a business in which Tesla will profit form the INFORMATION content of energy while neither generating, storing or using the energy directly.

    Another example is found in Tesla's cars and their onboard charging systems. Tesla cars have exceptionally powerful onboard chargers (10kW or optionally 20kW), much more powerful than chargers found on other BEVs. Further more, Tesla onboard chargers are controllable as to the amount of power they draw from the grid. Tesla also maintains constant contact with their cars through wireless 3G and/or WiFi connection to centralized Tesla server systems.

    Teslas, unlike other BEVs can 1) be charged much more quickly at home and 2) can have their rate of charging modulated remotely by Tesla. This means that, with a large fleet of tesla cars, it becomes practical to quickly apply or remove significant load on the grid, a capability that can be used to stabilize the grid and which has very significant economic value.

    Consider, for example, that a fleet of a million Tesla BEVs with average charging rate capability controllable through Tesla servers and the Internet connections maintained with each car, could apply or remove ~10GW of load on the grid (the equivalent of 10 nuclear power plants) within seconds. Again, this is a situation where Tesla is positioned as 'aggregator' in the value stream and can derive value form the information content of the energy without actually owning the infrastructure (car batteries and chargers).

    Aug 30, 2015. 10:16 AM | 1 Like Like |Link to Comment
  • Audi Details Its First Proper Tesla Competitor, The 310-Mile Range SUV [View article]

    It is not my study and it is not my obligation to defend what it is that some third party researchers chose to investigate. They studied a particular boundary case that illuminates what seems to me a counter-intuitive trade-off, namely that with high renewable fraction in the generation mix it may be less costly to over-generate than to cover all the 'dips' with massive amounts of seldom cycled storage.

    That you are in love with BYD, despise power lines, or believe more fossil fueled generation ought to or likely will be part of the generation mix is fine, and you are entitled to your opinions, but these things do not relate much to what we might expect to see on an all, or nearly all renewable grid.
    Aug 29, 2015. 05:40 PM | 1 Like Like |Link to Comment
  • Audi Details Its First Proper Tesla Competitor, The 310-Mile Range SUV [View article]

    Unless I got lost somewhere along the way, I believe discussion involved a study I cited earlier wherein it was found that a mix of solar, wind and batteries that would meet load with 99.9% renewables would have a large amount of excess generation over the year.

    The study in question was addressing specifically a 99.9% renewables case.
    Aug 29, 2015. 03:42 PM | 1 Like Like |Link to Comment
  • Audi Details Its First Proper Tesla Competitor, The 310-Mile Range SUV [View article]
    Significant NG generation is not consistent with the premise of 99.9% renewable energy.
    Aug 29, 2015. 02:31 PM | 1 Like Like |Link to Comment
  • Tesla Motors signs lithium deal with Bacanora [View news story]

    You got this one....

    The scale and 'certainty of supply' Tesla needs for the GF can only come, realistically, from a supplier that 'owns' their resource and builds dedicated refining capacity to support Tesla. And the supplier must be a BIG one.

    That leaves who, exactly? Albemarle, or China, or maybe, maybe SQM.

    So, Tesla needed a 'stalking horse'... the obvious suspects being Western Lithium, Symbol Materials, Bacanora...
    Aug 29, 2015. 02:27 PM | 4 Likes Like |Link to Comment
  • Audi Details Its First Proper Tesla Competitor, The 310-Mile Range SUV [View article]

    A subtle but very significant effect is not included in the earlier referenced study that suggested excess generation of 1.9X the total energy consumed by the load was the minimum cost solution. What was not fully considered was that the availability of a large pool of intermittently available, low cost electricity is likely to result in shifting some uses now supplied with 'reliable' supply, that is applications that are part of the 'load', to run from the pool of excess energy because there will presumably be a pricing differential.

    This is, in fact, a very powerful effect because 1kWh removed from the load means that the overall energy generation can be reduced by 2.9kWh (under conditions of the study). Of course one needs to consider that all the excess electricity is not 'equal'. Some part of the excess is available 'almost all the time' while some part is only rarely available. Obviously, the more 'intermittent' the excess energy is, the lower is it's intrinsic value. A rational electricity grid will apportion use of the excess electricity by some combination of 'rates and rules' in accordance with the degree of intermittency.

    The production of hydrogen by electrolysis offers an instructive example. Hydrogen produced from 'free' electricity that is available say 90% of the time can be cheap. However if one sets up an electrolyzer that operates only from the very peak excess power production that is available say 1% of the time, then hydrogen from that electrolyzer will be more costly, having to bear the capital expense of an electrolyzer that only operates 1% of the time.

    Aug 29, 2015. 08:07 AM | 3 Likes Like |Link to Comment
  • Audi Details Its First Proper Tesla Competitor, The 310-Mile Range SUV [View article]

    I certainly agree that solar has severe 'seasonality' issues in a far north location. The study I cited earlier specifically shows that the minimum cost solution is one with mostly wind and rather less solar in the mix. So, what they are looking at is large excesses of wind generation, and this study does specifically consider using the excess energy for heating - either simple resistive heating or 'ground source' heat pumps.

    The point seems to be that after actually running models against high resolution, long term, real world data, the lowest cost solution involves much more excess generation and much less storage than seems the intuitive solution.

    Batteries having reasonable characteristics for long term (seasonal) storage, and this includes both flow batteries and 'hydrogen', have such poor round-trip efficiencies that is ends up costing less to just generate more power than needed so the 'dips' to be met from storage are smaller.
    Aug 28, 2015. 11:22 AM | 3 Likes Like |Link to Comment
  • Audi Details Its First Proper Tesla Competitor, The 310-Mile Range SUV [View article]

    Your cited reference (page 12) specifically states that TODAY energy-to-energy efficiency using electrolyzed hydrogen is 20%.

    LFP cells operate at a lower nominal voltage (3.2V) than NCA / NMC cathode lithium cells. This means that less energy is stored per lithium ion in LFP cells than in the higher performance cells, and that more lithium ions are needed in order to store a given amount of energy in LFP cells.

    I made no claim regarding critical materials in LFP batteries.

    There are differences in materials costs, size and weight between LFP and NCA/NMC cells. The market has yet to determine which mix of advantages will be favored for particular grid storage applications. That said, Tesla's grid storage products appear to be aimed at the highest value grid storage applications where, in many cases, their smaller size and lightweight are likely to convey advantage.
    Aug 28, 2015. 11:02 AM | 3 Likes Like |Link to Comment
  • Audi Details Its First Proper Tesla Competitor, The 310-Mile Range SUV [View article]

    The notion that the study relates to supplying only 1/5 (20%) of the load via renewables is incorrect. The study looked at a region of the US that comprises 1/5 of the total US grid. Within that region, the study looked at what was involved in supplying 99.9% of ALL the electric load with renewables and batteries.

    The excellent characteristics of LFP batteries are well known. While the constituent materials of these batteries are low cost - as they come out of the ground anyway - the lower specific energy (Wh/kg) of LFP batteries means that significantly more (2X or more) material is needed to store a given amount of energy. This is twice or more the amount of material that must be processed into precisely nano-structured electrode active materials. It implies a battery factory that is larger for a given GWh/yr capacity. It implies larger, heavier storage equipment that must be transported and installed. And so on.

    Higher specific energy chemistries (NCA, NMC) while using more expensive materials offer substantial savings because they store more energy in a given amount of material. The degree to which this will turn out to be important in the market for grid storage solutions has not yet been determined.

    Flow batteries are offered as solutions to the 'time shifting' storage application because their capacity is easily scaled independently of the power (rate capability) of these batteries. Unfortunately however, the round-trip efficiency of flow batteries is on the order of 75%, much less than the 90+% round trip efficiency of lithium cells. Time-shifting is among the lesser valued grid storage applications as explained in this study.

    The relatively low economic value of time-shift makes the poor round-trip efficiency of flow batteries a problem because the round-trip loss significantly detracts from the economics of an application which is of marginal economic value to begin with.

    Using excess energy to make hydrogen by electrolyzing water, then running the hydrogen through a fuel cell to obtain electricity again is exactly like a flow battery, with the 'charging' and 'discharging' functions being performed in separate hardware. The round-trip efficiency for the electricity to hydrogen to electricity cycle is TERRIBLE, ~20% (25% electrolysis, 80% fuel cell) or less even BEFORE storage, compression and transport of the hydrogen are considered. Making hydrogen from 'excess' electricity makes sense ONLY when one can't think of anything else to use that electricity for...

    The highest value grid storage applications are T&D (Transmission & Distribution) deferral and short term (frequency) regulation. T&D deferral heavily favors small, light, modular storage solutions that can easily be relocated as T&D infrastructure is upgraded. Short term regulation 'services' depend on fast response but involve comparatively small amounts of energy most of the time.

    Tesla's grid storage - residential, commercial, industrial, and utility scale - are well suited to these high value grid storage applications. Tesla is also positioning to be the aggregator of distributed networks of small grid storage installations (residential, commercial, industrial). Tesla grid storage products include Internet connectivity and the ability to control charge / discharge remotely. This will allow Tesla to offer fast response and even 'virtual spinning reserve' services to the ISO. Tesla's partnering with ENERnoc, pioneers in demand response aggregation, furthers Tesla's positioning as a provider of highest value grid stabilization services.

    Just as Tesla is targeting the high-end, high margin segments of the car business, they are also targeting the high-end, high margin segments of the grid stabilization market. As the world has learned from Apple, if one can be successful / dominant in the high margin segments of a market, one can often realize a disproportionate share of ALL profits made in that market. This bodes well for Tesla's grid storage business, and for Tesla shareholders.
    Aug 28, 2015. 09:06 AM | 3 Likes Like |Link to Comment
  • Smashing rating for the Tesla Model S P85D from Consumer Reports [View news story]

    That thing about curing cancer, you don't have it quite right.

    If Musk/Tesla did achieve an effective, low cost cancer cure, the bears would complain that since the drug doesn't also cure leprosy, the company valuation is still excessive. And even if Tesla were to extend their new drug's allowed use to include leprosy (for which it has already demonstrated outstanding effectiveness) the market would be so small as to never cover the cost of the clinical trials. Further, the company has placed themselves at existential risk in that doctors using the new Tesla drug 'off label' could end up saddling the company and company executives with liability and burdensome litigation.

    They would further be at pains to point out the substantial risk to the company should Mr. Musk, though now un-infected, contract leprosy at some point in the future. The company's drug division, having as yet no approved leprosy cure readily available, will not be in a position to help him and additional Government support through Medicaid will further, unfairly burden taxpayers...
    Aug 27, 2015. 07:56 PM | 14 Likes Like |Link to Comment
  • Audi Details Its First Proper Tesla Competitor, The 310-Mile Range SUV [View article]

    Here is a study that looks specifically at what an optimum mix of batteries, wind and solar might look like if it is optimized for cost.

    The eventual real-world solution is however complicated for at least two reasons.

    1) The 'region' for which the problem is to be solved is not, in general, rigidly defined. For instance, Germany faces a difficulty with solar in that the resource is severely seasonal that far north. If however more of Europe (e.g. Spain, Italy...) are included in the region for which a solution is sought, the seasonality of solar is reduced.

    2) In the real world, what gets built and what is economically optimum are likely to be different. Environmental, regulatory and other 'restrictions' are likely to distort where the wind and solar generation is located and the relative proportions of such assets. An economically optimum solution may require power transmission lines that either don't get built, or end up located somewhat differently than the economic optimum requires.

    As for the scale issue associated with the hypothetical 30TWh battery, this is solved by not building a battery that big, and instead over-building the wind and solar generation. What one ends up with is a battery roughly the size needed for nominal diurnal shifting with an all solar resource, and much much smaller than what would be needed for the case of total renewable generation matched to total year, averaged over the year..
    Aug 27, 2015. 07:38 PM | 2 Likes Like |Link to Comment
  • Audi Details Its First Proper Tesla Competitor, The 310-Mile Range SUV [View article]

    The notion of needing 30TWh of storage to average-out seasonal variations of load and generation presumes that the generating capacity is sized such that over the year only slightly more energy is generated than is consumed. Before one uses a huge battery to smooth seasonal variations, it becomes cheaper to just over-build generation assets.

    Hydrogen electrolysis is around 25% efficient converting electrical to chemical energy. If a significant part of a year's energy consumption passes through 'hydrogen storage', overbuilding generation by a factor of two starts to look pretty reasonable...

    The 12GWh I mentioned covers diurnal energy shifting. Seasonal generation variations are handled by 'throttling' the reverse osmosis desalination plant so that average energy consumption matches seasonal generation variations.
    Aug 27, 2015. 04:47 PM | 2 Likes Like |Link to Comment
  • Audi Details Its First Proper Tesla Competitor, The 310-Mile Range SUV [View article]

    For variations much longer than a day or so, the battery both becomes very large, and is cycled infrequently. At some point, it becomes cheaper to just overbuild the generation (wind, solar) so that the low frequency, long period dips still cover the load, and just throw the unneeded electricity away. Of course, as soon as there is a bunch of unneeded (free) electricity available, even if it is intermittent, there becomes great incentive to make use of it...

    Germany's idea of electrolyzing water to make hydrogen, then using the hydrogen in fuel cells (to get the electricity back) or simply to augment the natural gas supply is one thing that can be done. In the Southwest US, one might use such excess electricity for very large scale seawater desalination to supplement the limited water supply.

    There is a continuum of potential uses ranging from those that can use very occasionally available 'free' electricity to those that only work if the electricity is available most of the time. With the aid of local battery storage, even applications that now rely on continuous electricity supply can 'get by' with some amount of intermittency, thereby obtain less costly energy and justify the investment in batteries.

    A fleet of long range BEVs, only a small minority of which will be making long journeys on a particular day, can adjust their charging in such a way as to 'harvest' intermittently available 'excess energy' from a largely renewable grid. If centrally controlled and fairly compensated, such a scheme can greatly reduce the cost of energy for such cars.
    Aug 27, 2015. 04:37 PM | 3 Likes Like |Link to Comment
  • Smashing rating for the Tesla Model S P85D from Consumer Reports [View news story]

    Tesla is 'maturing' as a car company though not any where near so large as it is likely to end up. It is now building cars and the upside of their car business, while large, is finite from this point forward. Those focused on Tesla as a carmaker naturally try to value Tesla that way. Doing so is an error.

    Tesla is not just a car company, but rather an energy + information company. Tesla has components ( grid storage batteries AND services, SuperChargers, battery factories - for themselves AND for others) that are in much earlier stages of development than its car business and which have sales and profit potential that exceed that of even a very successful Tesla car business.

    Tesla's early stage components have particularly high value for the following reasons:

    1) Tesla and Elon Musk have a solid TRACK RECORD making quite extraordinary things happen. Tesla's chances of success much greater than would be those of another company attempting these things.

    2) These new initiatives are highly synergistic with Tesla's electric cars.

    3) Each of these new initiatives lie directly in the path of a low carbon economy, which is the future of our industrialized (and industrializing) world.

    Tesla represents the opportunity that it does, and is valued by the market as it is, because Tesla is BOTH a disruptive, successful maker of cars AND an early stage disrupter in additional markets with potential as large or larger than their car business opportunity. The combination of size, track record, ability to raise capital and multiple, cutting edge innovations underway make Tesla exceptionally valuable by any reasonable standard, and a good value at the present valuation.
    Aug 27, 2015. 03:56 PM | 11 Likes Like |Link to Comment