How Tesla sparked the latest race for bigger, better batteries

Battery makers are suddenly finding themselves with an explosion of new markets to service—both big and small

Powerwall illustration and Elon Musk photo

Tesla founder Elon Musk is betting a new generation of batteries can help power your home. (Tesla; Bloomberg/Getty)

You can be forgiven for thinking Tesla Motors is a car company. Yes, it started out making electric cars, but only because personal transportation is the lowest-hanging fruit in tackling the global energy and emissions problem. In fact, Tesla’s core mission is to make big batteries inexpensive and practical for any number of uses.

Last spring, founder Elon Musk unveiled a new product called Power­wall, a battery pack starting at US$3,000 that’s designed to power your whole home for 10 hours or more. If you have a solar panel on your roof, it will allow you to store the electricity produced during the day and use it in the evening to cook, do the laundry and max out your electronic devices. Even if you don’t have solar panels, you may live in one of the growing number of jurisdictions where electricity costs rise and fall at different times of the day. You could save money on your utility bill by charging your Powerwall during the wee hours and drawing from it later.

Until recently, battery systems were ill-suited to powering anything larger than a golf cart. But big batteries are now being used in applications never before conceived of, powering cars, homes and industrial cranes. Corvus Energy, a B.C. company, makes batteries that help power hybrid ships. In Japan, utilities are building battery arrays as powerful as 300 megawatts for grid storage. The market for lithium ion batteries—the technology used in Tesla’s Powerwall—is expected to exceed US$30 billion by 2020, according to Research and Markets.

What has brought big batteries to the fore is not new technology so much as the demand created by the growth in renewable energy. “You can’t have renewable energy without energy storage, because renewable energy is fundamentally intermittent,” says Linda Nazar, senior Canada research chair in solid state energy materials at the University of Waterloo. The fact that solar energy, for example, is now cost-competitive with gas-fuelled power in many places matters little if people can’t cook dinner after the sun goes down. “It’s the realization that solar is here to stay, that both wind and solar are viable,” Nazar says, that is fuelling the need for larger, more powerful batteries.

The last significant change in battery technology came 24 years ago, when Sony commercialized the rechargeable lithium ion battery. “When it came out, it was twice as good as the next best battery on the market,” says George Crabtree, director of the Joint Center for Energy Storage Research in Illinois. Since then lithium ion batteries have become a little bit better and cheaper every year, but the improvements are diminishing. Crabtree estimates lithium ion can get 50% cheaper and more powerful, but that’s still not suitable to widely displace fossil fuel–burning engines.

Several research bodies and startups are working on new battery chemistries. The leading contenders are magnesium ion, lithium sulphur and redox flow batteries, but there’s a huge gap between something that works in a lab and something that can be cheaply mass-produced. ZincNyx Energy Solutions, another B.C. company, is coming at the problem in a different way. This summer, it’s piloting a fuel-cell unit that stores energy chemically but can convert it back into electricity on demand without wearing out, like batteries do. “Tesla has done all battery companies like us a huge favour by identifying a big market,” says Suresh Singh, ZincNyx president and CEO. The company is targeting applications for utility-scale energy storage, as well as for residential use.

Of course, any such gold rush attracts fools and swindlers, and even legitimate players often promise more than their new technology can deliver. “There’s liars, damned liars and battery salesmen,” says Grant Brown. He and Brent Perry, the founders of Corvus, recently started C Rate Solutions, a Vancouver-based consulting firm that helps industrial power users choose and install energy storage systems. “We want customers to have products that work here and now,” Brown says.

While utilities have long discouraged energy storage by homeowners and industrial consumers because it threatens their revenue model, Brown says it makes a lot of sense, not just for enabling more renewable power but for lightening the load on old, creaky infrastructure. If products like Powerwall catch on, the necessary restructuring of the electrical grid will create opportunities and demand new expertise well beyond designing and manufacturing batteries. For example, AES Energy Storage in the U.S. now sells electrical storage the way server farms sell data warehousing. Stem, a California startup, helps large energy users such as hotels finance their own battery arrays. “There’s a whole industry developing here that is all brand new,” Brown says. “There’s a whole bunch of spinoff businesses that are going to start popping up.”