The leaders of California and China have at least one thing in common: fear of blackouts. In late September, following widespread and economically debilitating losses of power, China’s vice premier Han Zheng ordered the country’s energy companies to ensure sufficient supplies before winter “at all costs” and added, ominously, that blackouts “won’t be tolerated.” A month earlier, California governor Gavin Newsom issued emergency orders to procure more natural gas-fired electrical capacity to avoid blackouts. And in a possible sign of more such moves to come, earlier in the summer, California’s electric grid operator “stole” electricity that Arizona utilities had purchased and that was in transit from Oregon.
In recent weeks, the European continent has also suffered blackouts, near-blackouts, and skyrocketing electricity prices triggered by a massive lull in nature’s windiness. Grid operators across Europe rushed to buy fuel and fire up old gas- and coal-fired plants. Europe petitioned Russia for more natural gas, and German coal plants ran out of fuel, causing a scramble (including in China) to get more (doubling global prices). Even long-forgotten oil-fired powerplants were pressed into emergency service on grids from Sweden to Asia.
The issue that’s now front and center is whether all these disruptions to electricity supply and price are, to use Silicon Valley language, a “feature” or a temporary “bug” of the new energy infrastructure favored by advocates of renewables: one dominated by power from the wind and sun. Proponents of this so-called energy transition admit that the road to a post-hydrocarbon world might be rough. But the solution, they say, is to accelerate construction of far more wind and solar machines. Thus, the key question now is not whether we need such a transition, or even what it would cost, but whether it’s even possible in the time frames now being bandied about (“carbon free by 2035”).
We can thank California for leading the way in helping us answer that question. In late August, in pursuit of that “transition” vision and while skirting the edge of widespread blackouts, California brought online the world’s biggest-ever grid-scale battery, located at Moss Landing, just 60 miles south of Silicon Valley. Proponents of an all-wind/solar grid seem to be saying that all we need to do to get past the volatility of conventional fuels for electricity is to build enough such batteries—the sooner, the better.
The Moss Landing battery is about ten times the size of the previous world-record-holder: the grid-scale battery that Elon Musk built, to global fanfare, for the South Australia grid in 2017. States and countries everywhere are in hot pursuit of grid-scale storage, including New York City, where the state Public Service Commission recently approved construction of a battery “plant” in Queens roughly the size of Tesla’s Australian project.
Three basic constraints work against building enough batteries to solve the intermittency of wind and solar power, however. First, there’s the time it takes to conquer the inevitable engineering challenges in building anything new at industrial scales. Second, there’s the scale issue itself and the deeply naïve reluctance to consider the utterly staggering quantity of batteries that would be required to keep society powered if most electricity is supplied at nature’s convenience. And finally, directly derived from the scale issues, are the difficulties involved in obtaining sufficient primary minerals to build as many batteries as the green dreamers want.
Let’s start with the engineering realities. Mere days after its ribbon-cutting, the Moss Landing mega-battery went offline. Heat and fire-detection systems automatically shut the battery down, activated sprinklers, and called local fire departments. Fortunately, nothing happened this time, but engineers have to take seriously fires with large lithium batteries because they are self-fueling and can be difficult, if not borderline impossible, to suppress. The technical issues resemble the ones plaguing several electric-car manufacturers, but the scale of grid-scale batteries adds to the challenge. The Moss Landing beast has an array of 100,000 lithium battery modules containing as much lithium as some 20,000 Teslas. The last thing anyone wants is for Moss Landing to light up like a Roman Candle visible from space.
This past summer, the Tesla Megapack in South Australia did catch fire and burn out a number of its tractor-trailer-sized “packs.” Two years earlier, a similar fire at a smaller but still utility-scale battery plant in Arizona caused an explosion and injured several firefighters. The state paused its grid-scale battery rollout while it investigated. As of this writing, some 75 percent of Moss Landing’s total capacity remains offline with, as one headline put it, “no timeline on return.”
Such challenges are part of the proper and normal course of engineering progress. Batteries at such scale have never been built. Engineers will doubtless find the causes of these problems and make appropriate fixes. That process may not happen as fast as enthusiasts would like, but operators everywhere will want to get it right before building hundreds and even thousands more such installations.
This brings us to the scale question: just how many facilities like the $400 million Moss Landing battery will California, the U.S., and ostensibly the world need? Answering the question requires simple arithmetic, yielding a substantial reality check.
Building grids that can supply electricity whenever people and businesses need it for decades on end requires more than meeting episodic peaks in demand; we must also understand and prepare for the frequency and duration of the inevitable power-plant outages. The eight grids in the U.S. today collectively possess hundreds of thousands of megawatts of “excess” generation. That backup or “peaking” capacity can be called upon whenever needed, and it can run indefinitely. Since sunlight and wind are by definition impossible to dispatch at will, the critical question for planners is just how much electricity storage is required for a grid whose primary sources of energy are the sun and wind. Keep in mind that Moss Landing’s four hours of storage at 400 megawatts is worthless just one minute after the fourth hour.
The big issue at grid-scale isn’t the oft-noted diurnal variability of sunlight and wind. Rather, it’s the seasonal variabilities, along with the episodic nature of long, even multiday weather events of, say, continent-wide wind lulls (as Europe recently experienced) or total continental cloud cover. Multi-decade meteorological data shows that while it’s impossible to predict precisely when such episodes will occur, it is entirely predictable that they will occur, and frequently, over decades. The adage that it’s always sunny or windy somewhere in the country is simply not true over a span of such time. And, not incidentally, it is this reality that makes it clear that building more transmission lines can’t solve that problem.
Consider the implications just for California. If the rest of the nation switches to a solar/wind grid, California won’t be able to count on neighboring power plants to make up for losses during regional dips in wind and sunlight availability. (Imports currently supply one-fourth of the Golden State’s annual electricity.) An easy arithmetical approximation shows that a transitioned California would need about 100 Moss Landings, costing about $40 billion, to make it through a power drought of several days.
In these days of profligate government spending, $40 billion might not seem like too much—except, of course, if the sunlight/wind drought lasted just one more day. In that case, California would need to have another $10 billion in batteries on hand. And since none of the batteries being built or planned today will last for the several-decade lifespan of normal grid equipment, those batteries will need replacement, raising the total investment well above $100 billion. The alternative would be to just turn everything off whenever such multiday episodes occur. Another alternative? A California-scale conventional grid can be reliably operated for decades with about $10 billion worth of excess conventional generation.
Such disparities are even more sobering at the national level. One detailed analysis based on national meteorological data concluded that an all solar/wind grid could keep America’s lights on 99.97 percent of the time using just 12 hours of storage. That sounds good until you do the math. On average, that statistical level of reliability means there would be a few hours of zero power every year. But that doesn’t include the unpredictable but inevitable episodes—even as few as every couple of years—of continent-wide blackouts due to extended sunlight/wind droughts. Such a grid sounds “Third World,” not “high tech.” And we’d pay more for it. The same analysis finds that an all solar/wind grid requires at least twice today’s installed generating capacity. That’s because far more than the normal peak generation would be needed, not only to supply peak demand when sunlight and wind are available but also to generate surplus to store electricity in batteries.
Such realities expose the silliness of the oft-repeated claim that solar or wind power have achieved “grid parity,” meaning that they can produce electricity for about the same cost per kilowatt-hour as a conventional machine—when they’re running. To match the energy produced by one conventional machine each year, and for years on end, you need at least two solar/wind machines, plus the batteries. That combination puts the sun/wind/battery option at roughly triple the capital cost of grid-scale conventional power. Even so, the cost for 12 hours of storage at U.S. grid-level alone would be about $1.5 trillion, and that would still leave the nation episodically in the dark. The alternative? A conventional grid with about $100 billion worth of conventional backup/peakers.
Nonetheless, because of existing and expected subsidies and mandates, the Energy Information Administration forecasts a 7,000 percent increase in the quantity of grid-scale batteries on the nation’s grids over the coming decades. That would bring storage to a total of less than a half-hour of national demand.
One alternative is to follow Germany’s lead: keep a roughly equal-size shadow grid of conventional generation on hand as backup. The expense of such a solution would be borne not by the builders of solar/wind machines but by ratepayers. That solution is the main reason that the average German residential customer pays about 300 percent more for electricity than the average American. Worse, as Europe has discovered as its winter of discontent approaches, that dual-grid option is exposed to episodic and radical fuel-price spikes arising from the inevitable supply-chain interruptions. Price spikes happen when there’s a widespread jump in demand for any commodity, but especially when fuel buyers choose (in this case under government mandates) to avoid engaging in long-term, low-cost supplier agreements.
The other option is to claim that batteries will soon see “revolutionary” declines in cost. It’s hard to keep track of all the media reports about new “game-changing” battery technologies. The batteries that will be built today are those that exist now, not some fanciful new product of the future. Of course it’s reasonable to expect researchers to discover superior chemical concoctions, but it takes many years to go from discovery to industrial-scale production. The first Tesla sedan, circa 2012, didn’t show up for more than three decades after the Nobel-winning lithium discovery in the mid-1970s (by an Exxon researcher). And yes, lithium batteries will become cheaper over time, perhaps dropping in cost by half, as enthusiasts claim. But for systemic grid-scale storage to be affordable, as one detailed analysis observed, we need to see nearly 100-fold cost reductions, which are nowhere on the horizon.
This brings us to the physical roadblock impeding a magical transition to a battery-infused grid enabling sunlight and wind as primary energy. Batteries are an extremely expensive way to store energy in the main because they’re so material-intensive. It requires about 50 pounds of batteries to hold the amount of energy contained in one pound of oil. Obtaining the minerals needed to fabricate one 50-pound battery requires mining and processing roughly 25,000 pounds of materials. This kind of physical disparity really adds up at grid scales.
Building enough Moss Landing-class systems for 12 hours of storage for the U.S. alone would entail mining materials equal to what would be needed for two centuries’ worth of production of batteries for all the world’s smartphones. That doesn’t count the additional minerals needed for the transition to electric cars or the “energy minerals” needed to build the wind and solar machines themselves. It’s a little-noted fact that using wind/solar/battery machines to deliver the same amount of energy as conventional hydrocarbon machines requires about 1,000 percent more primary materials for fabrication.
The world isn’t now mining, nor is it planning to mine, a quantity of minerals and metals sufficient to build as many batteries as the transition roadmap requires. About this fact there is no dispute, even if it’s being ignored. In a surreal disconnect, the International Energy Agency’s own analysis of the astonishing, even impossible mineral demands required for the wind/solar/battery path was quickly followed by a different report proposing an even more aggressive pursuit of the energy transition. Meantime, another recent study from the Geological Survey of Finland totaled up the overall demand that the transition will create just for common minerals—for example, copper, nickel, graphite, and lithium—never mind the more exotic ones. They concluded that demand would exceed known global reserves of those minerals.
Just starting down the transition path will soon put unprecedented pressures on global mineral supply chains. In the real world of commodities, that will translate into higher prices. It’s puzzling to see so many analysts believing that batteries will become a lot cheaper given the fact that, as the IEA noted, raw materials alone make up from 50 percent to 70 percent of battery costs.
The mineral-intensive transition path has some troubling geopolitical implications as well. China is the largest source for most of the needed critical materials; by most accounts, Beijing controls nearly half that supply chain. The United States is a minor player. The rush to build battery assembly plants here in America is the equivalent of building cars here but importing all the gasoline.
The retort from transition advocates is invariably that “clean tech” is getting better at a putative “exponential” rate, just as we’ve seen happen in computing and communications. But physical infrastructures like roads, bridges, power plants, and big batteries simply cannot improve at the rate that information systems do. These are realities anchored in physics, not policies or subsidies. It’s true that grid-scale wind, solar, and battery machines are fabulously better than they were three decades ago, and that we should expect many more of them to be built even without subsidies and mandates. But it’s just as naïve today to think that wind/solar/battery machines could entirely replace conventional power systems as it was in the 1950s to think that nuclear energy would power not only all our grids but also our ships and cars. Nuclear energy at scale was a lot harder than many thought.
History may mark the summer of 2021—from Europe’s approaching cold and expensive winter to California’s teetering on systemic blackouts—as the point when the world began to test the limits of supply chains for providing and storing electricity. California is on track to see its cost of electricity blow past Germany’s sky-high levels. Even the California Public Utility Commission has observed that the path now charted will mean that “energy bills will become less affordable over time.”
If one were taking bets on the outcome of the race to zero carbon, odds are that consumer patience with soaring costs—in tandem with decreasing reliability—will be exhausted long before we have the opportunity to deplete the supply of critical energy minerals. Here, too, California is leading the way.
Mark P. Mills, a Manhattan Institute senior fellow, is a strategic partner in Montrose Lane, an energy-tech venture fund, and author of The Cloud Revolution: How the Convergence of New Technologies Will Unleash the Next Economic Boom and a Roaring 2020s.
This article was originally published by the Manhattan Institute.
