A surge of energy is flowing into energy storage. Tesla Motors' Sept. 4 announcement that named Nevada the winner of a five-state competition to host its planned gigafactory added momentum to a market for which Lux Research LLC forecasts 8% compounded annual growth, to a global value of $50 billion, by 2020. Tesla's $4-billion plant outside Reno will produce batteries for the automotive market and the grid. According to market research firm IHS, the 2013 energy-storage installation of 340 MW will grow to 6,000 MW by 2017 and to more than 40,000 MW by 2022.
Tesla aims to produce 50,000 megawatt-hours of battery storage capacity annually by 2020. The company predicts the 10-million-sq-ft factory's production will shave 30% off the price of lithium-ion (Li-ion) battery storage per kilowatt-hour. Lux agrees that prices will drop but attributes the fall to a glut that will result from more than 50% overproduction. Prices now at $274/kWh will be $196/kWh when the smoke clears, Lux says. Tesla Motors declined to comment on the design and construction of the plant but is inviting bid inquiries.
