All right, picking up on batteries as we talked about, utility-scale battery storage costs have come down dramatically. Again, this data from the US, but global data would look quite similar because its systems are quite similar across different geographic locations. We've seen very rapid growth in global electro-chemical, another word for battery storage capacity to 1.4, 2016, 1.6 is probably between two and three gigawatts now, which is not that big relative to global capacity, which is thousands of gigawatts, but it's the growth that's worth noting here. So batteries are of great interest, growing really rapidly though from a very small base. To have a sense of where they are now is they're starting to play a role. Here's some data from the California Electricity System from late 2020 showing essentially the daily pattern of battery discharge and charging. Negative would be charging. The batteries are taking electricity. You can see kind of what you'd expect where California faces that late afternoon rapid ramp, increase electricity demand just from a solar is going away. At that point, the batteries are discharging and playing a role. But if you've seen the y-axis, sits in the hundreds of megawatt, and keep in mind, the California system is about 40,000 megawatts. It gives you a sense of where batteries are now. They're playing a role, it's small but growing quite quickly in California and which is in some ways a leader in storage use. Batteries are just starting to make a significant difference in systems. But if you look forward a little bit, you see something quite different. Again, here's data from the US. If you look at, for example, the solar photovoltaic systems that are planned, and by planned in this case, I mean firmly planned, they're actually what's called in the queue, which means on the list of projects that will need transmission capacity. Now, not all of these will actually be built, but many of them will be. If you look at all the US solar PV projects in what's called the queue in line for transmission capacity, about a quarter of them have storage. In other words, the projects had been defined and planned and developed to include storage. It says hybrid here, but almost all of that hybridness is essentially storage. In other words, slightly complex measure about a quarter of all large solar PV projects in the US will be built with storage. So storage is rapidly becoming an important technology. What is expected for battery storage cost is they'll continue to come down via just the classic loop of new applications, creates the art and money and interest in R&D, the batteries get better, they get lower cost, the price has come down. I mean, this is a classic positive feedback loop for technology improvement, which reduces costs, which increases interest in demand, which further reduces costs. What we're seeing with batteries is what we've seen with PV and when is that positive feedback loop to bring costs down. Now, that won't work if there's no technical opportunity for cost reduction. But in the case of batteries, there clearly is, here's some analysis done several years back that took a detailed engineering analysis of lithium batteries. It said, "Okay if we look at each component, how much better could we do?" This analysis suggested that battery costs could come down over 50 percent from say, 580-250, due to essentially technical improvements in all the components. Now, we'll see how this actually plays out, but I think it's quite clear from this analysis and from the stage of added that batteries are in, that cost reduction will continue. There's still plenty of room to do better. This is far from a technologically mature technology. Let me summarize batteries. Batteries are a type or example of storage. A subset. Remember there's pumped hydro, there are others. Batteries can provide many benefits to the grid. They can allow you to postpone new transmission capacity. They can do lots of things, at the end-use they can cut peak costs or demand charges. But one of their major potential and promising benefits is easing grid integration of variable renewables. Many ways they do that, for example, by firming output of utility-scale renewables. They can make your solar PV more of a reliable power plant because when the clouds come over when the sun sets, your combined power plant or solar PV plus batteries can still provide electricity. Batteries are similar to solar PV and they can be resized from enormous to very small. You can deploy batteries at the utility scale, 10-100 gigawatts at the household scale, 1-10 kilowatts, and almost anywhere in between. Actually, a lot of analogies are similarities between solar PV and batteries. Battery costs have dropped significantly. We saw the 70 percent drop over a five-year time period and seen in the US and will continue to drop. There's continued opportunities for cost reduction. There are many technologies, I call them for batteries from metal hydride to flow to lots of other terms. But lithium-ion approach or fundamental chemistry of a battery appears to be dominating the market. Now the future batteries, I'll label a break but unclear. The value proposition for batteries still under development. Well, can they actually do it, and how much is that worth? That's still being sorted out. Batteries are good for lots of things, but are they the best at any one thing? This is an ongoing discussion. I had a informal conversation with the VP of a large company involved with batteries and he described batteries as the Swiss Army knife. Does lots of things. But is it the best at any one thing? The market is going to determine that over the next 5-10 years. The last point on batteries before we move on is the future of batteries depends in part, on what we called the market rules for storage. At some point in most electricity systems, batteries are going to have to find some way to monetize or to put a dollar value and get paid for what they contribute to the grid. The grid is trying to figure out what they do and how to put a dollar value on. For example, in competitive markets, there's a system for a supply of electricity and demand and how do those rules apply to storage. The storage supply? Kind of. Is it demand? Kind of. But it's not really either. This is an ongoing discussion where for example, the independent system operators called ISOs are working to develop markets for what batteries can provide. That's just an ongoing discussion. We need to see how that rolls out. But batteries are promising and this vision of solar or wind plus batteries is that exciting one. We just have to see how that technology plays out.
