Oz battery bossmen: Fingers will be burned in the Tesla goldrush

Interview If Elon Musk does spark a market shakeup in home power storage, one of the battlegrounds will be between mature and emerging technologies.

With that in mind, The Register spoke to Stuart Smith, CEO of Redflow, and Bruce Ebzery, vice president of business development).

Yes, Redflow is a battery company, which means it has its own interest in this market, but it's also knowledgeable about things like battery chemistry, and that helped expand The Register's understanding of the challenges facing Elon Musk.

Chemistry is what sets the limits to things like a battery's charge density (how much energy it can store in a given unit of space), and the discharge currents it can handle.

It's what dictates the 2kW continuous output of the Tesla batteries, Ebzery believes, because of the heat that would be generated if the output were higher.

Simply: “You have to restrict the current, or it gets very, very hot.”

In managing the heat, Smith added that the Powerwall has both fans and a liquid cooling mechanism, both of which impact the battery's efficiency.

Efficiency, temperatures, loads – these make the home market difficult to address. The end user is probably without the expertise to make a sound choice, and even the retail/installer channel may be in the same position.

While the Powerwall is most suitable in grid tie applications, today on-grid systems are typically sold without batteries. Because off-grid systems are relatively rare, so is the training and experience needed to specify the right battery for a job.

Smith says for most people the addition of a backup battery isn't a great value proposition.

“By and large, most residential customers in cities and urban areas have a pretty robust connection,” he said.

And – reflecting among other things Redflow's commercial-scale focus – Smith said batteries for individual homes might not be the best way to provide backup even for “end-of-line” dwellings that don't enjoy urban grid reliability.

“There are other ways to make that network … more robust – it doesn't have to be at the individual house level,” he said. “It can be done at the distributor or generator level, across multiple residences.”

(The Register is aware of trials in Victoria in which batteries are being provided at the scale of hundreds of households to make them more efficient.)

Australia has a characteristic that sets us apart from America, which is indubitably the home market for the Powerwall: our regulatory regimes try to equalise urban and regional prices.

A SWER – single-wire earth return – is enough to ensure that a regional consumer is paying the same per-kWh price as the suburban cousin, Edzery pointed out.

This dents the battery backup economics for any grid-tie system, at least in Australia: while getting a new grid connection can cost a bomb (thousands per pole if such is needed, and much, much more if a new transformer is needed), any existing grid customer enjoys that price equalisation.

The difficult channel to individual households is what makes Redflow concentrate on commercial-scale customers for now, with the same focus in its channel.

“There will be people with their fingers burned,” is Ezbery's concern. “It's a complex play, and the winner will be those who make it simple.

“But right now, it's customer beware when you're buying it – the [Powerwall] package looks good and has a strong brand behind it, but where that leads in the end we don't yet know.”

Smith agrees that at the very least, Tesla's move is likely to spark something of a price war in the battery business. If that happens, he puts the argument that in the long term, a new technology has more room to slice the price than a mature one.

What Redflow calls the “right-side of the periodic table” has better potential than either lead-acid or lithium batteries, he contents. Lithium batteries have had 20-to-40 years of development, lead acid much more.

The mature technologies have only limited scope for cutting their costs, both in terms of the “bill of materials” and “producing them in continuous volumes,” he explained. Their cost advantages are something they've had for decades.

Newer technologies like Redflow's zinc-bromide battery has “only had a few years” of development. Existing technologies “do not have the ability to increase the energy throughput much more than it is already,” he said.

“We haven't really started looking at the cost components to get them reduced, and we have very little volume. Now that we have our tech and manufacturing sorted out, we're focussing on getting costs down”.

Redflow is working with its manufacturing partner, Flextronics, on the cost of materials, with its own research efforts concentrating on the cost per kilowatt-hour of storage.

“We're confident that we can significantly increase the amount of energy we put through the batteries,” he said. ®