By John Atcheson, STAY COOL for Grandkids Advisory Council Member
One of the most remarkable revolutions in clean energy is how rapidly the price of battery storage has plummeted, and how much better batteries are performing. This means that electric vehicles (EVs) will soon have a lower first cost than internal combustion engines (ICE) here in the US. They already have far lower fuel and maintenance costs. In Europe – which taxes fossil fuels at a relatively high rate – EVs are already cheaper on a life cycle basis than ICE cars, and in three years they will be here in the US.
As battery costs fall, the range of EVs goes up, and 500 miles per charge will be affordable soon. At the same time, charging times are going down, and next generation batteries could lower them to five minutes or so. According to Bloomberg NEF, electric cars will have about a quarter of the global market by 2030, and nearly half by 2040, and that’s without a carbon price or cap. Given the drop in battery prices and the improvements in capacity, either policy would make the transition happen faster and save us all a lot of money.
But the revolution in battery storage will not just make ICE cars obsolete; it’s already making fossil fuel power plants obsolete. New renewable energy capacity is already cheaper than building new fossil fuel power plants, and in some markets it’s cheaper to shut down existing fossil fuel power plants and replace them with wind or solar; as prices drop, that will be the case for more and more markets, and at that point, switching to clean energy generation will be even more of a no-brainer, allowing us to decarbonize the electricity sector at a net savings. The chart below shows how rapidly costs have come down. And according to BNEF, prices will continue to drop, falling from $176 per kilowatt hour in 2018 to $87 per kWh in 2025, and just $62 per kWh in 2030.
Volume weighted average price is simply the average price – in this case of battery packs – weighted by volume of sales.
Obviously, putting a price on carbon would make the transition to clean energy happen even faster, but the point is, anyone who tells you we don’t have the technology to cut greenhouse gasses or who tries to tell you we can’t afford it, is … well … full of hot air.