Tesla home storage a ‘nail in the coffin of conventional utilities’

Tesla announced it was launching energy storage packs for homes and businesses, based on the batteries used in its electric vehicles, at an event in Los Angeles.

Professor Mitchell said: “The potential for competitive energy storage, whether household or utility scale, is another nail in the coffin of conventional utilities.

“Those countries, like Denmark and Germany, with a reasonable proportion of variable power such as wind or solar have seen fossil fuels being displaced from the electricity market and have seen peak energy prices fall, leading to falling profits and share prices of conventional utilities like E.ON, RWE, Vattenfall and ENEL.

“Storage offers the ability to extend both the displacement of fossil fuels and reduction of prices beyond peaks - making it even worse for companies whose business models are based on fossil fuels and peak pricing profits.”

Professor Mitchell argued that the long-term implications for energy systems were profound, as decentralised energy systems based on renewable energy and demand management become increasingly attractive with effective energy storage. This in turn undermines the rationale in trying to force through infrastructure for big centralised power plants.

Professor Mitchell said: “The question is no longer whether decentralisation will happen within the energy system, but when the tipping point will be.

“Increasingly we are seeing a move away from big, centralised power infrastructure towards a decentralised system in which interconnectors and smarter, more flexible distribution grids play a bigger role.

“Governments have got to reset their minds to making policy in an uncertain world they cannot control.”