Powerwall will harness energy from renewable sources and make it available for household use or make it available on a distributed grid . The battery would store energy when demand is low and release it during peak periods when energy supplied by large power stations is expensive.
Not only do these batteries – known as “behind the meter” storage – raise the prospect of reducing households’ electricity costs by optimising the time they receive power, they could cut further bills by selling excess power back to the network at times of high demand. They could also provide an emergency back-up if the main grid fails.
There are other wider advantages to the system. Having batteries in every home solves the problem of solar and wind farms producing electricity when there is no demand for it and nowhere to store it, and they could also ease the current strain on the transmission grid as power is sent from large power stations. Perhaps most importantly, they could reduce the world’s reliance on fossil fuels by allowing green energy sources to be fully utilised without the worry of the wind dropping or the sun being hidden by clouds.
The whole idea might sound like a pipe dream, but it is becoming more a more real possibility. While Tesla is raising the profile of home energy storage, other less visible players are operating in the sector and already installing batteries in British houses.
However, last week just how seriously the concept is being taken was shown with a series of big moves in the sector. First came France, with oil giant Total on Monday announcing a £750m scheme to buy battery group Saft as it looked beyond the low oil price and to a future away from fossil fuels.
A day later, Engie, previously known as GDF Suez, revealed it had taken an 80pc stake in California start-up Green Charge Networks, a leading player in behind-the-meter batteries. But the most significant event came later the same day from automotive giant Nissan. As well as revealing it would begin using its Sunderland battery factory to start recycling the power packs from its Leaf electric cars for use as home power storage devices, the Japanese company said it had picked the UK for a much more important trial.
Under the title of Nissan Futures, it revealed a new vision for how electric cars will be used in the years ahead. A pilot project will see 100 Leaf cars plugging into the energy network and using their batteries as extra storage, in what it hopes could combine transport and energy in the future.
“As a company, we recognise there will be massive change in the future,” said Paul Willcox, Nissan’s European chairman. “There’s a revolution in the market and we need to think about how we evolve and what the car’s role is in society.”
Nissan’s plan is rather eloquent and effectively kills two birds with a single stone. The average Leaf uses only a quarter of its battery power before recharging, meaning there is a large capacity going spare for most of the time. The Leaf’s 30 kilowatt hour (kWh) battery can store enough energy to supply the average home’s needs for two days according to Willcox, but under Nissan’s scheme, this capacity is put to much more practical use. By plugging in at home overnight, the cars charge up on cheap late-night electricity, but their batteries are available to feed into the network at times of peak demand.
Willcox says the trial envisages electric vehicles as “mobile power plants, energy hubs” with them plugging in to offer up their resources not just at homes overnight, but also at workplaces during the day.
A giant such as Nissan weighing into the sector shows just how seriously energy storage is being taken, and the fact that the former chief executive of National Grid, Steve Holliday, is on board only emphasises it.
Cynics might argue that the idea is fanciful at best, but Willcox is confident of its potential. “Oil may be cheap now, but that is not going to last forever and people are increasingly going to want electric vehicles – it makes sense to use them in this way,” he says, adding that while Tesla is a “credible company”, Nissan began making electric vehicles in the 1940s.
“Some may see this as blue sky thinking but it is real and tangible now,” Willcox adds. “Six or seven years ago, when we invested heavily in battery vehicles people laughed at us, but we have 230,000 Leafs on the road now.”
Holliday argues that moving to a distributed grid could that takes advantage of cheap energy makes sense. “In the future we could see a time when electrons are free,” he says. “On this island, we have times now when people effectively pay to use electricity because of the cost of having to shut down [existing power plants] when there is low demand.”
Nissan makes a convincing argument and is certainly planting its flag firmly in what is a land grab for a huge industry of the future, though Willcox concedes the whole car industry will need to work together for the potential of “vehicle to grid” to be realised.
However, for a distributed grid to work, there needs to be a major reform of legislation around the UK power market, according to industry body Energy Storage Network (ESN). “The current system of buying and selling electricity is not fit for purpose,” said ESN director Anthony Price. “The paradox is that almost everything except storing electricity is subsided.”
Almost 1m UK homes have solar panels and Price estimates that several tens of thousands of UK homes have battery systems. To get these figures closer to parity the process of storing electricity and selling it back to the grid needs to be overhauled. However, Price says that even without the benefits of these batteries being charged from renewable sources, the UK needs to invest in battery storage.
“We have a variable demand for energy because we are human,” he says. “We run generation to match demand and there is a lot of effort to meet the peaks – such as everyone switching on the kettle when Coronation Street finishes – and that costs a lot, and the power is often from the dirtiest power plants which take time to be fired up.
“Battery storage – whether behind-the-meter or in community batteries at the end of the street – has the effect of taking out those peaks in demand and allows you to operate a much more efficient system.”
Cyrille Brisson, vice-president at global power management group Eaton, which is working with Nissan, agrees, saying that the present system requires large numbers of power stations ready to meet peak demands.
“At the moment we have to have massive over-capacity – which is expensive – to meet fluctuating demands, but with renewables you have unpredictable generation,” he says. “However, with storage in the middle you do not have to oversize everything. You get a ‘good load’ on the electricity grid where the spikes in generation and consumption are flattened out by the storage.”
Arguments that the wind might not blow or the sun won’t shine are false, argues Brisson, claiming that the “Sahara produces 100 times the wind and sun” to power the planet, and the technology for this “absolutely exists”.
He also warns against trying to subsidise the market to encourage the take-up of energy storage. “The worst thing you can do is subsidise it. The public think that renewables mean an extra tax on them, and regulation has got to make it clear it is not that. What is needed is a transparent market, so as the costs fall people will see it is cheaper.”
The cost of power from solar is falling rapidly – down 40pc 2012, according to KPMG – and Brisson argues that technological advances will soon make it as cheap as fossil fuels.
The Government also sees the potential in energy storage systems, having declared it one of eight “great technologies” it sees the UK as having the potential to become a world leader in. Nissan’s Willcox acknowledges this, noting the UK’s “encouraging” environment was a factor in picking Britain as the site for the global V2G pilot programme.
The public might find the idea of a battery in the home helping to solve complex problems about the UK’s energy needs hard to imagine. However, Joe Warren, chief executive of start-up Powervault, sees it a different way.
His company’s 4kWh batteries start at £2,500 and are capable of providing about a third of the needs of a typical British home, having charged themselves from roof mounted solar panels and Warren hopes to have 500 of them installed in Britain by the end of the year.
“There’s a massive transition away from centralised power generation,” he says, as news breaks that the cost of the long-delayed Hinkley Point nuclear power plant may rise by £3bn to £21bn. “It makes sense to decentralise when instead you can make small investments of £1m or £100m on wind farms or solar power stations.
“We hope to make a home battery as common as a dishwasher in every kitchen.”