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Bill Gross Keynote at DLD Munich 2019 on cheap gravity energy storage


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There is a quite interesting thread about this here: https://news.ycombinator.com/item?id=17789456

 

I tried to do some research (*random googling) on investing in "Gravity storage" without much success. I guess finding a publicly traded company with little debt and years of profits is hard in a capital-intensive industry that doesn't really exist yet  :-\ However, it would be nice to find some way to make a small bet on this field.

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There is a quite interesting thread about this here: https://news.ycombinator.com/item?id=17789456

 

I tried to do some research (*random googling) on investing in "Gravity storage" without much success. I guess finding a publicly traded company with little debt and years of profits is hard in a capital-intensive industry that doesn't really exist yet  :-\ However, it would be nice to find some way to make a small bet on this field.

 

Thanks for posting the URL.

 

Not aware of any way to invest in the idea, but it's a cool technology that, if it delivers, could be really useful to have on the grid.

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Guest cherzeca

simple idea, wonder what parts of it are patented (not the gravity part I would think  ;) ).  claims preliminary interest for $7B of orders.  shouldn't be too hard to ramp up since materials and process seems relatively easy to roll out.  does anyone know if there are any of these towers in operation, and what experience has been?

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Bill Gates just (one hour ago) hosted an "Ask Me Anything" session, where he wrote this:

 

 

"(...)even in the case of electricity you have to cover the times when the wind doesn't blow and the sun doesn't shine and electrcitiy storage (batteries) are not likely to be cheap enough to cover this. My friend Vaclav Smil gives the example of Tokyo's electricity needs when the renewable sources are not available for a number of days."

 

I haven't read these links myself yet, but definitely something I will digg into:

 

https://www.gatesnotes.com/Books/Energy-and-Civilization

https://www.sciencemag.org/news/2018/03/meet-vaclav-smil-man-who-has-quietly-shaped-how-world-thinks-about-energy

 

On a more general level, are there some historical lessons to be learned (and avoided) if one were to find a way to invest in "gravity storage"? (Or electrical energy storage in general). What I mean is: There are plenty of ways to be right (the world needs to store electrical energy) and not make money. Price vs value of course, but there also seems like plenty of ways to end up with the Betamax or HD-DVD of energy storage here. The Buffett quote about airlines ("(...)farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.") also comes to mind.

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Barely mentioned in that discussion is the almost negligible environmental impact this form of energy storage has relative to batteries/pumped hydro. This alone should be appealing since it's important to factor in the lifetime cost of an energy source not simply the price per kWh. Interesting technology, will be cool if they can achieve the costs they claim.

 

I think there are a few other companies out there exploring energy storage solutions that involve gravity storage using rail cars. Use electricity to take them uphill then lower them to generate electricity, creating a sort of loop of rail cars at various elevations depending on energy demand. Simpler technology but it too likely utilizes a lot more land area than this crane system would.

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Guest cherzeca

cost is said to be $.03/kWh. 

 

what does this mean? costs $7MM to build tower.  is some amortization figured into this cost? what is the delta between energy put in to raise blocks and energy coming out when blocks come down. is this delta the $.03/kWh?

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cost is said to be $.03/kWh. 

 

what does this mean? costs $7MM to build tower.  is some amortization figured into this cost? what is the delta between energy put in to raise blocks and energy coming out when blocks come down. is this delta the $.03/kWh?

 

Good question. I assume it's the all-in cost, kind of like how they give a cent/kWh cost for solar even though sunlight's free and many panels require little maintenance, so most of the cost is the upfront capex and labor to build it/install it.

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Guest cherzeca

if amortization and maintenance are included, then this is just a guess, right, since tower's useful life and maintenance costs are currently just a guess.  don't know if people will want to spend $7MM if so.  I am thinking this would be a great IP company where the IP is licensed to small scale utilities etc, but at some point early in the process the operational chasm needs to be leapt to establish value of the IP

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cost is said to be $.03/kWh. 

 

what does this mean? costs $7MM to build tower.  is some amortization figured into this cost? what is the delta between energy put in to raise blocks and energy coming out when blocks come down. is this delta the $.03/kWh?

 

From looking at other similar energy storage solutions like pumped hydro the efficiency usually runs in the 70-80% range. So in essence they're taking surplus power generated by solar/wind when it is "free" from the grid and are able to return somewhere in the range of 75% of that back to the grid. I'd expect this to have a similar efficiency, maybe somewhat higher say 85%.

 

The $.03/kWh figure I believe is their all in break even price for the crane/blocks. Assuming their costs are accounted for accurately, it's what they expect to be able to sell electricity back to the grid at and not lose money. So to the .03/kWh they add $.02/kWh which is what they're claiming the all in price of solar is and the total system, solar panels and the crane/block contraption, can reliably sell power to the grid at $.05/kWh at any time.

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"From looking at other similar energy storage solutions like pumped hydro the efficiency usually runs in the 70-80% range. So in essence they're taking surplus power generated by solar/wind when it is "free" from the grid and are able to return somewhere in the range of 75% of that back to the grid. I'd expect this to have a similar efficiency, maybe somewhat higher say 85%."

 

On pumped hydro, 70-80% efficiency is impossible IMO.

 

You have energy that you want to store, you pump water up the hill with a pump and electric motor. Right there you lose around 25% (motor loss of around 5% and pump loss of around 20%).

 

Then you take that water back down in a pipe to generate electricity with a generator. So you have energy lost as it flows down the pipe or friction loss along with efficiency loss of the generator. This is probably another 30%.

 

So 0.75 x 0.70 = 52.5% efficiency.

 

On the other hand, this block lifting idea is much more efficient since you lose energy when you lift the block (motor loss + friction in pulleys/cables) and lose some again as you drop it back down (generator loss + friction in pulleys/cable).

 

This is probably 80% efficient unless I am missing something.

 

Cardboard

 

 

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If you watch the video and check the slide I posted, they claim 91% round-trip efficiency on this gravity system.

 

For pumped-hydro:

 

"The round-trip energy efficiency of [pumped-hydro storage] varies between 70%–80%, with some sources claiming up to 87%".

 

This exists and can be measured, so no need for fuzzy napkin math based on the average efficiency of very different motors and pumps.

 

https://en.wikipedia.org/wiki/Pumped-storage_hydroelectricity

 

https://web.archive.org/web/20180716054047/https://www.colorado.edu/engineering/energystorage/files/MSThesis_JGLevine_final.pdf

 

https://books.google.co.uk/books?hl=en&lr=&id=TPReBwAAQBAJ&oi=fnd&pg=PA25&dq=info:1fSw0yVikpMJ:scholar.google.com&ots=nOV5mvjb3R&sig=-mVET6C_qQosE11doraPLlwi0e0&redir_esc=y#v=onepage&q&f=false

 

https://www.economist.com/technology-quarterly/2012/03/03/packing-some-power?frsc=dg%7Ca

 

FLv3A9o.png

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Fuzzy napkin math heh?

 

"The roundtrip efficiency (electricity generated divided by the electricity used to pump water) of facilities with older designs may be lower than 60%, while a state-of-the-art PHES system may achieve over 80% efficiency."

 

"Many existing PHES stations may increase capacity by (15-20)% and efficiency by (5-10)%.

 

Must be some fuzzy new fluid mechanics theory and electric motor efficiency that may deliver unheard of efficiencies.  ::)

 

Cardboard

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Fuzzy napkin math heh?

 

"The roundtrip efficiency (electricity generated divided by the electricity used to pump water) of facilities with older designs may be lower than 60%, while a state-of-the-art PHES system may achieve over 80% efficiency."

 

"Many existing PHES stations may increase capacity by (15-20)% and efficiency by (5-10)%.

 

Must be some fuzzy new fluid mechanics theory and electric motor efficiency that may deliver unheard of efficiencies.  ::)

 

Cardboard

 

Yeah, and really old cars could get 5-10 MPG too, but it doesn't make it "impossible" for modern cars to get 30 MPG. We're talking about new technology and building more to clean up the grid for the future. You said: "70-80% efficiency is impossible IMO", so looks like you were wrong.

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60% or less + maybe 5 to 10% from your own article what does that give you? A solid 70-80%?

 

I will say it again, it is impossible. Maybe in a lab but, not in real life.

 

Then we have not even got into AC vs DC, need to transform power up or down, power line losses, breakdown/maintenance.

 

It is like these numbers being published by this Bill Gross guy, are they correct? Do they include all costs and a reasonable safety factor?

 

If you are a promotter or CEO or salesman will you publish best case or base case? What about rounding?

 

I am not saying this is all crap. I mentioned that the crane idea is much more efficient. It is actually very clever.

 

However, I am saying that they are likely embellished numbers by people selling their ideas or not different at all from all corporate presentations. Greed is good you know?

 

 

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I don't disagree with the point that older systems are likely to be less efficient and that there tends to be a lot of promotional cherry picking by founders/early adopters of these technologies. However, I think the debate on the specific efficiency in terms of power in vs. power returned to the grid somewhat misses the point. These systems, by design, work when the grid is producing excess electricity. Any electricity they're able to capture, store, and return to the grid in a manner that makes economic sense for the investors in the project is a positive. Whether they're 50% efficient, 95% efficient, or 20% efficient is less important than if they can reliably work and return capital to those who invested in them since the energy they're capturing is excess. For utility scale solar in particular, the recurring maintenance costs are negligible so any storage designed to capture excess energy it produces is a positive.

 

This is the company (perhaps there are others) working on developing rail based systems where a heavy concrete/aggregate load is carried uphill and stored there then brought downhill when electricity is needed. They claim around 80% efficiency.

 

https://www.aresnorthamerica.com/grid-scale-energy-storage

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Indeed, in the end all that matters is the price. The efficiency is one of the factors that goes into the costs, but a 10% efficient system that could capture energy at 2c/kwh round-trip is better than a 90% efficient system that captures it at 3c/kwh round-trip.

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A 10% efficient storage system will mean that 90% of what was produced has been lost. It means that you will need 9 times more renewable generating capacity to end up with the same output as you would with the 90% efficient system. That is a lot of additional c/kWh!!!

 

I get the point but, your example is out of whack.

 

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Indeed, in the end all that matters is the price. The efficiency is one of the factors that goes into the costs, but a 10% efficient system that could capture energy at 2c/kwh round-trip is better than a 90% efficient system that captures it at 3c/kwh round-trip.

A 10% efficient system that captures energy at 2c/kwh needs an input of energy with a <0.2c/kWh cost to work at the given value.

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  • 11 months later...

There are a number of far cheaper solutions, that are already available. https://www.hydrostor.ca/toronto-a-caes-facility/

 

Hydrostor essentially pumps air into a bladder 180ft below the surface of Lake Ontario. Ancillary technical benefits are off-the-shelf technology, heating and cooling from air expansion and cooling, and storage primarily as a liquid versus a gas. Basically 4 businesses, 1) spread on the KwH, 2) centralized industrial HVAC (data centers and office towers), 3) centralized warehouse refrigeration, and 4) design/build/consulting.

 

Hydrostor is typical of today's solutions; the only way you get their stock is either via a P3 partnership, or working for them.

Point being that if your approach is to only buy/sell the shares of a publicly listed company, you are fishing in the wrong pool.

Annual dividend ROE's are typically in the 15-26% range.

 

SD

 

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