The Role of Energy Storage in the EU’s Future Energy System
ITRE hearing, 21 April 2016, Brussels
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SAFE HARBOR
Certainstatementsinthispresenta�on,includingstatementsrela�ngtoModelSproduc�onin2014;
manufacturing in general and manufacturing and �ming of sta�onary storage products in par�cular;
Gigafactory �ming, site loca�on, plans and output expecta�ons; and statements regarding future
vehiclessuchasModelXandModel3are“forward-lookingstatements”thataresubjecttorisksand
uncertain�es. These forward-looking statements are based on management’s current expecta�ons,
and as a result of certain risks and uncertain�es, actual results may differ materially from those
projected.
Thefollowingimportantfactors,withoutlimita�on,couldcauseactualresultstodiffermateriallyfrom
thoseintheforward-lookingstatements:delaysintherampingofproduc�oncapacityanddeliveryof
Model S, including the ability of suppliers to supply parts at desired quality levels and quan��es;
marketacceptanceofelectricvehiclesingeneralandnewTeslavehiclemodels,specificallyModelX
andModel3;delaysinthemanufactureandlaunchofModelX;problemsordelaysindevelopingthe
sta�onarystorageproducts;problemsordelaysinbringingtheGigafactoryonlineandopera�ngitin
line with expecta�ons; Tesla’s ability to establish, maintain and strengthen the Tesla brand; Tesla’s
abilitytoexecuteonitsmanufacturingexpansionaswellastherisksanduncertain�esiden�fiedunder
thesec�oncap�oned“RiskFactors”inourquarterlyreportonForm10-QfiledwiththeSEConAugust
8,2014.Exceptasrequiredbylaw,Tesladisclaimsanyobliga�ontoupdateinforma�oncontainedin
theseforward-lookingstatements.
© Copyright 2015 Tesla Motors, Inc. All rights reserved.
TESLA’S MISSION
To accelerate the world’s transition to sustainable energy.
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TESLA’S RESIDENTAL STORAGE SOLUTION
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4
TESLA’S UTILITY-SCALE SOLUTION
13 MW / 52 MWh
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WHY ENERGY STORAGE?
Storage Makes the Grid More Efficient and Reliable
Future
Grid
Electric
generation
Energy
storage
Electric
generation
© Copyright 2015 Tesla Motors, Inc. All rights reserved.
Daily Electricity Demand
Demand for
electricity
Demand for
electricity
Megawatts (MW)
Existing
Grid
“Peak
demand”
1
4
7
10
13
16
19
22
24
Volumetric Energy Density [Wh/l]
BATTERY CELL ENERGY DENSITY TREND
600
580
500
Doubling in 10 years
400
300
200
350
330
280
Tesla Model S
Tesla Roadster
Ni/MH
Ni/Cd
1985
Tesla Model III
Li-Ion
General Motors EV1
1990
1995
2000
2005
2010
2015
© Copyright 2015 Tesla Motors, Inc. All rights reserved.
GLOBAL BATTERY CELL MARKET
500,000 Vehicles +
Energy Storage
Global cell supply growing,
but almost entirely in Asia
GWh/Year Production Overall LIB Market (GWh/Year)
Copyright©2015-2016/B3 Corporation
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STORAGE
1.
Focus
Security of supply
a)  Storage enables renewable energy, which is local and
therefore more secure energy
b)  Storage makes the grid more reliable and resilient
2.
Fully integrated internal energy market
a)  %=8;*0..7*+5.<./F,2.7=89.;*=287<@2=1;201=7.=@8;4
mechanisms
b)  Storage enables integrated market consumer participation
3.
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4.
Climate action
Storage enhances renewables participation and system
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5.
Research and innovation
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ADVANCES
EU ENERGY
UNION GOALS
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today
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1a) STORAGE WILL BE KEY TO RENEWABLES
AND ENERGY SECURITY1
A renewables-based system is more secure (local or
regional sources) and more resilient (more distributed)
Storage would provide grid stability in a 100%
renewably powered electrical system
For example, when Europe is at 100% renewables,
20-80 GW of power storage gives enough power for
the anticipated 50-130 GW grid renewables power
Needed storage for energy depends on amount of
biomass and level of European grid integration: At
10% (490 TWh) backup dispatchable renewables, ca. 2
days (27 TWh) short-term energy storage needed
Results for power of balancing technologies divided by the total
production power installed at different shares of European renewable
power
(1) Adopted from Electrochemical Energy Storage for Renewable Sources and Grid Balancing, Edited by Patrick T. Moseley and Jurgen Garche, ISBN: 978-0-444-62616-5, 2015, p. 61-86
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1b) STORAGE MAKES THE GRID MORE
RELIABLE AND RESILIENT
Storage enables reliable and stable renewables transition
o  Renewables need instant load following due to rapid intermittency
o  Battery storage has millisecond activation, and can supply excellent grid reliability in all stability markets
o  &12<<8>;,.8/<=*+252=B*7-;.52*+252=B8/=1.0;2-2<7..-.-@2=127,;.*<270<1*;.8/G>,=>*=270;.7.@*+5.<
Whenever possible, storage should be allowed to compete in all power and electrical energy mar kets
o  Current market structure largely designed for outdated centralized thermal plants
o  Storage can compete in all of capacity, energy, and operating reserves markets, and at all applicable
timescales and planning scales, plus in-front-of-meter (utility-side) and behind-the-meter (customer-side)
When able to compete in all relevant mar kets, the public value of storage on the grid is maximized
o  For example, a T&D operator may need a storage asset for 100 peak hours in a year of 8,760 hours
o  If the application is limited only to T&D, then for 8,660 hours/year the asset is underutilized
o  Instead, the T/DSO could rent it to merchant operators for wholesale market services provision
o  &12<27,;.*<.<89.;*=287*5.//.,=2?.7.<<*7-,8<=./F,2.7,B
o  In turn, the customer pays lower rates
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2a) STORAGE ENABLES NETWORK RELIABILITY
AND OPERATIONAL EFFICIENCY
Storage can improve reliability and stability for Networ k Owner s
o  %=8;*0.*7-8=1.;<8>;,.<8/G.A2+252=B269;8?.<,*9*,2=B./F,2.7,B*7-;.<252.7,.8/7.=@8;4<
o  Network operators can already do this with natural gas
o  However, on other forms of storage, network adoption may be hindered due to restrictions on ownership
To improve resiliency and networ k efFciency, storage would have to be correctly deFned and not restricted
o  Network to own a device even if it both offsets a T&D asset and participates in energy markets
o  Storage cannot be categorized simply "transmission/distribution" or "generation" because it is neither—this
inhibits its full utilization, as participation in the opposite markets would be disallowed
o  Instead, storage is can function as (1) transmission/distribution or (2) generation or (3) demand
o  Enables transition to active local networks that use low-carbon generation as best deal for consumers
Example mar ket mechanisms for networ k efFciency and innovation that already exist
o  Objective is to enable network companies to trial new technologies or ways of working, and to adopt
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o
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cheaper and more timely connections, or better manage issues on their networks
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2b) STORAGE CAN EMPOWER CONSUMERS
IN AN INTEGRATED MARKET
Regional storage will stabilize regional low-Voltage grids via storage in Self-supply
Storage enables self-supply of load and frequency management
o  Gives lower-cost grid relief from local peak-load shifting, shift of charging times, and improved power quality
o  Mechanisms would include peak-time charging incentives, e.g. time-of-day pricing, smart-meters and enabling
,866.;,2*5-.6*7-G.A2+252=B*;;*70.6.7=<*7-,5*;2/B*7-=.<=89=287</8;;85.8/*00;.0*=8;<
Storage enables self-supply of renewables smoothing
o  Gives T&D cost-deferrals from smooth & stable RE output. Islanding & microgrids could help
o  Helpful enabling mechanisms would include removal of taxes, grid fees, conversion costs, and
apportionments, whether currently charged separately or together with electricity price
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QUESTIONS / DISCUSSION
2MW/4MWh Powerpack
Lathrop, California
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