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Clean Energy Revolution Is Ahead of Schedule

Clean Energy Revolution Is Ahead of Schedule Bloomberg View


The most important piece of news on the energy front isn't the plunge in oil prices, but the progress that is being made in battery technology. A new study in Nature Climate Change, by Bjorn Nykvist and Mans Nilsson of the Stockholm Environment Institute, shows that electric vehicle batteries have been getting cheaper much faster than expected. From 2007 to 2011, average battery costs for battery-powered electric vehicles fell by about 14 percent a year. For the leading electric vehicle makers, Tesla and Nissan, costs fell by 8 percent a year. This astounding decline puts battery costs right around the level that the International Energy Agency predicted they would reach in 2020. We are six years ahead of the curve. It's a bit hard to read, but here is the graph from the paper:

battery efficiencyThis puts the electric vehicle industry at a very interesting inflection point. Back in 2011, McKinsey & Co. made a chart showing which kind of vehicle would be the most economical at various prices for gasoline and batteries:

competitiveLooking at this graph, we can see the incredible progress made just since 2011. Battery prices per kilowatt-hour have fallen from about $550 when the graph was made to about $450 now. For Tesla and Nissan, the gray rectangle (which represents current prices) is even farther to the left, to about the $300 range, where the economics really starts to change and battery-powered vehicles become feasible.

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This is very encouraging.

A big improvement in battery storage technology is the only thing missing from a true energy revolution now.

I thought so too. This seems like a big deal but it's getting underreported.

i think we have gotten to the point where we just expect technology to improve.  so this is expected. (although 6 years ahead of schedule is awesome!  the asymptote has begun...)

but this will be a huge deal when it starts to make a dent on the oil industry.

It has already started. Prices are down from their peak a few years ago.

It's odd that we collectively just expect technology to improve.

That must be why so few people are panicked about the oceans levels rising. 

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