The announcement that Tesla Motors is releasing its patents has brought a buzz to the electric vehicle community, with many people wondering why they would do such a thing and how it will impact the EV market. While I’m interested in EVs, I think that angle has been covered well enough by others. I’d like to look at something less obvious but equally important: how Tesla’s decision will affect the renewable energy industry.
Image courtesy of Tesla Motors
By allowing other companies to use its patented technology, Tesla is essentially creating an open standard, much like IBM did with its personal computer and JVC did with VHS recording technology. Their competitors chose to stick with proprietary formats. Apple, while thriving in other areas, still has just a tiny percentage of the personal computer market. If you’re over forty you know what happened to Sony's Betamax. If you’re under forty you’ve probably never heard of Betamax. Enough said.
Tesla made a wise decision. By making its technology available to anyone, it creates a larger market for EVs, batteries, and charging technology. Tesla would rather have a small percentage of a huge market than a near-monopoly on a niche market.
Tesla as a Battery Company
Tesla has its eye on other markets as well. If car manufacturers adopt Tesla’s battery and charging technology, its growing nationwide array of chargers will get more use and its batteries will become the standard. While they may not make as much money from selling their own cars, they’ll make a killing on the battery and charger market, where they already have a head start.
Off-Peak EV Charging in Minnesota
Many people are rightfully concerned with the impact that EVs will have on the grid. If everyone switches to electric cars, we’ll need a whole lot more electricity, which means more power plants and a higher capacity grid. Minnesota has taken a proactive approach by encouraging off-peak charging. The grid is designed to handle peak load, which normally occurs during the afternoon. Overnight, the grid and the power plants have more than enough capacity, and that’s typically when someone would be charging their EV anyway. Some Minnesota utilities offer an off-peak EV recharging rate that’s equivalent to $0.57 per gallon of gasoline. And if you need to charge it during the day, there are solar charging options available too.
EVs, Batteries, and Grid-Level Storage
With off-peak charging, an increase in EVs should not have a negative impact on the grid. In fact, it could have a positive impact. If I charge my EV overnight and drive a few miles to work, my car sits in a parking lot with a nearly full battery bank. Imagine a parking lot full of EVs, each connected to the grid (I know, that’s a lot of infrastructure) and each serving as a source of energy during peak hours. All those EVs are now a part of a distributed storage market like a peer-to-peer energy network - the “Bit Torrent” of energy storage, except that you’d get paid for the energy that your car provides. Someone would need to develop a metering system to handle payments.
In addition to the physical infrastructure that’s required to implement that, cars would also need intelligent charge management software that assures that your battery won’t be fully depleted during the day. The owner could set a maximum depth-of-discharge and the software would stop selling energy to the grid when that level is reached.
Grid-Level Storage Without EVs
The intermittent nature of renewable energy makes efficient and inexpensive storage a necessity, and while parking lots full of EVs could help, their contribution will be small. The same battery and charging technology that’s used in EVs can also be used with battery-based grid storage. More batteries and chargers will decrease the cost and the open source concept will lead to better technology. I don’t think Tesla’s $5B Gigafactory is strictly about EV batteries; the company is looking at the grid-level storage market too.
Those Who Learn From History...
IBM made personal computers ubiquitous, even if everyone’s computer wasn’t made by IBM itself. JVC put VHS recording technology in most homes, making Sony’s proprietary Betamax a mere footnote in history. Tesla’s decision will likely do the same for EVs, and as a nice side-effect, make the case for renewables even stronger. The genius for whom the company was named, Nikola Tesla, had no interest in wealth; he just wanted to make the world a better place through advanced technology. I think he would approve of Tesla Motors’ decision to open its technology to the world, even if the motivation was more business than altruism.