Affordable Batteries Revolutionize Truck Charging with Minimal Grid Impact
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Chapter 1: The Decline in Battery Costs
The cost of batteries has seen a dramatic decrease, surpassing the expectations of even the most optimistic analysts. We are witnessing commercial prices for battery capacity that were not anticipated until 2030 or beyond.
In 2022, the price for a kilowatt-hour of battery capacity was $159. By 2023, this dropped to $136, and at the start of 2024, the price fell to $95 per kWh. Recently, CATL announced plans to release batteries at just $56 per kWh by the end of 2024. Projections suggest that prices could drop to around $30 per kWh by 2030, which appears to be a conservative estimate.
A significant portion of research on megawatt-scale charging for trucks has concentrated on maximum power needs. For example, a 2022 white paper by RMI, National Grid, CalStart, Stable, and Geotab analyzed trucking data from New York and Massachusetts. However, this analysis primarily focused on peak power demands at charging stations without considering battery buffering capabilities. Given the varying traffic loads, this approach overlooked average power needs, emphasizing only maximum demand. The study found that over 25% of the 71 sites examined required 5 MW of grid power, sufficient to charge five Tesla Semis or equivalent Class 8 trucks simultaneously.
This presents a challenge, as obtaining multi-megawatt grid connections can take years, while sub-megawatt connections are typically established within months, according to studies from the Department of Energy. Such substantial power requirements necessitate significant infrastructure investments. However, what if the cost of battery buffers were significantly lower?
Section 1.1: Understanding Transformers
Let's take a moment to discuss transformers, which are often a limiting factor in power distribution. Transformers are made from laminated silicon steel or amorphous steel, copper or aluminum wiring, various insulating materials like paper and pressboard, and components such as radiators and fans. You encounter transformers daily, often overlooking them. The cylindrical containers mounted on power poles and the metal boxes next to commercial buildings are all transformers.
Transformers are rated in kilovolt-amperes (kVa), and you can convert this to kilowatt power using a simple calculation—multiplying by 0.8, as noted in a 2011 paper from Consulting-Specifying Engineer. The ratio remains consistent. For instance, a small commercial building of about 460 square meters (5,000 square feet) may utilize a 112.5 kVa transformer, capable of delivering around 90 kW of power. Larger transformers, rated at 450 kVa, can deliver approximately 360 kW. These can be configured modularly to manage power from larger distribution lines.
Current truck stops and similar facilities do not typically have 6,250 kVa transformers readily available. However, they often have somewhat oversized transformers, especially newer installations, to accommodate the growing demand for electric vehicles, which includes powering pumps and refrigeration systems.
Section 1.2: The Role of Battery Buffers
Increasing the power capacity of existing infrastructure is more challenging than delivering additional energy through existing wires. Regions with rigid energy generation systems, such as Ontario's nuclear facilities, would greatly benefit from behind-the-meter battery systems that draw electricity continuously. In fact, the most favorable electricity rates in Quebec are offered to sites that maintain consistent power usage throughout the year.
In the U.S., distribution grid utilization is relatively low, ranging from 40% to 50%, as reported by the EIA. This implies that utilities design infrastructure to support double the energy demand observed to accommodate peak periods. Cheap batteries can leverage this underutilization, potentially increasing grid utilization by 20%, thereby enhancing utility revenues without additional maintenance costs.
Let's crunch some numbers. Consider a truck stop with transformer capacities of 112.5 kVa, 450 kVa, and 900 kVa. If these transformers operated at peak capacity for 24 hours, what would be the required battery size? How much would such a battery cost at the battery prices from 2022, 2025, and 2030? While there are additional costs associated with battery systems, the battery itself constitutes the majority of the expense. Therefore, we can estimate costs based on battery prices and add roughly 10% for installation.
How many trucks could be charged in a day, assuming an average truck requires 800 kWh to recharge its 1.1 MW battery for an additional 730 kilometers (450 miles) of travel?
Chapter 2: The Financial Viability of Battery Solutions
In 2022, the idea of battery buffering may have seemed impractical due to high costs. However, with anticipated price drops from CATL by 2025, investing around a million dollars in batteries at key truck stops could facilitate megawatt charging access within a year, while also starting the process of grid upgrades for additional power.
By 2030, smaller locations that see only a handful of electric trucks daily—like smaller distribution centers—might find it feasible to invest $300,000 in a battery system to support rapid electrified trucking. This option is significantly cheaper than hydrogen compression and pumping systems, with the added benefit that battery maintenance is minimal, unlike the frequent breakdowns seen in hydrogen refueling stations.
Moreover, the affordability of batteries opens up new possibilities for electricity price arbitrage. For instance, Ontario's overnight rates of $0.02 per kWh make it economically advantageous to shift demand to lower-cost periods. With peak rates at $0.21 per kWh, the price differential becomes substantial. Assuming a large 17 MWh battery charges 33% of its capacity during off-peak periods and consumes that amount during peak times, this could yield savings worth $400,000 annually. Given a battery cost of $570,000, this translates to a return on investment of just 17 months.
Charging truckers at rates above industrial electricity rates can further enhance profitability. For example, in California, DC fast charging rates can reach $0.45 per kWh. The average charging cost across the U.S. ranges from $0.08 to $0.27 per kWh, typically around $0.15 per kWh, as per the Department of Energy. Megawatt-scale charging is likely to be priced at the higher end of this range, as time is money for truckers. Super off-peak rates in California fall between $0.20 and $0.25, creating a lucrative opportunity when charging truckers at $0.45.
Integrating solar panels on truck stop rooftops and canopies enhances the value proposition. Even when future demand forecasts and grid upgrades are considered, the likelihood of maintaining and potentially expanding battery systems for additional energy buffering during peak hours is promising, ultimately leading to further savings on power upgrades.
Given these price dynamics, establishing sufficient charging infrastructure at numerous distribution centers is increasingly feasible compared to just a few years ago. David Cebon, founder of the Centre for Sustainable Road Freight at Cambridge, has repeatedly highlighted this challenge, advocating for electrified road systems and dynamic charging solutions. The high costs and delays associated with delivering substantial power to smaller distribution centers are considerable; however, supplying energy is becoming less problematic.
As battery prices continue to drop, the potential for charging trucks and fleets becomes much more practical. This shift addresses the peak power challenge by transforming it into a more manageable energy supply requirement over 24 hours, and the resulting cost savings from electricity price arbitrage make it financially viable. In essence, the case for batteries in the 2020s is as compelling as that for bandwidth in 1999—a bet that is unlikely to lose.