Electric cars to give solar industry a lift
The sun could join the ranks of top commodities such as oil and gas in less than 10 years as it changes the landscape of energy, even becoming the lone source of power generation in some places.
When oil was first discovered, no one predicted it would evolve into a major economic driver moving markets in a way that very few other natural resources can. From engineers to geologists down the line to rope technicians, university programmes, shippers and construction, the hydrocarbon market has created a well developed ecosystem worth trillions of dollars annually.
Just as with oil, the solar industry is maturing, growing its own supply chain from manufacturing panels and other parts such as inverters. Specialised developers and contractors are increasing as projects multiply, also spurring the rise of new departments in law firms and consultancies catering specifically to this sector.
The global solar industry is expected to nearly double this year to US$75.2 billion from $39.6bn five years ago, according to research firm MarketsandMarkets.
So while the onset of an emerging electric vehicle (EV) market may not, at first glance, seem a fit with the solar industry, it very well could be the make or break of an emerging supply chain in the form of energy storage.
The EV industry, or rather the batteries that are powering these eco-friendly alternatives to gas guzzlers, is expanding. Dubai announced last month that it would increase its target of all cars purchased to be electric or hybrid vehicles to 10 per cent by 2030. The emirate has added 100 electric car charging stations with many more scheduled, and government entities have already started using this alternative in their fleet. The power utility, Dubai Electricity and Water Authority, was the first to use EVs – 13 – over the past year.
These cars come equipped with lithium ion batteries, the same technology to be produced at the electric car maker Tesla’s so-called Gigafactory being developed in the United States. Tesla says it plans to drive down the per kilowatt hour (kWh) cost of its battery packs by more than 30 per cent.
And, while these batteries can store energy to power a car from Abu Dhabi up the road to Dubai, they can also be used in power plants or in domestic homes to capture and store sunlight for conversion into energy during the night.
The main obstacle that has plagued the solar industry is the high costs of energy storage, but with new technologies such as Tesla’s batteries moving to the forefront of innovation – the reality of having communities powered solely via the sun could become a reality sooner rather than later.
Sami Khoreibi, the chief executive of Abu Dhabi’s Enviromena Power Systems, says such batteries are helping to shift the energy paradigm in a big way.
Mr Khoreibi points to parallels between falling costs in the solar photovoltaic (PV) market and lithium ion batteries. The price of solar PV panels have dropped around 75 per cent since 2008, according to the International Renewable Energy Agency, based in Abu Dhabi. “The cost reductions [in solar PV] have predominantly been completely a reflection of an increase in scale, and the same concept applies to lithium ion batteries,” he says.