Currently, the world’s combined power usage averages roughly 18 Terawatts (18,000 Gigawatts) and continues to grow. The ability of mankind to sustain this enormous power consumption, which is needed to drive our way of life, is entirely due to the burning of fossil fuels – coal, oil, and natural gas. From an engineering standpoint, burning fossil fuels is the most convenient way to produce power. Fossil fuels are cheap, extremely energy dense, easy to transport, and easy to store. However, after centuries of burning fossil fuels, mankind has come to the realization that the days of burning fossil fuels are numbered. One reason is that burning fossil fuels produces CO2, which has been linked to a rise in global temperatures, and ultimately will cause dangerous changes to the global climate. Also, burning fossil fuels causes other unintended products such as nitrogen oxides, sulfur oxides, and other hydrocarbons, which cause damage to human and animal health, property, and vegetation. And finally, as Americans discovered in the 1970’s with the peak in domestic oil production, there is a finite amount of fossil fuels on earth, and mankind will inevitably run out. Note that significant disruption to our way of life will occur far before we run out. As population and energy consumption continues to grow, energy production must also grow in order to prevent global catastrophe. However, energy production will begin to decline at the time of peak production, which occurs approximately when we have used up half of the world’s supply of fossil fuels.
Now the good news. Even though we consume 18 Terawatts of power, there exists about 80 Terawatts of extractable energy from the wind, and 100,000 Terawatts of sunlight hits the earth. These energy sources are renewable – they will never run out. So it is entirely conceivable that extracting a small fraction of energy from the sun and wind (combined with geothermal, hydroelectric, and other sources), will completely free us from fossil fuels.
So, is it the cost of energy conversion from these renewable energy sources that has prevented this shift from occurring? No longer. Solar energy is now just as cheap as coal and oil (far cheaper actually, especially if you count the societal costs of burning fossil fuels). The problem is the intermittency of these sources. The sun does not shine at night. The wind dies down occasionally. And clouds can obscure the sun.
The only way to deal with this intermittency is to collect the energy when it is available. Store it. And deliver it when it is needed. This is precisely why batteries are so critical to renewable energy. When the sun is shining and the wind is blowing, a portion of the energy needs to be used to fill the batteries so that the energy can be extracted later when the wind or sun are not producing energy. This type of load shifting requires an enormous amount of storage and thus enormous banks of batteries. This is where the cost of energy storage becomes important.