Let The Foreigners Pay For The New Battery Technology

Apparently Britain will fall behind unless we subsidise the installation of lots of batteries. To which the correct response is let’s fall behind and let the foreigners carry the costs.

The UK risks being left behind in Europe’s home battery boom because of a controversial tax hike on solar-battery systems, according to a report.

The worry of falling behind, well, what worry? Because we’re not talking about manufacturing the things – no one does that wort of work here anyway. We’re talking about installation. And there’s no competitive or comparative advantage to be had by having an installation industry. By definition that’s something we’re not going to be trading internationally, isn’t it?

The analysts expect that by 2024, annual home battery installations across Europe could total more than 500MW, the equivalent of building a new gas-fired power plant every year.

Great, we all look forward to it, of course.

However, the UK is likely to lag behind its European neighbours due to its “unfavourable” policy frameworks and a VAT increase for solar-battery packs this October. Rory McCarthy, a senior researcher at Wood Mackenzie, said Germany’s lead had made Europe the largest residential storage market globally.

“Off the back of Germany’s success, residential storage is beginning to proliferate into other European countries, particularly where market structures, prevailing power prices and disappearing feed-in tariffs create a favourable early stage deployment landscape,” he said. “The economics of storage have been challenging in the past, however we are in the midst of an economic tipping point.”

That last there being the point. Currently battery installation is uneconomic. It requires subsidy to become so. Given the power of capitalism and markets of course the subsidy will kick start innovation and we’ll get ever cheaper batteries and installation.

The correct thing for Britain to do? Wait until it’s economic without subsidy then install. We lose absolutely nothing by doing so and gain not having to subsidise. This policy therefore makes us richer and we like being richer.

Let Johnny Foreigner pay the development costs and we’ll do it when it’s nice and cheap. Or, to put it nicely and politely, the battery installers looking for a subsidy can bugger off.

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MattDodgy GeezerBarksintheCountryJames BayleyQuentin Vole Recent comment authors
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Matt Ryan
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Matt Ryan

Last time I looked, the big hand numbers were:

Home storage (battery): £10k
Savings per year: £1.5k
Break even period: 6-7 years
Lifetime of batteries: 5 years

Only way it makes economic sense is to include some feelz for saving gaia or not boiling flipper.

ian parkinson
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ian parkinson

Even better with interconnectors we get the supply flexibility of batteries but someone else pays the cost.

Dodgy Geezer
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Dodgy Geezer

Wait until it’s economic without subsidy then install…. Up to a point, Lord Copper…. I am sure that, as a specialist in the acquisition and trading in specialist metals, you are aware of the general marketplace background in these exotic materials. (well, exotic compared to carbon and iron…). There is extensive research going on in this area. Because if someone makes a breakthrough in electricity storage capacity, they will have a patent worth ‘quite a lot of money’. Equally, they will be able to screw all countries which take note of IP legislation for a good wack. Or perhaps both… Read more »

James Bayley
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James Bayley

I am a physicist with some expertise in this area and hope you find this comment informative. The energy business is complicated because it seeks to maximise the use of capital equipment (power stations) to deliver a varying load. This means that at times of low demand expensive capital assets have to standing idle. Someone has to pay for this and it is either the electricity user or taxpayer. There are long-term contracts in place to pay for all these power stations. The amount of waste is measured in $billions. Storage disrupts this model because you will need fewer power… Read more »

Dodgy Geezer
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Dodgy Geezer

I have worked on an energy trading floor in the past, and, while regulation is undoubtedly the biggest challenge, it should be noted that a major driving factor behind regulation is to ensure that any system continues to provide profit for those involved in it. Northcote Parkinson is a useful authority here…

Matt
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Matt

Creating the technology in batteries is done wherever it is done. The batteries are then made in China and shipped to wherever there is demand. The UK taxpayer subsidising the purchase and installation of batteries will not change who does the research, where they do it, or where the factory that makes the batteries is located.

Oh, and for tha Gaia-huggers: how much Chinese coal-fired electricity went into making your oh-so-green batteries, and how much heavy bunker oil and diesel went into mining the lithium, shipping it from the mine to the factory and then from the factory to you?

Dodgy Geezer
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Dodgy Geezer

But it might change who gets the royalty earnings?

Matt
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Matt

Nope. Royalty earnings will be earned by whoever develops the technology, and that will not be affected by where the customers are.

Dodgy Geezer
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Dodgy Geezer

Er…I’m saying that IF we stop developing the technology, THEN we will not be able to charge royalties if there is a breakthrough.

Of course, if there is going to be no breakthrough we would be right to stop wasting money on research…

Matt
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Matt

But the article isn’t talking about development of the technology, it’s talking about subsidies for installation. The location of technology development and ownership of related IP will not be determined by where there are subsidies available to purchase the end product any more than the factory will be determined by the location of the mine.

Rhoda Klapp
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Rhoda Klapp

My oft-mentioned but never adopted catch-all political strategy is ‘ Find out where it is done best, and do it like that.’

Boganboy
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Boganboy

By burning nice cheap dirty coal, Australia used to have some of the cheapest power in the world. Now with expensive gas and even more expensive renewables, it’s some of the most expensive. We’re working hard to make it more expensive still.

There’s no reason for the UK to copy our bad example. Let the foreigners experiment. If they make a breakthrough, that’s the time to copy. But since it’s all storage of energy in chemical form, I don’t have any great hopes.

Q46
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Q46

Big breakthrough in battery technology? It’s physics Cap’n, and ye cannae change the laws of physics.

After more than a hundred years, we are still waiting for that big breakthrough that has puzzled experts… how to get a quart into a pint pot.

Nature solved the problem of solar batteries about 300 million years ago, coal.

The issue with the renewables fantasy is it is governed by physics not economics or good intentions.

Quentin Vole
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Quentin Vole

Yes, the eco-morons somehow expect electro-chemical batteries should (must!) follow something similar to Moore’s ‘Law’. If that were the case, 50 years of development would have given us something the size of a sugar cube that could store enough energy to power a city for a week. The fact we haven’t quite got there yet may be telling us something (for those prepared to listen).

Jonathan Harston
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Jonathan Harston

Foreigners can only do installations in foreign where they physically are. I was reminded of this today, while at work doing laptop upgrades, transfering users’ data and installing updated applications, while listening to the radio where it seems that BA’s problems are mainly due to offshoring their IT support to India. HTF is a techie in Delhi able to swap a hard drive in Heathrow and swap over a patch lead in Gatwick and tether a laptop to somebody’s phone in Luton?

James Bayley
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James Bayley

“Currently battery installation is uneconomic. It requires subsidy to become so. Given the power of capitalism and markets of course the subsidy will kick start innovation and we’ll get ever cheaper batteries and installation.”

IMHO the battery storage market is well developed and economic in many scenarios. There is no subsidy required to kick-start innovation because it has happened and shareholders are funding development.

Tim’s point is that we can’t export our installations skills is a good one. This is just a request for corporate welfare.

BarksintheCountry
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BarksintheCountry

Not only “gain by not having to subsidize” but perpetual gain as subsidies take on a life of their own and are difficult or impossible to kill.