Earlier quoted context omitted.
Doubtful that will be anytime soon and we'll most likely always need some sort of baseline power system that's not a from a renewable source.
That ignores the price curve of batteries. Right now, wholesale prices for lithium ion batteries are $150/kWh of capacity, which translates roughly to $0.15/kWh of stored energy. This is less than the price swing in spot prices for energy currently, so we'll start seeing this market expand drastically. And as electric car batteries lose capacity and need to be replaced, those batteries will still have plenty of stora…
2) a) The economics of battery energy storage are effectively a type of arbitrage in time, where you get some fraction of depth-of-discharge over the time in question.
2) b) In the most limiting case, lets assume that battery energy storage is only being used for daily cycling, that the maximum cycle depth is 75%, and that the investor expects to break even in 5 years. In order to be viable at that breakeven time, the price of energy needs to swing by over 0.22 USD/kW-hr over the day (RMS !). Considering that bulk energy is only 0.05 USD/kW-hr now (average!), that's a huge amount of volatility that needs to be exposed to the market.
I suspect that if customers are exposed to that volatility instead, that we will see enough voluntary adjustment on the demand side of the market to prevent 5x swings in price. With that much volatility available, consumers will demand the savings that aggressive time-of-use pricing offers in such a market.
On the other hand, the economics become much more favorable for energy storage in the frequency support market. For example, the market for primary frequency reserve (PFR) operates on 15 minute time scales and faster. Therefore, the time between battery cycles is two orders of magnitude smaller than the bulk storage market. Right now, there is enough PFR on the US grid (via coal-fired steam and gas-turbine power) that the price for PFR is very low. But as renewables continue to displace fossil fuels as a fraction of total power, the price for PFR will start to creep up.