Tesla may drive regional clean energy growth

The US electric car maker's battery technology could answer the problem of cost-efficient energy storage for the UAE and wider Middle East.

Leipzig // The US electric car maker Tesla's battery technology could hold the key to the growth of the region's clean energy sector.

Renewable energy faces limitations with a lack of cost efficient energy storage capabilities at present but Tesla Motors is investing about US$5 bn in its lithium-ion batteries for their widespread use in electric vehicles (EVs) and solar power plants via its partner, SolarCity.

And there is a demand for the Tesla products in the UAE and wider regional market, according to the company’s chief technology officer, Jeffrey Brian Straubel.

Speaking at the International Transport Forum in Leipzig, Germany on Thursday, he said Tesla was seeing an interest for energy storage products in the region as a result of the movements toward sources such as solar power.

“I definitely think the potential for renewable energy in the region is extremely high and we’ve seen a demand for storage products there, but it’s tough for us - we’re still a small company,” he said.

Tesla’s business model is to reach “critical mass” in every market that it currently operates before expanding to new areas. “We’re trying to take this one step at a time,” said Mr Straubel adding that there had to be enough to justify the investments needed to support the cars while maintaining a level of quality.

This month, Tesla recorded a first quarter loss in line with expectations. The chief executive Elon Musk said vehicle production could hit 1 million units by 2020.

Steve Griffiths, the vice president of research at Abu Dhabi's Masdar Institute, said that using Tesla's batteries for residential solar does not yet make sense economically in the UAE. "We still have very low electricity prices for consumers even though a great effort is being made in subsidy reform. Policies directly aimed at distributed storage are certainly not in place," he said.

“I’m more optimistic that transmission and distribution storage functions such as grid storage may find a place in the UAE sooner rather than later,” Mr Griffiths said, adding that Masdar Institute was exploring some other technologies that were better suited for these applications.

But the Tesla dream is still alive.

“Energy storage is the holy grail of renewable energy,” said Reda El Chaar, the chairman of Dubai’s Access Power. “It’s great to be able to generate solar electricity at 3 US cents per kilowatt hour, but if you can’t store it and then dispatch it at night when most needed, then your market share will always be restricted.”

Mr El Chaar said the latest battery storage technology unveiled by Tesla would hopefully lead the way to a commercially viable solution which will revolutionise the renewable energy market.

“Today the industry is entirely dependent on figuring out a way to store the energy produced for when it’s needed most,” he said.

“The person who unlocks this enigma will be the next Bill Gates.”

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