This is the Cato Daily Podcast for Wednesday, May 6, 2015.

I'm Caleb Brown.

Promoters of Elon Musk's new battery technology say it signals the beginning of the end for fossil fuel energy.

Peter Van Doren, editor of Regulation Magazine, argues that we're a long way from that

outcome and our electricity grid isn't structured to promote all of the benefits battery technology might deliver.

Elon Musk has announced a new battery system that would allow vast quantities of energy to be stored and he's pitching it as something that would allow businesses and individuals alike to store energy and make use

of it at some later time at a lower cost than it has been in that market.

Many press accounts have argued that this breakthrough will increase the adoption of solar power, particularly on rooftops in the United States.

I want to throw a little bit of cold water on those arguments in today's discussion.

What is the number one problem with these batteries being used to store up the cheap energy

or store up the cheap energy and use it when the energy is more expensive.

Because that seems to be the ideal outcome, at least the one that they're trying to

tout.

If you look at actual locational marginal prices for generation on the grid, any place

in the United States, you would see the highest prices are during the summer afternoon, and the lowest

prices would be winter at night.

So solar already has good attributes in the following sense.

It does deliver power when prices are highest.

That would be in the summer in the afternoon.

In contrast, wind, another renewable technology that many environmentalists like, is horrible in that regard because wind is most available when it is least needed, i.e. in the winter at night.

High winds that we all went through last winter

when it's really cold, you get a lot from wind.

...