The Renault-Nissan Alliance is planning to build a 100MW energy storage plant big enough to power 120,000 homes, which can replace a gas or coal-fired power station, sources told Reuters. It is widely seen as a pilot project that could lead to a major new business opportunity for OEMs.

Following trialling using electric vehicle (EV) batteries for home energy storage, this is a further sign the Alliance is planning to establish an energy storage division. The energy storage plant intentions highlight the Alliance’s growing confidence in the powerful position OEMs will find themselves in following the upcoming electric vehicle revolution.

Energy storage plants – essentially gigantic batteries – help save costs and emissions by charging up in times of cheap excess electricity supply. This is when, for example, wind farms generate too much electricity than needed on a windy day. The storage plants then sell the electricity back to the grid at peak times, when the high demand means the electricity commands a higher price.

This helps solve two key problems holding back efficiency in the energy sector: the need to smooth out the variable energy generated from wind and solar, and the desire to remove the need for gas- or coal-fired power plants to be idling on standby for most of the day, and switched on ad hoc in order to meet times of peak electricity demand.

The Renault-Nissan project both aims to cultivate this demand for a second-hand battery market, as well as encouraging the development of energy infrastructure (which can have 10-year lead times) that will synergise with booming EV sales over the next decade. If successful, the expected high demand for these second hand EV batteries would help drive down the costs of electric vehicles (and raise residual values), and also provide an attractive mechanism for recycling the power cells which contain environment-harming heavy metals.

Read more: Autovista Group