Elec­tri­fy­ing ev­ery­thing:

The Ukrainian Week - - CONTENTS -

Af­ter electric cars, what more will it take for bat­ter­ies to change the face of en­ergy?

But get­ting prices down this way has not just pro­duced cheaper, bet­ter bat­ter­ies. It has also re­sulted in sig­nif­i­cant over­ca­pac­ity. Cairn ERA es­ti­mates that last year the man­u­fac­tur­ing ca­pac­ity for lithium-ion bat­ter­ies ex­ceeded de­mand by about a third. Both it and BNEF say that the bat­tery man­u­fac­tur­ers are ei­ther los­ing money or mak­ing only wafer-thin prof­its on ev­ery electric-ve­hi­cle bat­tery they pro­duce. De­spite the seem­ing glut, though, they all have plans to ex­pand, in part to drive prices even lower. Mr. Jaffe ex­plains their think­ing as that of the “tra­di­tional Asian con­glom­er­ate model”: sac­ri­fic­ing mar­gins for mar­ket share. This may be a sound strat­egy given the ever-greater hopes for electric ve­hi­cles in the near fu­ture. But at the mo­ment it is also one that looks rather un­nerv­ing. Although Mr. Jaffe be­lieves that in­creased de­mand for both electric ve­hi­cles and sta­tion­ary stor­age will jus­tify the rush to ex­pand, he ac­cepts that, for now, “It feels like a gold rush—but there’s no gold.”

There are, though, other valu­able me­tals in the picture. Mak­ing more bat­ter­ies means ac­quir­ing more lithium, as well as var­i­ous other me­tals, in­clud­ing cobalt, for the cathodes. Th­ese make up about 60% of the cost of a cell. Be­ing as­sured of a con­stant sup­ply of them is as much a strate­gic con­sid­er­a­tion for bat­tery-mak­ers as mas­ter­ing electrochemistry. Since 2015 lithium prices have quadru­pled, says Si­mon Moores of Bench­mark Min­eral In­tel­li­gence, a con­sul­tancy. Cobalt’s price has more than dou­bled over the same pe­riod; prices of chem­i­cals con­tain­ing nickel, also used in cathodes, are ris­ing too.

New sup­plies of lithium should not be too hard to find; there are thought to be at least 210m tonnes of the stuff, says Mr. Moores, com­pared with cur­rent an­nual pro­duc­tion of 180,000 tonnes. New fields are be­ing opened up. In July SQM of Chile, the world’s big­gest lithium pro­ducer, said it would in­vest $110m in a lithium joint ven­ture in Western Aus­tralia. Cobalt is more tricky. Not only are sup­plies scarcer, but a lot comes from the Demo­cratic Repub­lic of Congo. This raises both eth­i­cal prob­lems (pro­duc­tion can rely on child labour) and busi­ness ones (no one wants to de­pend on war­lords for a vi­tal re­source). LG Chem has said it is try­ing to re­duce the cobalt com­po­nent of its bat­tery cells, while con­tin­u­ing to im­prove their per­for­mance. Fur­ther down the road, re­cy­cling the me­tals from old bat­ter­ies could make the in­dus­try much more sus­tain­able.

One of the rea­sons man­u­fac­tur­ers are con­fi­dently pil­ing on ca­pac­ity de­spite costlier raw ma­te­ri­als is that, at the mo­ment, lit­tle else can com­pete with their wares. Other bat­tery tech­nolo­gies that sound as if, in prin­ci­ple, they might have ad­van­tages are of­ten touted—but none of them en­joys the decades of de­vel­op­ment that have turned lithium-ion de­vices from an in­trigu­ing idea into a dom­i­nant tech­nol­ogy. This work has gen­er­ated a huge amount of knowl­edge about the fine de­tails of man­u­fac­tura­bil­ity, the choice of elec­trolytes and the ever more so­phis­ti­cated nan­otech­nol­ogy of the metal­lic cathodes.

Ke­nan Sahin, who heads CAMX Power, an Amer­i­can com­pany that sup­plies ma­te­ri­als for cathodes, says the lithium-ion bat­tery’s cost and weight, its abil­ity to charge and dis­charge re­peat­edly, its dura­bil­ity and its safety have all been achieved through an end­less process of fine-tun­ing, rather than eureka mo­ments. He likens bat­tery chem­istry to drug discovery in the phar­ma­ceu­ti­cal in­dus­try. “It’s re­ally dif­fi­cult. What­ever you have needs to work at large scale and the side-ef­fects have to be ac­cept­able,” he says. This is all hard for a would-be usurper to em­u­late. For the fore­see­able fu­ture, ever-im­prov­ing lithium-ion tech­nol­ogy—per­haps with new solid elec­trolytes—will make the run­ning, ben­e­fit­ing from yet more re­fine­ments the more ap­pli­ca­tions it sup­ports.

Un­til now, the main­stay has been a cylin­dri­cal cell called the 18650, which looks like a ri­fle shell. It is 65 mil­lime­tres long, 18mm in di­am­e­ter and has an en­ergy den­sity of per­haps 250 watt-hours per kilo­gram. (The en­ergy den­sity of petrol, for com­par­i­son, is about 50 times greater; but the cell can store that much en­ergy hun­dreds or thou­sands of times.) Tesla and Pana­sonic have now de­vel­oped the 2170, a bit longer and wider; Mr. Musk says it will be the most en­ergy-dense bat­tery on the mar­ket. The com­pany says that the cost of driv­ing a Model 3, re­leased in late July to rave re­views, will be half that of any of its pre­vi­ous ve­hi­cles. At the car’s launch Mr. Musk seemed a bit over­awed at the prospect of pro­duc­ing 500,000 such ve­hi­cles next year: “Wel­come to pro­duc­tion hell,” he told the as­sem­bled work­ers.

On Au­gust 7th Tesla an­nounced plans to sell bonds worth $1.5bn to sup­port its ex­pan­sion, giv­ing a badly needed breather to the eq­uity mar­ket, where it usu­ally raises cash (and where its value has risen by two-thirds over the past year). The com­pany has said that it has 455,000 pre-or­ders for the Model 3, which, if taken up, would gen­er­ate enough cash­flow by year-end to start shoring up the com­pany’s fi­nances. If it all goes to plan,

MAK­ING MORE BAT­TER­IES MEANS AC­QUIR­ING MORE LITHIUM, AS WELL AS VAR­I­OUS OTHER ME­TALS, IN­CLUD­ING COBALT, FOR THE CATHODES.

BE­ING AS­SURED OF A CON­STANT SUP­PLY OF THEM IS AS MUCH A STRATE­GIC CON­SID­ER­A­TION FOR BAT­TERY-MAK­ERS AS MAS­TER­ING ELECTROCHEMISTRY

Mr. Musk hopes to see the gi­gafac­tory be­come the largest build­ing in the world, crank­ing out 100GWh a year— and to be joined by fur­ther gi­gafac­to­ries else­where; the next would prob­a­bly be in China.

All this pre­sup­poses that electric ve­hi­cles re­ally are poised for take-off. There is no doubt that they are get­ting bet­ter and cheaper. But there are other con­straints on their use, most no­tably charg­ing. In Bri­tain 43% of car own­ers do not have ac­cess to off-street park­ing and thus would not be able to charge cars at home. Nor are do­mes­tic sup­plies al­ways up to the strains of, say, an 11kW charger; us­ing the ket­tle or im­mer­sion heater dur­ing the six hours it would take to charge up a 90kWh bat­tery could blow the fuses. The an­swer will be fastcharg­ing sta­tions, pos­si­bly like petrol sta­tions; some car com­pa­nies are be­gin­ning to build them as a way to as­suage the “range anx­i­ety” that turns some driv­ers off electric ve­hi­cles. Whether such fa­cil­i­ties can ex­pand fast enough to al­low the in­dus­try’s ex­pan­sive am­bi­tions to be ful­filled re­mains an open ques­tion.

This un­cer­tainty about the speed at which elec­tricve­hi­cle us­age will grow is one of the things that makes sta­tion­ary stor­age an at­trac­tive al­ter­na­tive mar­ket for the bat­tery-mak­ers. In­stal­la­tions such as the one re­cently built in a non­de­script lot on the out­skirts of San Diego, Cal­i­for­nia, by San Diego Gas & Electric (SDGE) have none of the glam­our of glis­ten­ing new mod­els hit­ting show­rooms. It is a 384,000-cell car bat­tery im­per­son­at­ing a trailer park: the dullest Trans­former ever. But its or­di­nar­i­ness is part of its beauty, says Caro­line Winn, chief op­er­at­ing of­fi­cer of SDGE; the util­ity uses it to of­fer power at times of peak de­mand. Mod­u­lar con­struc­tion meant the 120MWh fa­cil­ity—just a touch smaller than the one Tesla has promised South Aus­tralia—was ready to go only eight months af­ter the start of the project. It runs so qui­etly it is hardly au­di­ble. Build­ing a gas tur­bine to do the same job would have been cheaper but would have taken years, in the un­likely event that lo­cal res­i­dents had given it the go-ahead in the first place. The bat­tery fa­cil­ity “is a lot pret­tier than a gas tur­bine,” Ms Winn says.

THE FI­NAL SOURCE OF EN­ERGY

For Tesla and other big bat­tery-mak­ers grid-stor­age projects are the most at­trac­tive part of the elec­tric­ity mar­ket; they of­fer con­tracts that use up oth­er­wise sur­plus ca­pac­ity in sat­is­fy­ingly large job lots. But there is also de­mand for bat­ter­ies to go “be­hind the me­ter”. Tesla serves this mar­ket with its Pow­er­wall do­mes­tic bat­tery pack, de­signed to com­ple­ment the so­lar pan­els and so­lar tiles it of­fers. Nis­san, too, is look­ing at be­hindthe-me­ter ap­pli­ca­tions. It is work­ing with Ea­ton, an Amer­i­can power-man­age­ment com­pany, to put “sec­ond-life”, or par­tially used, Leaf bat­ter­ies into packs that can pro­vide busi­nesses and fac­to­ries with back-up power, thus re­plac­ing pol­lut­ing diesel gen­er­a­tors. The first big cus­tomer is the Am­s­ter­dam Arena, home to AFC Ajax, a foot­ball club.

Such sys­tems do not nec­es­sar­ily com­pete on price; but gov­ern­ments are pro­vid­ing var­i­ous in­cen­tives for them. In May the New York State reg­u­la­tor gave Con Edi­son, a util­ity, the right to al­low busi­ness cus­tomers to in­stall bat­ter­ies in Brook­lyn and Queens to ex­port elec­tric­ity to the grid. New York, with a rick­ety grid that dates back over a cen­tury to the days of Ge­orge West­ing­house and Nikola Tesla, is strug­gling to in­te­grate more re­new­able en­ergy into its sup­plies, and stor­age of­fers it a new way to man­age peak power de­mand. Ja­son Dol­ing, a state en­ergy of­fi­cial, says the pro­gramme should be ideal for high-rise blocks; pow­er­ing lifts from the bat­tery in morn­ings and evenings when elec­tric­ity prices are high­est would be a boon.

The New York fire depart­ment re­mains con­cerned that lithium-ion bat­ter­ies in build­ings pose a fire haz­ard, how­ever. When they are be­ing in­stalled, it keeps its en­gines on standby. As the ex­ter­nally com­bust­ing fi­asco of Sam­sung’s Galaxy Note 7 smart­phones re­minded the world last year, lithium-ion bat­ter­ies can, if badly or over­am­bi­tiously de­signed, short cir­cuit in in­cen­di­ary ways. In gen­eral, how­ever, new ma­te­ri­als and ceramic coat­ings for elec­trodes have made the bat­ter­ies for cars very safe.

Set­ting aside con­cerns about com­bus­tion, com­pa­nies that in­stall bat­ter­ies for be­hind-the-me­ter stor­age, and in­deed for grid stor­age, say they are ham­pered by out­dated reg­u­la­tion and by in­sur­ance prob­lems. This lim­its the fund­ing avail­able to them, ac­cord­ing to Anil Sri­vas­tava, who runs Le­clanché, a Swiss bat­tery-pro­ducer. They also need to find ways to make sta­tion­ary stor­age pay. Some­times, as in San Diego, it is pretty much the only so­lu­tion to the de­mands of a reg­u­la­tor: the Cal­i­for­nia Pub­lic Util­i­ties Com­mis­sion was wor­ried about black­outs in Los An­ge­les in the wake of a leak at the Aliso Canyon gas-stor­age fa­cil­ity in 2015. When price is more of an ob­ject, the bat­ter­ies need to find more than one ser­vice to pro­vide, a pro­ce­dure known as “rev­enue stack­ing”. For ex­am­ple, a sys­tem might be de­signed to of­fer power to the grid for short-term fre­quency reg­u­la­tion as well as pro­vid­ing a way of deal­ing with peak de­mand.

It sounds com­pli­cated. But find­ing more than one way to sell the same thing is sec­ond na­ture in the bat­tery busi­ness, as it fine-tunes its wares for ev­ery mar­ket and ev­ery scale. And though to­day’s ex­u­ber­ance may look a lit­tle scary, in the long run that abil­ity looks likely to see the in­dus­try do very nicely in­deed.

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