Energy Storage

30Dec 2019

Whether related to the stock market, presidential elections or climate, December is the month to make predictions for the coming year and decade. So what battery trends should we expect for the upcoming 2020-2030 decade?

1.Lithium-ion batteries will power more applications — electrification of everything:  The 2019 Nobel Prize in Chemistry highlights the progress lithium-ion batteries achieved in the past four decades. From a laboratory experiment in the 1970s, they are now ubiquitous in consumer devices. Increasingly, they are making inroads in transportation and grid storage applications. 

There is no question that the 2020s are the decade of electrification of transportation, from electric vehicles to buses and trucks. The number of available electric-vehicle (EV) models jumped from about ten in 2015 to over 75 in 2020, including categories of sports cars, sedans, SUVs and light trucks. Automotive companies and their supply chain are inexorably transforming. This will not be an easy transformation — there will be winners and losers. Car manufacturers and Tier-1 suppliers that will not adapt in the next couple of years risk becoming irrelevant. The nature of skilled labor in transportation is also transforming. Labor unions are taking notice but much training is needed for this new labor force.

Electric utilities will implement more energy storage projects on their grids — partly driven by regulations as well as the proliferation of clean-energy grids with distributed wind and solar generation. 

Industrial applications with historically smaller unit volumes will benefit from the increased proliferation of lithium-ion batteries. As communities seek cleaner air, we will see local regulations banning just about anything powered by fossil fuel, from forklifts to lawnmowers.

2. Batteries will deliver better performance but with optimized compromises:

Bill Gates’ famous quote in 1981 “640KB ought to be enough [memory] for everybody” stands as a stark reminder that there is not enough of a good thing. Just like computers flourished with more computational power and memory, mobility will continue to thrive with more available battery capacity. Next-generation 5G wireless smartphones require more battery capacity. Electric vehicle drivers require longer driving ranges (300+ miles). More battery capacity means a continued drive to look for newer materials with higher energy density. 

The public will become more discerning and expecting better battery warranties. Longer cycle life (lifespan) while fast charging will become a standard of performance especially in transportation.

But at what cost? Manufacturers will learn to optimize the battery’s capacity, size, cycle life and charging time to the target application or user case. Electric vehicles in fleets will have  vastly different battery designs than those for, say, residential commuters. Backup batteries used in conjunction with solar power will be even more different. Buyers of electric vehicles will learn how to make informed choices based on the battery. Much like buyers historically learned to understand the difference between 4- and 8-cylinder engines, they will become more literate in understanding the differences between kWh-ratings.

3. Battery prices will continue to decline, but at a slower pace:

The cost of lithium-ion batteries declined in the past decade from over $1,100 per kWh to $150 per kWh in 2019. Forecasters expect this figure to drop below $100 in 2023. At such levels, electric vehicles will reach cost parity with traditional vehicles using internal combustion engines (ICE) — without government buyer incentives. Driven by scale, increased volumes, and a dominant battery manufacturing based in China, standard batteries are increasingly become commoditized. Supply chains are becoming more specialized in addressing the commoditization of batteries. In an effort to improve the profitability of EV models, auto manufacturers will increasingly apply traditional cost disciplines to their battery supply chain, spanning improved manufacturing efficiencies to hedging. A few select applications in need of higher performance will benefit from new developments in advanced materials, e.g., providing higher energy density, albeit at a higher cost, but probably with limited penetration.

The risk of trade tensions with China will continue to loom over the battery supply chain. Even as lithium-ion battery manufacturing facilities come online in other parts of Asia and Europe, China will continue to dominate the lithium-ion battery supply chain, from sourcing raw materials to final assembly. The United States federal and state governments will need to formulate clear policies to address the rapid transition to a battery-centric transportation system — or risk escalating trade tensions with China around battery technologies and manufacturing.

4. Batteries will become safer in the field:

Smartphones routinely catch fire in many parts of Asia — and it’s not even headline news. That will change. That must change. The expected standard of battery safety must improve substantially, especially as larger battery capacities become available (in electric vehicles or electric grids). Efficient inspection methods at the manufacturing site and intelligent battery management systems in the field can improve battery safety by orders of magnitude. 

Yet, it is sadly inevitable that battery fires will become headline news in the future before the industry invests heavily in improving battery safety, possibly even with intervention of some governments.

5. Governments will step in to regulate the recycling of lithium-ion batteries:

The industry will recognize that the recycling of lithium-ion batteries is existential to its future growth. The impact of lithium-ion batteries on the environment, from mining raw materials to disposal of depleted batteries, will be devastating if economic recycling methods are not put in place. For example, lead acid batteries are the no. 1 recycled consumer item in the United States with a recycling rate in excess of 99%. Unfortunately, history shows that governments will need to step in and regulate certain recycling targets for lithium-ion batteries. 

31Mar 2017

We, that’s all of us on this planet, buy every year 1.6 billion smartphones. It works out to one new smartphone every year for every four living human beings on this planet. Cumulatively, we own and use 4 billion smartphones around the world. Every region of the world, rich or poor, is buying smartphones. Many developing nations in the Middle East, Africa, and Asia are growing their smartphone subscriptions at a fast rate. Ericsson reports that by 2021, there will be 6.3 billion smartphone subscriptions, that’s nearly every man, woman and child around the world. Impressive!

Of course, each and every one of these smartphones has a battery in it. Your first reaction is: “that’s a lot of batteries.” Yes, that is true. Sadly, many of these batteries go to landfills after they are exhausted. The easiest way to gauge the size of the market for batteries is to calculate the entire energy supplied by all of them. Of course, that is a large number. It is measured in billions of watt-hours, abbreviated as GWh. As a reference mark, the battery in a top of the line Tesla S is 100 kWh. One GWh = 1 million kWh = 10,000 Tesla S.

 

Screen Shot 2017-03-31 at 9.48.15 AM

 

In 2016, the battery factories around the world manufactured about 50 GWh worth of batteries for consumer devices. That drives an industry and a market worth in excess of $10 billions annually. Forecasts indicate that the consumer market will use about 65 to 70 GWh worth of batteries in 2020. Our appetite for more batteries is insatiable and the numbers show it.

Now let’s look at batteries in electrified vehicles, including both hybrid plug-in cars and pure electric cars (xEVs). This is a relatively new market. The Tesla S first came in 2012. The Nissan Leaf came a little earlier in 2011. Many states in the US or countries around the world haven’t yet experienced or experimented with such vehicles. In 2016, all of these vehicles accounted for a mere 0.9% of all car sales. In total, they amounted to less than 1 m vehicles in 2016.

 

GWh

 

However, in battery lingo, these cars accounted for an increasingly large number of GWh. The year 2016 was the first year that the battery capacity used in xEVs equalled that of all consumer devices, about 50 GWh. By 2020, xEVs will account for ⅔ of all battery production in the world. No wonder Elon Musk and the major car makers pay a lot of attention to their supply chain, including building these Gigafactories.

 

23Aug 2016

Tesla Motors announced today upgraded versions of the Model S and X boasting 100 kWh battery packs, up from 90 kWh used in their earlier top-of-the-line electric vehicles. One hundred kilowatt-hours sounds like a lot, and it is, but I bet that many readers don’t have an intuitive sense of this amount of energy. This is what this post is for.

First, a kilowatt-hour is a unit of energy, not power, and is most commonly used in electricity. To put it in perspective, an average home in California consumes about 20 kWh of electrical energy per day, so this 100-kWh fully-charged Tesla battery would cover this home’s needs for about 5 days.  Now that’s great if you like to go off-grid.

A Nissan Leaf has a battery with a capacity of 30 kWh and has a driving range of approximately 107 miles (172 km). If the Nissan Leaf were to have its battery upgraded to 100 kWh, then its range would increase to 350 miles, or about what you get from your average gasoline-engine car. That would be real nice!

100kWh is also equal to 341,000 Btu, that is if you like to use the British system of units. At about 10,000 Btu to run a home-sized air conditioning unit, this battery will provide you 34 hours of uninterrupted cool air. It it also equal to 3.4 US Therms (each Therm is equal to 100 cubic feet of natural gas), sufficient to heat a California home in the winter for about 4 days.

Now let’s get a little more creative in this comparison exercise. This high amount of energy can be quite explosive if not designed and operated properly and safely; 100 kWh is the same amount of energy delivered in 86 kg (190 lbs) of TNT….enough to level an entire building.

On a more cheerful note, this battery packs the equivalent energy of 86,000 kilocalories, or what an average human consumes in food over 43 days!

Yet as big as this figure sounds, and it is big, only 3 gallons of gasoline (11 liters) pack the same amount of energy. Whereas the Tesla battery weighs about 1300 lbs (590 kg), 3 gallons of gasoline weigh a mere 18 lbs (8 kg). This illustrates the concept of energy density: a lithium-ion battery is 74X less dense than gasoline.

19Aug 2016

As I pondered over the past couple of weeks what might be a befitting topic for this 100th post, a group at MIT announced that they discovered how to make batteries with double the energy. Of course, the operative word in the press release was “first-prototype” which means that it might be a long while before, that is if, we see commercial deployment. However this announcement was the catalyst to focus this post on the state of the lithium-ion battery: In other words, if we ignored future inventions, what is the best that we can expect from the lithium-ion battery today across a number of applications.

For the vast majority of modern applications, the lithium-ion battery is capable of delivering the requisite performance. So if you are wondering why is it that most users complain about the battery, I will use an analogy of a jigsaw puzzle. The solution to storing electrical energy involves many pieces, like the pieces of a jigsaw puzzle. These pieces include the battery materials, chemistry and design, which is often provided by one party: the battery manufacturer. But also a critical piece includes the power management of the device and system, in particular the electronics and software needed to monitor how the energy is efficiently used, say by the apps on your smartphone. An equally critical piece is the battery management intelligence, which is what we do here at Qnovo, that is responsible for the integrity and efficient operation of the battery. If water use is to represent energy use, then the battery is the reservoir; power management is akin to water conservation, something we, Californians, are familiar with; and battery management is ensuring the integrity of the reservoir and its contents, making it large and free of toxins.

Separately and individually, each piece of the jigsaw puzzle is today at an exceptional state of the art for consumer electronics, energy storage, and electric vehicles. For example, energy density of batteries in commercial deployment is already near or at 700 Wh/l. This energy density is sufficient to power smartphones comfortably for a full day of use, or power an electric vehicle for 300 miles. Power management has become quite sophisticated, especially in consumer electronics where now the operating systems, e.g., Android OS and iOS, are asserting clever decisions on how apps may use power. Battery management intelligence has also become quite sophisticated, peering deep into the battery in real time and ensuring its continued health and integrity under extreme operating conditions.

But now imagine for a moment trying to build a jigsaw puzzle where multiple players share in putting the puzzle together, or worse yet, each player owns a subset of the puzzle pieces, but not all the pieces. Now you can imagine that putting the puzzle together can get quite complicated. You see, battery vendors know how to build the battery itself but tend to be quite novices in power management and battery management intelligence. System integrators and OEMs tend to have plenty of experience in power management but their knowledge of the battery chemistry tends to be limited. As to battery management, both battery vendors and OEMs have historically under-estimated its need and are playing catch up.

This, for example, begins to explain why Tesla Motors wants to own all these three pieces of the puzzle, beginning with their widely discussed Gigafactory but also their less-advertised efforts in power management and battery management. Apple is also in the same league. While Apple does not manufacture their own batteries, it is widely known that Apple does design their own batteries as well as having growing expertise in both power and battery management. But these tend to be early adopters who have recognized that they need to lead in owning and putting the pieces of the puzzle together. There are other giants who are in need of playing catch up, and they include the likes of Google, Microsoft, Facebook…as well as industrial players who are eyeing batteries for stationary energy storage and electric vehicles. Gradually, they are all beginning to make power and battery management integral to their long-term strategies.

Historically, system integrators and OEMs treated the battery as yet another component they source from suppliers, like the display or other electrical or mechanical components. But this model of outsourcing the battery expertise is beginning to fray. First, battery vendors are hitting the limits of materials and are struggling to meet the increasing demands of their customers without the use of intelligent power and battery management algorithms. Second, there is a growing discomfort, and I might dare say mistrust, between the OEMs and system integrators on one side, and the battery vendors on the other. Third, with the advent of cheap, meaning both inexpensive and lower quality, batteries form China, the business model of the traditional battery vendors, in particular Sony Energy, Samsung SDI, LG Chem is under pressure. A quick evaluation of their financials is sufficient to show they are not healthy. Sony recently announced the sale of their battery business to Murata Manufacturing. These shifting dynamics complicate the necessary tasks required to put together this battery puzzle and are forcing participating companies to seek different alliances.  For example, see the growing alliance between Tesla and Panasonic as well as between GM and LG Chem. In China, witness the growing influence of BYD in making batteries and making electric vehicles. The result is that the optimal battery system that incorporates the right battery, right power management intelligence, and right battery management intelligence is accessible to limited few organizations that either have the means to be vertically integrated or put together the necessary alliances.

As the reader can gather, the challenges in offering a great battery experience is really not technical in nature, but rather have economic and organizational origins. For consumer applications, the technology already exists to build elegant smartphones with battery capacities in excess of 3,000 mAh, charging very fast at 1 to 1.5C, and lasting 800 to 1,000 cycles. These specifications give the average consumer an excellent overall battery experience. For energy storage, the challenge is not the battery chemistry but rather hitting the right price points and building out comfort in the specifications from extensive testing. For electric vehicles, the cost of the battery is rapidly dropping. The Chevy Bolt and the promised Tesla Model 3 are prime examples of vehicles targeting the broader population at an increasingly affordable price. That is not to say that engineering innovations and continued disciplined product improvements are not necessary; they are important. But the perception that the battery industry is in dire need of a large breakthrough in technology and materials is not well founded. Instead, there is a bigger need for all the players around the battery jigsaw to learn to work together and leverage each other’s expertise and technologies. This is happening; in the process, we will continue to see a race to build up intellectual property, patent ownership, expertise, and skills by the various participants.

17Jun 2016

I will jump ahead in this post to discuss the merits of different lithium-ion chemistries and their suitability to energy storage systems (ESS) applications. Naturally, this assumes that lithium-ion batteries in general are among the best suited technologies for ESS. Some might take issue with this point — and there are some merits for such a discussion that I shall leave to a future post.

Made of two electrodes, the anode and the cathode, it is the choice of the cathode material that determines several key electrical attributes of the lithium-ion battery, in particular energy density, safety, longevity (cycle life) and cost. The most commonly used cathode materials are Li cobalt oxide (known as LCO), Li nickel cobalt aluminum (NCA), Li nickel manganese (NCM), Li iron phosphate (LFP) and Li manganese nickel oxide (LMNO).

EnergyDensity

LCO is by far the most common being the choice for consumer devices from smartphones to PCs. It is widely manufactured across Asian battery factories and the supply chain is very pervasive…as a result, and despite the use of cobalt (an expensive material), it bears the lowest cost per unit of energy with consumer batteries being priced near $0.50 /Ah, or equivalently, $130/kWh. LCO offers very good energy density and a cycle life often ranging between 500 and 1,500 cycles. From a material standpoint, LCO can potentially catch fire or explode especially if the battery is improperly designed or operated. That was the primary reason for the battery recalls that were frequent some 10 years ago. Proper battery design and safety electronics circuitry have greatly improved the situation and made LCO batteries far safer.

NCA came to prominence with Tesla’s use of the Panasonic 18650 cells in their model S (and the earlier Roadster). It has exceptional energy density — which translates directly to more miles of driving per charge. But NCA has a limited cycle life, often less than 500 cycles. Historically NCA was expensive because of its use of cobalt and limited manufacturing volume. This is rapidly changing with Tesla’s growing volume and the Gigafactory coming online in 2017. It is widely rumored that Tesla’s cost is at or near the figures for LCO, i.e., near $100/kWh at the cell level. It remains to be seen whether Panasonic will replicate these costs for the general market.

NCM sits between LCO and NCA. It has good energy density, better cycle life than NCA (in the range of 1,000 to 2,000 cycles) and is considered inherently less prone to safety hazards than LCO. Its historical usage was in power tools but it has become recently a serious candidate material for automotive applications. In principal, NCM cathodes should be less expensive to manufacture owing to their use of manganese, quite an inexpensive material. The two Korean conglomerates, LG Chem and Samsung SDI, are major advocates and manufacturers of NCM-based batteries.

One of the oldest used cathode materials is LMNO, or sometimes referred to as LMO. The Nissan Leaf battery uses LMNO cathodes. It is safe, reliable with long cycle life, and is relatively inexpensive to manufacture. But it suffers from low energy density especially relative to NCA. If you ever wondered why the Tesla has a far better driving range than the Leaf, the choice of cathode materials is an important part of your answer. It is not widely used outside of Japan.

Finally, we come to lithium iron phosphate, or LFP. Initially invented in North America in the 1990s, it has developed a strong manufacturing base today in China, with the Chinese government extending it significant economic incentives to make China a manufacturing powerhouse for LFP-batteries. LFP has exceptional cycle life, often exceeding 3,000 cycles, and is considered very safe. A major shortcoming of LFP is its reduced energy density: about one third that of LCO, NCA or NCM. It, in principle, should be inexpensive to manufacture. After all, iron and phosphorus are two inexpensive materials. But reality suggests otherwise: the lower energy density requires the use of twice or three times as many cells to build a battery pack with the same capacity as LCO or NCA. As a result, LFP-based batteries cost today 2 or 3x more than equivalent LCO-based battery packs.

By now, you are probably scratching your head and asking: so which one wins? and that is precisely the conundrum for energy storage and to some extent, electric vehicles. Let’s drill deeper.

Energy storage applications pose a few key requirements on the battery: 1) the battery should last 10 years with daily charge and discharge, or in other words, has a cycle life specification of 3,500 cycles or more; 2) it has to be immensely cost-effective, measured both in its upfront capital cost and cost of ownership; in other words, the total cost of owning and operating it over its 10-year life; and 3) it has to be safe.

The first and third requirements are straightforward: they make LFP and NCM favorites. LFP inherently has long cycle life, and NCM, if charged only to about 80% of its maximum capacity also can offer a very long cycle life. So if you wondered why Tesla quietly dropped its 10-kWh PowerWall product,  it is because it is made with NCA cathodes and cannot meet the very long cycle life requirement of daily charging.

The second requirement gets tricky. Right now, neither LFP nor NCM are sufficiently inexpensive to make a very compelling economic case to operators of energy storage systems (ESS) — setting government incentives aside. So the question boils down to which one of them will have a steeper cost reduction curve over time. Such a question naturally creates two camps of followers, each arguing their respective case.

Notice that high energy density does not factor in these requirements, at least not directly. Unlike consumer devices or electric vehicles, ESS seldom have a volume or weight restriction and thus, in principle, can accommodate batteries with lower energy density. The problem, however, is that batteries with lower energy density do not necessarily correspond to lower cost per unit of energy. It actually costs more to manufacture a 3Ah battery using LFP than it does using NCA. This makes energy density a critical factor in the math. Lower energy density equals more needed batteries to assemble a bigger battery pack, and thus more cost. For now, in the battle between LFP and NCM, the jury is still out though my personal opinion is that NCM, by virtue of its higher energy density, has an advantage. On the other hand, China’s uninhibited support for LFP can potentially tip the scale. More later.

Before I adjourn, I would like to rebuke an oft-made statement by some builders of ESS: that they are “battery agnostic.” To them, batteries are a commodity that can be easily interchanged among vendors and suppliers, much like commodity components in a consumer electronic product. I am hoping that the reader gleans from this post the great number of subtleties and complexities involved in the choice of the proper battery in an ESS. The notion of battery-agnostic in this space is utterly misplaced and only points to the illiteracy of the engineers building these ESS. If the battery fires on the 787 Dreamliner can permanently remind us of one lesson, it should be to never underestimate the consequences of neglecting the complexities of the battery. They can be very severe and immensely costly. Battery-agnostic is battery-illiterate.

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