Do you find batteries exciting? I bet you don’t, but when you realize how central they are to the clean tech revolution, you’ll be intrigued. Batteries, along with emerging technologies such as ultra-capacitors and flywheels are at the heart of energy storage – the ability to store enough energy to power electric transportation and solve the intermittent issues associated with solar and wind.
Energy storage is widely viewed as an energy efficiency mega-trend that’s destined to grow to gigantic proportions over the next decades. This critical enabling technology is bringing us plug-in and electric cars and a smart grid based on large scale renewable energy.
The market for batteries, super-capacitors and fuel cells for transportation and smart grid applications is projected to double from $21.4 billion in 2010 to $44 billion in 2015, according to “Emerging Technologies Power a $44 Billion Opportunity for Transportation and Grid” by Lux Research. Between 2010 -2015:
Smart grid technologies are projected to skyrocket from $5.4 billion-$15.8 billion.
Electric vehicle storage technology will nearly double from $7.7 billion-$14.5 billion
Electric bike and scooter batteries will grow from $6.4 billion-$10.9 billion.
Lead-acid batteries currently dominate transportation markets, but lithium-ion (Li) battery markets are growing almost three times faster.
As we’re getting so accustomed to hearing, almost all the world’s high volume advanced battery manufacturers are in Asia. Until now, the US hasn’t had much manufacturing capacity and few trained battery engineers and scientists.
President Obama set out to change that and put the US on the map for advanced batteries. His goal is to have a million plug-in hybrids (PHEVs) on the road by 2015. As you read on, you’ll realize how difficult it will be to achieve that goal, but the Recovery Act gave us a running start.
In August 2009, the Department of Energy announced grants for 48 advanced battery and electric drive projects. The $2.4 billion will build US manufacturing capacity for batteries and electric drive components and expand battery recycling. An additional $1 billion was granted for research and development and $300 million for the government to buy hybrids, PHEVs and EVs (they just announced the purchase of 5600 vehicles). Tax credits for people who purchase PHEVs, neighborhood electric vehicles and EVs run as high as $7500.
Another strong driver for energy storage is the EU’s stringent emission requirements – by 2012, auto manufacturers must reduce average CO2 emissions from the current level of 160 g/km to 120 g/km. The Obama administration’s new CAFE standards went into effect April 1, which require light vehicles to average of 35 mpg by 2016.
Meanwhile, a Reuters survey of venture capital firms found that energy storage tied with energy management as the top clean tech sectors for investment in 2010.
Getting from Here to There
Sounds great, right? There are just a few hurdles to jump along the way.
First, the world is rapidly changing – the rise of massive consumer economies in South America, India and Asia will place unfathomable strain on global resources: water, food, energy and commodities such as rare earth metals. The NiMH batteries in the Prius rely on the rare earth, lanthanum – which could never supply the tens of millions of hybrids a year. That’s one example of the barrier we’ll soon be bumping up against – batteries require huge volumes of raw materials.
Second, today’s batteries are approaching performance targets, but to electrify personal transport, they need to be much more cost-effective, long lasting, and abuse-tolerant. The reason plug-ins (PHEV) and electric cars (EV) are so pricey is because of the high price of Li batteries. A PHEV manufactured this year costs as much as $18,000 more than a conventional vehicle – subsidies in the tens to hundreds of billions of dollars over decades will be necessary for PHEVs to seriously penetrate the U.S. automotive market.
Even with that level of investment, PHEVs wouldn’t significantly impact oil consumption or carbon emissions before 2030, according to the National Research Council. Assuming rapid technological progress, appropriate levels of subsidies and consumer acceptance, they believe no more than 40 million PHEVs will be on the road by 2030, and they see 13 million as a more realistic number.
DOE’s Vehicle Technologies Program doesn’t think NiMH systems can provide the energy and power for a PHEV battery for more than a 10- or 20-mile range, and although Li batteries can do the job for 10 miles, getting them to the 20- to 40-mile range is difficult. Challenges for developing and commercializing PHEV batteries are:
Cost: Li batteries have to come down in price 3-5 times per kilowatt hour (kWh). Costs include raw materials, materials processing, cell and module packaging, and manufacturing. Sandia National Lab estimates the current cost of advanced lead-acid batteries is $500 per kWh and Li batteries is $1,333 per kWh.
Performance: for a PHEV range to reach 40 miles or more, batteries need much higher energy densities to meet volume and weight targets and to reduce the number of cells in a battery, which would bring down costs.
Abuse Tolerance: Li batteries need to improve in abusive conditions. They tend to overcharge, over-discharge, or even explode in high-temperature environments.
Life: it’s not clear whether batteries can meet the target of hundreds of thousands of cycles of shallow and fewer deep cycles.
When it comes to grid applications, low cost, long life, high reliability, low maintenance and high system efficiency are the paramount criteria.
The Rare Earth Challenge
China produces 97% of the world’s rare earth’s and has been restricting the amount of material for export over the past seven years to protect its supplies for domestic manufacturing. Similarly, Bolivia, which has half the world’s lithium deposits isn’t ready for production and is providing strong disincentives to foreign investors who want to develop them. Li battery recycling will be an important source of long term supply.
Metals in short supply include lanthanum, an essential ingredient in NiMH batteries, and high purity lithium. Since it takes 5-7 years for a new mine to come online, the near term choice for automakers is to use cheaper lead acid batteries available today or expensive NiMH and Li batteries for hybrids, PHEVs and EVs.
According to rare earths expert Jack Lifton, Toyota had the foresight to protect the supplies necessary to produce millions of hybrids. It has stockpiles of lanthanum, deals with suppliers and even bought a trading company that specializes in rare earth elements. GM, on the other hand, is stuck with Li because it didn’t obtain enough lanthanum.
As a result of Toyota’s far-sighted planning, the supply of materials for making NiMH batteries isn’t available to Ford, Chrysler and GM, all of which are committed to Li for their hybrids. And until they develop a cost-effective Li battery, they have to source NiMH batteries from Toyota!
In July 2009, Japan adopted a Strategy for Ensuring Stable Supplies of Rare Metals which includes securing overseas resources, developing a recycling system and developing alternative materials. Toyota and other Japanese corporations have been investing in Li projects and funding them with low cost government loans. The U.S. is just waking up to the scarcity issue.
What to Expect in the Near Term
Dozens of variations on the theme in batteries from advanced lead acid to Li air are under development, but to meet emission requirements in the short run, the first technologies to achieve mass acceptance will likely be more efficient conventional cars, micro and mild hybrids – affordable, effective technologies available now.
The 2011 Chevrolet Cruze Eco, which goes on sale this fall, promises “hybrid-like efficiency without the price tag.” This conventional car gets 40 mpg on the highway because of its lightweight wheels, low-rolling resistance tires, improved aerodynamics and 6-speed automatic transmission.
Other improvements to conventional cars include:
Direct fuel injection delivers better performance while saving 11-13% of gas;
Cylinder Deactivation deactivates cylinders when they aren’t needed, saving 7.5% of fuel;
Turbochargers and Superchargers increase engine power, thus allowing smaller engines and saving 7.5% of gas;
Variable Valve Timing & Lift optimize the flow of fuel & air into the engine for various engine speeds, saving 5% of gas;
Automated Manual Transmission provide the efficiency of manual transmissions, saving 7% of gas
Continuously Variable Transmission have an infinite number of “gears”, providing seamless acceleration and improved fuel economy, saving 6% of gas.
Micro-hybrids, which employ stop-start systems, are another easy, quick fix that increases gas mileage 6-10% by eliminating idling. The engine shuts off when you stop at a light and starts up again when the light turns green. The technology, which only requires a premium lead acid battery (standard in hybrids), is being adopted industry-wide and only costs about $600.
Mild hybrids like the Honda Insight incorporate stop-start, recuperative braking and acceleration boost, which improves gas mileage by 20% as compared with full hybrids like the Prius, which save 40% by also having electric-only launch. Mild HEVs cost a few thousand dollars less than full HEVs.
Even though production of PHEVs and EVs will likely be limited in the coming years, it’s exciting that they are finally being introduced in the consumer marketplace. For the first time, a new vehicle class will compete with the combustion engine.
An example of the innovation we can expect in the near term, Ford Motor Co. and Microsoft announced a collaboration to integrate PHEVs and EVs with home energy management. Microsoft’s Hohm energy management system helps people determine when and how to most efficiently and affordably recharge these vehicles. It’s also expected to help utilities manage the added demands of EVs on the electrical grid. Ford is incorporating the system into its Focus EV, due out next year.
Ford plans to introduce five EVs in North America and Europe by 2013: Transit Connect Electric later this year, Focus Electric in 2011, a PHEV and two next-generation hybrids in 2012. In fact, people attending this year’s Geneva Motor Show called it the “electric car show” because every major auto manufacturer showed off new hybrids and/or new EVs.
Charging infrastructure is critical for vehicle electrification to succeed. Last week, the groundbreaking EV Project, funded through a $100 million grant from the DOE, was announced. 4700 Nissan Leaf EVs and 11,210 charging systems will be deployed in five cities as a test run for rolling out electric transportation across the U.S.
New iterations of Li batteries with new chemistry and materials are already being included – we should expect rapid improvement as long as there’s consumer demand. Whether it can eventually replace the 800 million vehicles on the road today worldwide is a question mark, which means that new battery chemistries, biofuels, fuel cells, and alternative e-mobility business models will also play important roles in the future.
Sustainable Business, April 2010