NAATBatt Blog

Roadmapping Electricity Storage in Ontario

November 21st, 2014 by

I had the pleasure of attending this past week the 26th Annual Canadian Power Conference in Toronto, where I served on a panel entitled “The Energy Storage Roadmap: Where is storage technology headed, what opportunities exist in the Canadian ES value chain?”  Following my presentation I was asked what I thought Canadians could learn from efforts in the United States to roadmap the electricity storage supply chain.  It was a great question and caused me to think hard about the best way to roadmap an emerging technology and, more fundamentally, what the purpose of a roadmap is anyway.  Here are a couple of thoughts:

Focus Hard on the Real Objective.  The United States government has in recent years undertaken several efforts to roadmap and fund the development of a domestic lithium-ion supply chain.  By and large, those efforts have been unsuccessful.  Much time and treasure was spent on companies deemed to own technology critical to the manufacture of lithium-ion batteries.  But too little effort was spent identifying exactly what kinds of lithium-ion batteries consumers would want to buy.  That question was left to little more than hope. As a consequence, a great deal of the $2.4 billion Stimulus Package funding for advanced battery technology, which probably represented the best one-time chance to put a critical mass of U.S. companies into the business of lithium-ion battery technology, was wasted.

A supply chain roadmapping project must start by defining the ultimate goal of the roadmap.  That goal must be the production of a product that has sustainable demand in the marketplace.   In terms of roadmapping the supply chain for energy storage in Ontario, this means defining a role or roles for storage that makes sense on electricity grid in Ontario.  Energy storage, like lithium-ion batteries, is a broad and diverse subject.  Focusing on exactly what you want to achieve with storage before diving into the exercise of roadmapping and building a supply chain for it is an essential prerequisite of success.

Focusing on the specific objective is not as easy as it sounds, particularly where the roadmapping is done by a political body or an entity that reports to one.  Focus requires making hard choices about priorities.  Making those choices may leave important stakeholders outside the scope of a properly focused roadmap.  This is not easy for a political body to do.  Political courage and perseverance are necessary prerequisites of focus.

Include De-Risking the Technology in the Plan.  Deploying storage technologies on the grid will be a capital intensive undertaking.  With the balance sheets of public utilities eroding (at least in the United States), the importance of lenders and project financiers to successful deployment of energy storage systems on the grid, including deployments behind the meter, cannot be overstated.  Anticipating the needs of the financial community in an energy storage roadmap is essential.

One of the key needs of a lender in almost any project finance transaction is the absence of technology risk.  Lenders are in the business of underwriting credit risk.  They are not in the business of assessing the risk of whether the equipment that will generate the cash that will repay the loan will work as anticipated.  Accordingly, it is important that a roadmap plan for de-risking the technology it hopes to promote, either by focusing on technology the risks of which are already understood in the marketplace or by creating a mechanism whereby those risks can be understood.

There are three pre-requisites for de-risking a new energy storage technology, such as an ess system incorporating a novel design or chemistry.  First, standards for those systems need to be developed.  Standards provide predictability and something against which to measure.  Second, there needs to be a certification process by which a credible, independent third party can opine as to whether the ess system has complied with the applicable standards.  Third, and most importantly, there needs to be multiple, multi-year deployments of the ess system in the field.  The importance of successful operating history in a lender’s assessment of technology risk cannot be overstated.  No supply chain roadmap can be successful unless it includes provision and funding for deploying new ess technology in the field independent of market demand.

Good luck, Ontario.

Welcome to NAATBatt International

November 14th, 2014 by

The Board of Directors of the National Alliance for Advanced Technology Batteries has voted to rename and rebrand our organization as NAATBatt International.  This is an exciting change, not just of name and logo, but also of focus, mission and capabilities.

NAATBatt, initially named the National Alliance for Advanced Transportation Batteries, has a storied history.  Organized in 2007 by Jeff Chamberlain, Ralph Brodd, Carlos Helou and I at the request of the then junior senator from Illinois, Barack Obama, NAATBatt was intended to create a manufacturing R&D consortium in the U.S. battery industry based on the model of SEMATECH in the semiconductor industry.  This battery industry version of SEMATECH was to facilitate the entry of multiple U.S.-based manufacturers into the lithium-ion battery business.  The ultimate goal was to ensure that as automobile drive trains electrified, the United States vehicle fleet did not trade dependence on foreign petroleum for dependence on foreign batteries.

The SEMATECH concept was not ultimately successful.  An interesting history of the Stimulus Package and its $2.4 billion investment in battery technology in 2009-10 can be found in Seth Fletcher’s book, Bottled Lightening (see: http://www.amazon.com/Bottled-Lightning-Superbatteries-Electric-Lithium/dp/0809030535). But in 2009, NAATBatt reorganized as a trade association under the name the National Alliance for Advanced Technology Batteries, and found a new mission in promoting advanced battery product sales and manufacturing in the United States.

But two things have become clear since 2009.  The first is the opportunities for companies working in advanced battery technology go well beyond electric vehicles.  Electrochemical energy storage is the most important technology challenge of our time.  Solving the problem of how to store more electricity in a smaller mass is fundamental to progress, not only in vehicle technology, but also in Smart Grid applications (such as ESS), robotics, consumer electronics, unmanned aviation, fuel efficient maritime systems, electricity-based weapons systems, medical devices, monitoring systems and many of the other technologies that will shape human society in the 21st Century.

The second realization is that defining the business of advanced electrochemical energy storage technology by reference to national borders makes little sense.  While many national governments continue to invest in advanced battery industry and research, few NAATBatt member firms see themselves as concentrating in any one national market.  The opportunity for our members is global.  Few wish to be identified and potentially constrained by the physical location of their home office.  Accordingly, NAATBatt’s Board of Directors has voted to internationalize our name and our mission.  Going forward NAATBatt will promote our members’ technology and help them make new business connections and sales wherever in the world opportunity takes them.

Going forward, I expect that NAATBatt’s international mission will be evident in a number of ways:

  • NAATBatt will sponsor more programs outside of the United States. Our first international members site visit meeting took place last month at Hydro-Quebec and Grafoid in Canada.  As NAATBatt sees opportunity to help our members gain visibility and build relationships outside of their home markets, I expect that we will be having more of these international site visit programs.
  • NAATBatt will seek to provide intelligence in markets outside the United States for our members. I will expect that this will take place by working through a network of partnerships, such as NAATBatt’s partnership with the India Energy Storage Alliance and our partnership, just announced this week, with InterSolar in Germany.  It is my hope that NAATBatt International will become a valuable resource for our members looking for information and to make contacts in foreign markets.
  • Promoting the commercialization of emerging electrochemical energy storage technology will remain a core mission of NAATBatt International. But this mission will now take on an international aspect.  As difficult as it is for many of our members to identify and keep track of corporate development opportunities in their home markets, scouting overseas is even more complicated.  Easing that task for our members will become a new focus at NAATBatt.

I am looking forward to NAATBatt’s new international focus and believe that our members will find that it brings important new value to their membership investment.  Please check out our updated Web site at: www.naatbatt.org.

Advanced Batteries and the Midterm Elections

November 7th, 2014 by

On Tuesday of this week, Washington reshuffled with Republicans capturing a solid majority of the U.S. Senate. With their capture of the Senate, the Republicans control both houses of Congress and have the ability to pass legislation of their choosing. Given that Cleantech and renewable energy technologies have gotten caught up over the last six years in the debate about climate change, which has become heavily politicized, it is reasonable to ask: what effect will the Republican victory have on electricity storage and investments in advanced battery technology.

The answer, I believe, is not much. Because the Republicans do not have enough votes in Congress to override a Presidential veto, their passing any legislation over the next two years will depend on either cutting a deal with President Obama or getting sufficient support among Democratic lawmakers in order to force the President’s hand or override a veto.

Of the things that the Republicans have talked about doing that may bear on the future of the advanced battery business, here is how I think things will play out:

Keystone XL Pipeline. Approval of the Keystone XL pipeline is low-hanging fruit. The pipeline has broad support even among Democrats and it is difficult to see the Republicans missing the chance to claim an early victory by pushing it through. During the recent campaign, pipeline proponents widely claimed that its approval would help bring down gasoline prices. Falling gasoline prices could crimp demand for electric vehicles. But no one familiar with the oil markets takes this seriously. Although the pipeline may create jobs in the United States and reduce U.S. dependence on petroleum producers located outside of North America, it will not in itself drive down oil prices or create any pressure to relax the fuel economy standards that are driving adoption of electrified drivetrains. In any event the falling price of conventional crude oil (see my commentary in the October 24, 2014 issue) is probably a greater threat to the future of Keystone XL than the Sierra Club.

Relaxation of EPA Regulations. Republicans have been hostile to the EPA’s regulation of greenhouse gas emissions (GHG’s). There has been some speculation that if Republicans can limit the EPA’s authority to regulate GHG’s, coal will become a more attractive fuel for electricity generation and slow adoption of variable wind and solar power, which electricity storage technology helps accommodate. But even setting aside the debate over GHG regulation and climate change, coal burned in the traditional manner is a dirty fuel and, global warming beliefs aside, Republicans are likely to have little success cutting back the clean air regulations that have done much to improve air quality and impair the economics of coal. Wind and solar power are here to stay and get cheaper by the day. The associated demand for storage to balance their variability is here to stay as well.

Tax Reform. Tax reform is reportedly a top priority of the new Republican-led Congress and reform does not bode well for tax provisions such as IRC § 30D. IRC § 30D provides tax credits of up to $7,500 to purchasers of electric vehicles. Simplifying the tax code is something that almost everyone can agree on. But actually getting that done will be extraordinarily complicated and time consuming. The Internal Revenue Code is, famously, more than 5,000 pages long (2014 CCH edition, excluding regulations). Every single one of those pages, including the page on which IRC § 30D appears, was sponsored and fought for by some special interest group and its lobbyists. There is no reason to believe that all those special interest groups will go quietly into the night. Tax reform may be a good idea. But the realities of Washington politics probably dictate that IRC § 30D and the thousands of provisions like it will be around for some time.

Battery Research. Developing new battery technologies takes decades, far longer than most private investors can afford to wait for a return on their investment. Accordingly, government investment in advanced battery research is essential to the continued development of that technology. The general hostility of Republicans to discretionary spending might appear to put continued government support for battery research at risk. But appearances can be deceiving. In fact, Republicans have generally been supportive of basic scientific research (excluding the Hell No Caucus—John Boehner’s words, not mine), particularly where the technology in question has important industrial or defense applications. After all the Reagan Administration funded SEMATECH, the public-private initiative that reinvigorated the U.S. semiconductor industry (and upon which NAATBatt was originally based). Some Republican legislators have criticized government spending on applied research vs. basic research on the grounds that applied research picks winner and losers in the private sector. But the dividing line between basic research and applied research is often hard to define. The battery industry will need to keep an eye on future budgets to make sure that battery research is not shortchanged. But the industry is likely to find a more sympathetic audience on the Republican side of the aisle than many may anticipate.

The more things change, the more they stay the same.

Rising Electricity Prices Will Open More Opportunities for Storage

October 31st, 2014 by

Last week I wrote in this column about the threat of a long-term decline in crude oil prices to “green” technologies, such as xEV’s.  I noted that world crude oil prices have declined by over 20% since June 2014 and that, should that trend continue long-term, it could serve to discourage investment in alternative fuels technology, much like what happened in the 1980’s and 1990’s.

But before panic sets in among battery technology investors, it is important to note that, while the future of investment in electrochemical energy storage technology may be determined in large part by the cost of energy, such as crude oil, crude oil is not the only from of energy with which advanced batteries compete.

A significant competitor to advanced battery technology is the centralized electricity power plant and the associated infrastructure necessary to get that power to consumers.  As the cost of centralized electricity rises, the opportunities for distributed energy storage, most probably provided by advanced batteries, will rise along with it.  Rising centralized electricity prices make distributed generation, a natural market for storage, more attractive.  Rising centralized electricity prices can also open more opportunities for load leveling and rate arbitrage by storage and make alternatives to storage economically less attractive.

Although crude oil prices may be falling, the cost of centralized electricity is clearly moving in the other direction.  The U.S. Energy Information Administration reports that U.S. retail residential electricity prices in the first half of 2014 averaged 12.3 cents per kilowatt-hour, an increase of 3.2% from the same period last year. This is the highest year-over-year growth in residential prices for the first half of the year since 2009.

It is likely that the cost of centralized electricity will continue to rise.  Beyond taxes, fees, and other charges, there are two main components of electricity bills: the generation component, which reflects the costs of generating the electricity, and the delivery portion, which reflects the costs of transmitting and distributing that electricity.  Today, about 39% of electricity in the United States is generated by coal, a fuel that will likely continue to be burdened by increasing regulatory expense.  Natural gas, comprising about 27% of electricity generation, has enjoyed an anomalously low price in the United States over the past few years.  But, regardless of the size of domestic reserves, many in the industry expect gas prices to return to historically higher and more volatile levels in years ahead.

The cost of transmitting and distributing centralized electricity is also expected to rise.  The American Society of Civil Engineers opined in 2012 that $673 billion of new investment is required in the U.S. electricity grid by 2020 in order to keep it well-maintained and functional.  Actual investment since 2012 has not kept pace with that recommendation.  But sooner or later massive investment in grid maintenance and infrastructure will need to be made and its cost will be passed on to electricity consumers in the form of higher electricity prices.

So the news is not that bleak for the future of energy storage technology.  In a world where energy will increasingly become more dear and its price more volatile, there will always be a need to use energy more efficiently.  Whether in a vehicle or on the electricity grid, that is a role that electrochemical energy storage technology is well-positioned to play.

Falling Oil Prices May Make for Unlikely Allies

October 24th, 2014 by

World crude oil prices have declined by over 20% since June 2014 and prices could decline to much lower levels by year’s end.  This may be good news, short term, for U.S. consumers.  But the declining price of oil, if it continues longer term, jeopardizes both manufacturers of “green” energy technologies, such as xEV’s, and producers of domestic unconventional oil, two groups whose interests have not always aligned.

There are many explanations for why oil prices are falling.  Slowing economies in Europe and Asia, discord within the OPEC Cartel, and growing U.S. domestic crude production (coming in large part from unconventional reserves) are all contributing factors.  But it has also been suggested that certain large foreign oil producers may intentionally be manipulating prices in order to squeeze out competition to conventional crude oil and preserve their share in the petroleum market.  A similar drop in oil prices in the 1980’s effectively shut down U.S. investment in alternative fuels and stalled efforts to improve automotive fuel economy for the better part of two decades.

Fool me once; shame on you.  Fool me twice; shame on me.  The oil price declines of the 1980’s and resulting loss of investment in alternative fuels left the U.S. woefully unprepared for the energy price spike of 2008, let alone for dealing with the long-term consequences of foreign oil dependence and GHG emissions.  We must not repeat this historic mistake.

To the extent that falling oil prices are a consequence of market manipulation, the target of that manipulation is more likely producers of unconventional oil than promoters of green technologies.  Unconventional oil, which accounts for about 70% of total crude oil reserves, poses a real threat to the market share of traditional oil producers.  But the cost of producing a barrel of unconventional crude oil is generally substantially greater than producing a barrel of conventional petroleum.  According to the International Energy Agency, production costs for oil produced through enhanced oil recovery (EOR) techniques (such as fracking) run from about $40 to $85 per barrel vs. production costs from conventional reserves, which run from about $10 to $30 per barrel.  If the price of oil can be held low enough long enough, investment in EOR technology could be shut down just as effectively as was investment in alternative fuels in the 1980’s.

Companies with interests in “green” energy technologies and unconventional crude oil production therefore share a common interest and probably a common fate.  Both sets of companies have a strong interest in ensuring that the dumping of conventional crude oil in the international market does not shut down investment in technologies that hold the promise of making the United States more energy secure and efficient.

It will be interesting to see if and how this new coincidence of interests between domestic producers of unconventional crude oil and manufacturers of “green” energy technologies plays out.  Wouldn’t it be remarkable if the impetus for finally taking action to reflect the true, societal cost of imported oil in its price came, not from “green” energy technology advocates, but from within the oil industry itself?

Graphoid Wows NAATBatt Members With Tour of New Graphene Development Centre

October 18th, 2014 by

NAATBatt held this week its first international event:  A members site visit meeting and tour of the Grafoid Global Technology Centre in Kingston, Ontario and a tour of the energy storage laboratory of Hydro-Quebec IREQ located outside Montreal.  The joke among those NAATBatt members who attended is that Grafoid and Focus Graphite, which organized and hosted the meeting, have set the bar for these meetings so high that it may be difficult to get other members to host such meetings.

The meeting began with a tour of the energy storage testing laboratory at Hydro-Quebec.  NAATBatt members have previously had the opportunity to tour other, impressive battery testing laboratories.  But Hydro-Quebec’s laboratory is simply in a different class.  Hydro-Quebec, an electric utility wholly-owned by the government of the Province of Quebec, has been working in lithium-ion battery technology since the 1980’s.  It claims to hold about 90% of all patents in the area of basic lithium-ion technology and receives about $20 million per year in licensing revenues from those patents.  That revenue, together with payments Hydro-Quebec receives from battery development partners, is continuously reinvested in its battery lab.  The result, in terms of the sophistication and capabilities of the facility, is unprecedented.

The highlight of the Hydro-Quebec program for me was the lunch following the tour of the battery lab.  NAATBatt members were joined at lunch by Karim Zaghib, the long–time Director of Energy Storage at Hydro-Quebec.  Dr. Zaghib, who is recognized as one of the leading experts in the world in advanced battery technology, spent nearly an hour with NAATBatt members talking about advanced battery technology, where he thought it is headed, what he views as the greatest challenges and opportunities, and answering members’ questions about the technology.  Dr. Zaghib also discussed Hydro-Quebec’s partnership with Grafoid, which focuses on enhancing the performance of lithium-ion cathode material by using graphene.

Members then boarded a bus for the drive to Kingston, Ontario.  There, members toured the recently opened Grafoid Global Technology Centre, where Grafoid and several of its affiliated companies make and develop new applications for graphene.  Although members did not have a chance to see graphene being made (Grafoid uses a highly confidential and proprietary batch process to produce large quantities of graphene at low cost), members toured multiple labs where scientists from Grafoid and its affiliated companies are developing technology to embed graphene on surfaces and in the structures of various materials.

In conjunction with the tour, Gary Economo, the CEO of Grafoid, gave a talk about some of the applications that Grafoid is developing for graphene technology.  Several partners of Grafoid, including Braille Battery, Stria Lithium and Alcereco, spoke about how they were using graphene to enhance the performance of their products.  Members left the meeting at Grafoid with a real appreciation for the properties of graphene and how wide ranging its applications are likely to be in the future in advanced battery and other technologies.

A wrap-up of the meeting would not be complete without noting the boat tour of the 1,000 Islands in the Saint Lawrence River and the reception and dinner at Fort Henry outside Kingston.  Both took place during the height of autumn colors in Southern Ontario, providing an aesthetically impressive finish to a technologically impressive program.

Many thanks to Gary, Chester, and all of our hosts at Grafoid, who put on a truly exceptional program.  The joke among attendees is right (at least in part):  The bar has been set very high for future members site visit meetings.

Battery XP™, Lithium-Ion and the VHS Effect

October 10th, 2014 by

This past week, I attended the JIP Information Workshop for Multi-Chemistry Battery Life Validation Program in Chicago sponsored by DNV-GL.  The purpose of the workshop was to organize an industry group that will provide data to populate a software tool called Battery XP™, which enables developers of stationary energy storage systems (ESS) to predict the performance of the advanced battery cells that are at the heart of such systems.  At the meeting, DNV-GL demonstrated how Battery XP™ can predict the performance of certain lithium-ion batteries based on an NMC cathode.  But given the right background data, Battery XP™ could, said DNV-GL, predict the future performance of a battery cell based on any chemistry.

Battery XP™ fills an important need in the advanced battery industry.  It can help developers better predict the performance and lifecycle of ESS systems.  It can help battery vendors better communicate the functionality of their products by providing third party validation of expected performance. It might also help financiers better model expected revenue streams from ESS projects, though the financeability of ESS projects may ultimately need to await the generation of data from actual experience in the field.

The generally warm reception that DNV-GL received to Battery XP™ at the Chicago meeting illustrates a larger truth about advanced battery technology.  For all the discussion in the market about the relative performance of battery cells of different chemistries, the truth is that the predictability of a cell may ultimately be more important than its performance.

This principal is illustrated in part by the rise of lithium-ion batteries.  Five years ago, conferences on advanced automotive batteries routinely included a panel discussion featuring a debate among lithium-ion battery proponents and those propounding the benefits of other batteries chemistries.  The faults of lithium-ion cells were recited almost by rote:  high cost, complicated BMS systems, frightening volatility, and an energy density when measured at the system level that was not nearly as impressive as at the cell level.

Today that debate in the automotive sector is no longer routine.  Lithium-ion is now clearly the chemistry of choice in xEV’s, a position further evidenced by the recent move of several automotive OEM’s from NiMH to lithium-ion technology in their HEV offerings.  It is not so much that the critics of lithium-ion technology were wrong.  It is simply that the industry is standardizing around a single technology that automotive OEM’s can better understand and better predict.

Lithium-ion may be winning the advanced automotive battery race in the same way and for the same reasons that VHS defeated Betamax:  Consumers crave predictability.  Whether advanced lead acid is superior to lithium-ion, or whether Betamax is superior to VHS, are interesting but largely irrelevant questions.  Lithium-ion batteries and VHS are just better known, more familiar and more predictable.

A quick look at the still very early market for ESS systems indicates that the same thing may be occurring in ESS.  According to a Roland Berger presentation presented at The Battery Show, the percentage of ESS systems based on lithium-ion batteries should rise from about 17% in 2015 to about 23% by 2020.  This despite the fact that for many types of ESS applications, lithium-ion batteries are clearly not the best technological option.  Navigant Research noted this trend in a recent report on the ESS market.  The report states:  “In particular, after several years of faltering growth, lithium ion batteries are emerging as the breakout technology in this sector.”

My point here is not to expound the benefits of lithium-ion chemistry or even to predict its success in the market.  Rather it is to point out that as users come to be more familiar with a type of battery and better able to judge its predictability, its market traction will grow regardless of its merits or challenges relative to competing technologies.  Non-lithium batteries will have to work hard to gain the familiarity that lithium-ion batteries enjoy by virtue of their use in consumer electronics and, increasingly, in automotive applications.  The greatest beneficiaries of projects such as Battery XP™ may be new battery chemistries looking for ways to increase their visibility in the market.  Those that are unable to do so may find themselves playing the role of Betamax in the battery market.

Hydro-Quebec and Grafoid to Welcome NAATBatt Members Later This Month in Canada

October 3rd, 2014 by

In a little less than two weeks, NAATBatt members will have the opportunity to participate in the latest of NAATBatt’s highly successful member site visit meetings:  a tour of the energy storage laboratory at Hydro-Quebec’s research institute, IREQ, located outside Montreal followed by a tour of Grafoid’s MesoGraf™ research and development laboratories, graphene material testing, engineering and product development facility in Kingston, Ontario.  The program will run from October 15-17, 2014.  More information about the program can be seen by clicking here.

The purpose of NAATBatt member site visit meetings is to provide members with an opportunity to communicate, form new business relationships, and get better market information in a way that is simply not possible at a trade show.  Meetings provide an opportunity to really understand the business of the hosting member and to meet all the members of their team.  The meetings are also informal by design, with social activities scheduled as part of the program.  NAATBatt strongly believes that good business relationships are based on good personal relationships, and a good part of our programming is devoted to building both.

The visit to Hydro-Quebec IREQ and Grafoid will be novel for a number of different reasons.  It will be NAATBatt’s first international program, underlining a decision by the NAATBatt Board of Directors to internationalize NAATBatt’s mission.  (NAATBatt will soon be changing its name and logo—more on that in a future column).

The October program will also feature two site visits rather than one.  Both will be amazing.  IREQ, as the holder of the base patents on LiFePO4, is unquestionably one of the world leaders in lithium-ion technology.  Grafoid, which recently opened the facility in Kingston, Ontario that we will visit, is one of the few companies in the world working to manufacture graphene in large quantities.  Graphene may have a profound impact on the development of lithium-ion battery technology, as well as on a wide range of other technologies.  Meeting attendees will have the opportunity to see this revolution at its earliest stage.

The program will also be exceptional because of the exceptional generosity of Grafoid and Focus Graphite, which have planned not only the facility tours but some noteworthy side trips designed, as always, to promote the development of personal relationships among attendees.  A boat trip among the Thousand Islands during the height of fall foliage season and a tour and dinner at historic Fort Henry, located near Kingston, is on the agenda.

This is really is a program not to be missed.  I would strongly encourage all NAATBatt members that are able to attend.  And register soon, as space may be limited.

The Politics of Distributed Generation

September 26th, 2014 by

One of the most interesting presentations this year at The Battery Show was the Fireside Chat – The State of Energy Storage Both Sides of the Meter panel, hosted by Dirk Spiers of ATC New Technologies.  The panel discussed the implications of storage and distributed generation for the traditional utility model.

A last minute addition to the panel was Haresh Kamath of EPRI.  EPRI is an independent research organization that is funded in large part by investor-owned utilities.  Haresh shocked a number of people in the audience by taking a somewhat hostile view of distributed generation and behind the meter storage.  Haresh said that it was unfair that wealthy people, by installing new distribution and storage technology, were imposing costs on poorer people.

I was also shocked by Haresh’s remarks, though less than by their content than their timing.  Distributed generation, of which behind the meter storage will be a key enabler, really does pose a long-term existential threat to the centralized electric utilities that have historically provided much of EPRI’s support.  That some of these utilities might react to that threat in whole or in part by using “rich vs. poor” political demagoguery in order to obstruct the deployment of new energy technologies is not a surprise.  It’s just that I thought we had about 10 years before we had to fight that battle—before any of the major players in the utility world started taking distributed generation and behind the meter storage seriously.

Judging from Haresh’s remarks, I was wrong.  The gauntlet has just been thrown down, though by whom exactly is unclear.  Supporters of distributed generation and behind the meter storage are in, I suspect, for a tougher and dirtier fight than many may imagine.

With respect to Haresh’s remarks, I would take exception to them, though I would acknowledge that, as with all good demagoguery, they contain some seeds of truth.

Properly understood, and properly represented, wealthier and better informed consumers are using distributed solar and behind the meter storage to do what they have been trying to do for years with other technologies: use electricity more efficiently and reduce their energy costs.  This includes investments in better home insulation, LED lighting and energy efficient appliances, as well as in PV solar panels and electricity storage.  Whether it is fair that it often takes money to save (or make) money is a larger issue in society than energy efficiency.  But few will contest that a greater public good is served by using electricity more efficiently—unless those few happen to be in the business of selling it.

The seed of truth in Haresh’s remarks concerns how the costs of maintaining the existing, centralized grid will be handled for those who cannot afford to move away from it.  This is a real issue and one that needs to be dealt with fairly and honestly.  The grid as it exists today includes of billions of dollars in stranded asset costs that were historically incurred for the benefit of all consumers, whether or not they seek to reduce or eliminate their reliance on the grid today.  Users of distributed generation and behind the meter storage can no more rightfully walk away from their obligation to help pay for those costs than could the Scots walk away from their portion of the UK national debt had they chosen independence.  In fairness, over the past few years, many wealthy and politically powerful consumers have looked to distributed generation and storage as a way of avoiding responsibility for their fair share of those costs.  That should not be allowed to happen.  But advocating for fair assessment of stranded grid asset costs is far different than trying to obstruct consumers from using new technologies, including distributed generation and behind the meter storage, to reduce their energy costs going forward.

Haresh also made another point during his presentation that bodes a little better for the coming fight over distributed generation and behind the meter storage.  Haresh said that the real future of electricity will have less to do with where it will be generated than how it will be networked.  Progressive utilities around the country are looking at new ways to play in the quickly evolving business of electricity.  Facilitating communications and transactions among the growing number of generators, transmitters, storers and consumers of electric power may well provide a profitable business model for the utilities of the future.  This kind of thinking should be supported and encouraged.  The battle within the utility community between the facilitators of distributed generation and storage and the obstructers will be an important one to watch.

In the meantime it is necessary for those involved in distributed generation and behind the meter storage to play close attention to the political headwinds that may soon be blowing against those technologies.  What is clear from Haresh’s remarks is that not all utilities are likely to see themselves as facilitators.  I fear that we will be hearing more from the obstructers soon.

NAATBatt to Begin Educational Webinar Series

September 19th, 2014 by

The NAATBatt Education Committee met earlier this week at The Battery Show in Novi, Michigan.  At its inaugural meeting, the Committee decided to reinvigorate the NAATBatt program of educational webinars.  NAATBatt hosted 9 webinars in 2010 and this year co-hosted with the DOE Office of Electricity a webinar on the Section 1703 loan guaranty program for energy storage projects.  Audio files of these webinars are available to NAATBatt members on the Members Only page of the NAATBatt web site.

The new series of webinars will be managed by members of the Education Committee and will be offered on a monthly or bi-monthly basis.  The purpose of the webinars will be to offer education on issues important to the industry to employees of NAATBatt member firms and to target audiences that NAATBatt member firms would like to reach.  There will be no charge for NAATBatt members to listen in on the webinars and an audio copy of each will be made available on the Members Only page.

The first webinar will be entitled “Lithium-Ion Battery Safety: Myths and Realities” and will air on November 18, 2014.  The program, which will be aimed at regulators, government employees and the general public, will address a number of misperceptions about the safety of lithium-ion batteries that are rampant in the market today.  The program will also discuss how lithium-ion battery manufacturers mitigate safety risk at the cell and the system level with a multiple, layered system of protection.

The second webinar will be entitled “Global Survey of the Advanced Battery Market” and will air on January 27, 2015.  This webinar will address the global market for advanced battery technology on a geographic basis.  Consultants and trade associations based in China, Asia ex-China, Europe, India, Africa and South America will discuss the battery applications that are expected to drive demand for advanced battery technologies in those particular markets over the next few years.  NAATBatt members wanting to get a high level understanding of where the markets will be for what should plan on listening in.

Plans for future webinars on battery applications for buses and supercapacitor applications in automotive systems are in the planning process.  Please watch your e-mail for information about upcoming programs.  NAATBatt members interested in planning and producing these educational programs should contact Education Committee co-chairs Ralph Brodd (Broddarp), John Warner (XALT) or John Butkowski (Beckett).