NAATBatt Announces DES Demonstration Project Initiative

Written by James Greenberger on May 05th, 2012

The 22^nd Annual Meeting of the Electricity Storage Association (ESA) wrapped up today in Washington D.C.  Drawing more than 500 attendees, the meeting was very successful and a testament to the movement of advanced energy storage on the grid ever closer to commercial feasibility.

One of the themes touched upon by several speakers at ESA was the need to develop the mechanism of storage on the grid.  It is increasingly clear that the technology of storage is to some extent a different issue than the mechanism of storage.  For several years much of the focus has been on developing new devices that will lower the cost of storing a kilowatt of electricity.   While this focus has not been misplaced, the larger and perhaps more important challenge is developing the actual mechanisms for installing and using electricity storage on the grid in whatever form it happens to be stored.  Without a better understanding as to how stored electricity can be deployed, managed, controlled and used on the grid, progress on the electrochemical technology front will be for naught, as there will be no market for the technology in any grid-connected application.

In light of theme that emerged from the ESA meeting this year, it was my pleasure to announce at the meeting the newest NAATBatt initiative.  Consistent with the emphasis placed on distributed energy storage (DES) demonstration projects in white paper that NAATBatt presented last month to DOE Secretary Steven Chu, NAATBatt will be organizing a consortium of electric utilities and storage solutions providers to develop a list of proposed demonstration projects designed to study and familiarize electric utilities around the country with DES technology.

The list of proposed DES demonstration projects will have two objectives. First, it will provide industry with a way to outline what industry believes it needs to learn about deploying DES systems in the field and set out a rational and comprehensive roadmap for obtaining that knowledge.  The list is a proactive initiative of utilities and solutions designed to address the challenges they see in deploying distributed storage on the grid, rather than responding to individual project solicitations from government.

The second purpose of the list will be to provide a catalyst for government support of DES technology.   There was a sense among those that attended the meeting with Secretary Chu that while the meeting went well, and that the Secretary was gracious and receptive to our general advocacy for DES technology, the meeting did not result in anything substantive.  We simply did not have anything substantive to ask for.  The purpose of the list is to give industry a substantive ask—a set program endorsed by industry that Congress and the DOE can support and, hopefully, fund.  The proposed projects will provide the best means to bring national benefits of DES technology outlined in the recent NAATBatt white paper to consumers.

The list will also be a lever to seeking additional funding for utilities willing to invest in the designated projects.  Because DES technology will be located on the distribution portion of the grid—an area subject to exclusive state regulation—it is necessary and proper that the funding for building it out on a national basis come from state sources, and not just the U.S. Department of Energy.  By designating a program of regionally diverse projects, which will involve the deployment of new technology and job creation in many different states, we hope to use the list to encourage the formation of regional consortia of state governments that can fund and direct the projects.  The U.S. Department of Energy can play a helpful, and even a critical, role in providing impetus and seed funding for this initiative.  But it is time to bring the states into the discussion about DES and to recognize them as key players in creating solutions.  A program of DES demonstration projects coordinated among utilities nationwide will encourage this to occur.  NAATBatt looks forward to doing its part to encourage that to happen.

Lux Research Report Highlights the Need for Innovation

Written by James Greenberger on April 28th, 2012

Last month, Lux Research published a report titled “Searching for Innovations to Cut Li-ion Battery Costs”, information about which can be obtained at www.luxresearchinc.com.   The report suggests that while scaling production of high energy automotive Li-ion batteries can reduce their costs, the benefits of scale max out at a certain point.  The Lux report suggests that the lowest cost point that can be achieved by manufacturing current Li-ion battery technology at scale is $397/kWh by 2020 – far short of the <$150/kWh commercialization target for full electric vehicle batteries set by the U.S. Advanced Battery Consortium.

Although I was amused by the precision of Lux Research’s prediction–$397/kWh by 2020 (I bet Pike Research would have gotten it down to the penny!)–its thesis is valid:  in order for EV’s to penetrate the mass consumer market, substantial innovation is needed to bring down EV battery cost.  Lux Research suggests that the most effective focus for new innovation would be developing new, more energy dense cathode materials.

In fact, the battle to bring down battery costs requires innovation in almost all aspects of advanced battery systems.  New, more powerful cathode materials are certainly necessary.  But so too are better anodes, more efficient separators and non-flammable electrolytes.  Substantial progress is also needed in battery system management, control and measurement technology.  Progress in one area can make up for deficiencies in others and spur new approaches and new innovations that may not be obvious in isolation.

What tends to be overlooked in the disappointment about low EV sales numbers and the failure of a Moore’s Law to appear in battery manufacturing is that steady progress is being made in all of these areas.  While we all hope for a disruptive magic bullet–and one may yet appear–the reality of the struggle to commercialize advanced automotive batteries may be that slow, steady progress is what wins the race, not major breakthroughs.

NAATBatt Meets with Secretary Chu; New Initiatives to Follow

Written by James Greenberger on April 20th, 2012

Last Monday I had the pleasure and privilege of accompanying a delegation of eleven companies (ABB, Altairnano, AEP, Dow Chemical, Dow-Kokam, DTE Energy, Duke Energy, EaglePicher, General Motors, KEMA and S&C Electric) to a meeting with Secretary of Energy Steven Chu in Washington.  The delegation was part of a working group of companies that produced the recent NAATBatt white paper entitled “Distributed Energy Storage: Serving National Interests”.  A copy of the white paper can be obtained on our Web site at:  www.naatbatt.org.

The purpose of the meeting was to present Secretary Chu with a copy of the white paper and to drive home two of its key points.  We spent about 45 minutes with the Secretary, which was for many of us, including myself, a great delight.  One can argue the pros and cons of some of the decisions the Department of Energy has made over the past three years.  But there is little denying that no one in the world has done more over that period to support the development of critical new energy technologies than Secretary Steven Chu.

The delegation stressed two points to the Secretary:  First that the best and most valuable way to store electric energy on the grid is to store it on distribution systems, proximate to the ultimate electricity customer.  Storing electricity on a distributed basis offers the greatest flexibility and the highest value to the grid.  Moreover, as the white paper describes in some detail, many of the benefits that distributed energy storage provides are difficult to quantify in monetary terms.  As a consequence, other studies focused on the value of different storage applications tend to undervalue the actual benefits of distributed energy storage.  Those difficult to value benefits include stabilizing the national electricity grid by providing back-up power to local distribution systems, integrating renewable energy (and in particular the rapidly growing distributed generation of renewable energy) onto the grid, and making electric vehicles more convenient and affordable to consumers.  The delegation suggested that in a time of tough choices and tightening budgets, distributed energy storage should be thought of differently than other types of electricity storage technologies and given priority.

The delegation’s second point had to do with the best way to push distributed energy storage technology forward.  The delegation stressed that the cost challenges of distributed energy storage technology are significant and are driven by many factors, not just the need to improve the energy capacity of battery cells.  The principal opportunities for price reduction lie in giving the utilities that will deploy these systems real world experience with them.  Through that experience new, more cost efficient ways of installing, networking and using distributed storage will develop.  The goal is to evolve “plug-and-play” systems that can be installed, interconnected and plugged into a network by a standard utility crew without special training.  As advances are made in electrochemical energy storage, new types of battery cells can be dropped into DES systems.  But letting those DES systems evolve by means of actual field deployments is the key to moving that technology most rapidly down the cost curve.  The delegation urged Secretary Chu to continue his support for DES demonstration projects and suggested that those projects be small, fast, cheap and geographically diverse.

NAATBatt looks forward to following the progress of the distributed energy storage market and to playing an important role in promoting it.  The white paper predicts a possible combined DES/automotive market for advanced batteries of as much as 370 GWh by 2022.  That market may happen, but it will only happen if the groundwork is properly laid for it.  NAATBatt expects to follow-up our success with Secretary Chu with the announcement of two new initiatives at the ESA meeting in Washington next month.  Watch this column for more details.

NAATBatt Group Presents Recommendations to Secretary of Energy Steven Chu

Written by James Greenberger on April 16th, 2012

Chicago, Illinois (April 16, 2012) – The National Alliance for Advanced Technology Batteries (NAATBatt) issued a white paper  today detailing the benefits that would result from widespread deployment of distributed energy storage (DES) systems.  Representatives of a coalition of industrial companies and electric utilities assembled by NAATBatt presented a copy of the white paper to U.S. Secretary of Energy Steven Chu at a meeting this morning in Washington, D.C.  DNV KEMA Energy & Sustainability acted as advisor and technical writer to the NAATBatt group.

White Paper Details the National Benefits of DES Technology

Titled “Distributed Energy Storage: Serving National Interests,” the white paper provides a comprehensive overview of the role DES can play in producing a more reliable, efficient, clean and secure electrical grid.  Cited benefits include system regulation, integrating distributed renewable power generation, mitigating the impact of power disruptions, transmission and distribution project deferral and making electric vehicles more convenient and less costly.  The paper also discusses financial and regulatory barriers to DES and makes recommendations for moving past them.

“DES is often lumped together with other technologies when talking about the benefits of storing electricity on the grid,” said NAATBatt Executive Director James Greenberger.  “But the white paper points out that storing electricity out at the “tips” of the grid has unique advantages.  While smaller, multiple distributed storage systems can cost more than large, bulk scale electricity storage, distributed storage can do much more.  DES systems can play a key role in providing reliable electricity service to consumers, integrating renewable energy onto the grid, and making electric vehicles more attractive and affordable.  The white paper argues that utilities and utility regulators should place a high value on those benefits.”

NAATBatt coordinated the production of the white paper at the request of the U.S. Department of Energy (DOE) to serve as a guide for federal funding priorities as well as an information resource for state regulators to help them understand DES systems and their benefits.  NAATBatt hopes the white paper will encourage continued DOE funding of demonstration projects designed to reduce the cost and increase the utility of DES systems.

DNV KEMA produced the document based on direct input from the NAATBatt working group comprised of utilities, energy storage manufacturers, system integrators, automotive manufacturers, and government entities from across the nation. The 13-member working group included ABB, American Electric Power (AEP), Altairnano, Boston-Power, DTE Energy, Dow Chemical Company, Dow Kokam, Duke Energy, EaglePicher Technologies, General Motors Company, Oak Ridge National Laboratory and S&C Electric Company.

“Larger trends like bringing distributed wind and solar online and heavier peak loads are realities we’re dealing with now, but storage technology needs to advance before we can adequately address them,” said the paper’s technical writer, DNV KEMA Senior Consultant Kristen Brewitt.  “The technical and business cases for DES are solid.  It is a matter now for policymakers and regulators to agree on uniform policy and make the numbers work.”

Copies of the white paper may be downloaded at http://naatbatt.org/uploads/NAATBatt-DES-White-Paper-FINAL-120410.pdf.

About NAATBatt

National Alliance for Advanced Technology Batteries (www.naatbatt.org) is a not-for-profit trade association of industrial companies, electric utilities and advanced materials suppliers dedicated to growing the market for and improving the technology of advanced battery systems in the United States. NAATBatt focuses on battery technologies that are weight and volume constrained, such as lithium-ion batteries that are usable in both motive and stationary, grid connected applications.  By encouraging the development of a combined, multi-gigawatt market for advanced automotive batteries and distributed stationary batteries, NAATBatt hopes to spur innovation and promote greater public and private investment in advanced battery technology.   NAATBatt’s core mission is to encourage U.S. leadership in advanced battery technology. The long term health of the U.S. economy, and tens of thousands of future U.S. jobs, depend in no small part on the ability of U.S. companies to remain competitive, if not to become leaders, in this critical technology.

Battery Fires and Rick Santelli

Written by James Greenberger on April 13th, 2012

On Wednesday the advanced battery industry again received some negative publicity when an explosion in one of the laboratories at the General Motors Technical Center in Warren, Michigan injured one employee and caused the building to be evacuated.  According to press reports, the incident occurred during extreme abuse testing of a new prototype battery.  During the test, gases escaped from the battery cell being tested, failed for some reason to vent from the area, and were ignited by a heat source.

Mishaps in a laboratory are not a trivial thing.  But they are also not uncommon or unexpected.  In a sense, the whole point of abuse testing is to get something to go wrong.  The more rigorous the abuse and testing, the safer the end product.  Customers driving some future GM car will one day owe the safety of their vehicle in part to the unfortunate employee injured on Wednesday.

The only truly noteworthy thing about the accident was the publicity it received.  Because of heightened public sensitivity to the safety of electric vehicles, a somewhat unexceptional laboratory mishap received national press coverage.  This is to be expected, of course, when the subject is a much anticipated new energy technology that has unfortunately become somewhat politicized.

As I read with a sense of frustration the numerous reports of the Warren incident, I could not help but think about another news item from earlier in the week.  Last Monday on CNBC, reporter and Tea Party hero Rick Santelli presented a lengthy piece on how easy it is to convert a vehicle to run on natural gas.  As I watched Mr. Santelli, a trained financial professional, amble through the conversion process in his garage with safety goggles and about 1,000,000 btu’s of compressed energy, I could not help but worry that there was a better chance that he was building a bomb-on-wheels than a useful vehicle.  The demonstration went forward without comment or concern by the other CNBC commentators, many of whom were undoubtedly reporting extensively on the GM laboratory accident two days later.

Advanced batteries and compressed natural gas can both power vehicles and can do so safely if properly engineered and manufactured.  The key to the safety of both technologies is rigorous testing, high quality manufacture, and minimum safety standards.  As between the safety technology coming out of the GM Technical Center and that coming out of Mr. Santelli’s garage, I will take the GM technology any day of the week.  Hopefully, the press will catch on soon.

Workshop Format Demonstrates the Value of NAATBatt

Written by James Greenberger on April 06th, 2012

The workshop held this past Tuesday in Chicago on thermal safety issues in lithium-ion batteries was a great success.  The success was not unexpected.  We knew before it started that we had identified the leading experts in the world on the subject of thermal safety to participate in the program, and the agreement of the major automotive OEM’s—General Motors, Ford, Toyota and Daimler—to participate and speak frankly about the issue insured that the program would be unparalleled in quality.

The thermal safety of lithium-ion batteries is one of the small and often overlooked issues that has the ability on its own to have a major impact on the prospects of electric drive in the United States.  A relatively minor incident just a few month ago involving the Chevy Volt became overnight sensation in the press.   Much of the general public’s seemingly deflating enthusiasm for electric vehicles over the past few months can probably be traced directly to that incident.

The major take-aways from the workshop are too many and too complicated to summarize in this column.  But I have been gratified by the numerous compliments that NAATBatt has received for the program and by the large number of participants from important companies in the industry, who genuinely seemed to leave with a better understanding of the thermal safety issue and of where their companies should be devoting resources for maximum commercial advantage.

The success of the workshop owed much to its format.  Attendance at the workshop was far smaller than attendance at the major commercial battery shows.  The attendees as well as the speakers were largely handpicked by NAATBatt.  Everyone in the room already had some level of expertise in lithium-ion technology and had something to contribute to the discussion—a fact that became quite evident during the two hour afternoon interactive discussion with the OEM panel.

Large, expensive, multiday conferences have their role in the industry.  One workshop attendee reported that he had recently returned from a battery conference in Japan, which had more than 80,000 attendees.  To be sure, those conferences have a certain value.  But programming that results in real industry progress—that gives rise to the “aha moment” for participants and their companies—must be done differently.  For that you need a much smaller group, with handpicked presenters and handpicked participants and a comfortable, intimate venue that encourages them truly to interact.

That is what we do at NAATBatt.  No commercial conference organizer can do the same, because you can’t really make money doing it.  But it is something the industry must support, if we are really going to get to the “aha moment” on the thermal safety issue and on a lot of the other issues that will ultimately determine the commercial success of the industry and the companies that participate in it.

Experience with Energy Storage Technology is the Key to Promoting Innovation

Written by James Greenberger on March 30th, 2012

This past week, Lux Research released a report on its outlook for lithium-ion batteries and the prospects for cost reduction.  Lux noted that the electric vehicle market has been slow to develop and that the key to its more rapid evolution is, as always, reducing the price of lithium-ion batteries.  The report suggests, however, that there is a limit to the price reductions that existing technology can deliver and that the long term commercial viability of battery electric vehicles (BEV’s) must await the development of new, next generation technologies.

The Lux report is interesting because it puts some numbers on the problem.  According to Lux’s calculation, the best that can be done with existing lithium-ion technology, largely by manufacturing batteries at scale, is to reduce their cost to about $397 per kWh.  While this is likely a significant improvement over the cost of lithium-ion automotive batteries today, it is a far cry from the <$150 per kWh threshold that the U.S. Advanced Battery Consortium estimates as necessary for BEV’s to penetrate the mass consumer market.  Lux suggests that the best opportunities for further price reductions in BEV batteries lie in developing new cathode materials, such as lithium-air, lithium-sulfur and magnesium ion, and solid state lithium-ion batteries.

Distributed, grid-connected energy storage technology is also running up against significant cost barriers.  The cost figures being reported for the initial deployments of community energy storage systems are too high and unsustainable.  The cost challenge for stationary storage, however, as opposed to motive storage, seems less related to the price of the battery itself than to the cost of evaluating, monitoring and controlling the battery both before and after it is deployed.

With an eye on addressing this problem, ARPA-E announced this week a new initiative aimed at identifying high-impact concepts for providing diagnostic, prognostic, and control capabilities for energy storage systems.  The initiative focuses on encouraging the formation of teams of companies and researchers organized across industrial sectors that will bid on ARPA-E funding opportunities for energy storage control systems that will be announced in the future.  The ARPA-E initiative aims at encouraging the building of more and better relationships among the software, controls and battery industries, sectors which have not necessarily worked closely together in the past.  This is a very interesting concept and NAATBatt looks forward to doing its part to encourage the formation of these relationships.  More information about the ARPA-E initiative can be found at: https://arpa-e-foa.energy.gov/#7fb756a5-03ec-471f-8b9a-454487240447.

It is clear that new innovation is needed to bring down the cost of energy storage and that the innovation must produce technologies and systems that are different than what we use today.  But in looking for that innovation and trying to promote it, it is important to identify from where it is most likely to come.  Innovation that matters, that truly impacts mature technologies such as automobiles and the electricity grid, will not occur in a vacuum (or in a laboratory alone).  Innovation that matters can only be promoted by giving battery manufacturers, auto makers and utilities real world, practical experience with existing energy storage technology, insufficient as it may be, and letting them figure out how best to increase its power and decrease its cost.

Developing next generation technologies is important, even critical, to the future of energy storage.  But we must resist the temptation to believe that these new technologies will emerge magically from someone’s garage.  Energy technology is not information technology and does not work the same way.  Giving battery manufacturers, auto makers and utilities the practical experience they need with energy storage technology is the true key to innovation that matters and that will ultimately allow energy storage technology to fulfill its promise in vehicles and on the grid.

Thinking About Disruptions in the Advanced Battery Supply Chain

Written by James Greenberger on March 23rd, 2012

Earlier today I participated in a roundtable discussion at the U.S. Department of Commerce on possible threats to the supply chains of critical technology materials. The Department of Commerce and the White House National Science and Technology Council co-sponsored the meeting responding in part to recent concerns about rare earth metals supply.  The purpose of the meeting, as expressed by the Department of Commerce, was to identify future “rare earth problems” that might be a threat to U.S. industry.

In preparing for the meeting, I had opportunity to talk to several NAATBatt members about their views of the critical materials supply chain issues.  Thanks to all who responded to my inquires.  Based on those responses I made a short presentation this morning, which summarized, in unscientific fashion, what seems to be a consensus view in the industry.  That view is as follows:

There is a general concern that the supplies of certain critical materials are controlled by a limited number of suppliers (in many cases, by China).  The concentration of supply gives rise to the possibility of future supply disruptions, though no member reported experiencing any such disruptions to date.  The specific critical materials mentioned by members included heavy rare earth metals, lithium carbonate, high quality natural graphite and antimony.

Although several members expressed concern about the concentration of supply, no member reported that their concern was serious.  There seemed to be general confidence that, at least with respect to raw materials, the threat of disruption was not great and that any disruptions or potential disruptions that might occur can be remediated in the short to mid-term by normal market forces.  In the worst case, responding members expressed the view that government intervention though subsidies or socialization of environmental costs would be effective in establishing new sources of supply in relatively short order.

Several members expressed concern about possible government over reaction to China’s clearly mercantilist strategy of using its control of most rare earth supplies to encourage greater manufacturing of finished goods in China (i.e., the Chinese will sell you all the rare earth metals you want, so long as they are incorporated into a battery, electric motor or wind turbine).  Several members fear that the government will spend money or political capital buying access for U.S. manufacturers to Chinese critical materials.  Those members feel that such capital would be better deployed supporting the development of new U.S. technology that could one day replace those critical materials or make them unnecessary (such as switch reluctance motors and superconducting direct drive generators for wind turbines).

Although responding members seems generally unworried about constraints of raw materials supply, many were very concerned by threats to the supply of many processed materials and finished goods that are important to the advanced battery industry.  Access to domestic supplies of cathode materials, lithium-ion battery cells, and the machinery and equipment necessary to manufacture battery cells and electrode materials were a source of serious concern.  Although the Stimulus Package funding of 2009-11 did much to ensure that a domestic supply of such finished materials exists at all, that supply chain is fragile and under great stress as demand for electric vehicles and renewable energy proves slower to develop than originally thought.

Disruptions to the supply chain of processed materials and finished goods can be far more destructive than disruptions to raw material supplies.  If lithium carbonate or rare earth metal supplies are disrupted, new mines or sources of supply can simply be opened when prices rise above a certain point.  Processed materials and finished goods, however, are more problematic.  Producing processed materials and finished goods requires human experience and know-how.   If this experience and know-how is lost as a consequence of a disruption in the manufacture of processed materials or finished goods, simple price signals may be insufficient to restart production.  The deficit will be more critical and of much longer term.

My conclusion to the Department of Commerce was that while studying threats to the supply chains of critical, raw materials may be important, it is more important to concentrate on protecting the domestic supply and production of processed materials and finished goods.  This will require making sure that the experience and know-how that U.S. battery industry has gained over the past two years does not fall victim to the short term challenges of the electric vehicle and grid-connected energy storage markets.

Seeing Past the Bad News

Written by James Greenberger on March 16th, 2012

The past few weeks have been rough ones for the advanced battery industry and for electric drive.  Last week, NAATBatt member International Battery shut its doors, citing a lack of cash.  This followed General Motor’s announcement that Volt production was being suspended temporarily for lack of demand.  Bankruptcy court approval of Ener1’s plan of reorganization pretty much completed a trifecta of bad industry news for the month.

It is easy, in light of these announcements, to get bearish on batteries.  Bad news concentrates the mind on the challenges of battery technology, which have been talked about for some time:  low energy density relative to hydrocarbons, high cost and safety questions.  It also exaggerates the successes of competing technologies, such as petroleum and natural gas, which seem to be in the midst of a run of good news and growing political support.

It is important to remember, however, that the fundamental factors and mega-trends that made advanced battery technology seem attractive just a few years ago have not changed or gone away.  Worldwide demand for energy, particularly in the developing world, is growing steadily.  Using natural gas in the transportation sector suffers from significant challenges and its long term price volatility has not necessarily been mitigated by new sources of unconventional supply.  And the dangers of continued petroleum dependence…have you checked gasoline prices recently?

A closer look at the news over the last few weeks reveals some interesting items, which may have been lost in the gloom:  This week BASF announced a global licensing deal with LiFEPO4+C Licensing AG for a package of lithium iron phosphate technologies owned by Hydro-Quebec and others.  This follows BASF’s purchase last month of Ovonic Battery Company and its portfolio of patents in nickel-metal hydride technology.

Not to be outdone, 3M announced this week that it is investing in the manufacturing of silicon anode materials, based on its recently granted U.S. patent No. 8,071,238.  3M claims a 40 percent increase in cell capacity based on its new material and is apparently backing that claim with significant new investment.

In short, while some recent news has been discouraging, the energy challenges of the world have not changed and the smart money, or at least a good bit of it, is still betting on batteries.  After what was certainly some irrational exuberance in the last few years about the short term prospects of full electric drive, we may yet look back at 2012 as the time when the real deals were done, and the real foundations were laid, in a technology that will still one day power much of the world.