January 30th, 2015 by James Greenberger
January 23rd, 2015 by James Greenberger
As in past years, the NAATBatt 2015 Annual Meeting will include something we call a Spouses’ Program. This is a set of activities specifically organized (by my wife, Ellen) for spouses and significant others who accompany delegates to the Annual Meeting. This year’s program involves a guided tour of some of the most significant sites, museums and shopping areas in the Phoenix area. A full description of this year’s Spouses Program activities may be seen by clicking here. Spouses and significant others are also welcome to join delegates at the Annual Meeting dinners and receptions, and to register to play in the Advanced Battery Golf & Tennis Tournament on Monday.
While it is true that one purpose of the program is to provide great entertainment for family members of delegates—and a good excuse for a low-cost vacation in a warm and sunny climate during February—the principal purpose of the Spouses Program is something far more important than mere entertainment.
One of the core missions of NAATBatt International is to create a community of professionals working in the business of electrochemical energy storage. The value of that community is that it permits its members to grow their visibility and personal relationships in the industry. Those personal relationships can become the basis of solid business relationships.
It is much easier, and much less risky, to do business with someone you know—and someone your spouse may also know—than to do business with a stranger who you happened to meet at a trade show. Sometimes I think that Asian business culture is far more attuned to this business reality than Western business culture. But that reality is hard wired in human nature and cuts across all cultures. In business, you are who you know well.
While former attendees could provide great testimonials for the Spouses Program, the greatest testimonial may be its close to 100% return rate among the spouses and significant others who have participated in the program in the past. Some great and enduring friendships have been formed among those past participants–which is, of course, the principal purpose of the program.
Those relationships matter. They matter not just to the individuals who have formed and enjoyed them, but also to their battery industry spouses. Those spouses, looking to grow their own relationships and visibility in the industry, now have a wife, husband or significant other who is an important business asset. Welcome to the advanced battery industry community.
I hope that you can join us next month in Phoenix and bring your best business partner along.
January 16th, 2015 by James Greenberger
It was my pleasure this past week to announce the winners of NAATBatt International’s annual awards for outstanding contribution to the advanced battery industry. Each year, NAATBatt International acknowledges at its annual meetings individuals who over the past year or over the course of a lifetime have made an outstanding contribution to the industry. The awards are presented at the Gala Dinner at the annual meeting, this year on the evening of Wednesday, February 18, at the Wigwam Resort outside of Phoenix.
This year’s winners are:
Prof. Stan Whittingham of SUNY Binghamton will receive the NAATBatt 2015 Lifetime Achievement Award-Technology. Prof. Whittingham is one of the main figures in the history of rechargeable batteries. In 1972, while leading a research team at Exxon, he discovered the role of intercalation in battery reactions, which resulted in the first commercial lithium rechargeable batteries. Prof. Whittingham is listed as No. 17 in the Greentech Hall of Fame (following No. 16, Nikola Tesla). He has received the Yeager Award of the International Battery Association and is a Fellow of both the Electrochemical Society and the Materials Research Society. Prof. Whittingham’s work has facilitated battery applications that would have been unthinkable 30 years ago. Anyone working in lithium-ion technology today owes their job in part to Prof. Whittingham. NAATBatt International is honored to salute him.
Naum Pinsky of Southern California Edison will receive the NAATBatt 2015 Technology Commercialization Award. 23 years ago, when Dr. Pinsky joined SCE, few envisioned electric drive, let alone storing electricity on the power grid, as practical possibilities. Dr. Pinsky established the Electric Vehicle Technical Center at SCE, which did some of the earliest work by any public electric utility on vehicle electrification and electrochemical energy storage on the grid. He is also responsible for the operation of the Large Energy Storage Test Apparatus facility at SCE, which is capable of testing large transportable energy storage devices prior to field demonstrations, and pilot deployments. As more utilities and IPP’s gain an interest in grid connected energy storage, it is fitting that we should honor this year one of the early pioneers in the field. Dr. Pinsky’s work continues to serve as a valuable guide to those who are just beginning to investigate the uses and value of storage on the grid.
Sally Miksiewicz, former CEO of East Penn Manufacturing Co., will receive the NAATBatt 2015 Lifetime Achievement Award-Industry. NAATBatt International is both glad and saddened to be offering the award this year to Ms. Miksiewicz, who died tragically last year. Ms. Miksiewicz will long be remembered in the advanced battery industry by the many friends she made and by the many people to whom she served as a mentor and a role model. The industry will remember that under her leadership, East Penn introduced the Deka UltraBattery, a major leap forward in lead acid battery technology, and became an industry leader in lead acid battery recycling. There is no question but that Ms. Miksiewicz has earned this lifetime achievement award; NAATBatt International only regrets that it is being given so soon.
I would urge those working in the advanced battery industry today to make the trip to Phoenix next month to honor Prof. Whittingham, Dr. Pinsky and Ms. Miksiewcz. As an industry, we are the sum of our individual parts. By honoring those parts, those individuals, who have made outsized contributions to the technology and businesses that provide us our livelihoods and our mission, we honor our entire industry. I hope you can join us.
January 9th, 2015 by James Greenberger
It was suggested to me that in light of the tragedies in Paris, I devote my column this week to remembering the victims and honoring the principles of tolerance and free expression for which they gave their lives. While that request may seem a bit of a stretch—this column is normally devoted to developments in the business, technology and policy of electrochemical energy storage—it is not as much of a stretch as it may appear.
The world today seems in many ways to be pulling apart along the lines of competing ideologies. Radical Islam in the Middle East, nationalism in Europe and Asia, nativism in the United States, and tribalism almost everywhere: these forces urge us to compete against each other, sometimes violently, in pursuit of one zero-sum-gain objective or another. Perhaps this is inevitable. After all, one is a Muslim or not; the Senkaku islands belong to China or not; one is an undocumented alien in the United States or not. Identifying win-win outcomes in ending disputes and re-defining differences is not always easy or possible.
But advanced battery technology, in a sense, is different. In developing better energy storage technology, individuals and companies, even competing companies, strive to improve a technology that will positively impact the lives of all people around the world regardless of nationality, legal status or tribe. Reducing the pace of climate change, extending the reach and reliability of electrical power, and breaking the monopoly of hydrocarbon fuels in transportation are in the interest of all of mankind. The more we cooperate, the faster the technology and its benefits will occur. Battery technology draws us together rather than pushes us apart.
The forces in the world that pull us apart are inevitable. The best antidote to them is to focus our efforts on the forces that pull us together, so that the forces of cohesion will simply outweigh those of dispute. The most fitting tribute we can make to those who died in Paris is to redouble our efforts to benefit all humanity through our technology and its benefits. Through those efforts and those benefits we will hold mankind together and make for a more peaceful world.
January 2nd, 2015 by James Greenberger
Retail prices for regular grade gasoline in the United States reached the lowest levels in four years primarily as a result of falling crude prices in the second half of 2014. As of December 12, the weekly retail price for regular gasoline in each city for which U.S. Energy Information Administration collects data was below $3.00 per gallon for the first time since February 2010. Each city recorded its lowest 2014 gasoline price on the last Monday of the year.
Falling gasoline and crude oil prices have ignited predictable concern about the future of renewable energy technologies and of technologies, such as electrochemical energy storage, that facilitate the use of renewable technologies on the grid and in transportation. Those concerns are misplaced.
There are three reasons why those in the advanced battery business should not be concerned about the falling price of hydrocarbon fuels. First, the story really isn’t the falling price of petroleum but rather its substantial volatility over time. Prices are falling today because of an imbalance of supply over demand. The market will correct for that over time, as it does for all commodities, and prices will go back up. One of the long term advantages of renewable energy technologies over hydrocarbon fuels is that renewable energy tends to be technology-based rather than commodity-based (i.e., a wind turbine vs. a lump of coal). The price of technology tends to go down over time whereas the price of commodities tends to be volatile.
The second reason not to be concerned about the falling price of petroleum is that petroleum is not the same as energy. Energy is produced by a number of different sources the prices of which are not necessarily linked. For example, petroleum prices may have fallen over the past six months, but electricity prices in the United States rose during the same period. Advanced batteries are not a source of energy and they do not really compete with petroleum or other hydrocarbons. Advanced batteries are instead an energy vector, taking energy produced in one form and delivering it in another. In a sense the independent volatility of different forms of energy underscores the importance of battery technology, as it potentially permits users to replace more expensive fuels with less expensive (or cleaner) fuels.
Third and finally, the falling price of petroleum should not concern the battery industry because the principal value of a battery is not its ability to substitute for petroleum or other fuels. Rather the most valuable function of a battery is to deliver energy to a place or to an application where it would be difficult or impossible to deliver energy by any other means. Consumer electronics, cell phones and certain distributed energy storage applications are examples of this function. Even if the cost of a barrel of crude oil fell to $1.00, Apple will still look to lithium-ion batteries to power the iPhone7, not oil.
The falling price of petroleum should not be a drag on the business of advanced batteries. Electrochemical energy storage is not a form of energy. It is an energy enabler. So let the price of hydrocarbon fuels do what it is going to do naturally–fluctuate. In the meantime, enjoy the ride.
December 26th, 2014 by James Greenberger
New Years is a good time for individuals to look to ahead and to wonder a bit about what the future holds them. The same is true for companies and for entire industries.
Earlier this past year at the Battery Show, Christophe Pillot of Avicenne Energy made a presentation about the state of the worldwide battery market in 2013. One of the slides in Mr. Pillot’s presentation was a bar graph breaking down the battery market into its largest individual components. The largest component shown on Mr. Pillot’s slide, of course, was SLI batteries followed by portable batteries. Other automotive batteries came next, followed by a large number of industrial and stationary battery applications in increasingly smaller sizes accounting for the balance of the market. Certain applications that generated a lot of attention this year, such as residential and grid ESS, were so small as to be barely perceptible on Mr. Pillot’s graph.
The interesting question to ponder in the New Year is what will Mr. Pillot’s graph look like 10 or 15 years from now? How is the industry going to change? And perhaps, more interestingly, what significant bars will appear on Mr. Pillot’s graph in 2030 that we do not even anticipate today?
As to the question of how the industry is going to change, the balance of Mr. Pillot himself made several interesting predictions. Mr. Pillot suggests that by 2025, lead acid batteries, including SLI batteries, will still represent the largest share of the market. During the 2012-2020 period, however, Mr. Pillot expects the market for lead acid batteries to grow at a 4% CAGR. Lithium-ion batteries and the applications they serve will grow, according to Mr. Pillot, at a 16% CAGR. Mr. Pillot predicts that by 2020, the lithium-ion battery market, powered by the growth of the xEV and ESS applications, will be more than half the size of the market for lead acid batteries.
This is all very interesting. But what about the bars that will appear on Mr. Pillot’s graph in 2030 that do not even appear on his graph for 2013? Is there a “killer app” that will emerge in the next 15 years that could fundamentally impact the market for batteries? After all, would xEV’s, ESS, and notebook and tablet computers have even appeared on Mr. Pillot’s graph in 2000?
It is not difficult to speculate on what some of the new “killer apps” for batteries might be by 2030. Robotics, control systems, advanced weaponry, and wearable consumer goods are all possibilities. If we have learned anything over the last 15 years, it is that the battery market is dynamic and the greatest limit on that market is not technology but imagination.
At the NAATBatt 2015 Annual Meeting & Conference next February in Phoenix, we will take a serious look at one of the new battery technologies that may well drive some of these “killer apps” and perhaps emerge as a significant bar on Mr. Pillot’s slide for the battery market in 2030: thin film battery technology.
Thin film lithium ion batteries are similar to conventional lithium-ion batteries, but they are composed of thinner materials, some only nanometers or micrometers thick, which allow the finished battery to be just millimeters thick. These batteries consist of a substrate, electrolyte, current collector, anode, cathode, and a separator. Their manufacture involves unique manufacturing and materials challenges, not all of which have yet been adequately addressed by industry.
Thin film lithium ion batteries can be used to make thinner portable electronics, because the thickness of the battery required to operate the device can be reduced greatly. They can be used in implantable medical devices, such as defibrillators and neural stimulators, “smart” cards, radio frequency identification, or RFID, tags and wireless sensors and wearable devices. They can also serve as a way to store energy collected from solar cells or other harvesting devices. Each of these applications is possible because of the flexibility in the size and shape of the batteries. The size of these devices need not be determined by the size of the space needed for the battery, as they largely are now. The opportunities in which to use this type of batteries are endless.
At the NAATBatt 2015 Annual Meeting & Conference, a panel consisting of Anand Kamannavar and John Busch of Applied Materials, Simon Nieh of Front Edge Technology and Igor Bimbaud of ST Microelectronics, some of the early movers in the thin film battery space, will offer delegates an insight into thin film battery technology, its possible applications and the challenges that industry must still meet in order for thin film batteries to achieve their enormous potential.
This brings us back to the missing bars on Mr. Pillot’s future slide showing the composition of the battery industry in 2030. My bet is that one of the most significant bars on that graph, which is entirely missing on the graph for 2013, will be the thin film batteries that power what some pundit already refer to as the “internet of everything”: the interconnection of almost all devices and consumer products to each other. If my guess is right, this will be a huge opportunity for the battery industry as a whole. I hope you will join us in Phoenix next February and learn more about it.
December 19th, 2014 by James Greenberger
Will lithium-ion batteries ever be able to compete with gasoline in powering light vehicles? Ten years ago, many optimists said yes. But the last ten years of working with lithium-ion technology created many pessimists. They discovered that there is no Moore’s Law for lithium-ion batteries. And they realized that there are scientific limits on the amount energy that a lithium-ion battery can store, which they were told does not even come close to that of gasoline. Over the past several years, the pessimists have taken much of the air out of the electric vehicle bag.
But the optimists may be making a comeback. Recent estimates suggest that the price of large format lithium-ion batteries may fall from about $1,800/kWh in 2009 to less than $200/kWh by 2020. Just this week Tesla Motors announced that unspecified upgrades in the lithium-ion battery pack of the Tesla Roadster are going to increase its range from 244 miles to 400 miles, a nearly 2x improvement. Moreover, at nearly every battery conference these days, some analyst displays a chart showing the “breakeven” point for lithium-ion batteries just a few years in the future. Suddenly, the optimists of 10 years ago are not looking so overly optimistic.
So what is the real story about the potential of lithium-ion batteries and, by implication, the potential of electric vehicles? NAATBatt International has decided to get to the bottom of this question.
At the NAATBatt 2015 Annual Meeting & Conference in Phoenix on February 16-19, 2015, NAATBatt International has invited four of the greatest minds in the world in lithium-ion battery technology to talk about the true potential of lithium-ion technology and its ability to compete with gasoline. No more analysts and charts predicting the future: This will be the real deal.
The four experts are: Dr. Stan Whittingham, distinguished professor of chemistry and materials at SUNY Binghamton and one of the original inventors of lithium-ion battery technology; Dr. Khalil Amine, Manager of the Advanced Battery Technology programs at Argonne National Laboratory and five time recipient of the R&D 100 Award; Dr. Michael Thackeray, a Distinguished Fellow and senior scientist in the Electrochemical Energy Storage Department in the Chemical Sciences and Engineering Division at Argonne National Laboratory and inventor of several lithium-ion compounds used in advanced automotive batteries today; and Dr. Karim Zaghib, who has published 131 papers, 85 patents, and served as editor or co-editor of 11 books, many on lithium-ion technology and serves as the Administrator, Energy Storage and Conversion at Hydro-Québec Research Institute (IREQ), which owns the rights to lithium iron phosphate technology worldwide.
Drs. Whittingham, Amine, Thackeray and Zaghib will discuss what is really possible to do with lithium-ion technology and, by implication, with electric vehicles. While it might be an overstatement to say that this will be the definitive word from the scientific community as to the future of lithium-ion technology, it might not be that much of an overstatement. We will leave considerable time after the panel discussion for Drs. Whittingham, Amine, Thackeray and Zaghib to take questions from the audience. This will be a great opportunity for industry and for energy storage consumers, such as automakers, utilities, IPP’s and solar PV installers, to really get to the bottom of the lithium-ion value proposition.
The opportunity to speak with our four distinguished panelists at one place and one time about the true potential of lithium-ion batteries will be unprecedented. Don’t miss it. I hope you will be able to join us in Phoenix this coming February for this and other important parts of the NAATBatt 2015 Annual Meeting & Conference program.
December 12th, 2014 by James Greenberger
For the past three decades, the once sleepy technology of electrochemical energy storage has been going through a revolution of historic proportions. The improvements in battery energy density and performance produced by new lithium-ion, nickel metal hydride, advanced lead acid and other chemistries represents vast improvements in a technology which had largely stagnated since the Bagdad Battery of 0 A.D. While the speed of improvement in battery technology has not yet matched the Moore’s Law of semiconductors, its pace has been sufficient to enable fundamental changes in the many technologies that batteries can power, from automobiles to the electricity grid to robotics and to any number of future technologies the nature of which we cannot yet fully imagine.
There is no sign that the revolution of the last three decades will slow anytime soon. This past month, two major users of battery technology doubled down on investments in new battery technologies. Volkswagen, the world’s most profitable automaker, purchased a 5% interest in QuantumScape. QuantumScape is is an early stage battery startup that is commercializing technology from Stanford University. It is reportedly developing a new method for stacking trace amounts of materials together, which can lead to high energy and power densities, and also higher cycle life than standard lithium ion batteries.
Also this month, Samsung, the electronics conglomerate, made a $17 million investment in Seeo, a Hayward, California-based company developing lithium polymer batteries. Seeo’s batteries incorporate its proprietary DryLyte™ solid polymer electrolyte. The new electrolyte reportedly enables Seeo’s batteries to operate with enhanced safety and at an exceptionally high energy density.
Skeptics of advanced battery technology have never been hard to find. One of the most eloquent in recent years has been John Petersen, a regular contributor to Seeking Alpha. John’s columns often criticize lithium battery technology and he reportedly maintains a long position in Axion Power International, a manufacturer of lead carbon batteries. This past week, however, Axion apparently had its own stumble. Axion announced “significant” salary deferrals by management in order to conserve cash while the company tries to execute a new strategy. This stumble may not be significant; Axion’s technology is itself quite interesting. But the stumble illustrates the broader danger of betting against some battery chemistries just because they seem in the short term to have some issues.
The bottom line is: Don’t bet against innovation in battery technology. Battery technology is evolving rapidly and it is far from clear which chemistries, designs and systems will ultimately win out in the competition to power the increasing number of technologies that will rely on stored electrical power. The fact that some of the biggest companies in the world are still investing heavily in advanced battery technology is a testament to its future and its potential.
NAATBatt International is also betting heavily on new battery technologies. Our mission is to help those technologies move more rapidly from the laboratory into commercial application. Each year at our Annual Meeting, our members select from among dozens of applications the 20 most interesting new energy storage-related technologies to make “flash” presentations at the Meeting.
This year will be no different. At the NAATBatt 2015 Annual Meeting & Conference in Phoenix on February 16-19, 2014, the following 20 companies have been invited to present: Ambri, Paper Battery Company, SiNode Systems, Worcester Polytechnic, 1Energy Systems, Envia Systems, XG Sciences, Eguana Technologies, NOHM Technologies (Li-Sulfur), Urban Electric Power, Yunasko, Bess Tech, SeaWave Battery, University of California-San Diego, Voltaiq, Inc., Nickel-Cobalt Battery LLC, NOHM Technologies (Electrolytes), NETenergy, Ecoult, and Stria Lithium.
I very much hope that you can join us for this program in Phoenix next February. The battery revolution is continuing and will affect us all. Our Annual Meeting will provide an opportunity to see some very interesting glimpses of the future.
December 5th, 2014 by James Greenberger
I have written previously in this column about the great promise of advanced electrochemical energy storage technology. Batteries may be ancient, but advances made just within the last three decades are transforming what had been a sleepy, not very important technology into one of the most significant enabling technological forces of the Twenty-First Century economy.
But what about the business of batteries? Given the tremendous progress that has been made in battery technology and its importance to such a wide range of technologies, why do so many of the companies engaged in the battery business seem to be struggling? To answer this question, it is necessary to understand not just what a battery does but what function a battery performs in commerce.
To my mind, batteries perform one of three functions. The first function is improving the efficiency of energy systems. Hybrid vehicles, such as the Toyota Prius, demonstrate this function. In the Prius, a battery permits the gasoline engine to work more efficiently, improving fuel economy. The batteries in most electricity stationary storage (ESS) on the grid demonstrate the same function. ESS systems obtain their value from the efficiency gains they bring to the grid. By leveling electricity load, batteries allow thermal plant electricity generators to operate more efficiently. ESS systems also reduce the need for grid infrastructure otherwise required to transmit and distribute electricity at times of peak demand.
The problem with the energy efficiency function of batteries is that the cost of the energy and grid infrastructure saved by batteries defines the upper limit of what one can charge for the batteries themselves. The not so unfounded criticism of xEV’s is that the cost of the batteries that power them is often higher than the cost of the fuel they save. Even where this is not the case, the cost of the displaced gasoline generally defines the upper limit on what can be charged for the battery. As a consequence, many battery companies that have devoted their businesses to providing batteries for energy efficiency functions have found the economics of the battery business to be challenging.
The second function of batteries is a fuel substitution function. Batteries, of course, are not themselves a fuel. Batteries are an energy vector, which store energy generated by a wide variety of fuels. Batteries enable a customer to switch among different forms of energy in order to take advantage of price differences or, more often, to accommodate government policy. Electric vehicles exist because governments have decided that they want to replace petroleum with other fuels, such as wind, solar and natural gas. ESS is growing on the grid because governments have decided that they want to replace traditional coal and natural gas electricity generation (or, in Germany and Japan, nuclear power generation) with renewable fuels.
The problem with the fuel substitution function of batteries is that it is ultimately dependent upon government policy. And over time government policy can be fickle. This makes building a long term battery business around the fuel substitution function problematic. By way of example, many early investors in A123 Systems who got out quickly did very well. But those who held the stock longer ultimately fell prey to the U.S. government’s unwillingness to continue the kind of financial subsidies that helped build the A123 Systems business initially. Batteries used only for fuel substitution purposes pose a challenging business model.
The third function of a battery is power enablement. In this function, a battery serves as a mechanism to bring power to an application that could not otherwise be powered on a practical basis. Cell phones are a good example of the power enablement function. Without batteries, cell phones would not work. Similarly, many industrial batteries provide a power enablement function to such application as UPS systems for cell phone towers, implantable batteries for medical devices and SLI batteries for cars. In the absence of a battery, the application it powers would not work, or would only work with a substantial loss of functionality.
The power enablement function allows for a more lucrative business model than fuel efficiency or fuel substitution. Where a battery enables the application itself, the only limit (aside from competitive market forces) on what you can charge for the battery is what the consumer is willing to pay for the application. No natural upside price cap or uncertain government policy impacts the business of selling batteries for power enablement. That is probably why the most successful companies in the battery business seem to be the ones that focus on power enabling functions.
I mention the possible advantages of power enabling functions as a business model for batteries in order to highlight an interesting aspect of the NAATBatt 2015 Annual Meeting & Conference next February in Phoenix. On Wednesday, February 18, 2015, there will be panel discussion about thin film battery technology organized by Applied Materials. In theory, thin film batteries are intended to power the future “internet of everything”: a web of micro-electronic devices that will interconnect with each other, from household appliances to wearable devices to imbedded control devices. This future has not yet quite arrived. But if, and probably when, it does, thin film batteries will fundamentally enable those new applications and potentially command attractive profit margins. Those in the battery business should take note. Hope to see you all in Phoenix next February.
November 29th, 2014 by James Greenberger
This week saw the release of the National Transportation Safety Board (NTSB) report about the January 7, 2013, fire on board a Japan Airlines Boeing 787-8 aircraft at Boston’s Logan Airport. The fire involved a lithium-ion battery located in the aircraft’s the auxiliary power unit (APU) and was followed by a second fire, nine days later, in Japan involving the main battery unit of another Boeing 787 aircraft.
The two fires shook the aircraft and advanced battery industries. The Federal Aviation Administration (FAA) grounded all Boeing 787’s in the United States for three months. It was not that the risk of thermal incidents in lithium-ion batteries was unappreciated by aircraft and battery designers. Rather it was the fact that two thermal incidents occurred in the batteries of the 787 fleet after less than 52,000 accumulated flight hours. The expectation had been that the rate of occurrence would be about 1 in 10 million flight hours.
The NTSB determined that the probable cause of the incident in Boston was an internal short circuit within a cell of the APU lithium-ion battery, which led to thermal runaway that cascaded to adjacent cells, resulting in the release of smoke and fire. The incident resulted from Boeing’s failure to incorporate design requirements to mitigate the most severe effects of an internal short circuit within an APU battery cell and the FAA’s failure to identify this design deficiency during the type design certification process. The NTSB report identified the principal safety issue as the failure to anticipate a catastrophic failure of the entire battery system: i.e., the ability of a single, defective APU battery cell to trigger cascading thermal runaway in the other cells within the battery.
I attended this week the UL’s Lithium-Ion Battery Safety Summit in Washington, D.C., where a team from the NTSB presented its Boeing 787 report. The UL Summit also brought together representatives of the battery industry, the airline industry, a wide range of battery customers, and the first responder community to review the NTSB report and discuss its implications for the use of lithium-ion batteries in commerce.
One of the most interesting insights of the Summit was that discussion of lithium-ion battery safety often confuses two different hazards. The first hazard is the one that dominates most discussion about battery safety: the danger of ignition due to an internal short or defect within the battery. This is the 1 in 10 million flight hour problem. This is the problem that is at the root of most debates over which lithium-ion batteries or battery chemistries are better or safer than others.
The second hazard, which is different and separate from the first, is the hazard of lithium-ion batteries becoming the fuel for any kind of fire. This hazard is unrelated to the question of how the fire starts. Lithium-ion batteries store large amounts of energy, and the amounts of energy that batteries are capable of storing increases every year. Some electrodes, and today substantially all electrolytes, are highly flammable. Even the smoke generated by a battery undergoing a thermal event is flammable. As one of the first responders noted, in a fire smoke is fuel.
The challenge of lithium-ion battery safety, therefore, is not just a matter of moving from Six Sigma to Nine Sigma in manufacturing efficiency. It is a challenge of controlling a lithium-ion battery thermal event after that event has started, regardless of the cause.
In a sobering note, Lt. Paul Rogers of the Fire Department of New York noted that in the 1970’s the State of New York banned the storage of LNG in residential buildings, a ban which continues to this day in New York City. Lt. Rogers noted that today there are proposals to fill entire floors of New York City high-rises with lithium-ion batteries in order to permit peak shaving of electricity usage. Lt. Rogers said that the NYFD will not hesitate to ban lithium-ion batteries, just as it banned LNG, if their storage in residential buildings cannot be proven to be safe.
Given that the State of New York is now seen, after the State of California, as the most promising market for grid-connected electricity stationary storage (ESS) in the United States, Lt. Roger’s remarks underscore how precarious a market it is. It is critically important that the battery industry get its arms around the lithium-ion safety issue—and quickly. The future of a good part of the ESS market may well depend upon it.
Daimler announced this past week that its Li-Tec subsidiary would cease production of lithium-ion battery cells in December 2015. This followed Nissan’s announcement last month that it would diversify its supply sources of lithium-ion batteries from Automotive Energy Supply Corporation (AESC), a joint venture between Nissan and NEC, to LG Chem and, potentially, other suppliers. Nissan noted that AESC’s products were about 15 percent more expensive than those of LG Chem. Daimler’s and Nissan’s outsourcing of lithium-ion battery manufacturing to third parties that manufacture cells in high volumes and have deep experience in consumer batteries underscores a trend in the automotive battery sector that has been underway for some time.
Also this month Proctor & Gamble sold its Duracell battery business to Berkshire Hathaway for $2.9 billion, representing about a 60% decline in value of the Duracell brand from 1996. The decline of Duracell, once one of the most respected and recognized consumer brands in the United States, is most likely attributable to the incorporation of rechargeable lithium-ion batteries inside of consumer devices displacing the replaceable primary batteries that are the mainstay of the Duracell brand.
The Daimler and Duracell stories may seemingly have little to do with each other. But they each illustrate an important stage in the battery product development cycle that will inevitably be repeated within the battery industry. As a battery technology matures, there is a natural tendency to commoditization. The companies that can manufacture most efficiently at scale—the LG Chem’s of today and the Duracell’s of yesterday—will capture market share. Volume manufacturing leads to great price efficiencies and the possibility of better quality control that lower volume manufacturers will have a hard time competing with.
But with market dominance comes greater vulnerability to technological change. All glory is fleeting and business dominance can disappear in not much more than the blink of an eye. Duracell was too heavily focused on primary batteries to make the major investments necessary to enter the lithium-ion rechargeable battery business as a major player. Duracell fell victim to Kodak Syndrome–the paralysis that sometimes afflicts market leading companies confronted by technological change. It was not the first large company to do so, nor will it be the last.
The recent Daimler and Nissan announcements seem to indicate that we have a new Duracell (or perhaps a few Duracells) in the industry. It will be interesting to see whether these new leaders in lithium-ion cell technology are able to avoid Kodak Syndrome when their time comes. Certainly, lithium-ion battery technology will one day be replaced by better electrochemical energy storage technology, which may interact quite differently with the devices it powers. If LG Chem and the other lithium-ion battery leaders wish to avoid the fate of Duracell, they will need to foster a culture of innovation within their companies and a willingness to explore and invest in the battery technologies of the future.
The collapse of Duracell as a battery market leader reminds us that we are in the midst of a battery revolution of historic proportions. The ability to store electric energy in increasingly smaller mass is advancing rapidly with no end in sight. The industry leaders of the future will be those companies that keep abreast of technology developments and invest in them. Those companies that do not are destined to go the way of Duracell and Kodak.