Navigant Research Blog

2015: A Turning Point for Batteries

— January 30, 2015

One of the biggest energy stories of 2014 was the emergence of battery-based energy storage as a reasonable option for grid management.  But the battery industry is just getting started.  This year, the energy news cycle will be led by batteries on all fronts.  This year will mark the tipping point that sees batteries become not only an accepted part of our electricity grid and transportation network, but also a key underpinning to the global economy.

Beneath these developments is a single realization that the world is beginning to accept: that high-quality advanced batteries are becoming very cheap.  As Navigant Research’s Materials for Advanced Batteries report explains, a lithium-ion (Li-ion) battery that was priced at more than $1,000 per kWh in 2009 can now be bought for a third of that.  And there is no visible end to the reductions in pricing.  This price decline is caused by three factors:

Manufacturing scale: The world’s battery factories are capable producing some 100 GWh worth of Li-ion cells this year.  While not that much will actually be made (Navigant Research expects that 2015 will see some 65 GWh of Li-ion batteries produced), the manufacturing scale is now in place to enable the enormous growth of the use of batteries that is to be expected as pricing comes down.  And the capacity is only growing with time.  When Tesla Motors and Panasonic build their GigaFactory in Nevada in 2017, global manufacturing capacity will be increased by 50%.

Manufacturing expertise: It’s been 24 years since Sony introduced the first mass-produced Li-ion battery.  It’s taken that long for manufacturers to make these products at high efficiencies and high speeds.  A typical production line can now crank out 4 times the batteries that the same machines were able to produce just 5 years ago in the same amount of time.

Supply chain maturity: The chemicals that go into Li-ion batteries used to be specialty, batch-processed chemicals.  Now that the industry is so large, they have been converted into continuously processed commodity chemicals.  This means cheaper input materials, which in turn translates into cheaper batteries.

Golden Age

Now that these three factors have conspired to result in an environment of cheaper Li-ion batteries, the industries that use those batteries will see dramatically increased demand.  Here are some key events expected in early 2015 that will help usher in this golden year for batteries:

New automotive launches: Three cars will be unveiled in early 2015 that have the potential to be enormous sales leaders.  The 2016 Chevy Volt might make the Volt become a reasonable alternative to other low-priced compacts, even in this age of cheap gas.  The Model X, Tesla’s version of a high-end crossover, has the potential to be even more popular than the launch of the Model S in 2013.  And the BMW 5-series electric vehicle (EV) could hit the sweet spot of a mid-size luxury EV.  Even if only two of these three models turns into a global success, it will mean dramatically higher EV sales in 2015.

The great California grid rush: Each of the major California utilities has now issued requests for proposals for grid energy storage systems.  Combined with the final announcement of the winners of the Hawaiian Electric Company (HECO) bid in Hawaii sometime this spring, these programs will see the most extensive purchases of grid storage systems in history.

Additionally, new products in the e-bike, e-scooter, and portable appliance markets will see dramatic growth in the thirst for batteries in those markets as well.  All told, 2015 is shaping up to be a historic year for the battery industry and for the industries that buy batteries to make their products popular.

 

Schaeffler Shows One Path to Better Fuel Economy

— January 30, 2015

January in Detroit heralds the annual North American International Auto Show (NAIAS), where many manufacturers launch new models and technology.  It’s less well known as a supplier event, but many of the Tier One companies hold press and industry events to showcase their developments, primarily during the media and industry days that are held before the show opens to the general public.

This year, German supplier Schaeffler chose to highlight its project on fuel economy, with a view to meeting the upcoming more stringent American CAFE requirements.  As well as developing specific components and products, the company has incorporated them into an existing vehicle to demonstrate the integration potential.  Phase 1 of the implementation shows one way to meet the 2020 CAFE target on an existing vehicle by making a series of small, low-cost changes; Phase 2 will add additional features to meet the 2025 fuel economy goal.

Hunker Down

The target vehicle chosen was a model year 2013 Ford Escape AWD (all-wheel drive), which features a 2.0-liter engine and Ford’s 6-speed automatic transmission.  For phase 1, Schaeffler engineers implemented an AWD disconnect feature to eliminate additional friction when only two-wheel drive is necessary, a new torque converter damper to allow a lower lockup speed, and an automatic engine stop-start system.  A new thermal management module enabled faster engine warming from cold.  Other detail changes included coated tappets, new balance shaft bearings, and low rolling-resistance tires.

To reach the 2025 target fuel economy, phase 2 houses two main features: ride height adjustment and disconnecting vehicle accessory drives from the engine.  Automatically reducing the ride height as speed increases is a straightforward way to reduce aerodynamic drag, a topic that I discussed in a previous blog.  The idea of disconnecting accessory drives has been around for some time, and is key to extending the value of stop-start systems, but replacing a traditional crankshaft belt drive with individual electric motors is a very expensive solution.

Clutch Move

Schaeffler solves this dilemma by setting up a separate 48V motor generator to power the accessories when the engine is switched off.  The system is controlled by a pair of clutches that can connect the electric motor to either the engine or the transmission.  Using a 48V subsystem allows more powerful regenerative braking than a 12V system, and therefore greater energy recovery, and the motor can also be used to supplement the drive.

Navigant Research has recently released a detailed report on this topic: Automotive Fuel Efficiency Technologies.  The Schaeffler approach nicely illustrates our conclusion that there is no single solution for meeting future fuel economy targets, and future vehicles will have to incorporate many small changes that will combine to deliver measurable results.  Schaeffler’s concept of creating a separate 48V accessory drive subsystem can keep costs manageable while allowing the industry to transition from 12V to 48V.

 

For Hospitals, a Path to Resilience

— January 27, 2015

My colleague Madeline Bergner recently wrote about efforts to reduce the greenhouse gas emissions from hospitals and other healthcare facilities.  That effort is paralleled by a movement to make these spaces less vulnerable to natural disasters and other disruptions, as well.

In December, President Obama gathered healthcare leaders to announce a set of new recommendations for making the country’s healthcare facilities more climate resilient.  Hurricane Sandy caused over $3 billion in damage to healthcare facilities alone, triggering federal attention to the issue.  At the event, the U.S. Department of Health and Human Services announced a web-based Climate Resilience Toolkit as well as a best-practices guide, “Primary Protection: Enhancing Health Care Resilience for a Changing Climate.”

The guide describes a number of issues that have caused hospitals to lose power during recent disasters.  These include reliance on local infrastructure (namely local [municipal] steam generation), aging infrastructure, and a reliance on onsite diesel generators, which are often poorly maintained and rely on limited fuel supplies.

A Holistic View

The report also cites a challenge in the approach to backup power.  Backup systems are viewed as having no value during normal operations, and therefore “are less likely to attract adequate investment and maintenance from the private sector.”  By viewing backup power as emergency-only, the hospital is viewing power in binary terms; the big diesel generator is there when you need it, and takes up space (and money) when you don’t.

A more holistic view of energy use can lead to a more resilient facility.  The report cites a number of strategies, including the use of combined heat and power, energy efficiency, and passive survivability.  This last concept drives building design and functionality so that hospitals can still function without power.  With operable windows, passive heating and cooling, and naturally ventilated spaces, these levels of resiliency can be accomplished.

Generator Hospital

Navigant Research’s reports on Grid-Tied Energy Storage present a range of technologies that can aid in power management all the time, not just during a crisis.  By viewing grid connectivity as a continuum, facilities can mitigate the effects of disasters and make money by selling power into the grid.  The resilient healthcare facility of the future may not just be one that can survive a disaster but one that provides power to the community 365 days a year.

In upstate New York, the town of Potsdam just announced a microgrid project that will connect 12 facilities using 3 MW of combined heat and power, 2 MW of solar, 2 MW of storage, and 900 kW of hydro-electric generation.  The local hospital is a key stakeholder in this project, led by Clarkson University.  Other partners include General Electric (GE) Global Research and GE Energy Consulting, National Grid, and the National Renewable Energy Laboratory.

Innovative technology is not only being deployed for the entire hospital facility.  At the Texas Scottish Rite Hospital for Children in Dallas, Texas, flywheel manufacturer Vycon installed two 300 kW flywheel systems just to power the imaging facility.  The benefits of flywheels include high reliability, power density, and overall quality, as well as the quiet nature of backup power.  While the hospital has only suffered a few power outages in recent decades, the protection of the expensive equipment from power spikes and voltage drops is of great value.

 

Adapting to the New Demand Response Landscape

— January 27, 2015

Demand response (DR) was first employed in the United States the 1970s.  At that time, DR was implemented as a component of the energy conservation focus of demand-side management (DSM) programs to encourage consumers to use less electricity during peak hours or to shift their energy use to off-peak times.  Utilities have run residential direct load control programs as forms of demand management and offered interruptible rates to commercial and industrial customers for many years.

Today, however, the electric grid needs resources beyond just meeting peak demand situations, requiring more flexibility and faster response.  A number of drivers point toward increased DR adoption by utilities and grid operators around the world.  The changing resource mix in electric grids globally is creating more potential for DR to play a pivotal role.  As coal and nuclear plants retire due to economic or environmental factors, clean replacements are needed that can be built in short timeframes.  Conversely, as large-scale intermittent renewable resources like wind and solar power fill in this gap, they require backup solutions when the wind is not blowing and the sun is not shining.

New Training Course

At the same time, new market types, including ancillary services such as spinning reserves and frequency regulation, are opening up to DR.  The concepts of resilience and microgrids have taken strong root along the Atlantic Coast following Hurricane Sandy in 2012, and DR will be an integral part of those developments.  The advent of grid modernization is also tied to this new view on how the grid should be designed.  With the proliferation of advanced meters that can record usage at very small intervals, more dynamic types of pricing can be applied down to the residential level.

To help utilities navigate through this changing landscape, the Peak Load Management Alliance has developed a series of DR training courses.  The next session, DR Program Design and Implementation, will take place from February 18 to 19, hosted by NV Energy in Las Vegas.  The 2-day course will first cover program development topics like DR program types; how to determine market potential; designing programs and managing portfolios of programs; and calculating cost-effectiveness.  The second day will delve into program implementation strategies and tactics such as staffing and operations; strategic outsourcing; technology architecture and integration; and evaluation, measurement, and verification.

A Visit to the NOC

NV Energy is a pioneer in testing out innovative DR program designs in an extreme climate.  The company has a diverse portfolio of programs that includes a range of applications, along with various flavors of direct load control, dynamic pricing, and DR in combination with energy efficiency programs.  The Las Vegas course will include a visit to NV Energy’s operations center, along with a first-hand look at its DR management system in action.

For utilities considering or being required to implement DR programs (which includes just about every utility today), this is a great opportunity to hear from industry experts and meet peers from across the country to exchange experiences and best practices.  For more information on the course, please click here.

 

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