Navigant Research Blog

Scanning the Battery Frontier

— May 21, 2012

Often described as the next evolutionary leap in battery systems, solid state batteries substitute solid electrolyte films for liquid electrolytes, thus eliminating the need for cooling devices and supporting materials and making the battery more stable and efficient.  Theoretically, they have the potential to cut both the size and the price of batteries in half.

In pursuit of this technological achievement a host of start-ups have emerged, some backed by big names.  However, in the last three months, major tech and manufacturing juggernauts (GM, IBM, BASF) have announced big investments and/or breakthroughs in technologies utilizing liquid electrolytes that promise to achieve competitive results with solid state technologies.  Listed below are the companies working on the cutting edge of battery chemistries and materials development, their backers, and announced time to commercialization.

Liquid Electrolytes:


The GM backed start-up announced in late February that it has produced a Li-Ion battery with 400 watt-hour per kilogram (Wh/Kg) energy density and with a mass-produced cost of around $125 per kilowatt-hour (kWh).  Most lithium cells currently in production offer 100-150 Wh/Kg and are significantly more expensive than Envia’s estimates.  Envia expects commercialization could come as soon as 2015.  The company’s major innovation is the utilization of manganese within the battery cathode.

Sion Power

One of the biggest single investments in a battery developer to date was BASF’s $50 million stake in Sion Power.  Based in Tucson, Sion Power is developing a lithium-sulfur (Li-S) battery that could theoretically achieve energy densities of 2600 Wh/Kg.  The company says it has created a battery cell with a density of 350 Wh/Kg, and that 600 Wh/Kg is achievable in the near future.


The latest announcement may also be the biggest.  In April IBM demonstrated the lithium-air battery, which “breathes” as it derives power from taking in and expelling oxygen from the ambient environment.  IBM estimates the battery is capable of powering a vehicle over 500 miles, but the technology won’t be available for at least 10 years.

Solid State:

Planar Energy

A spin-off from the National Renewable Energy Laboratory (NREL), Planar Energy has developed solid-state electrolytes that can be deposited as film directly on to battery substrates through the company’s SPEED process.  The SPEED process can be applied to a diverse body of compound materials and can theoretically cut battery costs in half while tripling current energy densities.  Planar says it hopes to be producing batteries for plug in vehicles in about six years.

Sakti 3

Michigan-based, GM-backed Sakti3 is has developed software capable of identifying material combinations conducive to solid state electrolyte structures and is also working to develop mass production manufacturing techniques.  Sakti3 is primarily working with Li-Ion chemistries but has been mum on specifics and a timeline to commercialization.

Prieto Battery

Born from Colorado State University’s Synergy program, Prieto battery is a high tech start up looking to utilize copper nanowires for battery cathodes, anodes, and separator materials.  If successful, the battery can achieve energy densities of 650 Wh/Kg and drastically decrease recharge time while increasing battery life.

Advanced battery development will never rival the extraordinary performance leaps and bounds microchips exhibited for the last 50-plus years, commonly described as Moore’s Law.  However, the race for the next advanced battery stands to profit its victor so enormously (see chart below), that the race is sure to remain heated.

Portable Power Revenue by Geography (Consumer), World Markets: 2010-2015

(Source: Pike Research)


Financiers Unearthing Energy Efficiency Opportunities

— May 21, 2012

There are dozens of financial instruments specifically designed to help address the initial capex challenges posed by energy efficiency investments. Research by Rod Janssen, a board member of the European Council for an Energy Efficient Economy, has shown that nearly every country in the European Union has a national energy efficiency financing scheme.  And revenue for energy service companies, who specialize in using financial tools to pay for the installation of energy efficient systems, are nearly $35 billion worldwide, as we found in the research for our recent report, “Energy Efficient Buildings: Global Outlook.”

Still, we can all agree that the building stock could be much more efficient than it is. Much of this energy efficiency opportunity can be achieved through energy conservation measures that meet even the most stringent investment criteria of building owners worldwide, according to speakers at the recent Hannover Messe in Hannover, Germany, who represented from leading global financiers such as Siemens Financial Services, Commerzbank, and the European Investment Bank, the world’s largest investment bank.  However, the capex requirements of energy efficiency discourage many building owners from considering energy efficiency upgrades.

Financing energy efficiency, in other words, remains a perennial challenge.

The challenge of breaking through these first-cost barriers sits, in large part, with the firms that install energy efficient systems.  In Hannover, Roland Chalons-Browne, CEO of Siemens Financial Services, discussed his role as a financier within a firm traditionally focused on hardware sales and engineering services.  On the technology side, Siemens knows that its efficiency solutions have a high net-present value (NPV), but the capex requirements deter many customers from paying for efficiency improvements.  Siemens Financial Services’ financing toolbox, which includes a wide range of instruments ranging from traditional energy performance contracting (EPC) to power-purchase agreements (PPA), to straight lending-lease solutions and bespoke financing arrangements for specific customers.  Leveraging its top credit rating and strong cash position, Siemens can effectively create business for itself without any cash obligation from customers by handling all aspects of energy efficiency financing.

Financiers themselves, however, are also being opportunistic about the growing energy efficiency financing opportunity. Simone Loefgen, a vice president at Commerzbank, the second largest bank in Germany, described how energy efficiency financing today in Europe is where renewable energy financing was six years ago: a niche area with a rapidly transforming regulatory and market environment that could dramatically accelerate investment.  Specialist firms such as Sustainable Development Capital, a London-based private equity firm, are opportunistically creating investment portfolios based largely on energy efficiency projects.

One of the most challenging areas is the small and medium enterprise (SME) opportunity.  Current energy efficiency financing arrangements tend to focus on large facilities and multi-site building portfolios, in which the profitability of energy efficiency improvements more than justify the transaction and implementation costs. However, Gil Levy, a partner at Sustainable Development Capital, indicated that his firm aims to aggregate energy efficiency opportunity across many sites, including many smaller-scale facilities and organizations, to create an overall attractive energy efficiency portfolio for institutional investors. Other organizations such as the Berlin Energy Agency, a public-private energy service company based in Berlin, have already found success in aggregating smaller sites.

As suppliers and financiers play a more proactive role in offering attractive financing schemes to potential adopters, , they will help customers access the latent value locked up in their inefficient buildings.


EV Telematics Market Begins to Take Shape

— May 18, 2012

While the market for electric vehicles (EVs) is still very small, it’s important to recognize that EV telematics are at the cutting edge of the telematics industry.  As I point out in my report on EV Telematics, 73% of EVs in 2012 have “connected vehicle telematics” – packages that include streaming content and cloud applications.  This mix is expected to grow to almost 80% by 2017.

In June, I am moderating a panel at the Telematics Detroit 2012 conference on telematics for EVs.  The event, which will feature panelists from Continental, Nissan, Agero and SAP, will not include individual presentations.  That’s a good thing because it means more time dedicated to the panel discussion.

It’s also clear that this conference will cover the telematics industry overall.  Many of the sessions are focused on digital content for vehicles, pay-as-you-drive (PAYD) issues, and the interaction of automotive OEMs with other service providers.  The telematics for EV session will be part of the Auxiliary & Vertical Markets track, which is interesting because this panel will cap off a day of fleet, aftermarket, and mobile health telematics panels.

We’ll be discussing many of the key issues facing the telematics industry as a whole, but from the perspective of EVs.  This will include differentiation between traditional vehicle and EV telematics, smart grid integration, privacy issues, and how important telematics are given the rise of smartphones.  Aside from the differentiation question, the telematics industry is going to be facing a variation of all these issues in the broader automotive market.

Obviously, in a 35 minute panel we can’t cover all the issues facing EV manufacturers and telematics suppliers.  EVs are likely to be among the first to get a PAYD tax system applied to the vehicle owners, and the small size of the EV market raises questions of how OEMs can use telematics as a tool to promote the value of the vehicles.  With such a high concentration of connected vehicle telematics in the EV market, there may also be faster influence on the market by social media companies.


Crowdsourcing New Consumer Applications for a Smarter Grid

— May 17, 2012

In a smarter grid world, what new software applications will resonate with consumers?  Tendril, a Boulder, Colo.-based software platform provider for energy markets, has made a move in Europe that will help answer the question.  Tendril has partnered with Dutch retail utility Essent to create a unique energy application crowdsourcing project.

Here are details of how the project is expected to unfold:

Later this year, qualified independent software application developers will use Tendril’s Connect cloud platform to gain access to interval-usage data from smart meters.  Armed with this data, the developers are expected to create web-based and mobile applications aimed at energy efficiency in the home (see Pike Research’s latest report on Home Energy Management for our market view) – such as automation tools for switching off lights and controlling thermostats, or “dashboards” for showing real-time energy consumption and pricing.  Then these applications will be made available through a kind of energy “app store” to a small test group of Essent residential customers whose homes are equipped with smart meters; these customers will provide feedback to the developers and rate the apps.  Winning applications won’t be chosen by the utility, but rather by consumers themselves who will be choosing the ones that work best for them.

Eventually, the applications could be made available to all of Essent’s 2 million residential customers, and could go out to millions more through Essent’s parent company, RWE Group, which serves 24 million customers.

The project got a jumpstart during a “hackathon” event in Amsterdam called The Next Web Kings of Code Hack Battle, in late April, at which the project concept was presented to potential developer partners.

I like this idea of bringing software developers into the mix and letting consumers evaluate the results.  Clearly, this will help speed up the process by enabling creative people from outside the traditional energy industry to experiment in new ways.   Who knows, perhaps the Angry Birds of energy is just around the corner.

On May 24 I’ll moderate a panel at ConnectivityWeek in Santa Clara, California, called “Getting Useful Applications to Consumers.”  The panelists and I will be delving into these same types of issues: What consumers want, and what can be made available to them through new applications? And, like the “hackathon” event in Amsterdam, the ConnectivityWeek conference sponsors are holding a similar contest to see who can come up with cool new energy apps.  If you’re in the area, come and join the discussion.


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