Navigant Research Blog

Regulatory Focus on Air Transit of Li-Ion Batteries Increases

— July 2, 2015

Lithium ion (Li-ion) batteries have been highly touted for their long lifespan, high discharge rate, and ability to perform effectively in a number of different energy storage applications, which has led to their widespread adoption across the consumer electronics, automotive electrification, and utility grid energy storage sectors. The key factors driving the design and application of Li-ion battery technologies include power capacity, energy capacity, cost, lifespan, and safety. On the cost side, Navigant Research sees the maturation of the automotive and energy storage manufacturing and supply chains creating market forces that are expected to drive costs to new lows. However, the safe transport and use of Li-ion batteries is paramount and must be factored into each step of the manufacture, sale, transport, and use phase of the battery.

Since Li-ion cells are shipped partially charged to maximize their lifespan and reduce the chance of oxidation over time, they are classified as dangerous goods for transport, according to the United Nations (UN) Model Regulation for the Transport of Dangerous Goods.  Further, it has been well-documented that heat generation coupled with metal contamination and poor battery management systems can increase the risk of thermal runaway and fires during the use phase of a Li-ion battery. Whereas design, manufacturing, and quality control improvements have been implemented to reduce these risks during battery use, new scrutiny is being placed on the air transport of partially charged Li-ion cells and battery packs due to combustion risk from extreme temperatures. These developments are creating a challenge for Li-ion battery manufacturers that are considering export strategies due to the increasingly complex set of regulatory challenges facing airline carriers.

For example:

Assessing and Addressing the Risks

To address safety risks during transport and use, scientists at NTT Facilities, Inc. have tested adding a chemical flame retardant called phosphazene to lithium batteries to increase their safety in different applications. Their study has shown that fully charged 200 Ah packs, like those commonly used in portable electronics, did not explode, ignite, or undergo thermal runaway when undergoing significant laboratory testing protocols. Further, larger battery packs were also tested and operated for 400 days in a state of floating charge with positive results and minimal impact to battery capacity.

Though this advancement is still in the early stage of development, the prospect of integrating a material that is commercially available with a high voltage resistance and low cost to further improve safety while balancing costs merits a watchful eye. Whereas battery manufacturers are loath to add materials, those battery manufacturers and energy storage systems integrators looking to ship (or procure) Li-ion batteries from long-distance manufacturing sites will want to track these developments.

 

High-Accuracy Mapping: An Opportunity for the Post Office?

— June 23, 2015

Telescopers_webSynergy is one of the most overused and abused words in business. Whenever this word is uttered, it’s time to break out a big hunk of salt. However, at the recent TU-Automotive Detroit conference in Detroit, an actual synergistic opportunity popped up in the course of discussion. The U.S. Postal Service (USPS)—and by extension, other postal services globally—could play an important role in the future of automated driving. According to Navigant Research’s Autonomous Vehicles report, nearly 95 million vehicles with some autonomous capability will be on the world’s roads by 2035.

High-Resolution and High-Accuracy Mapping

One of the most common topics to arise during the 2-day gathering of people involved in automated driving and connectivity was the need for high-resolution and high-accuracy mapping data. Alain De Taeye, management board member at TomTom, gave a keynote presentation on the requirements for highly automated driving systems. While sensors including a global positioning system (GPS) that can detect the immediate surroundings are clearly a critical component, they are insufficient for robust automated control. Maps can help extend visibility well beyond the line of sight of either the driver or sensor system.

More importantly, the combination of high-definition 3D maps and sensors enables greater capability than either on its own. For example, GPS sensors are notoriously unreliable in the urban canyons where automated vehicles offer some of their most important potential benefits. As satellite signals bounce around off tall buildings set closely together, a GPS-only system often places the user far from their actual location. On the other hand, cameras and LIDAR sensors can contribute to a fused real-time map of the surroundings that can be correlated with stored maps for validation and provide more accurate and precise location information.

De Taeye discussed the sources of data used by TomTom and other map providers, including HERE and Google. By blending data from satellite imagery, government data, real-time crowdsourced information, and fleets of vehicles that traverse the actual roads, maps are constantly updated. De Taeye emphasized the need for continuous updates on road information to ensure accuracy as well as precision, which is where the USPS could come to the rescue. Even companies as large as Google have practical limits on how frequently they can drive down each road.

Capturing Data with Future USPS Vehicles

Ryan Simpson, an electrical engineer with the USPS, attended the conference to learn about some of the new technologies that could potentially be put to use in future service vehicles. With more than 150,000 daily delivery vehicles and another 100,000 vehicles of various form factors, the USPS has the largest commercial vehicle fleet in the world. Those 150,000 delivery vehicles traverse a huge proportion of the roads in the United States 6 days a week, 52 weeks a year. The USPS is currently in the process of defining a next-generation delivery vehicle to replace its rapidly aging fleet. If the new vehicles were equipped with some cameras and sensors, they could capture data with much higher frequency than any of the existing mapping companies. Real world data about everything, including road construction, bridge problems, and even potholes, could be updated daily.

Given the persistent financial difficulties of the USPS, providing fresh and reliable navigational data to mapping companies could provide a significant revenue stream that helps support a very important service to the U.S. population. At the same time, such data would also help to enable automated driving systems. This would be genuine synergy.

 

Nissan Enters the Energy Storage Market

— June 19, 2015

Since Tesla debuted the PowerWall in late April, two other automakers, Daimler and Nissan, have announced plans to bring similar products to both the commercial and residential energy sectors. Daimler announced in early June that it’s offering a storage plant of up to 20 kWh that will begin shipping in September. The next week, Nissan announced it will deploy second-life vehicle batteries for commercial energy storage markets through partner Green Charge Networks. The first system is set to be placed this summer at a Nissan facility to offset demand charges. These three announcements are important indicators of trending automaker revenue stream diversification. However, Nissan’s announcement is far more important as an indicator of a strengthening business case for plug-in electric vehicle (PEV) ownership.

Outside of automotive and mobile device applications, stationary batteries can provide energy cost savings to homeowners through energy arbitrage and increased rooftop solar utilization. The same applications are true for commercial entities. An additional use is to draw power from the batteries during peak energy consuming times, which minimizes the monthly demand charge, significantly cutting electricity bills. Further, batteries can be used by aggregators to participate in grid service markets, as BMW is doing in the Bay Area. Though these opportunities have existed for some time, the high costs of batteries have made these investments risky.

Minimizing Risk

To minimize risk, some companies are developing ways to utilize PEV batteries when the PEV is parked. This reduces the total investment, as battery costs are borne by the PEV owner, but it also reduces returns, as a PEV’s primary function is mobility and the PEV owner requires compensation. Utilizing a PEV battery in such a fashion strengthens the business case for PEV ownership; however, the technological and logistical requirements of these business models are complex.

Nissan’s and Green Charge Network’s development of a business model for a second battery life is another approach to harnessing the full potential of vehicle batteries, though without the logistical complexities inherent in utilizing a battery while it’s still in the vehicle. Theoretically, the success of this type of business model would likely increase the value of PEVs already in use and/or play into innovative automaker financing schemes that bake second-life battery value into PEV purchase costs. Both of these strategies would be a significant step forward in strengthening the business case for PEV ownership in high volume economy class vehicle segments.

 

Tesla Announcement Highlights Importance of Energy Storage Partnerships

— June 9, 2015

Boatbuilder_webTesla Motor’s April announcement of stationary energy storage solutions brought an unprecedented level of attention to the burgeoning energy storage industry, benefiting all stakeholders.  Competing products providing storage for residential, commercial, and industrial customers are already on the market, however.

These systems are designed for a variety of distributed energy storage applications—currently some of the fastest-growing areas of the global storage market.  Navigant Research estimates that the global installed capacity of residential and commercial energy storage systems will grow from around 246 MW in 2015 to over 10,484 MW by 2024, with lithium ion (Li-ion) expected to account for 58% of total capacity.

The new product launches from Tesla highlight the growing importance of partnerships within the industry.  While Tesla provides a sleek battery module, the company does not offer bidirectional inverters or installation services.  The energy storage ecosystem is comprised primarily of companies like Tesla, with specialized offerings that must seek out partners to offer the complete solutions that customers demand.  (Navigant Research’s recent report Energy Storage Enabling Technologies analyzes the value chain within this industry.)

Tesla has established partnerships to complete their offering and provide storage systems for a range of end users through channel partners.  The systems will be available through solar PV provider SolarCity, demand response aggregator EnerNOC, and engineering/construction specialist Black & Veatch, among others.  These partnerships each target different market segments, each requiring varying business models and product specifications.  With Tesla’s plans, competition has intensified in the distributed storage market, as several leading companies have recently announced new partnerships to offer similar integrated solutions.

Competition Heating Up

Partnerships are essential for most storage market players: battery manufacturers need supply agreements for their products and system integrators need component suppliers, while software and power electronics providers look for integrators and developers to get their products into complete solutions.

Electrical solutions provider Gexpro recently announced an agreement with battery manufacturer LG Chem, the power conversion provider for Ideal Power, and energy management software vendor Geli to offer a fully integrated battery energy storage systems (BESS) for commercial and industrial (C&I) customers.  This follows similar announcements from LG Chem to provide Li-ion batteries in the Northeast United States through an agreement with energy services company OneEnergy for C&I customers and Eguana for residential customers.

Other notable relationships recently announced include solar PV provider SunPower partnering with storage system vendors Stem and Sunverge to offer BESSs for their C&I solar customers.  Additionally, leading Li-ion battery vendor Samsung SDI recently announced supply agreements with GreenCharge Networks, as well as with microgrid developer ABB.

Aside from battery vendors, other companies in the market are establishing similar relationships to solidify their offerings.  Notably, microinverter manufacturer Enphase, which is developing energy storage solutions utilizing its products, recently announced an agreement with battery vendor ELIIY.

Coming into Focus

While supply agreements and distribution partnerships have been developing in the stationary storage market for some time, more recent announcements targeting C&I customers are increasingly important.  In this segment, it is crucial for companies to offer integrated solutions that are easy to operate and quick to install.  As a result, leading companies are joining forces to combine their specialties into the most effective offering.  We explore these relationships within the energy storage ecosystem through various reports, including the recently published Navigant Research Leaderboard Report: Energy Storage System Integrators and an upcoming Leaderboard Report on Li-ion grid storage.

 

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