Navigant Research Blog

Wearable Computing Batteries Get Real

— June 9, 2014

In the computing revolution that started with the invention of the transistor in 1947, microprocessors have continuously become faster, cheaper, and more energy efficient.  These improvements have shrunk the typical computing device down from the size of a room into a phone that fits into the palm of your hand.  The next step: something that fits onto our wrist or attaches like a piece of jewelry onto our clothes or bodies.  The era of wearable computing is emerging, and the only thing holding it up is batteries.

The typical consumer device battery is made up of rigid electrode plates surrounded by a gel or liquid electrolyte that needs a lot of non-flexible packaging to keep the outside air from getting in and the potentially flammable internal materials from getting out.  All that rigidity makes for very few options in designing a battery that is capable of meeting the ever increasing power needs of wearable devices.  In fact, if you look closely at most wearable devices today, including the Google Glass and the Jawbone Up, they are designed around a battery that can’t bend or conform to the shape of the device, while the other parts of the device — including the microprocessors, accelerometers, and other active components — are much more flexible in their design parameters.

Slim and Powerful

Now that the wearable computing industry is demanding better and more flexible batteries, the battery industry is responding, and for good reason.  Navigant Research’s Advanced Batteries for Portable Power Applications report forecasts that the market for batteries for wearable devices to grow from $62 million in 2014 to $795 million in 2023.  Two large battery manufacturers have begun to build customized manufacturing lines expressly to make smaller, more power-packed, and more flexible batteries for wearable computing devices, and at least four battery startups are expressly targeting the wearable device industry with new battery chemistries and designs.  One of them, Imprint Energy, believes that its zinc-based chemistry lends itself to very slim and flexible battery designs.

And then there are the laboratory experiments.  Many electrochemistry laboratories are trying to design novel batteries for the wearable computing industry that meet its three fundamental needs: energy density, durability, and safety.  One of the more promising developments comes from the laboratory of James Tour at Rice University, which developed a thin-film nickel fluoride battery that has shown impressive durability.  Other interesting projects involve weaving battery electrodes into a yarn-like structure that can be sewn right into clothing, such as is being done here and here.  While such textile-like batteries might eventually prove very promising, it’s hard to imagine that a shirt made out of battery components would be very popular clothing choice, due to the risk of sweating next to a surface with an electrical charge running through it.  However, a textile-like battery that is properly enclosed in safety packaging could provide the necessary flexibility and conformability for which wearable computing manufacturers – and potential buyers – are clamoring.


Energy Storage Reduces Diesel Use in Microgrids

— June 6, 2014

One of the challenges to deploying energy storage in existing grids is building a convincing business case.  If the business case for storage is built on reducing or optimizing the use of diesel fuel, it doesn’t take much to get a positive return on investment (ROI) for a storage asset.  Two examples of diesel reduction applications are remote microgrids and mobile base stations.  In this blog, I’ll look at the numbers on remote microgrids.

Even using conservative assumptions, storage makes sense to rein in the total cost of ownership of remote power generation – and hopefully make operating systems, such as remote microgrids, less vulnerable to volatility in diesel prices.  For example, Ontario Power Authority has estimated that it spends CAD$68 million each year on diesel fuel for 20 remote communities.

Payback Time

In the case of remote microgrids, the storage system typically provides several benefits: diesel reduction, higher renewables penetration, and improved power quality.  Even if the business case is based only on diesel reduction, though, the ROI is still positive in less than 4 years across all advanced battery chemistries.  The forecasts in the chart below assume the replacement of all batteries except flow batteries at the 7-year mark – which may or may not be required.  It also assumes that for each kilowatt-hour (kWh) of energy, a diesel generator requires 0.3 liters of diesel, and that the cost of diesel is about $1 per liter and remains steady over the forecast period.

Less than 4 years is an impressive payback period, but the payback period is even shorter with a 25% increase in diesel prices. If the cost of diesel is $1.36 per liter, the payback period goes down to less than 3 years for all storage technologies.  At $1.64 per liter, the payback period shrinks to 2 years or less.

Cumulative Net Present Value of Energy Storage Technologies Integrated in Remote Microgrids by Battery Type, World Markets: 2013-2023

(Source: Navigant Research)


How to Build a Successful Battery Startup

— May 5, 2014

In the course of doing the research for our upcoming report, Next Generation Advanced Batteries – and the accompanying webinar, “Beyond Lithium Ion” – we encountered more than three dozen battery-related startups.  Some produce battery materials, some produce battery components, and others are planning on becoming full-fledged battery manufacturers.  It would be unreasonable to expect all of them to survive.  In fact, given the nature of the battery industry, it would be a surprise if more than two or three of these companies are successful over the long term.

Based on our understanding of the advanced battery industry, here are our three top tips for how to shepherd your battery startup through the valley of death and into the gates of post-IPO paradise:

  • Forget about becoming a manufacturer: Making batteries is hard.  It has taken the battery heavyweights decades to perfect their combinatorial chemistries and manufacturing processes so that they can operate enormous factories at speeds that boggle the mind (in a modern cylindrical cell factory the cells literally shoot through the machinery so quickly that their forms are blurred to the naked eye), and at efficiencies that are very difficult for new companies to match.  It’s also nearly impossible to scale battery manufacturing upward.  Starting small and slowly building out the manufacturing infrastructure over time is not an effective strategy when your competitors (such as Tesla) are building 50-gigawatt-hour factories from scratch.  The best path to market for a battery startup is to align with an existing manufacturer and let it do the capital-intensive and laborious task of building assembly lines.
  • Understand manufacturing completely: If you’re not going to manufacture batteries, then why do you need to understand manufacturing?  Because the lithium ion (Li-ion) industry has become so large, with so much manufacturing infrastructure behind it, that a new battery chemistry that requires a complete retrofit to the factory is not going to succeed.  To become attractive, any new battery technology has to have a “drop-in manufacturing process,” meaning that it can be made in pre-existing factories with similar equipment with minimal changes.  If a whole new factory, or even an exotic piece of equipment, is required, that’s a black mark against your technology.  And to understand how to create a drop-in manufacturing process, you have to intimately grasp the details of the manufacturing process in real battery factories today.
  • Niche markets are the lily pads that can keep your company afloat: Navigant Research expects that by 2023, the world will buy 245 gigawatt-hours of rechargeable batteries, which is more than three times the size of the market today.  It’s tempting to claim that your battery will be the one that fills that market and replaces all other chemistries.  It probably won’t.  But specialization in the battery world is no longer a dirty word.  Many applications that were previously considered niche, such as defense applications, power tools, and wearable electronics, are now billion-dollar markets.  Each of these requires special form factors or cell specifications that may not be met by mass-produced Li-ion batteries, opening up key areas of opportunity.

Following all of these tips won’t guarantee success in the rapidly advancing battery industry.  But the companies that do make it to the major leagues will have established these recommendations as core business principles.  For more information, join us for our webinar, “Beyond Lithium Ion,” on Tuesday, May 6 at 2 p.m. EDT.  Click here to register.


Criticism of EV Battery Environmental Impacts Misses the Point

— April 2, 2014

The environmental impact of electric vehicles (EVs) remains the subject of debate, with Tesla Motors becoming the latest scapegoat for allegedly contributing to acid rain in China.  Bloomberg News points out that EV batteries require the use of graphite, which is mostly mined and processed in China.  Graphite mining pollutes the air and water and harms agricultural crops.  The average electric car contains about 110 lbs of graphite, and Tesla’s proposed Gigafactory is expected to single-handedly double the demand for graphite in batteries.

While these are valid concerns, they ignore a few larger facts: the oil industry has far greater overall environmental impact; the production of electricity is much cleaner than refining and burning gasoline; and recycling and reuse techniques are revolutionizing the battery industry.  Tesla, meanwhile, has responded to the graphite concerns. The recent 25th anniversary of the Exxon Valdez Oil Spill reminds us of one of the worst environmental disasters in U.S. history, in which 10.8 million gallons of crude oil was spilled into Prince William Sound, off the coast of Alaska.  Ironically, the congested Houston Ship Channel (one of the world’s busiest waterways) was partially closed over the Valdez anniversary because of a weekend oil spill of nearly 170,000 gallons of tar-like crude.

Compared to Gas

Overall, the equivalent lifecycle environmental impact of electricity is much less harmful than gasoline – assuming it isn’t entirely generated by coal.  According to the U.S. Environmental Protection Agency (EPA), a gallon of gasoline produces 8,887 grams (g) of carbon dioxide (CO2) when burned in a vehicle.  An equivalent 10 kilowatt-hours (kWh) of electricity emits about 9,750g of CO2 when generated in a coal-fired power plant, 6,000g when generated in a natural gas plant, 900g from a hydroelectric plant, 550g from solar, and 150g each from wind and nuclear.  These figures include the entire lifecycle analysis, including mining, construction, transportation, and the burning of fuel.  Since 63% of the 2012 electricity mix in the United States was derived from non-coal energy sources, it has been estimated that EVs emit about half the amount of carbon pollution per mile as the average conventional vehicle.

At the same time, innovative recycling and reuse techniques are significantly increasing the sustainability of EV batteries.  In the United States and Europe, all automotive batteries are required by law to be recycled.  This has made the lead-acid battery industry one of the most sustainable industries in the world, with nearly 99% recycling rates of all the batteries’ components.  Additionally, the world’s first large-scale power storage system made from reused EV batteries was recently completed in Japan.

Second Lives for Batteries

While these approaches do not fully solve the problems associated with graphite mining, the environmental impact created by the manufacturing, transportation, and disposal of batteries is significantly lowered for each additional cycle a battery supplies.  If battery lifetimes can be doubled, the negative environmental impact is cut in half.  Navigant Research’s report, Second-Life Batteries: From PEVs to Stationary Applications, also points out that a global second-life battery market will create new businesses and jobs in addition to improving sustainability.  The global second-life battery business is expected to be worth near $100 million by 2020.

Even with the negative externalities associated with graphite production, EVs still offer an improved overall environmental picture than traditional internal combustion engine (ICE) vehicles.  And Tesla, perhaps in response to pollution criticisms, has announced that it will source the raw materials for the proposed Gigafactory exclusively from North American supply chains. Producing graphite in North America is a much cleaner process than in China.


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