Navigant Research Blog

Lessons From the Lithium Ion Leaderboard

— May 22, 2013

With the publication of Lithium Ion Batteries for Stationary Energy Storage, we launched our first Navigant Research Leaderboard report, which is the rebranded version of the Pike Pulse series.  This report looks at the landscape of lithium ion battery vendors in the stationary energy storage space.  To score each market participant, we looked at six elements of strategy and six elements of execution.  Once the results were tabulated, we ended up with a few surprises.  Here are some of the lessons learned from this report:

Entering bankruptcy is a surefire way to damage a reputation.  A123 Systems, the historical market leader in stationary storage, has placed more than 100 MW of batteries into stationary systems since its inception in 2005.  Its team of engineers, marketing executives, and senior managers is world renowned.  So how did it end up in the Followers category, the lowest quadrant of the Leaderboard?  The answer rests primarily with the fact that it entered bankruptcy after a series of manufacturing setbacks with its automotive batteries.  The company recently emerged from bankruptcy under new ownership.  Now it’s part of Chinese automotive parts manufacturer Wanxiang Group and is re-entering the business of manufacturing and marketing batteries.  As the company formulates and articulates its strategy going forward, it will likely recapture its market leadership.  But the immediate after-effects of the bankruptcy severely damaged the company’s scores.  We anticipate that A123 will score significantly higher next year.

It Only Takes One Fire

Battery fires burn more than just the battery.  Fires struck several battery makers, such as Electrovaya and GS Yuasa, driving some to the point of failure.  Unfortunately for the industry, these incidents have received an inordinate amount of media attention, leading to lost sales and severe public relations problems (luckily no deaths or severe injuries have been caused by any of the fires).  In other industries, safety breaches can be tolerated.  In the advanced battery space, however, a single fire event can lead to the company’s collapse.

China is still playing catch-up.  While Chinese lithium ion companies have made tremendous gains in the last 3 years in the consumer electronics sector, they are still market laggards in stationary storage.  ATL, Lishen, China BAK, and BYD (the four horsemen of the Chinese lithium ion industry) have all either avoided the global stationary storage market or failed to make a lasting impression with buyers.  Don’t expect this to continue, though.  All four companies have plans to develop their stationary storage businesses in North America and Europe as soon as they feel an investment is warranted.

There’s more than one way to score highly.  The two market Leaders in the Leaderboard, LG Chem and Johnson Controls, both scored much higher than any competitors.  However, they got their scores for very different reasons.  LG Chem bet the house in 2008 and 2009, building large factories on multiple continents and blitzing customers with an all-out marketing push.  The results have put LG Chem into the driver’s seat in the automotive space and made it a major competitor in the stationary space.  Johnson Controls, on the other hand, kept its powder dry.  It invested heavily in basic research into the nickel manganese cobalt chemistry that most industry participants agree will dominate the space in the next 5 years.  The company kept its scientists busy while making relatively small investments on manufacturing capacity.  Now Johnson Controls is in an excellent position to invest in manufacturing even as many of its competitors are struggling to keep factory doors open.


A Possible Energy Storage Breakthrough

— May 21, 2013

In a recently published paper, Stanford professor Yi Cui revealed a new battery design that could, if it proves durable and effective in the real world, be a significant new technology in the energy storage market.  Like many experimental battery designs, Cui’s battery uses forms of lithium and sulfur.  However, the professor’s battery uses them in a completely novel fashion, sidestepping some of the problems that normally plague lithium sulfur batteries.

To understand why this battery holds so much promise, it’s important to understand the electrochemistry of sulfur.  When sulfur is used in a battery, it sometimes produces polysulfides, which can damage the inner workings of the battery.  When polysulfides collect within the electrolyte of the battery, they cause the other parts to degrade quickly.  That’s why traditional lithium sulfur batteries have such a low cycle life, sometimes lasting only a few dozen cycles.

Cui’s design turns the production of polysulfides on its head: the electrolyte is composed of a lithium polysulfide material.  When the battery is discharging, lithium ions leave a lithium cathode and bond with the lithium polysulfide electrolyte.  When it’s charging, the ions head back to the lithium metal cathode.  The result is a flow battery that, unlike any other flow battery, needs no ion-selective membrane.  Instead, a cheap passive coating of the lithium metal allows the correct ions to pass without leading to degradation of the cathode.

Multiple Breakthroughs

The Cui lab at Stanford will be familiar to readers who have read about previous battery work done there.  He seems to have an uncanny ability to turn out several new battery chemistry breakthroughs every year, ranging from yolk-shaped encapsulants to silicon nano-rods to dye-based batteries.  It seems inevitable that an innovation from the Cui lab will eventually rewrite the energy storage history books.

There’s reason to be hopeful for this particular concept.  This battery has two features that resonate with anyone who has tried to understand why flow batteries haven’t succeeded so far: the materials involved (lithium and sulfur) are relatively cheap and the absence of a membrane eliminates another large cost factor for most flow battery designs.  If the Cui battery can be scaled up from its small laboratory prototype and can withstand thousands of cycles, this concept could lead to a much cheaper form of energy storage than currently exists.

That’s a big “if.”  Many other promising experimental battery designs have proved to be too finicky or too expensive to manufacture to become real-world products.  Cui and his graduate student, Guangyuan Zheng, have shown data that their battery can endure 2,000 cycles without any noticeable degradation, which is a good start.  But the real proof of the system’s success will be in a commercially manufactured, scaled-up model.


The Cleantech Resource Boom

— May 10, 2013

The United States may be in for another resource boom.  Data from researchers at the University of Wyoming suggests that brines in the Rock Springs Uplift in that state could contain 228,000 tons of lithium.

It’s easy to forget how reliant we are on natural resources, such as lithium, for our clean technologies.  We typically think of natural resources in concert with energy ‑ it’s hard to forget that natural gas, oil, and coal are natural resources since we literally drill and mine them out of the ground.

However, new energy technologies are also reliant on natural resources.  Certain metals are key components in clean energy technologies.

For instance, fuel cells are reliant on platinum and platinum group metals (found primarily in South Africa and Russia).  Lithium ion batteries require lithium (found primarily in China, Bolivia, and perhaps now the United States).  Rare earth metals are used in smartphones, electric vehicles, wind turbines, and oil refining.  China famously – or infamously – instituted an informal ban on exports of rare earth metals.

Blood and Treasure

The reliance on these natural resources is frequently cited as a downside of new energy technologies.  The distribution of these metals is inequitable, and demand for them creates an inherent risk to changing the energy paradigm and adopting new energy technologies.

Why risk a conflict over rare earth metals, when we have the means to keep drilling for gas?

For one thing, we alredy risk conflict daily – and spend piles of money – to develop fossil fuel resources.  In the United States, we’ve had a century and a half to perfect the science and engineering behind finding, exploiting, and delivering petroleum resources.  In contrast, it’s still early days for new energy technologies.  As these metals become more desirable and valuable, more treasure ‑ and, likely, blood ‑ will go toward exploration and production of these elements.

By way of example, in 2011, Total’s exploration budget was $2.1 billion (independent of production).   Petrobras recently announced that it would spend $236 billion over the next 5 years on oil exploration and production.  In 2013, PEMEX, Mexico’s state oil monopoly plans to spend $19.98 billion on exploration and production.  Chevron’s budget for exploration and production in 2013 is $33.03 billion.

The magnitude of these investments far outweighs that for exploitation of lithium, rare earth elements, and other resources required for new energy technologies.  Needless to say, if there’s a run on lithium for EV lithium ion battery packs – it’s likely a forward-thinking miner or two who will put some resources to finding more.


New Technologies Boost Fuel Economy

— March 26, 2013

While battery electric and hybrid vehicles are slowly gaining in popularity, they show no signs of becoming a significant portion of vehicle sales in the next several years.  Automakers, meanwhile, are busy exploring other aspects of vehicle design that will improve fuel efficiency.  Below is an update on some of these approaches:

Better Aerodynamics.  At speeds of 30 mph or less, aerodynamic performance has a minor impact on fuel efficiency.  Once freeway speeds are achieved, though, the energy needed to push the vehicle through the air dominates other factors.  Because drag is proportional to the vehicle cross-sectional area, the coefficient of drag (Cd), and the velocity squared, less energy is needed to maintain speed of smaller and smoother cars.  Significant improvements were measured on VW’s new XL1 hybrid when the conventional door mirrors were replaced with tiny cameras that projected the rear side view on to a small screen on the door where the mirror would normally be.

Reduced Mass. The energy required to overcome inertia and accelerate a vehicle is a function of its mass, so heavier vehicles need more energy to get them moving.  They also have to dissipate more energy to slow down and stop, which means bigger and more powerful brakes.  Electric vehicles with large and heavy battery packs suffer particularly in this department.  Automakers seeking to produce lighter vehicles face two big problems: alternative, lighter materials such as aluminum and carbon fiber are more expensive and often harder to work with, and lighter vehicles have to be stronger to keep the occupants safe from impact with heavier vehicles.

ICE Technology. The internal combustion engine continues to get incrementally more efficient.  Turbocharging and supercharging are now used for economy as well as performance, and features such as direct injection and higher compression have migrated from diesel engines to gasoline.  Downsizing the engine’s volumetric capacity without sacrificing performance is now a realistic option, and cylinder deactivation allows fuel saving when cruising while maintaining full power for acceleration when needed.

Stop-Start. Sometimes labeled “micro-hybrid,” the ability to eliminate idling while the vehicle is stationary has the potential to save a lot of money for drivers in heavy traffic.  Stop-start technology requires other vehicle systems to be electrified, which in itself can improve fuel efficiency.  New stop-start systems in development will add an electric “crawl” mode to extend the fuel savings in slow-moving traffic jams.

All these technologies are being introduced as new models come to market, but the challenge for automakers is to incorporate features that offer customer benefits without the steep price premiums that hamper EV sales.

Some of these innovations face regulatory hurdles.  To launch its XL1 hybrid in Germany and Austria, Volkswagen had to get special government dispensation because it lacks conventional external mirrors. The XL1 is illegal to drive in other European countries and in North America.  For some new technologies to take hold, lawmakers must revisit certain existing restrictions on vehicle design.


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