Navigant Research Blog

Funding R&D for Improved Advanced Batteries

— June 8, 2017

The battery of the future must meet the performance standards of industry stakeholders in the motive and stationary energy storage sectors. Navigant Research anticipates the following criteria will be key in the development of new battery advancements going forward:

  • Improved safety to reduce susceptibility to overheating
  • Abundant raw materials to reduce manufacturing costs
  • Lower $/kilowatt-hour costs on energy-intensive operations of 3-plus-hour durations
  • Lower $/kilowatt costs on power-intensive operations of less than
    1 hour
  • Improved energy density (kilowatt/kilogram or kilowatt/liter)
  • Step change cycle life improvements across both stationary and motive applications

Going forward, next-generation advanced batteries will compete with commercially available, mature advanced battery technology manufactured by large, well-funded multinational conglomerates. To do so, new advanced batteries will need to deliver more kilowatt of power per kilowatt-hour of energy to meet the power and energy needs of vehicles and multiple benefit applications on the grid.

Government and Private Sector Support

To meet the performance criteria mentioned above, government and private sector support of clean energy technology development will remain a critical driver for the commercialization of these advanced batteries. For example, Mission Innovation (MI) is a consortium of 22 countries and the European Union that have agreed to accelerate global clean energy R&D by providing funding for new efforts through countrywide and statewide programs. All member nations vowed to double their R&D spending on clean energy by 2020, including the United States, China, France, and Australia. The second MI Ministerial event, which showcases innovations and debates ideas around new energy technologies, is being held in Beijing during June 2017.

National Commitments to Clean Energy

(Source: Mission Innovation)


For the US storage industry, Advanced Research Projects Agency-Energy (ARPA-E) has provided dozens of energy storage companies with funding to bring their technologies to market over the past 6 plus years. With the US Department of Energy under fire through the past several months, the future of ARPA-E was unclear, leaving several companies worried. ARPA-E is back up and running and recently received a $15 million boost from this year’s congressional budget instead of being eliminated, as previously proposed by the Trump administration. It is tasked to identify and support revolutionary energy inventions and energy technology advances, which requires constant evolution of its programming focus. This is accomplished by establishing dynamic technical agendas designed to accelerate innovation in high potential areas.

Strategic Advantage

Companies currently working to commercialize new advanced battery technologies that partner with large, well-funded technology and/or manufacturing companies now moving into the energy storage sector will be at a strategic advantage. There have been several examples of this happening in the past year; L3 Technologies’ acquisition of Open Water Power (OWP) is one of the most recent. L3 is a provider of communication, electronic, and sensor systems for government and commercial technologies. Its acquisition of OWP allows L3 to further develop and utilize OWP’s high energy density undersea power generation technologies used in unmanned underwater vehicles (UUVs) and other maritime devices. Navigant Research anticipates that advanced battery companies that show progress toward commercialization like OWP will likely receive investment or will be acquired by large technology manufacturers.

Providing adequate funding and opportunities for companies to develop new energy storage technologies is essential to the long-term evolution of the entire energy industry. Ensuring that we have the best and brightest minds working on our toughest energy storage problems and that venture startups continue to emerge is contingent on reliable funding from both government and the private sector.


California Legislative Session Closes with Climate Victory, but Questions Linger

— September 9, 2016

Smoke StacksAmbitious but controversial legislation strengthening California’s climate goals won approval in the final days of the state’s 2016 legislative session, which ended August 31. Senate Bill 32 (SB 32) calls for California to reduce greenhouse gas (GHG) emissions to 40% below 1990 levels by 2030, an aggressive extension of the current target to reduce GHG emissions to 1990 levels by 2020. Governor Jerry Brown lobbied heavily for the bill, and White House officials even placed calls to California lawmakers urging them to support the measure, which passed narrowly in an Assembly vote held August 23.

The new goal brings California in line with the European Union, which is already working to reduce emissions to 40% below 1990 levels by 2030. It also complements the renewable portfolio standard, increased last year, requiring the state to get 50% of its electricity from renewable resources by 2030.

At its core, SB 32 is an extension of Assembly Bill 32 (AB 32), the landmark law signed by Governor Arnold Schwarzenegger in 2006 that established California’s 2020 emissions reduction targets and laid the foundation for a suite of clean energy and climate programs implemented over the last decade, including the state’s cap and trade program. Yet, while SB 32 deepens the climate commitments established under AB 32, it comes at a time when the future of the cap and trade program is increasingly uncertain.

Cap and Trade Under Scrutiny

AB 32 authorized the California Air Resources Board (CARB) to develop regulations and market mechanisms to achieve the state’s GHG reduction targets. The cap and trade program that emerged places a cap on the total volume of emissions that can be released into the atmosphere and requires companies to purchase permits, or emissions allowances, for each metric ton of CO2 equivalent emitted. The state sells these allowances in auctions and funnels the revenue to other programs geared toward reducing emissions, such as the state’s high-speed rail initiative. The allowances can also be traded in the marketplace. Since its launch in 2012, cap and trade has become a centerpiece of California’s climate policy. However, the program faces challenges surrounding the legality of allowance auctions as well as CARB’s authority to continue operating the program beyond 2020.

The legality of auctions came under assault following a change in the definition of taxes that took effect after AB 32’s enactment. Proposition 26, passed in 2010, expanded the definition of taxes to encompass a variety of payments previously categorized as fees. This is significant because passing a tax in California requires a two-thirds voting majority in each chamber of the state legislature whereas passing a fee requires a simple majority. In November 2012, the California Chamber of Commerce filed a lawsuit alleging that the cap and trade auctions amount to an illegal tax, since the auction process was not approved with two-thirds voting majorities. The lawsuit is still moving through the courts.

Separately, questions have emerged regarding the state’s legal basis for continuing cap and trade beyond 2020. Although language in AB 32 authorizes the use of market-based mechanisms to reduce emissions through 2020, authority to continue implementing those mechanisms beyond 2020 is murkier. In attempt to address this ambiguity, CARB released a draft proposal in early August to continue operating the program beyond 2020. Without legislative support, such an extension would likely face legal challenges.

Given uncertainty over the program’s future, demand for allowances has plunged in recent auctions. Only one-third of available allowances were sold in the latest auction, a poor performance but a marked improvement over the previous auction in which a paltry 10% of allowances sold.

Looking Ahead

With legal and regulatory decisions outstanding, it is unclear whether cap and trade will remain a primary mechanism for pursuing the state’s emissions reductions targets. If the courts decide auctioning allowances under cap and trade constitutes a tax, California would either have to pass legislation supporting the program with a two-thirds vote, halt the program, or continue to implement the program without auctions, distributing allowances at no cost to be traded among market participants. Affirming CARB’s authority to continue implementing cap and trade beyond 2020 will be a separate task.

Although the future of cap and trade is thus unclear, one thing is certain: by passing SB 32, California has once again asserted its role as a leader in clean energy and climate policy, both within the United States and globally. If the state can stay on track to meet its ambitious 2030 targets, it will also help to pave the way for other states and nations to follow.


Oregon State Energy Policy Leadership Back on Display

— November 30, 2015

Oregon has a long history of innovative firsts across the social, political, and business spectrum with regard to energy. Below are some notable examples of Oregon energy state policy leadership:

  • In 1919, Oregon became the first state to initiate a gas tax, and the rest of the country followed its example in repairing roads. Now rolling out a trial pay-as-you-drive tax called OReGO, the state is incentivizing its citizens to drive less. In 2011, per capita use of gasoline in Oregon fell to its lowest level since 1962.
  • Oregon was the first West Coast state to pilot a floating offshore wind farm in Coos Bay.
  • The state is home to Shepherds Flat, one of the largest wind farms in the world at 845 MW. Shepherds Flat has more than 300 2.5 MW General Electric (GE) wind turbines.
  • Portland was the first U.S. city to adopt a climate change plan, called the Global Warming Reduction Strategy. In 2010, Oregon hit its 2010 emissions target.
  • In 2007, the state legislature passed numerous pieces of clean-energy legislation in electricity, biofuels, and other sectors that led to the arrival of Vestas, Iberdrola, SolarWorld, and other industry leaders.
  • Oregon’s only coal plant, Boardman, is expected to be converted to biomass by 2020.

However, since the financial crisis and amid challenging market conditions both locally and globally, there have been lulls in legislation and activity that previously gave Oregon its credibility in the energy sector.

There are two new initiatives facing voters in the coming ballot cycle. Initiative Petition 63 aims to increase the state’s renewable portfolio standard from 25% by 2025 to 50% by 2040, which would make it one of the top five most aggressive among U.S. states and territories. The initiative would also ban coal electricity imports, which, when combined with the planned phaseout of coal generation in the state, would make the state coal-free by 2030. Initiative Petition 64 is similar, but it also ties these results to executive compensation, which is the first approach that I have seen tied to energy policy, anywhere.

Initiative Petition 64

Dexter Blog Quote

 (Source: Oregon Initiative Petition 64)

To be sure, many other aggressive state-level efforts have seen strong innovation on the policy front and have enjoyed various levels of success. One differentiating factor that makes Oregon particularly unique on the local implementation front, however, is the massive hydroelectric system in the Columbia River Gorge. This system provides about half of the state’s power (and does so cheaply), and has been somewhat of a barrier to the larger uptake of non-hydro renewables at the residential, commercial, and industrial levels.

Voters have consistently voted with their dollars, and Oregon is home to one of the highest percentages of green power program subscribers—where customers pay approximately 10% more on their electric bills in order to support renewable energy projects in the state. Similarly, polls associated with these new ballot initiatives found that 71% of Oregonians supported the bills, and that 58% said they supported the proposal even if it would increase their energy bill. This flies in the face of conventional wisdom that voters are unwilling to put their money where their mouth is, and is instead representative of most of the state’s population. The positive economic impacts of wind and biomass power in rural areas has led to progressive energy legislation being passed.

Many groups outside of Oregon will be watching closely to see if these initiatives pass, and this underscores not only the importance of policy to keep the state on the front lines of statewide energy policy, but also its potential for the rest of the United States.


Advanced Energy Is $1.13 Trillion Market

— April 11, 2014

The publication of the Fifth Assessment Report by the Intergovernmental Panel on Climate Change (IPCC), Climate Change 2014: Impacts, Adaptation, and Vulnerability, made headlines recently with a familiar message: The climate is warming, people are causing it, and we are ill prepared to deal with the direct and indirect effects of climate change.

Indeed, it is a grim outlook, but when looking at one indicator not covered in the IPCC report – revenue from deployment of smart energy technologies – there are signs that things are moving in the right direction to reduce emissions.

One group, the Advanced Energy Economy (AEE), is a national association of businesses and business leaders who seek to make the global energy system more secure, clean, and affordable.  The group takes a big tent approach to clean energy.  It is bankrolled by one of the leading advocates and funders for the United States taking a leadership position in deploying clean energy, Tom Steyer.  AEE has identified seven core segments that make up the advanced energy industry: transportation, electricity generation, fuel production, electricity delivery and management, fuel delivery, buildings, and industry.

For the past 2 years, AEE has commissioned Navigant Research to quantify the advanced energy industry market sizes for the United States and globally.  We have identified 41 categories and 80-plus subcategories that meet the AEE definition and put the detailed findings and key trends in the report, Advanced Energy Now 2014 Market Report.  Below are some key findings from the report that illustrate the breadth and depth of technologies that are capable of reducing emissions and U.S. activity in those markets.

Key Findings

  • The global advanced energy market reached an estimated $1.13 trillion in 2013.
  • In the United States, the advanced energy market was an estimated $168.9 billion in 2013 – 15% of the global advanced energy market, up from 11% in 2011.
  • Advanced transportation is booming: Navigant Research forecasts annual plug-in electric vehicle sales will reach approximately 467,000 vehicles in the United States and 80,000 in Canada by 2022 – slightly faster than hybrid electric vehicles sales grew in their first decade.
  • The United States accounted for an estimated 18% of the global solar PV market that approached $100 billion annually in 2013 and far surpassed 100 GW of cumulative installations in 2013.
  • LEDs are expected to be the leading lighting technology over the next decade, with LED lighting products (including lamps and luminaires) in commercial building markets forecast to grow from $2.7 billion in 2013 to more than $25 billion in 2021.

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