ENERGY WATCH #4 - August 7, 2018
Germany getting charged up by battery factories – but is lithium-ion the end game?
by Karel Beckman
A new report from GTM Research projects that there will be 40 million EV charging stations worldwide by 2030. This is based on the assumption that 11% of the cars on the road will be electric by that date.
OK, so you have heard this kind of prediction before, but here are some interesting additional pieces of news from the report, as noted by Steve Hanley on the website Cleantechnica:
- “Vehicle-to-grid systems are also expected to increase dramatically. A V2G system using Tesla Powerwall batteries has proven its worth for Green Mountain Power in Vermont, where its ability to draw energy from about 400 networked residential batteries saved it over $500,000 during a recent heatwave. Some EV owners worry that allowing the batteries to interface with the grid in a two-way arrangement will degrade those batteries faster than normal use. That question is yet to be definitively resolved.”
- “In a recent experiment in Denmark, participants in a pilot program earned up to $1,500 from their local utility for allowing the batteries in their electric cars to be tapped on demand. A little cash back could help ease the pain of any possible degradation. And being able to use the battery in your car to help power your home is a feature many would welcome.”
- “In order to enable this explosive growth, GTM says ‘utilities, along with manufacturers, oil and gas giants and sector-specific specialists, will need to test new business models.’ According to ThinkProgress, that is already happening. Volta Charging has raised over $60 million so far to fund its ad supported network of free chargers. As cars are plugged in, drivers are exposed to video ads similar to what they see already on gas pumps as many fueling stations. Volta says it has already provided customers with enough free electricity to drive more than 22 million miles.
Another promising development: BYD, the world’s largest manufacturer of EVs (including plug-in vehicles), has joined the Charging Interface Initiative (CharIN). This initiative aims to standardize EV charging across the world. Partners thus far include ABB, Tesla, BMW, Ford, GM, VW, Daimler, Toyota, Subaru, Mazda, Shell and others. In other words plenty of momentum.
Innovation in EVs and batteries does not end there. Daimler in Germany is using discarded ( “second-use”) battery modules from electric cars to provide electricity to the grid. “The world’s largest second-use-battery storage unit will be connected to the grid soon”, according to a recent press release from the company.
Daimler notes that “Systems from second-generation smart electric drive vehicles … are combined to create a stationary storage unit with a total capacity of 13 megawatts. With their second-use- battery storage project, the four partners (Daimler, The Mobility House, Getec and Remondis) are proving that the life cycle of a plug-in or electric vehicle battery does not end when it is no longer being used in a vehicle.”
More significantly, German automotive supply company Continental may be willing to build a factory for the production of E-car batteries, CEO Elmar Degenhart told Handelsblatt in an interview. They would be one of the first European companies to become a major battery producer, besides Northvolt, which is planning to build a factory in Sweden, and Daimler, which is building a €500 million battery factory for EVs near Dresden. However, Degenhart is asking for substantial support from the German government.
It’s a major dilemma for the European automotive industry and for Europe in general: should we continue to buy our batteries or produce our own? Samsung SDI and South Korea’s LG Chem are already building relatively small European factories due to open soon in Hungary (50,000 batteries per year) and Poland (100,000). In addition, China’s GSR Capital produces battery cells at a UK plant it bought from Nissan.
Just recently, the Chinese battery producer CATL, destined to become the world’s largest, announced it will be building a battery gigafactory in Germany. BMW will be the launching customer, having placed an order with CATL worth several billion euros on the understanding they would be manufactured close to their own production plants in southern Germany, notes Handelsblatt. Daimler, too, is said to be in talks to place a multibillion-euro order with CATL, although Daimler will also soon start producing its own lithium-ion batteries in Germany.
In addition, as you will no doubt have read, Tesla’s Elon Musk has said Germany is the first choice for the location of a gigafactory in Europe – although the Netherlands also seem to be in the race.
Degenhart estimates the cost of building one factory to produce lithium-ion batteries at just over $3 billion (€2.56 billion). “At Continental they have run the numbers, he says, and by 2050, if 70 percent of all cars being made were electric, then the world would need 160 of what are known as gigawatt factories. But the start-up phase won’t begin properly until sometime between 2025 and 2030.”
Continental’s biggest competitor, Bosch, have decided it’s not worth it. “We spent a lot of money and took a lot of time to really look into this major strategic question,” Bosch head, Volkmar Denner, told Handelsblatt. “But at the end of February we decided against it and we’re sticking with that decision.” To gain a 20 percent market share you’d have to spend at least €20 billion, he notes. Not even the offer of government funding could change the Bosch decision.
However, Degenhart believes – despite the initiatives of Daimler and CATL – that large-scale European battery production can happen if European governments get involved, notes Handelsblatt. We are always being criticized for doing too little in this area, the Continental boss notes. “But just compare the conditions in China and Europe. In China, battery cell producers are supported and protected intensely by the government. It doesn’t have much to do with free trade. What we need is much more intensive state support, particularly with research and development.”
Although European companies will find it hard to compete in lithium-ion batteries, Degenhart doesn’t believe that lithium-ion is the end game. “Of course, you can make money with these at the moment and Continental won’t wait around for the right technology to arrive, he says. But at the same time, as an engineer by training, Mr. Degenhart wants to wait for the next generation of batteries, those which he believes will replace the lithium-ion ones: solid state batteries.”
“Solid-state batteries weigh less and take up less space and are likely to have double the energy density of lithium-ion cells. Even though lithium-ion batteries are improving massively, solid state batteries are seen as the holy grail of e-car cells because they’ll hold more charge for longer and be smaller and safer.”
“The first [lithium-ion battery] with 500 watt-hours is going to be on the market soon,” Degenhart continues. “But even that won’t be enough to make e-cars competitive. We have to get up to 1,000-watt hours. That will only happen with solid state batteries.”
Batteries, as the vehicle-to-grid projects show, can also be used to help grid operators balance the grid, at least in regard to short-term fluctuations. This does not only apply to car batteries. In the U.S., technology companies are investigating whether they can use the backup batteries at their data centers to supply electricity, reports E&E News.
Microsoft, for example, is carrying out a test at data center in Southern Virginia, with positive initial results. In fact, initial results suggest that the batteries are more effective at responding to the grid operator’s demands than traditional power plants.
In Australia, Tesla’s big battery has already shown the potential of batteries for grid balancing.
“In the future, you don’t have a data center or a power plant. It’s something in the middle. A data plant, for example,” Sean James, Microsoft director of energy research, told E&E. “Where this thing isn’t just a load on the grid, it’s an asset on the grid. We’ve been doing a lot of calculations, working with partners to get it just right, but to see it actually going is a special moment for us.”
To be sure, as MIT Technology Review re-iterated recently, this does not mean batteries are suitable for long-term balancing, i.e. to deliver electricity over a period of a day or more, if there is no wind or sun. At least not lithium-ion batteries, though, who knows, alternatives might be developed, such as aqueous sulfur-flow batteries, which Bill Gates is investing in.
If this venture, Form Energy, becomes successful, it “could make it possible for renewables to provide 90 percent of electricity needs for most grids, for just marginally higher costs than today’s.” Degenhart of Continental may well be right: in batteries, we are not at the end-game yet.