“The factory is the machine that builds the machine,” says Elon Musk. The CEO of Tesla Motors is talking about his new Gigafactory, a vast production plant now taking shape in the Nevada desert. Tesla has long imported lithium-ion batteries from Asia, but to meet its target of producing 500,000 cars a year, it needs to build them nearer home. “Tesla alone will require today’s entire worldwide production of lithium-ion batteries,” the company says about its goals. The Greek word “giga-“, which means “billion”, has a number of Tesla interpretations, including the Gigafactory’s planned annual battery production capacity of 35 gigawatt-hours.

Market research firm Frost & Sullivan predicts the lithium-ion battery market will have grown from $17.5 billion in 2013 to $76.4 billion in 2020, a 23 percent compound annual growth rate. The cause is the projected global demand for the batteries that are used in everything from power tools to laptop computers to mobile phones to electric vehicles (EV).

Elon Musk gets lots of press, especially because he wants to set up a human colony on Mars, but Tesla is not the only horse in the EV race, which is a driver of battery development. Volkswagen’s new all-electric I.D. car motor is powered by a lithium-ion battery pack. The I.D. will be the first VW to use the company’s Modular Electric Drive platform and an expanded international charging infrastructure will be vital for its success. China could be a key VW partner as it has a goal of building 4.8 million charging stations by 2020.

Talking of China, EV startup Faraday Future, reportedly backed by Chinese capital, has teamed up with LG Chem and Faraday’s cars will contain lithium-ion cells from the Korean company. And if that is not enough to demonstrate the battery dynamics of the EV sector, Fisker Automotive is working on a high-tech battery that improves storage. Prototypes have been shown to store five times more energy than conventional lithium-ion batteries. This would help to decrease charging time and increase range.

And that’s the magic word: range.

From the starting grid to the smart grid

Volkswagen’s I.D. may be able to travel up to 560 km (350 miles). If that kind of range became the EV norm, sales could grow significantly over the next five years. But that’s a big “if” and the automotive industry is far from united in its storage strategy.

Daimler CEO Dieter Zetsche decided against joining with BMW and Audi to invest in battery cell production in Germany claiming there is huge overcapacity in the market. “Contrary to the expectation four or six years ago when everyone thought that the cells would be a rarity that could even be used as a tool of industrial policy, there is de facto a massive overcapacity in the market today,” Zetsche said.

While the auto industry waits for EV sales to rev up, the electricity storage sector is looking towards the “smart grid”, which is expected to bring utility electricity delivery systems into the 21st century, using software and automation. Southern California Edison’s announcement that it has picked six companies —Advanced Microgrid Solutions, NextEra, NRG, Swell, Hecate and Convergent — to supply 125 megawatts of battery storage and “demand response” as part of a project to learn how clean energy and the grid can work together, has boosted those who believe a new model is possible.

That model would draw heavily on renewables.

Storing the sun and the storm

Producing renewable electricity is popularly associated with solar and wind power. But while these are clean, they are also unreliable: too little on a cloudy or a windless day, or too much when the sun shines brightly or breezes blow continually. As these power sources become more important to the energy economy, so does investment in the technology to store the energy produced in times of abundance.

The renewables community believes in batteries and this belief is based on predictions of battery technology breakthroughs and the role of the state, especially the idea that if a government legislates for something — electricity storage — industry will have to build it.

Beyond batteries, however, there’s a variety of storage options, many exotic, some mundane, including hydro, compressed air, hydrogen, thermal and flywheels.

Regardless of the technology, the benefits of electricity storage for businesses and consumers are obvious: cleaner energy, more reliable availability during times of high demand and protection against fluctuating costs.

The power of politics

With the world consuming 20 trillion kWh of energy annually, the activities of infrastructure manufacturers such as General Electric and Siemens deserve noting as does the strategy of Amazon. Its Web Services (AWS) offers a widely-used platform in the cloud and AWS has a long-term commitment to achieve 100 percent renewable energy usage for its global infrastructure footprint.

The algorithm is at the heart of the Amazon story and computer code is equally important for EnerNOC, one of the largest providers of energy intelligence software and services for commercial and institutional customers, as well as grid operators and utilities.

When it comes to utilities, an interesting policy question exists about electricity storage and its role in the power systems of developed countries: Who should own storage technology? While some believe that distributed storage – large scale, home-owned battery arrays– could transform power generation, most experts dismiss this as idealism.

What will be required is utility-scale storage, they say. And that will demand deep pockets. Who should finance, build and own the storage power plants needed to enable the renewables revolution? Conventional, vertically-integrated utilities have the know-how and finances to maximize benefits from storage, including integrating the technology into the grid to assure reliability. They can also take advantage of economies of scale. It’s a compelling argument.

Conclusion: keep an eye on the periphery

Each May, for the last nine years, the US Department of Energy has hosted a symposium called “Beyond Lithium-Ion”. It’s significant that the name hasn’t changed. The case for more and better battery technology is easily made and serious research is being done, but making a better battery costs a lot of money and backing an unproven battery technology is risky. Those looking at the sector need to keep an eye on the periphery of the electricity storage market. Car manufacturers, robot makers, software firms and energy utilities are vital to the evolution of this Zeitgeist.

The Samsung inferno

Samsung has stopped production of its Galaxy Note 7 following reports of the smartphone catching fire. After the device experienced problems in August, the company blamed lithium-ion batteries supplied by its subsidiary, Samsung SDI, according to documents from the Korean Agency for Technology and Standards, which were leaked to South Korea’s SBS TV. Samsung recalled 2.5 million Note 7s in early September and switched to batteries from Hong-Kong based Amperex Technology Limited (ATL). It then shipped Note 7s with ATL batteries as replacement phones, but they kept igniting and, following house fires and plane delays, the Galaxy Note 7 was withdrawn on 12 October. The parent company of ATL is Japan’s TDK, which is not included in the Werthstein Battery Renaissance portfolio of companies.
Samsung still has not said what exactly caused the Note 7s to catch fire, or whether it knows what the problem was. “It was too quick to blame the batteries; I think there was nothing wrong with them or that they were not the main problem,” Park Chul-wan, former director of the Center for Advanced Batteries at the Korea Electronics Technology Institute, told the New York Times.


Valerie Plagnol

“The new generation of lithium batteries are much better and the demand especially from car producers is rising due to better distance for electric cars.”

Giles Keating

“The prices of these companies are down, but beginning to pick up from their lows.”

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