Is battery technology finally at the cusp of a revolution?
For two decades, battery technology has been almost, but not quite, at the verge of something big — and with it the promise of a clean-energy revolution. In the 1990s, General Motors and Toyota brought us the electric car. That experiment did not go so well: Even as some consumers loved their cars, high cost and low range made them a hard sale for the mass market.
Then came the cleantech boom at the turn of the century, and the hope of energy storage was re-ignited. Hundreds of companies have pursued as many innovative storage technologies, but progress has been slow. Because energy storage is the linchpin to solving the issue of renewable generation intermittency, plummeting solar prices suggest market demand for energy storage will grow. However, stubbornly high cost, limited lifetime and safety issues continue to thwart broader penetration.
Then came Tesla. Elon Musk’s announcement of the Gigafactory and its massive scale of manufacturing has the potential to dramatically reduce the cost of batteries. Other companies will be forced to follow Tesla’s lead and embark on vertical integration.
Greater efficiencies and increased competition will lead to much cheaper batteries. Preliminary estimates suggest batteries at one-third the price — a reduction deemed impossible just a year ago.
But even cheaper batteries won’t crack the energy storage code if they are short-lived and plagued by safety problems. Accelerated innovation and breakthrough technologies are essential if batteries are to deliver on their promise. And with cheaper batteries comes the risk: Will this cheaper lithium-ion (Li-ion) technology undermine innovation in the overall sector?
In other words, will batteries go the way of solar? As the price of silicon solar cell dropped, we saw the slow, but steady, movement toward crystalline photovoltaic technology at the expense of all others. Will new innovative battery technologies survive competition with the massive scale that Li-ion is expected to reach and the cost reductions that come with it?
We all know that the far-out ideas being pursued at universities, national labs and startups are critical to getting us where we need to go. But will investors fund these more pioneering technologies in an uncertain landscape? Might we be at risk of failing (yet again) to realize the promise of battery technology?
These are the topics of the upcoming Bay Area Battery Summit at Berkeley Lab. Organized with the Joint Center for Energy Storage Research, the Electric Power and Research Institute and CalCharge, and sponsored by the Bay Area Council, this Nov. 3 summit features industry, policy and finance experts.Participants will explore fundamental questions about energy storage:
- What does the reduction in cost mean to the market?
- What is needed to achieve parity with gasoline powered vehicles in cost, range and refueling time?
- What is needed in technology to expand the range from 200 to 400 miles, and recharging from hours to minutes?
- What is needed to achieve grid scale storage and cost parity?
One key topic will be emerging trends in finance. Funding for cleantech is scarce; traditional venture capitalists have walked away from this sector. What is the value proposition for strategic investors? In the world of intense cost-cutting, some investors, along with big battery companies, are starting to realize the need to differentiate their technology. New ideas provide a path to do exactly that. And a few big players have begun to invest in transformational ideas as a path to differentiation.
Another key topic is the ways policy shapes markets. Standards for electrified vehicles (the ZEV mandate in California) and grid storage (California’s 1.3 GW of storage by 2020) could help provide a market for a diversity of battery companies — not just the big players, but also the startups.
These policies also, hopefully, provide long-term predictability for both the company and the investors. What other policies are needed to remove market barriers to the development, deployment and commercialization of battery technology?
The transition to a clean-energy economy is both urgently necessary but also inevitable. It isn’t a question of if — it is a question of when.