Alternative Energy Storage: Lithium, Lead or Both?

Since mid-July I’ve been an outspoken advocate for advanced lead-acid battery technology and a fairly vocal critic of lithium-ion technology, which I’ve uncharitably compared to airbrushed centerfolds. Understandably, defenders of the true faith have condemned my heresy. Today I’m going to back up a few steps and try to give new readers a better understanding of where the battery industry has been, where it is now and where I believe it is going in the future. I hope this overview of how the industry has developed will make my reasoning more clear and improve everyone else’s understanding of a complex but very exciting investment sector.

A Brief History

To understand the current state of battery technology, one must first consider the historical needs that gave birth to all invention. Around 250 BC, a clever Babylonian found that a magic genie could be released from a clay pot containing the right combination of lead and acid. During the 1800s, people began to find ways to make the genie do useful work beyond electro-plating and parlor tricks. From there technology progressed rapidly to a point where batteries are now a ubiquitous but largely invisible part of our daily lives. We don’t usually think about batteries until they need to be recharged or replaced, but life would be very different without them.

Until the 1960s, there were two primary classes of batteries: rechargeable lead-acid batteries and disposable dry cells. Lead-acid batteries handled the heavy work like starting cars and providing emergency lighting while dry cells were used for flashlights, toys and consumer goods, including the first wave of cheap transistor radios.

In the mid-70s, maintenance free valve regulated lead-acid (VRLA) batteries were introduced and rapidly became the dominant technology. They worked so well in fact that the level of R&D spending on lead-acid technology plummeted. Shortly thereafter, new rechargeable battery chemistries including nickel cadmium (NiCd), nickel metal hydride (NiMH) and lithium ion (Li-ion) emerged on the scene. Since the new chemistries had tremendous potential utility in portable electronics, R&D spending on those chemistries soared in response to intense consumer demand. That trend continued through the early years of the current decade because lead-acid batteries were generally adequate for the work they needed to do while batteries for portable electronics were still frequently inadequate.

Over the last few years, an entirely new market dynamic has emerged as people have been forced to come to grips with the amount of energy they waste. Today we are witnessing a seismic shift in the storage sector because none of the technologies we relied on in the past is durable enough or robust enough to meet the demands of an energy efficient future. In response to this new market dynamic, companies throughout the energy storage sector have:

• Instituted new research programs to improve the performance and durability of lead-acid batteries;
• Refocused existing research to concentrate on making larger NiCd, NiMH and Li-ion batteries;
• Increased research on new and improved flow battery chemistries; and
• Devoted new resources to physical storage systems like pumped hydro, compressed air and flywheels.

The victors’ spoils will be massive new markets that represent an estimated incremental value of up to $70 billion per year – a whopping 233% increase over current global revenues of $30 billion industrywide.

Critical Performance Metrics

Understanding performance claims in the energy storage sector can be difficult because there are several critical performance metrics including “energy,” or the capacity to do work, which is usually measured in watt-hours (Wh); “power,” or the rate at which work can be performed, which is usually measured in watts (W); and “cycle-life,” or the number of times a device can be discharged and recharged before it needs to be replaced. Another key concept is “energy density,” which quantifies the amount of energy a battery pack can deliver per unit of weight measured in kilograms (kg) or volume measured in liters (l).

If you think in terms of the humble electric golf cart, energy limits the distance you can travel on a single charge, power limits your speed of travel, cycle-life limits the number of rounds of golf you can play before replacing the battery and energy density dictates the size of your battery pack. So performance metrics are easy to understand when they are tied to the requirements of a particular application. But if you try to discuss performance metrics in a vacuum without considering how they relate to a particular application, all you get are confusing gee whiz numbers.

I’ve been studying SEC reports from energy storage companies for several years and believe that investors would be well-served if every company presented summary production, revenue and cost data using a uniform watt-hour metric. The disclosures in the prospectus for the proposed A123 Systems IPO come close to my ideal, but are still not quite there. In my opinion, this simple change would make it far easier for investors to make apples to apples comparisons and truly understand the competitive strengths and weaknesses of widely varied storage technologies. But since fair comparability can really take the edge off a story, standardized disclosure may be a long time coming.

Critical Application Requirements

The biggest challenge facing the energy storage industry is an incredible diversity of needs that precludes even the remote possibility of a silver bullet solution. I couldn’t begin to describe or quantify the global scope of the problem, but a couple of concrete examples may be helpful.

In a light HEV where the principal goal is to use energy from recuperative braking to provide extra boost during acceleration, power and cycle-life are the critical metrics. You need a storage solution that can accept a huge charge over a 10 to 15 second braking interval, deliver that charge over a 10 to 15 second acceleration interval and repeat the process many thousands of times over the life of the vehicle. In a PHEV where the principal goal is to run in electric only mode for 40 or 50 miles and then switch over to an internal combustion engine, energy and power are the critical metrics and cycle-life is fairly unimportant because the average user will not recharge his batteries more than 300 to 500 times in any given year.

Similar disparities are common in the utility industry where power and cycle-life are critical metrics for frequency regulation and short-term grid stabilization, but energy and power are the critical metrics for long discharge periods involving rate arbitrage, renewables leveling and diurnal storage.

In the extreme case of an emergency backup or upgrade deferral system that only kicks in if there is a severe grid disruption, energy and power are the only metrics that matter and cycle-life is almost irrelevant.

Size and weight are mission critical constraints in portable electronic device. They are far less important in motive applications and almost irrelevant in stationary applications. Likewise, high cycle-life and power are critical for light HEVs but expensive overkill for an electric runabout that will only be charged a couple thousand times during its useful life. In the final analysis, the fundamental laws of economics will require that every user pick the storage solution that is best suited to his particular needs and budget.

Two Decades of Li-ion Technology

Sony (SNE) first introduced commercial Li-ion batteries in 1991 and there have been huge improvements in safety, power and cycle-life over the last two decades. But each major safety improvement has reduced energy density and increased manufacturing costs.

Sony’s original Li-ion batteries had energy densities approaching 200 Wh/kg, were able to deliver their stored energy in an hour and offered between 500 and 1,000 cycles. In comparison, today’s high-end Li-phosphate and Li-titanate batteries offer energy densities of less than 100 Wh/kg; can deliver their stored energy in three to five minutes and offer useful lives of 5,000 to 20,000 cycles. Between these extremes, the variables are almost endless.

While precise cost comparisons are difficult because nobody uses standardized reporting metrics, the bulk of available data indicates that lithium-cobalt batteries based on Sony’s original chemistry cost $0.45 to $0.55 per Wh and high-end Li-phosphate and Li-titanate batteries can cost upwards of $1.50 per Wh. About the only good price news in the group is Li-polymer batteries that cost about $0.35 per Wh to manufacture.

Battery cost per Wh is not a critical issue when a consumer is shopping for a 50 Wh laptop battery. But it will be the primary market driver when that same consumer is shopping for a 2,000 Wh battery for a Toyota Prius, a 16,000 Wh battery for a Chevy Volt or a 26,000 Wh battery for a Th!nk City runabout. After all, the only place a comma and two or three additional zeros don’t matter is Washington DC.

There is no question that today’s Li-ion batteries offer far better power and cycle-life than Sony’s originals. But gains in one performance metric have always reduced energy while increasing manufacturing costs. Over the last two decades,  Li-ion technology has seen incremental improvements of 8% to 10% per year, but it's never seen anything even close to the "Moore's Law" type performance gains so many investors have come to rely on.

Since we have not seen disruptive performance improvements over the last two decades when Li-ion technology was rapidly evolving and research chemists had all the R&D funding they could possibly use, I think it is unreasonable to assume that disruptive performance improvements will arise in the future as a mature technology is scaled up to larger sizes. I am also troubled by recurring reports from natural resource analysts who note that Li-ion batteries require raw materials that are not abundant in North America and may not be abundant anywhere else.

I believe Li-ion is a wonderful technology that has a wealth of potential uses. But it is not and never will be a cheap general-purpose solution for all energy storage needs. Julia Child is rumored to have owned a solid gold frying pan that had incredible thermal uniformity but no economic utility in the average kitchen. I remain convinced that many of the highly touted bulk storage applications for Li-ion technology are in a comparable category, technically feasible but impossibly expensive in the real world of paychecks and budgets.

Three Decades of Lead-Acid Technology

After the invention of VRLA batteries in the mid-70s, research on lead-acid technology plummeted and there were no substantive new research and development projects for almost 30 years. VRLA batteries were adequate for the work they needed to do and without the pain of necessity there was no compelling incentive for new invention.

That dynamic began to change a few years ago when it became obvious that new energy storage solutions would be essential to minimize waste. At that point, researchers once again began to look at new ways to improve lead acid battery performance by integrating new materials and technologies that were developed for use in other sectors during the 30-year period when lead-acid research stagnated. Established lead-acid battery producers funded some of the research work, but Firefly Energy, Axion Power International (AXPW.OB) and Australia’s Commonwealth Scientific and Industrial Research Organisation (CSIRO) initiated the more ambitious projects.

The Firefly project was spun out of Caterpillar (CAT) in 2003 and its goal was to use a carbon foam composite to replace lead current collector grids. Firefly’s hope was that its carbon foam technology would reduce the amount of lead used in a battery, minimize lead that was not chemically active and improve energy density. Over the last five years, the Firefly project has grown from a pure R&D initiative to a manufacturing and commercialization partnership between Firefly and C&D Technologies (CHP) that was announced at the end of October. While pricing information hasn’t been released yet, the available performance data indicates that the new Oasis battery will offer a 40% to 50% increase in energy density, higher power and up to 800 cycles at an 80% depth of discharge. My current sense is that the Oasis battery will probably cost $0.20 to $0.30 per Wh, or twice as much as a normal lead-acid battery, but offer four times the performance in suitable applications.

The Axion project was also initiated in 2003 and its goal was to create a true hybrid between a lead-acid battery and a supercapacitor by replacing the lead-based negative electrodes with carbon electrode assemblies. Axion’s hope was that its PbC devices would reduce the amount of lead used in a battery, eliminate sulfation, which is the primary cause of lead-acid battery failure, and bring supercapacitor-like power to the lead-acid world.

Over the last five years, the Axion project has progressed from a pure R&D initiative to a planned commercial rollout that’s expected by mid-2009. While detailed performance and price specifications haven’t been released yet, the available information indicates that Axion’s PbC battery will offer a 400% increase in power and well over 1,200 cycles at a 90% depth of discharge. My sense is that Axion’s PbC batteries will probably cost $0.20 to $0.30 per Wh, or twice as much as a normal lead-acid battery, but offer six to eight times the performance in suitable applications.

The historical details on the CSIRO project are a bit sketchy but the CSIRO ultrabattery appears to have a lot in common with Axion’s PbC battery since both products are a battery-supercapacitor hybrid. While we don’t know much about the design, construction and electrochemistry of the CSIRO ultrabattery, there are some impressive results from a recent 100,000-mile road test in a modified Honda Insight. The bottom line was that the CSIRO device performed flawlessly; got 2.8% less gas mileage because of the added battery weight; but offered a $2,000 cost savings over the factory original NiMH battery.

I am not suggesting that the Firefly, Axion and CSIRO projects embody the pinnacle of lead-acid performance; innovation simply doesn’t work that way. Instead, I believe they’re simply important steps in the ongoing quest for a cheap general-purpose storage solution, But these advances clearly demonstrate that disruptive improvements in lead-acid chemistry are still possible when advanced materials and technologies that were developed in recent years are combined into new products based on inherently cheap lead-acid chemistry. When it comes to cost-effective energy storage, Firefly, Axion and CSIRO have made more progress in five years than the entire Li-ion group has made in two decades. So I think it’s far too early in the game for the press or politicians to be picking a winner.

My Cloudy Crystal Ball

I’ve spent five years immersed in energy storage because of the work our firm did for Axion. So circumstances and professional standards required that I carefully study the needs of the emerging storage market and the strengths and weaknesses of the leading technologies. The lessons my work taught me beyond any reasonable doubt are:

• Commercial decisions will always be based on detailed studies that carefully weigh the fully loaded cost of storage against the value of the stored energy;
• Consumer decisions will be very sensitive to both front-end costs and back-end energy savings;
• There is no silver bullet solution to the energy storage problem and our future will require the use of several different technologies; and
• The prize will ultimately be shared by dozens of companies instead of being concentrated in one or two.

For the reasons summarized above Li-ion technology has been the headline grabber for the last two decades. During that period the energy requirements of portable electronics have fallen by Moore’s Law multiples and while Li-ion batteries have gotten safer, they’ve also lost energy density and gotten more expensive. For most of the time that Li-ion technology was being actively developed, lead acid technology was the object of benign neglect.

Over the last 5 years, research projects from Firefly, Axion and CSIRO have resulted in disruptive improvements in lead-acid durability and performance. While none of them can claim energy, power and cycle lives that are as good as advanced Li-ion batteries, the size and weight multipliers are now in the 2x to 3x range, rather than the 6x to 8x range that the experts predicted when they first compared advanced Li-ion with conventional lead acid. But what Firefly, Axion and CSIRO lack in performance they more than make up for in price. After all, we Americans have never minded lugging around a few extra pounds if the heavier choice is 40% to 80% cheaper.

In the final analysis I don’t see the future of energy storage as an either-or proposition. I think Li-ion batteries, lead-acid batteries, flow batteries, pumped hydro, compressed air and flywheels will all make important contributions to the energy storage solution. So I believe a balanced portfolio of energy storage stocks is the only sensible approach for investors who don’t have the time or inclination to do their own research. Articles like this one can provide useful ideas, but they should not be relied on as investment advice because every author (including me) has his own agenda, preferences, predilections and prejudices.

As an investor, my goal is to buy low and sell high. Based on five years of work in the sector, I’m convinced that growth in the Li-ion group will be slower than most people expect and growth in the lead-acid group will be faster than most people expect. In the current market, the lead acid group including Exide (XIDE), Enersys (ENS), Ultralife (ULBI), C&D and Axion are trading at far lower valuations than companies in the Li-ion group like Advanced Battery (ABAT), China BAK (CBAK), Valence (VLNC), Altair (ALTI) and Ener1 (HEV). If my basic thesis about differing rates of technological change and sales growth is correct, the companies in the lead-acid group are likely to perform far better over the next few years than the companies in the Li-ion group.

The upcoming IPO from A123 Systems will focus the market’s attention on the storage sector in a whole new way and a rising tide of investor sentiment is certain to lift all of the boats in the marina. Astute investors ought to be doing their boat shopping now.

Disclosure: Author holds a long position in Axion Power International (AXPW.OB) and is a former director of that company.

Comments

[lance sjogren:]

I am still reading through this post and I have an open mind on the author's opinion.

However, I would like to know exactly what natural resource needed for Lithium batteries is not readily available in the US?

Western Lithium Corp, and its parent, Western Uranium, has a deposit in the western US of 25 billion pounds of Lithium Carbonate. An EV powered by Lithium batteries is expected to need 50 pounds of raw Lithium Carbonate to provide enough Lithium for the batteries.

That one deposit thus would provide enough Lithium for 500 million cars.

I'm not sure how recyclable Lithium will be, but even if those batteries are throwaway, there is plenty of Lithium for Lithium battery powered automobiles for a long time.

From past discussions I have seen on this issue, I believe that the critical material whose future availability has been debated is specifically the Lithium.

In my view the availability of Lithium is appropriately viewed at the present time as a non issue.

2008 Nov 10 10:51 AM

[NOWHEREMAN:]

Do either of the two stocks you mention trade publically?

Western Uranium and Lithium.

2008 Nov 10 11:27 AM

[John Petersen:]

I took a look at Western Lithium's website and am far from comforted by hard rock mining and lithium concentrations are on the order of 80 pounds of lithium carbonate for every 2,000 pounds of ore. I've done enough work in the mining sector to know that it's a tough business that requires very high quality proven ore reserves before it makes sense to even consider permitting, production and environmental reclamation.

westernlithium.com/_re...

2008 Nov 10 11:30 AM

[stop the press:]

EEStor Inc. is supposed to deliver their first production line prototype in 2008 to Zenn Motor Company. The unit will feature 52KWh of energy storage. It will be chargeable in 5 minutes and enable the cityZenn to travel 250 miles.

Kleiner Perkins is an early investor in EEStor.
Lockheed Martin has announced a partnership.

The latest news and discussion of EEStor, takes place here:

TheEEStory.com

2008 Nov 10 11:50 AM

[Mayascribe:]

Pretty nutty world we're in when the experts now say GM will have a cap value of zero! Ener1, Axiom, Exide may be worth more than General motors? Sheesh!

I know this not to be true value, but holy cow, whose going to be around to buy these lith batteries for cars?

Thank heavens I sold all my JCI at $32 and then $27.

Odd, John, that I started e-trading within a week or so of your first Energy Storage Sector column. The stocks in this sector I made the most from, Ener1 and Exide. The stock I lost the most was China Bak.

All tolled, thanks in large part to Wachovia Bank, I stand up about 22 percent since July 2nd.

With the next round of hedge fund redemption occurring between now and November 15, I think today's China bounce was the right time to get out before weeks end.

We''ll see...

In the near term my thoughts are that the DJI has a much greater chance to sink well below 8000 (again) than to surge to 10500. Too much negative news the world.

To the sidelines I stand, until I have the hedgefunds bullish and workiing with me, rather than against me.

2008 Nov 10 11:59 AM

[John Petersen:]

You're a braver man than I Mayascribe. I may claim a cloudy crystal ball when it comes to long-term trends, but the immediate future is usually clear as mud. It obviously works for you. Be happy.

2008 Nov 10 01:39 PM

[NOWHEREMAN:]

I'm an early investor in ZNNMF, around $4.5, too bad I didn't stick by my own principles of waiting for proof before the pudding.

2008 Nov 10 04:22 PM

[Jeff Dearborn:]

I see no mention of ultra-capacitors.
Aren't ultra-capacitors the way of the future for portable electric storage?

2008 Nov 10 08:00 PM

[NOWHEREMAN:]

Jeff, Zenn Motors has a licence from EEstor Inc which is private for one type of UltraCapacitor technology. I had not heard that they had progressed to prototype status, but then, I stopped paying sttention to ZNNMF when it dropped below $2.00.

2008 Nov 10 11:28 PM

[John Petersen:]

The words "ultracapacitor" and "supercapacitor" are used interchangeably to describe a class of devices that store electricity in physical rather than chemical form (basically a static charge). The simplest example of a capacitor that I can think of is the one in your camera that charges for a few seconds so you can take a flash picture. Capacitors typically have very high power and very low energy, so I've never quite understood how they would be useful in an EV that needs high energy. But experience has taught me that I shouldn't try to explain things I don't understand.

2008 Nov 11 12:46 AM

[marketquant:]

This may be of some use to you.

"Investigation into the Scope for the Transport Sector to Switch to Electric Vehicles and Plugin Hybrid Vehicles"
October 2008

The study produced for the (UK) Department for Business Enterprise and Regulatory Reform (BERR) and the (UK) Department for Transport (DfT).

(quote from page 20)
"There has been some recent commentary concerning the potential impact of increased production of lithium-ion batteries on lithium availability and prices9. A report from the USGS (US Geological Survey) (note 10) on lithium reserves states that there is a world reserve of 4.1 million tons with a reserve base of 11 million tons. This means that 4.1 million tons are economically recoverable, with the remainder being proven geological reserves, but not necessarily economic to recover at the present time. John Searle of Saft, a supplier of lithium cells to the automotive industry, is quoted in Automotive Engineer (note 11) magazine saying that the quantity of lithium in a lithium-ion battery is countable in just a few grams (comprising less than 2% of the battery weight), implying that lithium used in batteries has a minimal impact on reserves even if production was to be scaled up."

note 10: U.S. Geological Survey, Mineral Commodity Summaries, January 2007
note 11: Article can be found in the July/August 2008 edition

(quote from page B1)
"According to industry sources, lithium accounts for around 1.75% of a battery by weight."

link to study:
www.berr.gov.uk/files/...

2008 Nov 11 06:04 AM

[John Petersen:]

Thank you for the information. If your statement about the % of lithium used in a battery is accurate, it may well be good news.

I just wish I could get by the sheer volume of shortage reports like this one from yesterday:

news.bbc.co.uk/2/hi/bu...

I don't know the answer. But not knowing is enough to leave me uncomfortable.

2008 Nov 11 07:42 AM

[john s. gordon:]

i see no discussion of edison (nickel-iron-KOH) batteries here. in 1910 (before gasoline took over the market and everybody started driving long distances all the time) a lot of vehicles used them.
> jack

2008 Nov 11 09:03 AM

[Mayascribe:]

John, I did not tell you how much I was up in this experimental e-trading portfolio a month ago. I dearly wish I would have numlocked my puter's keyboard back then and stood pat.

Unfortunately, I listened trustfully too much to Cramer, when, back then, he stated that the DOW was going to 10000, before receeding.

I figure myself a bull long term investor. But with every meaningful country that has an impact on the global economy already cutting basis points and doing unprecedented capital injections, I wonder what good news is left to come.

But...there are still more tidal waves of bad news out there coming; unless you're in the market to buy three suits for the price of one. (But I only wear suits as often as I mow the lawn in December.)

Bonds and high yielding pipelines, a few drug stocks are pretty much all that looks good right now.

Temptation awaits me this Friday around 3:30 PM, when the hedgefunds only have a half hour left of redemption mania. I sit, writhing....

####

My muddy crystal ball gives forth a sharp sneak peak glimpse of gold. And after a vigorous shake, my magic 8-ball reveals that it will be gold that stirs the market; not the BRIC countries, which really now should be titled "BIC." Unfortunately, my magic black orb does not reveal when.

2008 Nov 11 10:47 AM

[isaac the t...:]

John, I find your opinions about the battery industry to be very useful, especially in that they are based on some experience in the industry and real-life numbers rather than just pie in the sky speculation.
Since many companies, who are devising new powertrains and energy storage packages, are including ultracapacitiors in their plans, I offer the suggestion that you study this topic. This would roundout your expertise, and would be very helpful to those of us who are interested in investing in this sector.
My limited understanding is that UC's would be used as an adjunct to the batteries and the small motor/generator, in order to provide rapid bursts of power needed for acceleration in a more efficient manner than drawing on batteries. This may allow a smaller battery bank.
Respectfully submitted.

2008 Nov 11 11:12 AM

[33Nick:]

What is interesting is that we have a world of choices. Hopefully people won't get too bogged down with splashy PR pitches and marketing blitzes. Ideally it would be good to have some standardization for measurements but also battery bays in electric vehicles and plug-in hybrids so that one would have a set of cheaper lead-acid ones for every day drive and more potent, maybe some derivative lithium/ultracapacitat... for longer drives.

My favorite quote for your article which makes all so much sense is: "After all, we Americans have never minded lugging around a few extra pounds if the heavier choice is 40% to 80% cheaper." Indeed, as long as the cupholders are there!

2008 Nov 11 12:35 PM

[searcher:]

Most visitors here are interested in the market and, thus, supply and demand. Focusing on supply, we all view any statement about availability of capital or materials or scalable innovative concepts with reservation. Only over the last 50 or so years have the notions of finitude and residual toxicity become paramount. The 'true' costs of these supplies and their employment are more important than ever and subject to assertions of varying credibility. A lot of what can be done economically cannot be accommodated economically.

2008 Nov 11 02:57 PM

[The motorman:]

The problem is only partially described by most EV enthusiasts. IF the EV and battery industry would take a second to read my Batchange article it might get some sense.. we need a different concept from the customer being responsible for maintenance and charging the batteries. Please read all the details on the website members.cox.net/~rdoctors/evs.html and
let's start a dialog about the battery pack standard that we need now!
One figure in the calculations is the cost/mile for the consumer for the battery AND the electricity use.. at the moment with the hi tech lithium batteries the cost is much too high due to the limited life. It is a capital cost to life ratio that is the critical number.. we need the performance of a lithium phosphate with the price of a lead acid as a minimum!! With current battery technology if you include the recycling costs the actual electric power cost is not a primary concern.. and it should be!! After all the of EVs is to pollute less and that includes the recycling of old batteries.. Batchange could do the job but we need the infrastructure and instead of gas stations you have a combined station with Batchange and gas sales. Exon/ Mobil where are you in this?

2008 Nov 11 04:35 PM

[phoenixdad:]

My goodness, Peterson, enough with the Axion stuff already.

And, on what basis are you lumping ABAT with CBAK, HEV, ALTI and VLNC? Last I looked, ABAT was the ONLY one with a P/E ratio.

Be a bit more, no, a lot more respectful of your audience's intelligence.

2008 Nov 12 09:42 AM

[John Petersen:]

I mention Axion whenever I mention the lead-acid group because it is the only public equity in that group that's going for the long ball with a radical departure from established lead-acid technology. Even if I didn't own Axion, it would be stupid to ignore it when discussing the sector.

I lump companies together based on the mineral content of their products. ABAT with CBAK, HEV, ALTI and VLNC are all producers (or hope to be) of lithium ion batteries. Their chemistries vary modestly, but the core technology is the same.

I have a lot of respect for the intelligence of my readers. But there is a fundamental difference between intelligence and knowledge. Likewise there is a fundamental difference between market hype like one sees in the Li-ion sector and economic reality.

So I'll just keep on observing what I observe and leave the deciding for my readers. If you don't like my perspective, I'm sure Seeking Alpha would welcome another viewpoint that is as well-grounded as mine.

2008 Nov 12 11:30 AM

[marketquant:]

Forbes current issue contains an article on the lithium supply. Selections (all from page 42):
1) William Tahil, a technology consultant, has argued that there simply isn't enough economically recoverable lithium to support the auto industry's ambitious plans, 4.4 million ton economic estimate.
2) SQM, a lithium production company, says that it has already discovered 5.7 million tons of lithium in the Salar de Atacama.
3) Argonne National Laboratory has stated that long term supply should not be a major concern.
4) R Keith Evans, a geologist who has worked in the lithium business since the 1970s pegged global reserves of lithium carbonate at 165 million tons and higher prices will make it cost-effective to extract lithium from clay and wastewater.
5) Ener1's Gassenheimer says lithium is the 33rd most abundant element in the world.

2008 Nov 12 02:08 PM

[John Petersen:]

. . . and a cubic mile of seawater holds a metric ton of gold.

It's one thing to have immense quantities of an element and another entirely to have reserves that can be economically mined, processed and refined.

I keep saying I don't know the answer here, but until something that looks like consensus develops, I'll continue to view it as a risk.

2008 Nov 12 04:11 PM

[marketquant:]

Links

Argonne National Lab:
www.transportation.anl...

USGS:
minerals.usgs.gov/mine...

Tahil:
www.meridian-int-res.c...

Evans:
www.worldlithium.com/A...

It makes me a little suspicious that there only 2 researchers at Merdian International Research, and that MIR provides expert opinion of a wide variety of topics. Tahil provides no creditials on the MIR website, but one person who looked into Tahil's background quoted Tahil background as a "statistician, a professional market researcher and technologist".

Here is a link to William Tahil's paper titled "Incontrovertible Proof that the World Trade Centre was destroyed by Underground Nuclear Explosions"

nucleardemolition.com/...

Another article with Tahil including his lithium opinion and trade center explosion opinion:

www.guardian.co.uk/tec...

2008 Nov 13 09:37 AM

[John Petersen:]

USGS reports that provide a figure of 12 million tons of metallic lithium reserves are not comforting when the Argonne report says that metallic lithium is useless and the compounds used in Li-ion batteries are lithium carbonate salts.

It also strikes me as disingenuous when Argonne says that salts are the critical resource but uses metallic reserve figures to conclude that supply shouldn't be an issue.

The most critical quote from Argonne is "Therefore, significant market penetration by EVs with Li-ion batteries would perturb the market and require expansion of imports or U.S. production."

I would love to have somebody show me massive unexploited resources of the right kind and quality. But pointing to metal reserves when the industry needs salt reserves doesn't help because the process of turning one into the other can require some very expensive processing.

It is fascinating, however, when you go to the pricing table in Section 6.4 of the Argonne report and see how little price progress the industry has made since the report was first issued in 2000.

Thanks for increasing my knowledge base.

2008 Nov 14 01:52 AM

[marketquant:]

Lithium recycling may help.

www.toxco.com/aboutrec...
www.toxco.com/processe...

Established in May 1984, Toxco is now one of the world leaders in battery recycling. With facilities in British Columbia, California, Ohio, and Tennessee, Toxco recycles millions of pounds of all types of batteries, electronics, and metals per year.

We are the only company in the world that can recover lithium from any size or type of lithium battery.

Lithium Battery Recycling Process:
Toxco’s lithium battery recycling facility is located on 11 acres adjacent to the Columbia River near picturesque Trail in southern British Columbia. With over 70,000 manufacturing square feet, Toxco Trail was the company’s first recycling facility. The facility inventories incoming lithium battery waste. The waste is then stored in earth covered concrete storage bunkers. Residual electrical energy is removed from larger, more reactive batteries. If necessary the batteries then begin Toxco’s patented cryogenic process and are cooled to -325°F. Lithium, although normally explosively reactive at room temperature, is rendered relatively inert at this temperature. The batteries are then safely sheared/shredded and the materials are separated. Metals from the batteries are collected and sold. The lithium components are separated and converted to lithium carbonate for resale. Hazardous electrolytes are neutralized to form stable compounds and residual plastic casings and miscellaneous components are recovered for appropriate recycling or scrapping. If the batteries contain cobalt this is also recovered for reuse.

2008 Nov 14 09:08 AM

[marketquant:]

This will also be interesting:

trugroup.com/Lithium-M...
trugroup.com/Lithium-B...

2008 Nov 14 09:21 AM

[NOWHEREMAN:]

Ok. John, I assume you still have contacts at AXPW.

Some time ago we talked strictly about lead content, Why Not get on the Bandwagon, have their PR people advertize AXPW's products as a means of dramatically reducing the amount of lead floating around the system with the added benefits that AXPW products provide.

Who knows, you might even get some of the Green sites to push it if the beneficial reduction in the amount of Lead use is marketed properly.

PS I do not own AXPW, it has to go sideways for a while longer but its latest Qtr was much better than I had expected it to be.

2008 Nov 14 05:01 PM

[John Petersen:]

Quant, Most recycling gives you and end product that's far less pure than the material that originally went into the product. It's not a problem in lead-acid recycling because the technology does not have tremendously tight materials standards. I understand that Li-ion batteries, in comparison, need ultra-pure materials. I would be very curious to know whether Toxco is getting lithium carbonate that's pure enough to use in new batteries.

Paul, I still have wonderful personal relationships but am very careful to respect the lines. The guys at Axion are masters of understatement and always talk about milestones achieved instead of milestones created. The recent manufacturing contract was a great example. The company released a $6.4 million number, but in the earnings call Tom Granville clarified that it should be up to a couple million a month by Q-3 2009.

They're working diligently to get a manufactured product rolling off the production line. When that product exists and is priced, I would expect to see detailed pricing and performance specifications with appropriate advertising materials. But until it's actually being made, talk about specifications would speculative and I don't see them going there.

The microcap world is full of promises made and broken that invariably shake investor confidence. The boys have taken a higher road of relying solely on track record and I think it the wiser but more difficult choice.

2008 Nov 15 02:03 AM

[blazespinnaker:]

I think it's a pretty big mistake to assume that battery technology will not change over time. It's not like oil, where the infrastructure is dependent on it. I could upgrade to an air compression battery and still plug into the grid.

Lithium Ion could be used for the first 100M cars, and by the time we've produced that many and lithium ion reserves are running low, a newer and better battery tech may be available that uses different materials.

The shortage argument on Lithium Ion doesn't make sense at all.

2008 Nov 15 08:37 AM

[John Petersen:]

Blaze, the Argonne Labs study referred to above says:

"U.S. consumption in 1999 was estimated to be about 2,800 T of contained lithium (USGS 2000). This quantity is equivalent to that required for about 290,000 EVs with Li-ion batteries annually, or about 6 million HEVs. Therefore, significant market penetration by EVs with Li-ion batteries would perturb the market and require expansion of imports
or U.S. production."

Since 1999, consumption of this critical resource has soared from global demand for portable electronic batteries. There may well be enough lithium resources to make 100 million cars. But I've seen nothing that makes me comfortable enough to discount the risk of materials shortages, particularly when China comes out near the top of everybody's list of potential suppliers.

The biggest problem with oil is exporting $300 billion a year to people who don't like the U.S. all that much. Do you expect South America, China and Russia to behave differently if we give them a shiny new cartel opportunity?

2008 Nov 15 10:53 AM

[marketquant:]

LithChem International is a wholly owned subsidiary of Toxco, Inc.

LithChem markets both 99.9% pure and 99.99% pure lithium carbonate.
www.lithchem.com/Lithi...

2008 Nov 15 12:12 PM

[marketquant:]

"LithChem International (a subsidiary of ToxCo, Inc.) of Anaheim, CA, produced lithium carbonate and lithium hydroxide at its plant in Baltimore, OH. LithChem produces these compounds from lithium compounds that are products of
ToxCo’s lithium battery recycling operation in Trail, British Columbia, Canada."

U.S. GEOLOGICAL SURVEY MINERALS YEARBOOK—2001
minerals.usgs.gov/mine...

2008 Nov 15 12:17 PM

[NOWHEREMAN:]

ABAT is a Chinese company which makes Lithium based Batteries in China. About a year before the olympics, they contracted for the production of 3,000 all electric buses based on the Tech licensed from ALTI. I don't know what the final count was but do know they were initially producing 200/month.

IMHO, China will export only what it doesn't need itself.
ABAT batteries are widely accepted as the Battery of Choice by Chinese consumers and has received awards for same. The lights in the helmets of Chinese Coal Miners are powered by ABAT batteries.

Ditto on electric bycycles with contracts with Chinese bycycle makers. Need a battery which continues to power equipment Miles beneath an ocean's surface, you go to ABAT. Trial runs already completed, no other Battery need apply.

This is old historical news, some 2-3 years old.

These ABAT products are available now, in China. It is also the battery of choice for cell phones. ABAT's exposure in the US is virtually nil. Rabbit stew if the Bunny enters China, Rabbit shish kebab if ABAT enters the US in force.

The People's Daily online is a much bettter source of info than anything I get from Western Media inre China.

Did you know they are building their own Commercial Aircraft Design and Manufacturing Facility. They want to supply their future needs internally. Anyone believing Boeing has a bright long future in China better think again.

2008 Nov 15 12:42 PM

[marketquant:]

(at the risk of being repetitive)

Occurrence

Due to its high reactivity lithium is not found in its native state. It’s main sources are igneous rocks and brine. The main igneous rocks used as sources of lithium are:

· Spodumene (LiAlSi2O6) – The most abundant and important of the lithium containing ores. Found in North America, Brazil, USSR, Spain, Africa, and Argentina.

· Lepidolite (K2Li3Al4Si7O21(OH,F)3... – Found in Canada and Africa.

· Petalite (LiAlSi4O10) – Found in Africa and Sweden.

· Amblygonite LiAl(F,OH)PO)4 - not a common source of lithium

Lithium is also extracted from brine by evaporation. Places where this occurs include Searles Lake (California, USA) and Clayton Valley (Nevada, USA).

Extraction

Lithium is most commonly extracted from spodumene.

www.azom.com/Details.a...

=== also this ===

"Spodumene is a lithium aluminum silicate (8.0% Li2O, 27.4% Al2O3, 64.6%SiO2) and is the world's most common commercially mined lithium ore mineral."

"Spodumene competes with natural brines as a source of lithium in the production of lithium carbonate"

"The production of lithium carbonate from spodumene is much more energy intensive than the production from lithium chloride-enriched brines."

www.thecanadianencyclo...

2008 Nov 15 12:52 PM

[John Petersen:]

Marketquant, you obviously know a lot more about lithium mining and processing than I do and proving this issue seems far more important to you than it is to me.

Until somebody shows me a greater body of contrary information, I'll not repeat the rumors I read about lithium shortages.

I've not done enough work to satisfy myself that it is not a problem, but you've done enough to satisfy me that it is not necessarily the problem I feared it might be.

Now if they could only do something about product cost.

2008 Nov 15 02:32 PM

[John Petersen:]

Paultant, for what it's worth, ABAT looks to be a fine company in the Li-ion space and reasonably priced to boot. I would also have serious problems finding fault with Hong Kong Highpower and Ultralife.

But with $70 million in new revenue from new sources coming into the storage sector over the next several years, I think it would be foolish to believe that all of the incremental revenue will go to one technology or even one technology class. This is a huge tent with plenty of room for everybody to prosper. But it will take a very long time for some of the current market favorites to work off their overvaluations and join the real world.

2008 Nov 15 02:45 PM

[NOWHEREMAN:]

To hell in handbasket. I hate to say it but I'm beginning to believe that this Fiasco is turning into the death knell of the US financial system. The wrong idiot is in the driver's seat.

I don't know who made Paulson King. 3 Month LIBOR was approaching 2.0 stopped going down and reversed the day after Paulson did a 180, inching up 2 days in a row. If it accelerates to the upside, it will be a no confidence vote.

Meanwhile, GM has the makings of a catalyst for the market as a whole. I was starting to look at Tax Free Municipals but will wait.(MAV)

The best thing about the Asian Economies is the huge savings rate amongst the people. They have trading surpluses. The Government has zilch as collateral and our people have been pushed/pulled and otherwise advertized to such any extent that they do not have nest eggs to withstand a prolonged recession.

I have been and remain a Bear, but I have always felt that given a year or two, I could turn into a Raging Bull.
Now I'm not so sure. Frankly, my outlook has turned so grim that I'm really scared. I do not see any positive sectors anywhere, including Gold. Its like 1987 revisited but with no end to it.

2008 Nov 16 06:07 AM

[marketquant:]

I'm no mining expert. I'm just an investor (with an engineering degree) who agrees with you about the prospects of energy storage. I like to get my info from industry sources (e.g. USGS, EPRI, the ISOs, Journal of Power Sources, independent experts, independent tests) rather than financial sources (e.g. Wall Street, the press, "technologists").

2008 Nov 16 08:50 AM

[John Petersen:]

I'm far more concerned with costs than most engineers. Your recent comments got me digging into the cost issue a bit and I found the following in a recent article entitled "The Saudi Arabia of Lithium"

cocochanel.tistory.com...

"Lithium's boom had begun in earnest just a year before, when Sony launched its first generation of lithium-ion batteries for consumer electronics. By the end of 1991 Sony was making 100,000 a month. SQM began selling lithium carbonate in late 1996, and within a matter of weeks, lithium carbonate prices fell by a third, to $2,000 a ton. The American lithium industry vanished overnight."

If prices fell by a third overnight when the Salar went into production, don't we have to assume that costs will be at least 50% higher than the current market if the plentiful other sources you've identified come back on line?

In my book a 50% increase in raw materials prices is never insignificant because the battle lines are not technical feasibility, they're economic feasibility.

2008 Nov 16 10:46 AM

[marketquant:]

The sources listed above say that lithium is less than 2% of the batteries by weight -- so why focus on this one input cost?

2008 Nov 16 02:08 PM

[NOWHEREMAN:]

Think in terms of hundreds of millions of new cell phones produced every year, the amount used per item is small. The number of items are immense. With new uses introduced which use far greater amounts, cars, one really must be sure that supply meets demand before usage.

Think in terms of what happened to all of those that thought Betamax would be the standard VCR format.

2008 Nov 16 02:34 PM

[marketquant:]

And what about the price of lead? It tripled or more in 18 months before coming back down -- not particularly comforting there.

2008 Nov 16 02:55 PM

[marketquant:]

According to Wikipedia:

"About 60% of the weight of an automotive-type lead-acid battery rated around 60 Ah (8.7 kg of a 14.5 kg battery) is lead or internal parts made of lead; the balance is electrolyte, separators, and the case."

So Pb batteries look *far* more sensitive to the price of the input commodity.

2008 Nov 16 03:00 PM

[John Petersen:]

The prices of all commodities went on a roller coaster ride over the last 18 months before coming back down. But the price per pound of the ultra-high purity metals and other commodities used Li-ion batteries is several times higher than the price per pound of the relatively low-purity lead needed for lead-acid batteries.

As metals go, lead itself is also far more common and easier to process than any of the exotics.

By the time that you remember that the vast majority of the lead used in new batteries has been produced by recycling old batteries, the future mining impact of growth in the lead-acid group will be far less of an environmental and economic nightmare than opening new mines for exotic materials in sensitive locales.

2008 Nov 16 04:49 PM

[marketquant:]

Lead recycling is obviously far more common -- it's a very mature industry. The growth of recycling of lithium and other metals (i.e. by Toxco/LithChem) should be watched to see if it scales up smoothly or hits obstacles -- why not interview them? Also, the lithium resource report by TRUgroup in January should be watched for clues to any resource limitations. Let's see some numbers on "exotic" and "locales" before declaring a "nightmare".

The *frequency* of recycling of lithium batteries could be an interesting story as well. As you mention, Li titanate batteries can last 20,000 cycles (Altair says 25,000 -- I own that stock). So theirs has 20 times more cycles (but only costs 10 times as much) while delivering over 4 times as much power as your Axion numbers (4000 W/kg vs 900 W/kg -- you wrote "400% increase" over typical Pb).

2008 Nov 17 05:27 AM

[John Petersen:]

I don't believe lithium recycling is technically impossible. I just don't know whether it's economically feasible to get to a purity that's suitable for use in new batteries instead of one of the alternative and more forgiving industrial uses for the material.

I'm also not prepared to declare a nightmare scenario for any natural resource (except perhaps oil) because there are always sources of supply if industry is willing to pay the price. But the laws of economics dictate that price increases along with demand in the absence of a big new source of cheap supply. Frankly, I don't see big new sources of cheap supply for any of the principal materials used in Li-ion batteries.

If Altair can make those numbers there are substantial potential uses including frequency regulation. But you have to admit that 25,000 cycles is silly for an EV that will be cycled 300 to 500 times in an average year.

There is no such thing as a perfect company in the energy storage sector. They each have their own strengths and weaknesses. But people who are investing for the long-term instead of playing in the day trading casino need to understand that stocks like ENS that are trading at 50% of equity and 3 times earnings have much greater upside potential than others that are trading at 200% of equity and 15 times sales.

2008 Nov 17 06:02 AM

[marketquant:]

Hybrid/EV acceleration and regen braking factor into the cycle life, so it's not just 1 cycle per day. The transit buses that will utilize their batteries start and stop many times during the day. Altair batteries may have a large residual value beyond the life of the vehicles -- perhaps in stationary power applications. Having a 25,000 cycle life is a "high class" problem in my mind.

ENS looks cheap. From a quick take, the only worry would be their thin (but fairly stable) margins. Insiders sold a bunch recently -- over a million shares in 3 months around $13. Why? If they turn into buyers at $7 this could be a good sign.

ALTI is extraordinarily hard to value -- a high-tech small-cap growth stock with no guidance and secretive customers -- it's like venture capital investing.

2008 Nov 17 09:12 AM

[John Petersen:]

I beg to differ. Except in an ultra-light HEV, regenerative braking and acceleration place no meaningful stress on a battery because they only use a miniscule percentage of total capacity. Cycle life testing is typically done at 80% to 100% depth of discharge. If you take a battery that can handle 1,000 deep discharge cycles, it can usually get an order of magnitude more shallow discharge cycles. That's why your car battery doesn't need replacing every year. The starting cycle only stresses it to 5% or 10% of rated capacity.

Payback calculations always account for time value of money. A battery that costs $20,000 and will save $15,000 in gas over the life of a vehicle does not increase in value because it will have remaining life when the car is junked. It is simply too expensive for the job and will never make economic sense.

I've previously said that hybrid bus applications have significant potential because they will have relatively small battery packs (44 kWh) and cycle the heck out of them for braking and acceleration. I'd likely reach the same conclusion on a taxi. But not on a family car because they're used differently.

Batteries are hard core materials intensive manufactured products. They will never have the kind of margins one sees in software where the incremental cost for each additional unit of sales is miniscule. The likelihood that you'll ever see a battery company with an Intel class margin is too remote to even consider.

2008 Nov 18 01:36 AM

[marketquant:]

Altair is working on a 600kWh battery for the US Navy to replace one of the two generators used on each Navy Destroyer. Also, Altair has been using $2/Wh pricing for low volume production for some time now -- so that's a $1.2m battery (not including the the "marinization" costs). The Navy expects the Altair battery to save them in excess of $1.5m per year per ship in fuel cost alone. So does the "payback calculation" for the "time value of money" make "economic sense" to you in this case?

2008 Nov 18 07:07 AM

[John Petersen:]

If the Navy is running their backup generators 24/7 just in case there is a problem with the main power system, then the payback for the battleship installation looks excellent. The only question is whether the ships have tight enough size and weight constraints to demand a Li-ion solution instead of a battery technology. Remember the entire submarine fleet ran on lead-acid during WWII

2008 Nov 18 09:42 AM

[John Petersen:]

second to last line should begin "cheaper battery technology"

Sorry I left the word cheaper out.

2008 Nov 18 09:42 AM

[marketquant:]

'Cheaper' is only one aspect of battery technology. How about operating temperature range, operational safety, environmental safety, and maintenance? -- in addition to the already mentioned energy density, cycle life, and power density. That's an 8 dimension problem -- so far. Nine if we count sustainability.

In one of these dimensions, you implied above that only depth of discharge determines cycle life. But if I discharge a battery by 15% over an hour versus rapidly discharging it 15% by shorting it out, do you not think the cycle life will be different? Regen braking and acceleration are power intensive operations.

2008 Nov 18 10:42 AM

[John Petersen:]

I agree with your suggestion that the problem has many more dimensions than cycle life, power and energy density. But I think if you and I were to lay out a chart of where the various classes of technology fit in each of those dimensions, we would end up with strikingly different evaluations.

I said outright that depth of discharge is the greatest determinate of cycle life. While a manufacturer must assume that his product will be abused by morons, he will also size a device to meet the anticipated stresses and strains of an application and a 6 kWh HEV battery is not going to be deeply cycled or severely strained by 10 to 15 second periods of braking or rapid acceleration.

Chevy just announced a contract with LG Chem for the Volt battery packs. As near as I can tell, LG Chem will be filling the order with Li-polymer packs that are similar to the ones HEV will supply to think.

These contracts are not going to 20,000 cycle battery chemistries. They are going to 1,000 cycle chemistries because that's all the application needs.

There are applications that can effectively use 20,000 deep discharge cycles over a reasonable useful life. But they are few and far between.

2008 Nov 18 11:13 AM

[marketquant:]

According to one set of numbers that I've seen from a bus maker, they need 150,000 W for 60 seconds to accelerate a bus of people to speed -- that is 2500 Whr in *one* acceleration -- about 42% DOD of your 6kWh battery example. They expect over 300,000 of those cycles by the bus in five years -- they expect warranty to meet 200 minimum cycles of 2500 Whr per day. Those cycles look pretty deep to me.

2008 Nov 18 08:29 PM

[John Petersen:]

The bus pack ALTI has announced is 44 kWh, which puts the DOD at about 6% (biz.yahoo.com/iw/08101...). But 300,000 shallow discharge cycles is a whopping big number. With a cycling rate that high the Li-Ti may well prove to be the only cost effective device. I was impressed with the potential for the application when I first read the ALTI release and am even more impressed now. But justifying a $2 wH battery in a bus (or for that matter a taxi) is a lot easier than justifying the same battery in a family car.

Overall this is a great example of the immensity of the storage market and why I believe everybody will do just fine. Even if we were to make a silly assumption that transit busses were the only possible niche for LI-Ti the niche is big enough that it could support a large and successful company.

To be a success, a battery technology only has to be "Best" for one or two important applications. That's why I'm convinced there's room for everybody to succeed in this market.

2008 Nov 19 12:29 AM

[blazespinnaker:]

> Do you expect South
> America, China and Russia to behave differently if we give them a
> shiny new cartel opportunity?

There can not be a cartel. It'd have to be a cartel of the entire universe of battery tech.

The switching costs (to a different battery tech from lithium) are small enough that as soon as the lithium producers try to do anything funny, then car companies will just switch to a different battery tech.

The producers of lithium will know this, and so will always price their product not based on mining costs plus some reasonable markup. They will not enter into the business of mining lithium expecting that they will somehow be able to get an unfair premium.

The shortage argument does not make sense. The other arguments, I can't comment on.

On Nov 15 10:53 AM John Petersen wrote:

2008 Nov 19 04:12 AM

[blazespinnaker:]

err, sorry. I meant to say that lithium prices *will* be based on mining costs + some reasonable markup.

There will be no cartel premium (well, maybe a small one based on what little switching costs there are).

As long as lead based or nickel or whatever is waiting in the wings, lithium producers have no leverage.

2008 Nov 19 04:16 AM

[John Petersen:]

I disagree.

2008 Nov 19 08:20 AM

[John Petersen:]

An October 2, 2008 report from Lux Research (available from their website at www.luxresearchinc.com/) concludes that Lithium supply may be the ultimate constraint in EV-PHEV-HEV industry growth. It also takes pains to emphasize that "Investors should be wary of EV-related business plan claims."

2008 Nov 20 01:46 AM

[alan ljl:]

This is my first time out here, and I'm impressed. Only one problem though! Most of the repliers don't see the forest thru the trees. Bottom line is that ABAT is well capitalized, run well, and ahead of the curve in new product development. Going forward this company is a winner!! Those that disagree most likely invested in WB, C, CC, GM, F etc. Good Luck and Happy Thankgiving!!

2008 Nov 27 02:17 AM

[fireofenergy:]

At first i was skeptical (about advanced sla), but I didn't resaerch. I believe that lugging around a few extra pounds is a good thing if it helps the cause of generating renewable electricity by being far cheaper. Speaking of which, solar thermal storage is better than building lakes on top of high hills, or filling our dried up oil wells with air (that gets hot under pressure and subsequently "self discharges").

Perhaps we should put (overseas) excess cheap oil back into those dried up wells instead??? Since it is not really in excess! (I know, that sounds rather nationalistic...)

Solar thermal storage has a much lower self discharge through heat dissapation but would need a much larger (than required) mirror field in order to maintain baseload. And, of course, it is virtually unlimited in nature if just part of the world's deserts were to be mirrored by ambitious mirror mass production companies. Most countries are large enough to absorb intermittancy from bad weather.

And guess what the other side of the world will export when oil does indeed get too expensive for the masses... synfuels made by solar thermal energy and coal. Yuk! Or even worse yet, become our own desert CSP sources!

2008 Dec 05 12:40 AM