Alternative Energy Storage: It's All About Price vs. Performance 60 comments
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Benjamin Franklin once wrote, “A penny saved is two pence dear;” a self-evident truth that is half of the driving force behind cleantech, the sixth industrial revolution. The other half is our innate desire for reliability and stability, particularly when it comes to transportation and the power grid. Larger issues like energy independence, political policy, technology and global warming make for stimulating conversation, but when it comes to individual decisions, the things that really matter are saving money, getting to work on time and keeping the heat and lights on.
It’s impossible to pick up the Sunday edition of a major newspaper without seeing several reports on the latest cleantech projects and innovations because all cleantech sectors are progressing rapidly and the rate of change is likely to accelerate as the cleantech revolution becomes more pervasive. Notwithstanding their widely accepted economic and environmental advantages, cleantech solutions are inherently variable. Without energy storage to smooth out the peaks and valleys in wind and solar power, maximize the savings from hybrid electric vehicles (HEVs) and reduce the end-user cost of other cleantech solutions, the rate of change will slow and we’ll all be poorer for it. Since energy storage is the only way to make cleantech reliable and stable, and cost-effective energy storage can make cleantech investments more profitable, informed consensus holds that energy storage is an enabling technology for the cleantech revolution. As such, it is certain to be a major investment trend for decades to come. I think the first rising waters of this investment tsunami have already hit the beach.
It might strike some as a jaded view, but I’ve always suspected that scientists, politicians and reporters like talking about long-term technical solutions to pressing problems because they can’t be held accountable for the results. I was a year out of law school when the Carter administration included the first tax credits for ethanol production in the Crude Oil Windfall Profits Tax Act of 1980. Twenty-eight years and billions of dollars later, we discovered that using food to make motor fuel caused as many problems as it solved. The point is that major changes happen over the course of decades and things rarely work out the way the planners intended; but we muddle through anyway.
Today, scientists, politicians and reporters are spending so much time advocating various power train alternatives for cars and light trucks that one would think a golden age of transportation is just around the corner. The more contemplative types at the Department of Energy tell us a very different story. The following graph comes from the DOE’s 2009 Annual Energy Outlook and forecasts that power train alternatives for cars and light trucks will grow from about 1.5 million units in 2007 (10% of total sales) to about 12.5 million units in 2030 (63% of total sales).
One intriguing aspect of the DOE graph is the forecast that in 2030, HEVs like the Toyota (TM) Prius will account for sales of about 4 million units per year; “mild hybrids” will account for sales of over 3 million units per year; and PHEVs and pure EVs, the current darlings of scientists, politicians and reporters, will only account for sales of about 500,000 units per year. I’m also surprised that the graph does not show a visible market share for compressed natural gas, a plentiful domestic resource that has many advantages over imported oil. The Pickens Plan may not ultimately succeed at the level advocated by Mr. Pickens, but ignoring the plan entirely strikes me as strange.
The data in the following table comes from a July 2008 Sandia National Laboratories report on its Solar Energy Grid Integration Systems – Energy Storage (SEGIS-ES) program. While the original Sandia table focused on the current and projected capital costs for energy storage technologies that can be used in solar power projects, the basic cost structure applies to the entire spectrum of energy storage applications from transportation to utility grid support. To enhance understanding, I’ve reordered the Sandia data to create a cost hierarchy. I’ve also added dark and light circles to indicate the likely and potential uses for the various technologies in five broad market sub-segments.
Last Monday I noted that in the emerging world of cleantech, energy storage requirements start at 5 kWh for an HEV, ramp up to 25 kWh for a pure EV and exceed 250 kWh for a grid support installation. With storage systems of that size, even the lowly sealed lead-acid battery becomes a big-ticket item for most consumers. So while the geeks like me ask, “What is the best possible technology?” the consumers among us who worry about things like budgets and monthly car payments are more likely to ask, “What is the most affordable technology for the job?” Given the prevalence of mild hybrids and HEVs in the Sandia forecast, they apparently reached the same conclusion.
These are tough times in the equity markets. Most stocks have been savaged by the economic crisis and some of the biggest percentage declines were seen in companies that will be the first beneficiaries of the cleantech revolution. The following list of pure play energy storage companies has been arranged using the same cost hierarchy as the technology table. All table values other than closing prices and forward P/E ratios are expressed in thousands. Likely consumer behavior tells me the companies with the cheapest technologies have the greatest short- to medium-term growth potential and should have the highest relative market valuations, but the opposite is true in many cases.
While tables like this one can be daunting because they contain so much data, it’s easy to see that the six established companies that have earnings are currently trading at prices that are significantly lower than the Standard & Poors long-term average of 15 times earnings. The lead-acid group including Exide (XIDE), Enersys (ENS) and C&D Technologies (CHP) are U.S. based manufacturers that derive the bulk of their revenues from the domestic market. The exotic chemistry group including Hong Kong Highpower (HPJ), China BAK (CBAK) and Advanced Battery Technologies (ABAT) are Chinese manufactures that derive the bulk of their revenues from sales in China. While all six are fine companies and attractively priced compared to historical norms, the Chinese firms are not likely to have a meaningful presence in North American for the foreseeable future.
Making sense of the data on the eight companies that do not have established earnings can be far more difficult. I believe the following quote from the SEGIS-ES report that was the source for my technology cost table can add context and help investors better understand the long-term goals and potential of the development stage companies.
Energy storage devices cover a variety of operating conditions, loosely classified as ‘energy applications’ and ‘power applications.’ Energy applications discharge the stored energy relatively slowly and over a long duration (i.e., tens of minutes to hours). Power applications discharge the stored energy quickly (i.e., seconds to minutes) at high rates. Devices designed for energy applications are typically batteries of various chemistries. Power devices include certain types of batteries, flywheels, and ECs [electrochemical capacitors]. A new type of hybrid device, the lead-carbon asymmetric capacitor [lead-carbon battery], is currently being developed and is showing promise as a device that might be able to serve both energy applications and power applications in one package.
Active Power (ACPW) manufactures equipment based on steel flywheel and compressed air technologies for power applications. Its systems have traditionally been marketed as uninterruptible power supplies for commercial and industrial customers, but have significant potential to stabilize short-term variability in the power output of wind and solar power facilities. The company has a five-year history of rising revenues and should enjoy a strong competitive position as demand for low-cost short-term power stabilization systems increases. The potential global market for Active Power’s systems is measured in billions of dollars. It’s stock has taken a beating over the last year and is currently trading at about 9% of the 12-month high.
ZBB Energy (ZBB) manufactures a zinc-bromine flow battery for energy applications. The modular ZESS system can provide stable power for long periods of time (2 hours or more). The technology is well developed and the company is currently working on a number of demonstration projects in remote locations that are not served by a stable power grid. It is also working on projects to smooth the power output from wind installations in Ireland. While its revenue from demonstration projects has been limited, ZBB has recently joined forces with Eaton and the potential global market for the ZESS systems is measured in billions of dollars. It’s stock has taken a beating over the last year and is currently trading at about 1/3 of the 12-month high.
Axion Power (AXPW.OB) manufactures conventional lead-acid batteries and has commenced field demonstration projects for its proprietary PbC batteries, the asymmetric lead-carbon capacitors singled out in the Sandia report. Axion believes its PbC batteries will be ideal for a variety of power and energy applications that need storage, but do not justify the use of a more exotic and expensive technology. Axion is presently expanding its manufacturing capacity for PbC batteries and expects to begin selling up to 20,000 units per month by the third quarter of 2009. It is also ramping up manufacturing capacity for conventional flooded and sealed lead acid batteries. While Axion’s historical revenues have been limited, annualized sales in the range of $50 to $100 million appear likely by the end of 2009. Its stock has taken a beating over the last year and is currently trading at about 40% of the 12-month high.
Beacon Power (BCON) manufactures utility support systems based on a composite flywheel technology and has recently received regulatory approval for its plan to provide paid frequency regulation services. During the testing and demonstration phase, which will likely take a of couple years, I would expect Beacon to build and operate frequency regulation facilities for its own account. Upon completion of the testing and demonstration phase, I would expect Beacon to sell frequency regulation products to utility customers worldwide. The global potential for high power frequency regulation services and equipment is measured in billions of dollars. Beacon’s stock has taken a beating over the last year and is currently trading at about 1/4 of the 12-month high.
The remaining companies on the list are engaged in the development and commercialization of cutting-edge Li-ion and supercapacitor technologies that I have a hard time justifying in light of current economic conditions and my knowledge of the potential markets. These companies may ultimately prove to be diamonds in the rough, but they could just as easily prove to be lumps of coal.
There are immense differences between the technically plausible and the economically rational. The difficulty in distinguishing between the two is compounded by history, which shows that cutting-edge innovations are frequently uneconomic in the early stages but profitable over the long-term. I’m an optimist and convinced that we will find solutions for today’s problems that seem insurmountable. I’ve also had enough experience to know that the solutions will probably lead to a new set of problems. So what we really need to do is get up in the morning, go to work and solve the problems of today with the tools we have. If we do that consistently, tomorrow will take care of itself.
Disclosure: Author holds a large long position in Axion Power International, recently bought small long positions in Exide, Enersys, and Active Power and will likely make additional energy storage sector investments in the future.
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This article has 60 comments:
Socrateazz, I regularly mention the advantages and cost-effectiveness of both pumped hydro and compressed air storage. I've not seen anyone write on suspended weights, but that too might be cost effective. I limited the scope of this article to the technologies named by Sandia that are useful across the spectrum of fixed and mobile applications.
The only solution is to use a wide variety of energy sources. Each one by itself will play a part. Time has passed to think about having more energy to less costs.
It is time to think using less energy for the same task more efficiently.
Okay lets do the math - World Carbon Emission now 26GT - US 6 GT China already surpassed us. India not far behind. The report says 2 GT goal. Remember the chinese built a coal plant a week these have asset lifes of greater than 60 years. Do you really think we can get to 2GT by 2100 plus a significant reduction by 2020? I am not being a naysayer - but a truthsayer. Either the report overstated the goals or we should prepare for adaptation not a goal that is unachievable - e.g. most of us attempting to be professional atheletes - we can spend the rest of our lives working out but we will not advance to that level no matter what so no point in trying.
Battery storage is very expensive when you incorporate the life cycle. Power plants can last 60 years batteries life cycle 15. I did own CBAK but its not to save the world but the fact we all have cell phones that need batteries.
You write such wonderfully organized and interesting articles. You make it a pleasure to follow the development of these important new complex technologies. Thanks again for your efforts.
Having considered the various alternatives to our energy dilemma, my own experience tells me to separate these concepts into two distinct divisions, those designed to assist electric generation and those useful for transport. I believe several of the emerging companies you identify (along with nuclear breakthroughs such as the mini-reactors produced by Hyperion Power) will assist us making the former more economic in coming years.
It is also my belief that various forms of NGV's will replace the use of some considerable amounts of oil (ie. gasoline) in our transportation sector. The main reasons for this thesis are 1) we cannot afford to abandon the 250 million ICE's already in use, 2) alternative fuels we have access to are not economic or 3) environmentally acceptable, 4) we have hundreds (or perhaps thousands) of years of supplies of methanes on hand, and 5) other substitutable alternative fuels (eg. electricity) don't work very well in practice.
Since you mentioned Boone Pickens, he has already signed contracts with Swift Trucking and Wal-Mart to replace their over the road rigs (his company provides the fueling stations) with models powered by LNG. Over time, this will significantly lessen demand for diesel fuel. Moreover, NO forms of EV's are even in the game in the future of this major sector of highway commerce.
CNG fueled vehicles, light trucks and passenger cars, are a somewhat different story. However, as there are already 7 million of them on the road throughout the world, it is only a matter of time until we catch up. GM now converts some gasoline models for free to existing customers in Germany, and conversions of most makes cost $600 US in Brazil. We can't do it here at any price (legally) due to EPA "certifications" that cost equipment manufacturers $200K per model and motor, but that's simply a regulatory roadblock which will be revised one way or another.
Assuming new NGV's are included in the realm of future federal (and state) tax credits, EV's simply can't compete at any but the very highest price points. Like you, Pickens has a saying for this, "The lowest cost energy solution wins every time."
John Petersen continuously tries to assess the future cost profiles of emerging technologies, but these are merely estimates ("guesstimates"). I think he has made it clear he does not have a crystal ball regarding such things as technology evolution in battery chemistries and potential economies of scale for a wide variety of still rather primitive commercializations of solar (thermal and photovoltaic), wind, geothermal, tidal and wave hydropower, etc.
Discussion of the entire future energy paradigm is still proceding on the level of hunches. John Petersen is providing an excellent service in summarizing the rationale of various efforts underway, but, as he has made clear in his excellent series of articles, this entire area is still in gestation - it hasn't even reached infancy, in my opinion.
John, I hope you have the patience to stay with this subject and keep your perspectives regarding developments in the energy storage area in front of us for some time to come.
Truthsayer, I suppose I'm a global warming agnostic because I don't have a strong opinion either way. That being said, I would rather act like it's a problem and have it prove to be nothing than act like its nothing and have it prove to be the catastrophe the true believers describe.
I am not an economic agnostic and I know there are only two ways for the 500 million who have a good lifestyle to make room for the 6 billion who want one: we either have to drastically improve the way we do things or accept drastic cuts in the lifestyles we hold dear. I'm in favor of making more instead of making do with less.
"The suit, filed Thursday in federal court in Washington, asks for a court order requiring the U.S. Environmental Protection Agency to set limits for mercury and dozens of other hazardous air pollutants.
"Power plants are the largest unregulated industrial source of air toxics," said Jim Pew, an attorney with Earthjustice, one of the groups that filed the suit. "It is unconscionable that six years after the deadline for action, we still do not have air toxics controls on these large existing sources of pollution."
The suit follows up on a ruling by the U.S. Court of Appeals for the District of Columbia that threw out two Bush administration rules governing power plant emissions. The Bush EPA rules had essentially overturned a Clinton administration move under the 1990 Clean Air Act to set new air limits for arsenic, chromium, various acid mists and other hazardous air pollutants. ..."
www.wvgazette.com/News...
Radiation apparently too.
Lead times for bringing new electric power sources on line are sufficiently long [see FOIL 10] that we might in for electric shortage problems.
home.comcast.net/~bpayne37/pnmelectric...
We also read, vienna,
"[C]urrently, there are 439 reactors in 30 different countries. The reactors consume 167 million pounds of uranium on an annual basis. The problem is that current mine production is only 108 million pounds per year. ... " See link at top FOIL 10 page.
This translates into a drastic reduction in CO2 emmissions, involuntary but there nonetheless. This drastic reduction has already wreaked havoc across the US and I personally expect more of the same for the rest of the winter.
The 70's theories regarding the Coming Ice Age are as plausible as are current Global Warming theories.
Eliminate Greenhouse Gases, yippi ki ay, the end result would be an Ice Ball devoid of life.
Whatever is done has to be done uniformally across the Globe, efforts should be coordinated. Each nation going its own merry way could affect the weather around the planet, especially when dealing with nations the size of China and India.
The Movie, The Day After Tommorow shows a mammoth frozen in the process of eating. This is real, one was actually found in this state.
Whatever is done has to be done slowly. IMO
Other countries will go all electric, ours has too many jobs tied to the present auto manufacturing configuration to be approved.
On Dec 26 06:58 AM User 267708 wrote:
> Energy generation from solar and wind is less than 1% and I don't
> see where expansion of this source will ever exceed 15-20% of our
> energy needs. The country has to return to nuclear energy generation
> in order to solve its energy requirements and solve it's CO2 emissions
> from coal. The safety issues and recycling issues have been resolved
> with new technology. Costs are much lower than sources other than
> hydrology. Listening to the false science of environmentalists has
> been the main obstacle in achieving energy self sufficiency.
This article only casually mentions the Lithium Iron Phosphate battery as a new technology with potential. Do a search on “Li-FePO4”. It is disappointing it is not included in the general analysis of the article broken-out from the Li-ion battery.
On Dec 26 08:52 AM Vienna wrote:
> User 267708 - Uranium for nuclear power is only around for the next
> 50 years or so what I heard, shorter than oil.
>
> The only solution is to use a wide variety of energy sources. Each
> one by itsself will play a part. Time has passed to think about having
> more energy to less costs.
>
> It is time to think using less energy for the same task more efficiently.
>
>
> The energy task is NOT a task about cost/earings - just compare it
> with the US military, just with the difference that the many different
> solutions implemented here will still be here in 20 years, opposed
> to the bombs and weapons you use to kill innocent people (600 bio
> USD for military, why the fuck are people even worried about the
> few billions spent for alternate energy?) US is just not about logic,
> it is always just about greed, and that is how you fuck about the
> world.
Roadrunner, Li-FePO4 is a wonderful and robust chemistry, production cost at the factory is in the $1,300 per kWh range in the Sandia report. If you have an application that will fully use the power of lithium phosphate over a reasonable period of time, then it's probably the best choice. But you can never recoup the end-user cost of even a 10 kWh EV battery pack from gas savings. Which means we're talking about a wonderful technology that is too robust and too expensive for use in anything but the most extreme applications. It's like using gold contacts in a light-switch - it works wonderfully but makes no economic sense.
(along with pressurized/compressed... was liquified/synthetics, etc.).
Why isn't anyone talking about conservation. If we had a decent energy policy it would surly include a floor on the price of gasoline. This would stop the back sliding during periods of cheap oil and promote conservation.
For example, why do we have a long haul trucking industry? The cheapest way to transport stuff is on trains. We need leaders who will make sure that we don’t do stupid things like haul products on trucks that should be hauled on trains.
As we know, any discussion of "cost vs. performance" must seriously consider diesel's place in easily attainable immediate gains. I appears, the DOE is allowing for some measured gain in this area. Yet, after a 20 year projection, it doesn't even come close to diesel's present share in Europe.
A difficult projection to make, probably because the Mastodon in the living room, compensatory energy/gas taxes, continue to be a political dead end. My hope is that this discussion begins to find the light of day in the public domain. We, in the U.S. have to at least begin to consider one of the most easily attainable conservation mechanisms. Unfortunately, the present economic climate only makes the elephant even more transparent.
Steven Chu's appointment to Energy Secretary is encouraging. I particularly liked his courage shown in his brief comments, regarding carbon taxes "without loopholes". If I remember correctly he even momentarily mentioned raising gas taxes as a possibility. If this is done in a manner to that reflects efficiency, then diesel in the U.S. may be priced in a similar competitive situation as in Europe.
Again, back to the DOE's prediction, the growth in diesel share is interesting and encouraging. Yet, I wonder what they base it on and if it might not be much larger, even approaching European levels, if equalizing energy taxes are in our future.
www.eia.doe.gov/oiaf/a...
Galewhitiker, I agree that the first step is eliminating waste in all its forms. The world changed when we were paying attention to other matters. It's no longer a secret, the 6 billion know how the other 500 million live and they want to upgrade their lifestyles. So we have a major challenge over the next 20 years. I just hope we have the sense to do the work before the pressure is too great to bear.
First, where in the Sandia report does it break out Li-FePO4 from Li-ion and say Li-FePO4 costs $1,300 per kWh? I don’t see it.
Second, the long term price of Li-FePO4 will drop dramatically because it is a spanking new technology with strong demand. Google LiFePO4 and you will find site after site how you can upgrade Prius’, motor scooters, boats, etc to LiFePO4. One site tells how you can cannibalize many DeWalt power packs to create an electric car.
The ultimate price, after supply catches up with demand and after the patents expire, depends on material costs, and they are very low for this battery. Don’t give me the “Lithium will be in short supply” argument either, because there are many untapped dry lake beds (like Nevada) that have good deposits of Lithium. Plus it will ultimately be extracted from the oceans.
You can put all your lawyer spin on this all you want, but you can not give anything reasonable about the future price of LiFePO4 batteries.
At the risk of putting the cart before the horse (this suggestion may be too early to be anything more than a temporary stab at the subject), do you think that an analysis attempting to separate different cost effects for emerging generation and storage technologies could be done? Let me make a list to clarify what I mean by different types of estimated cost factors:
1. Scalable costs that will come down with volume production and usage.
2. Fixed costs that have no economy of scale.
3. Costs that might have reverse economy of scale (higher raw material costs based on scarcity facing higher demand, for example).
4. Costs that face the risk of lowered recoverability through obsolescence (by a leap-frogging technology change).
I realize that what I am asking is monumental if tackled comprehensively, but you have been effectively against the monument. Can you keep trying to focus on these issues in manageable pieces as you continue your work?
My comments here are prompted by the comment stream discussion of uranium availability (Vienna and billp37) and use of thorium (kewlhand) and the mention of Li-ion-phosphate technology (Road Runner). I am aware of this technology which Valence (VLNC) is working on. There are other alternative lithium based systems from Altair Nano (ALTI) and A123 Systems (privately held). The mention of EEstor (nickgogert) raises the question: how does this relate to the BoostCap technology from Maxwell Technology (MXWL)?
John, if you continue your sofar excellent efforts, the parameters of energy storage technology and the intersection with new generation technologies can only become clearer. Thanks for doing what you are doing.
I wrote "...you have been effectively against the monument."
Insert the word "pushing": ...you have been PUSHING effectively against the monument.
Entirely different implication. Sorry.
Large organizations can harm innovation by buying patents and locking them up, for example, or by ostentatiously floating a bad idea like direct corn-to-alcohol technology, for which they have received subsidies, then lobbying the subsidies gone to kill off lesser capitalized start-ups, even if the start-ups had better ways of doing things. They can also hope they have crashed that entire thread by doing it badly in a showy way.
Making alcohol out of corn or other food products isn't a completely bad idea if you feed the mash to animals. The animals are then healthier because the micro-organisms that break down difficult-to-digest parts of corn add important nutritional components. The micro-organisms also decrease the famous flatulence from eating corn directly. Consequently, the animals are healthier and win prizes at fairs, after which their owners receive uninvited visits from the BATF.
Smart people can make alcohol out of kudzu, for example, an abundant weed with huge starchy underground roots and cellulosic tops that runs rampant over the south. But for a long time we have had a government that discourages distributed attempts at generating wealth in reasonable ways, where, for example, energy is made close to where it will be used, thus avoiding the loss and possible interruption of porting it over long lines.
Staple foods should be grown this way as well, and we would have different varieties suited to different micro-climates. To some extent, this is getting done, but the remarkable process of governments wanting to condemn small operations to, say, put an LNG pipe through them, is also stunning on a punishing-small-innova... index.
Lobbying that results in enriching cartels and protecting them from start-up competition is a terrible drag all over the planet right now. Some parts of the U.S. are safer from this than others. The federal government has been running over even state governments that try to resist on behalf of their people.
We have incredible potential that is locked up in bad practice. As bad as the U.S. is, most other places are worse, though Brazil and Europe have been able to get our car companies to produce more efficient vehicles, as noted above.
If I were to invest in a company like ACPW, my concern is whether they are safe from unfair regulation. Do they have protectors in congress? Who are their customers, can they help to protect them? How will they break through the entrenched processes of existing businesses in an industry used to monopoly and entitlement? Will they sell to consumer-owned operations first? What is the business plan for the present situation?
I really anticpated your answer because I have read much of what you have written. So let me suggest Plan B: Can you keep pushing this question as a challenge and maybe some reader will seize the challenge and add to the discussion.
I recognize that the questions I ask, if thoroughly addressed, would be worthy of a Ph.D. thesis in Economics or Materials Science.
On Dec 26 03:02 PM John Petersen wrote:
> John, it's one thing for me to talk about what the finished products
> costs are and another entirely to estimate what they might be. That
> kind of work requires detailed manufacturing expertise that I simply
> don't have. In a perfect world, the various manufacturers would publish
> white papers about their relative costs and expected future economies.
> But it's hard enough right now trying to get to reliable costs per
> kWh. This baby is changing fast and I'm sure the rules we have today
> won't apply forever. So the best I can do is try to keep on top of
> developments and talk about what is, rather than what might be.
On the CNG front two issues that are real which will require a societal change or massive technological improvements - 1. CNG vehicle cost an additional $3-5K 2. The distance you can travel will be cut in half as compared to conventional vehicle before the next fillup - assuming you can find a station. 3. You will have a reduction of 40% of your trunk space.
WIth the credit issues the way it is as long as you give choice (which by the way is the American thing to do) it will be hard for consumers to pony up the additional capital whether CNG or other hybrid technology. Compared to the other technology CNG right now has much more sacrifice in how you behave with your car - driving distance and trunk space.
I didn't read all the comments so I don't know if this was touched upon, but I found it interesting that of the 4 companies you detailed in your article, that you mentioned that the potential global markets were all in the billion dollar range, but for Axion you only mentioned they would/could have slaes for next year in the 50 - 100 mill range. Was this done on purpose (not mentioning Axion was also in the billion dollar market) or was it because Axion is the closest to realizing its market than the others so you were simply projecting actual revenues as opposed to potential?
John, I figure the best way to get companies to publish detailed data is to keep raising uncomfortable questions about the limited data one can glean from reports. I was overjoyed by the quality of A123's registration statement disclosure because if everybody moved up to that standard comparisons would be much easier.
Truthsayer, all of the alternatives involve some level of increased cost whether we're talking about diesel, flex fuel, or the various hybrid types. In the end I think consumers will make the best choice for themselves. It's a shame Americans have a knee-jerk dislike for diesel because I think a mild hybrid diesel could be a real winner in terms of economy and the benefits of biodiesel compared to ethanol are staggering.
ACPW is already doing about $30 million a year in revenue and I don't really have a feel for what their growth path looks like. ZBB is logging million dollar demonstration project sales at an impressive rate, but estimating their future numbers is tough without a lot more detail than I have access to. Likewise, Beacon is starting to offer frequency regulation services, but they haven't offered guidance on how much revenue they will generate or how quickly. They're all going after billion dollar niches, but I would hate to predict revenue growth rates.
Axion's advantage is a cheap general purpose technology that will be aimed at the middle market of average users. Statistics tells us that about 68% of all users fall in the center of any standard bell shaped curve. I'll gladly take the middle and leave both the high and low ground for competitors. Given the size of the market, I think Axion's future sales are likely to be capacity limited rather than customer limited.
Axion announced a $6.4 million contract for lead-acid batteries in early November and in the subsequent earnings call its CEO said they would begin shipments in 2008. He also said that they hoped to ramp up lead acid production to a couple million dollars per month by next summer. When I turned Axion over to other counsel, they were hoping to have first generation electrode equipment installed by year end and second generation equipment installed by next summer. After allowing for a few months of shakedown testing, I would look for operational PbC battery production capacity in the 500 to 1,000 unit per day range by the end of next year. If you assume a lead-acid revenue base of roughly $2 million per month and then layer in revenue from the sale of 10,000 or 20,000 PbC devices per month, the numbers look very solid.
The timing may slip if shake-down testing and quality control require are more complicated than I expect. But Axion has already started selling products and I expect its revenue to ramp up rapidly over the next 12 to 18 months.
I do want to mention on the subject of ethanol and biofuels- there has been a bunch of bashing on ethanol. I for one over the past couple years have been an opponent of ethanol. However I have changed my mind over the past year. The reason is we (US) are the number 1 agriculture producer in the world. Before the 2007-2008 runup in oil clearly one could argue gasoline was underpriced relative to the good it brought to people versus lets say bottle water ($8/gallon). I believe in that sense people have undervalued food. Subsidy for oil contributed to the increase oil prices. Increase in oil prices hurt us because we net import. If food prices rise I believe the US would be the benefactor of this trend so if biofuels caused food prices to rise I really dont think it would be bad for the US. Clearly we will pay more for food but food does have a very good utility which deserves greater value than its seen the past few years. In the long run just like wind generation we will get better at the technology. Biofuels is better than the other alternatives in terms of balancing economics, energy security, environment, and technical implementation.
truthsayer, I first started looking at ethanol immediately after the tax credits were passed in 1980. At the time I was working with a chemist who insisted that the energy inputs to make a gallon of fuel grade ethanol were close to if not greater than the energy available in the final product. I see the same argument presented regularly today by ethanol detractors. As I understand the energy input to energy output ratios of biofuels, ethanol is approaching 1 and biodiesel approaches 3. That leads me to think biodiesel is a wiser choice. But since the policy decisions were made long ago by people more powerful than me, my opinion on the issue don't really matter much.
1) your implication was that the Carter ethanol tax credits were responsible for the recent food inflation. they were not. it was the bush ethanol *mandates* (i.e. mandates forcing the amounts of ethanol blended gasoline) that caused the huge disruptions in the food chain.
2) the DOE has been dead wrong on every major energy policy affecting the US and the department should simply be shut down. presenting DOE data is a good way to be discredited. for instance, the DOE has been wrong on oil price predictions, supply/demand prognositications, and you yourself point out the lack of support for US produced natural gas transportation. DOE policy and predictions make it one of the most dangerous departments of the US government.
3) i am very surprised an article on alternative energy storage didn't go into more detail on molten salt and electrolysis production of hydrogen. in my opinion (and i am still studying the matter) both these system are potentially more cost effective energy storage mediums for large wind and solar arrays than are batteries, as well as being more environmentally friendly.
Michael, thanks for your thoughts. In response I would note that (1) President Carter started the regulatory snowball rolling downhill and it gathered steam ever since as bad policies are wont to do. I offer ethanol as an object lesson in DC dynamics; nothing more. (2) The DOE may have a murky crystal ball, but I don't have a better one and if there is one thing government agencies are good at it's gathering statistics. I may take their forecasts with a grain of salt, but things like current costs are usually pretty reliable. (3) This is an article about companies that people can invest in, not an article about technology. Every investment in the storage sector is based on a technology, but not every technology is an investment. When somebody registers a molten salt or electrolytic hydrogen company with the SEC, I'll talk about them too.
Which brings up second point - it's absolutely time we redefined the concept of "light" duty vehicles. The four ton duallys and SUV's are today's dinosaurs, or should be. The federales need to suspend all the safety rules and let truly lightweight vehicles on the road. I ride a bicycle on the roads. Do I need an airbag ? Only if I get hit, I guess.
We REALLY need smaller, lighter weight, less thirsty vehicles with small, efficient propulsion systems.
I have greater issues with their charts, specifically #11, which shows just WIND generated electrical power in 2030 being greater than all electrical generation of 2007 (>100 quads).
What's more troubling, they show all electrical generation at >400 quads in 2030, 4x today, and still show now reductions in all liquid fuel consumption: hence, no reduction in "burning" as we switch to the electric economy. Something smells.
naked, I appreciate the kind words and certainly take government estimates of what the future holds with a grain of salt. Even so, my crystal ball is murkier than theirs and my views are probably a more biased. We're coming into an exciting time and are definitely not in Kansas any more.
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2) the DOE publishes something like their prediction of vehicle sales in 2030?? come on John...anyone who has the slightest idea of oil supply/demand fundamentals (and the DOE has proven it hasn't the slightest clue), knows that these DOE estimates of vehicles sales is nothing but pure dreaming. the DOE has an oil centric bias, yet doesn't have a clue about oil supply/demand fundamentals. using their data is not only misleading, but dangerous. statistics, sure. prognostications about the future, F-
3) i understand it's an article about investment ideas. but at the same time, listing investment choices in an area as specific as "alternative energy storage" without acknowledging the possible competition to those investment choices seem an omission to me. much of your analysis on batteries is good, and they will certainly be used in electric only and hybrid cars. however, the larger playing field of solar and wind energy array storage, well, i am not so sure batteries are the way to go. are you? do you think batteries, with the cost and capacity needed, will be the way to go to store energy from wind and solar for those times when the wind isn't blowing and the sun isn't shinning? just curious.
I truly wish there was somebody out there with a public company that focused on ultra-high efficiency storage like pumped hydro, compressed air, molten salt and all the cool stuff that people far smarter than me are working on. I've been doing small company finance work for darned near 30 years now and understand the difference between an invention and a product. The inventions need to be nurtured and financed by folks who understand and can afford the risk. But far too often companies over-promote mere concepts and over-promise based on unproven plans which makes it very easy for investors to get sucked into the next financial catastrophe at valuations that bear no relation to economic reality, risk and future potential. Since I feel very comfortable with corporate, market, economic and financial issues and far less comfortable with policy issues, I'll stay in my comfort zone and talk about what is - leaving the what should be and what might be to others who are more qualified.
We need to look at how to increase the efficiency of conventional vehicles first and like the Aptera with a Diesel Electric drive; it had a rated performance of 250 mpg. The Aptera is only available in a pure Electric form the Diesel Electric was only for testing purposes.
Diesel or Gas Electric is more efficient then the hybrid drives and has for over 100 years has proven to be an economical choice in the industrial and marine environment. Additionally technology has been available to increase the efficiency of our homes with out using wind or solar and expensive storage systems by more then 50%. With cars and trucks the Aptera show a conventional system can be much more efficient. We need to look at the technology we currently use and what is presented with open eyes and mind.
If I told you we could reduce the energy consumption of every conventionally built home in the US by 50% or more on average would you listen? Or do I have to come up with some very complicated system that looks cool for you to believe in it? Well we can increase the efficiency of every home by 50% or more and it’s not the equipment like a boiler, HVAC system or adding solar or wind. Aptera Uses advanced aerodynamics to increase its efficiency (NOT a Hybrid Drive System). I don’t work for Aptera, but I do applaud them on fixing the problem with transportation efficiency at the root cause, aerodynamics, not by putting an expensive system that is a problem itself.
As for us at TMCP we were laughed at from the 1950’s – 1980’s for focusing on technologies that we thought would make a difference, superior in efficiency, and were environmentally sound (the term green did not exist then). We called ourselves the first environmentally conscious company in the 1950’s.
I retired from the Babcock & Wilcox Co. (sub of McDermott International, MDR) in 2000. My last project there was a Superconducting Magnet Energy Storage (SMES) system funded with about $25 million from DOE. The objective was to serve utility-scale grid stabilization applications with stored energy of about 100 MJ and discharge power of 100 MW. In the course of developing the system, we tried mightily to find a utility willing to foot the cost of integrating the system into their grid, given the magnet for free. The Anchorage AK municipal utility has a real problem in service stability at the end of long supply lines, but they couldn't find the money to provide the foundation, enclosure, and electronics to charge and discharge the magnet. AEP has a station in KY with a power controller that would be ideal for the application, but they were unwilling to take the risk of modification of their controller to charge and discharge the magnet. Eventually the magnet was completed and delivered to the DOE-funded National High Magnetic Field Lab at the University of Florida at Tallahassee, where to my knowledge it sits in the boneyard with other relics of DOE programs that have never been put to use.
The Navy is developing an Electromagnetic Aircraft Launch System (EMALS) to replace the steam catapults on future aircraft carriers, improving energy efficiency and reducing force variability on the aircraft and maintenance workload. I consult with the prime contractor, General Atomics (private). The system includes 12 flywheel generators charged at a relatively low power level from the ship's bus, then discharged in a 5-sec pulse to launch an aircraft. Each flywheel stores over 120 MJ (33 kWh) of energy and discharges with a peak power over 100 MW. These specs are somewhat more than the 25 kWh capacity advertised by Beacon Power. I don't believe GA has any plans to commercialize the product, and given our experience with SMES i doubt that many utilities would want to invest in it.
GA operates the largest Tokamak fusion research machine in the country, also funded by DOE. Research results from this facility are key to the development of the International Thermonuclear Experimental Reactor (ITER) in France, intended to produce the first continuous fusion reaction apart from the sun. Although the uranium fuel for fission reactors may run out in 50-100 years, within that time span we can hope to realize essentially limitless power production from fusion reactors, with little or no hazardous waste product. BTW the largest lode of uranium ore in the US is down the road from where I now live in Virginia, but given community fears of digging the stuff up, I doubt it will ever be mined.
Regarding pumped hydro storage, I live a few miles from a pair of artificial reservoirs built with private capital by AEP in the 1960s. The generators on the main dam operate in reverse at night to pump water from the lower reservoir back into the upper, to be released during the day to feed the variable load. Problem is, the water level in the lower reservoir varies as much as 20 feet per day, which depresses the value of land abutting the lower lake. Regardless of governmental regulation, local property owners will have strong reservations about permitting widespread use of pumped hydro power.
The reason utilities build large generating plants is pure economics: small distributed generators will never compete in thermal efficiency or maintenance cost with large plants. So unless we are willing to foot the extra cost, the idea of little green generators in every backyard or neighborhood will remain a fantasy.
In the 1980s I built a house in Maine with the objective of economizing as much as possible on energy and capital costs. The Central Maine Power Company installed two meters, one for the daytime load and the second metered at a lower rate for off-peak load. We installed German-made energy storage heaters in each room (ceramic bricks were heated at night by electricity), saving the capital cost of a furnace and ductwork; and we connected an over-size water heater to the off-peak meter. We put concrete thermal mass behind large south-facing windows, and had wood stoves in the living areas for ambience and emergency heat. The system worked like a champ through the Maine winters.
Regarding hybrid vehicles, I bought a Ford Escape hybrid three years ago, and have rolled up over 35,000 miles with no power train maintenance issues. When I bought the car (with tax credit, thank you), I figured the hybrid premium was justified over a 5-year life with gas at about $2.75 a gallon. Last summer I made money; not so now, with gas at $1.50 locally.
BTW I share your agnostic position on global warming; the more I hear ignorant politicians and their followers rant about it, the less I believe in it. The decisions I have made were primarily based on economics, with some consideration of being an early user of new technology. Heaven save us from more ill-considered Washington mandates.
Who is a likely candidate to build this for Iowa?
www.wapa.gov/es/pubs/e...
www.treehugger.com/fil...
rrbatch, you should consider writing for Seeking Alpha. They're always looking for new contributors and I think your education, experience and pragmatic approach are impressive. Even if you don't want to write, please take the time to comment when the muse strikes you.
kidecar, privately held Energy Storage Power Corporation seems to be the technical leader in the field. Their website is www.espcinc.com/ I keep looking for an investment opportunity in CAES but haven't found one yet. If and when I do, I'll be sure to mention it prominently.
A problem with Pickens' plan is that burning natural gas in a power plant is a far more efficient use of the gas than burning it in cars.
And wind isn't a good match for replacing gas plants which are not intermittent. Also, it makes much more sense from an environmental perspective to phase out coal plants and let the gas plants run. Use solar thermal with heat storage for replacing coal base load.
There is an interesting article on energy storage and transmission at:
www.altenergystocks.co... #comment-106183
The article talks about how much grid balancing can be done with smart transmission, making the point that it is even more important to establish the new improved grid, than to develop storage solutions.
We obviously need both as key elements of an improved electric infrastructure, but I found the article interesting, offering a perspective I hadn't heard before.
You mention Active Power's and BeaconPower's flywheel potential.
How to compare them? Which is a better investment?
"So what we really need to do is get up in the morning, go to work and solve the problems of today with the tools we have. If we do that consistently, tomorrow will take care of itself."
Well said
www.altenergystocks.co...
"I truly wish there was somebody out there with a public company that focused on ultra-high efficiency storage like pumped hydro, compressed air, molten salt and all the cool stuff that people far smarter than me are working on"
There is a public company working specifically on molten salt energy storage.
United Technology's Sunstrand Rockedyne division has developed advanced molten salt sytems for solar thermal plants. They have also started a new solar thermal company, Solar Reserve, to use this technology.
I believe they intend to sell the technology to other solar thermal companies as well.
"The new hybrid systems for cars are expensive, costly to maintain, and have no return on their investment. Additionally they do not reduce the “green house” gases"
PHEVs are said to double the efficiency of even a Prius. A car with IC engine that would normally get 25mpg, would achieve 100mpg overall. That cuts emissions drastically.
Furthermore, it's estimated that a PHEV would achieve a life of car cost equal to gasoline cars, even with gas at $1.75/gallon. I doubt we will see prices that low for the majority of the next 10 years. Probably twice that at least. That would amount to substantial savings over the life of the car.
The emissions would be even lower if the PHEVS are NG powered, as well as having even larger life of car savings due to lower fuel costs. Having said, that, I still think there are serious flaws in Pickens' plan.
It's much more efficient use of Ngas to burn it in power plants and power cars with the electricity. This has to be weighed against the lower cost of NG over gasoline or diesel, and the fact that the U.S. has better domestic supply of NG than oil. If we really have enough Ng, then Pickens' plan may serve in transition to EVs, as PHEVs would also do.
The biggest argument for PHEVs over EVs in the near term, IMHO, is that people would be much more inclined to buy a car without range limitations, particularly if they are one car families, who want a one size fits all car.
"BTW I share your agnostic position on global warming; the more I hear ignorant politicians and their followers rant about it, the less I believe in it."
Couldn't disagree more.
The ranting of the deniers repeats arguments endlessly that have been thoroughly disproved for years and decades in some cases. And it is plain to see that most deniers are blinded by political ideology to the point where they will believe Sean Hannity over tens of thousands of climate scientists. That side of the argument is based on belief almost exclusively. Sure there are uncertainties in the science, but deniers believe nonsense, like that a scientific theory isn't valid unless it is 100% proven.
Where are the skeptic climate scientists who are not funded by the fossil fuel industry?
Where are the scientific papers at the AGU meeting that disagree with the consensus?
Or the EGU meetings? They don't exist.
Deniers believe that global warming stopped ten years ago, which is blatantly false, and only seems reasonable because of cherry picking data points like the huge anomaly that was the 1998 El Nino, and the huge anomaly that is the current La Nina cooling.
Anyone who can read a stock chart can see that the warming trendline has not been violated.
Some deniers still claim that the greenhouse effect is disproven by laws of thermodynamics.
Yeah right.
They take 100 arguments with no scientific basis and add them up with 2 or 3 relatively reasonable arguments and think they are making sense.
Heartland Institute couldn't get a single climate scientist in Texas for their list of "experts" who disagree with AGW theory, even though there are dozens if not hundreds of climate scientists in Texas.
Their 4 experts?
policy analyst
energy expert
petroleum engineer
emergency physician
This is typical of all the lists of skeptics the deniers claim.
The Oregon Petition and the 32,000 "leading scientists" that the VP of GM talks about? Jokes. The 32,000 includes the Oregon Petition, which was a phony hoax, started by a guy who believes the industrial revolution has improved biodiverstiy on earth and that the more CO2 we pump into the atmosphere the more wonderful life on earth will be.
Right!
I don't know where you saw a rational analyst suggest that PHEV technology could be competitive at $1.75 gasoline, but I would love a citation because the calculations I posted in a December 22nd article tell a far different story. See:
seekingalpha.com/artic...
One of us wrong on that point. Show me how and I'll change my point of view. But don't quote unsourced numbers.
I respect your right to believe whatever you choose, but ask that you accept my right to doubt, question and investigate until somebody can satisfy my questions about the effect of that big yellow ball in the sky that seems to vary up and down over time.
Lithium Iron Phosphate (LiFePO4) batteries even today are economically a better value for EV-Hybrid vehicles than today's AGM/VRLA Lead-acid batteries, if one amortizes the battery cost over the lifetime of the battery, and if one looks at the efficiency improvements offered by LiFePO4. For example:
1. Lead-acid, and even NiMH batteries for higher power applications often spec. a 300-500 cycle lifetime, versus 2000-3000 for LiFePO4. I've bought some Chinese large-scale LiFePO4 batteries for $500/KWh versus $200/KWh for AGM lead-acid. But, if the lead-acid batteries must be replaced even only 4 times during the life of the battery, the LiFePO4 could be cheaper, depending on what discount rate you use.
2. The spec'd energy storage of LiFePO4 is fairly independent of power output (within spec'd limits), whereas many lead-acid batteries are spec'd for 10-20 hour output, and the realized value for 0.3 to 2.0 hour EV discharge is often half or less of the spec'd value, which is partly why e-Bikes with a 1 KWh LiFePO4 pack often achieve 3X the range of a 1 KWh Lead-acid pack.
3. Higher quality lead-acid batteries, where the 1 hour energy storage value is closer to the 20 hour value (names like Odyssey, Trojan, Surrette, Optima etc.)
can cost around $400/kWh (in my experience), with less than a 2X improvement in cycle-life.
4. Vehicle range is highly dependent on aerodynamics for highway travel, and vehicle weight for city driving and hill climbing. A decent 30kWh LiFePO4 battery pack capable of peak 200 HP output weighs around 500-700 lbs, whereas a similar lead-acid pack weighs around 2000-3300 lbs.
5. For decent range and battery pack like, Lead-acid and LiFePO4 require some string equalization/battery management, so any battery pack cost must include the cost of a BMS.
6. My experience has been that fast-charging some high-power high-quality lead-acid batteries takes about 4 hours, whereas my LiFePO4 batteries take 15-60 minutes for the same task. Although this advantage goes away due to charger constraints for larger battery packs, it does offer compelling advantages for e-bikes and scooters, where their smaller pack is recharged from a standard 115VAC outlet.
7. Advances in nanotechnology, materials science, and biochemistry mean that current Lead-acid, LiFePO4, and other potential battery chemistries should see significant improvements in battery performance versus cost over the next 5-10 years, so LiFePO4 could one-day look like lead-acid does today, or perhaps not.
Transitions to a new technology often take longer than many optimistic CEOs predict, so the established Lead-acid "big guys" have some time to see which companies manage to gain most market share, before deciding which pure-play companies they'll need to buy to maintain and grow certain parts of their existing market share.
And, lest Chevron's example with NiMH large format EV batteries be forgotten, patent ownership and licensing could in the end decide which LiFePO4 battery vendors survive, and which don't.
Although simple gasoline motor conversions to natural gas can just barely stand on their own, one can get much higher efficiency with natural gas, along with reduced CO2/other pollution per unit horsepower, by taking advantage of the high effective octane performance of natural gas with higher compression engines designed for diesel or natural gas. For example, the average modern gasoline engine is around 25% efficient, versus 45% for a dedicated natural gas engine with small amounts of diesel injection.
One company I watch in this space is a Canadian traded stock (WPT-TSX) called Westport Innovations, who's been working with Cummins diesel motors.
Also, if you want North American energy independence, the US and Canada have huge amounts of natural gas locked up in Shale/Tight Rock/Coal-bed deposits, which becomes economic to extract with current natural gas prices. And, if you add in Natural Gas from Alaska, and Canada's North, once pipelines become economic, there's no shortage of Natural gas for the foreseeable future (something global peak-oil believers including myself until last summer may have overlooked).
Plus, one comment on Uranium supply (one of my invesment focus areas... Although the current supply of high grade (1% or higher U3O8) is fairly small, there's huge deposits of low-grade (say 0.15% or even 0.01%) Uranium worldwide. So, just like shale gas, although the economic supply of Uranium at $50/lb may be limited, Uranium, and Thorium for that matter are quite abundant and economic at $150/lb. And, since the cost of raw U3O8 fuel is realitively small compared with the processing, and capital costs of reactors, nuclear energy at even a longer term price of $150/lb for raw Uranium could still be economic, with a large supply ensuring a long term future for this energy choice.
Overall, I'm a big believer in HEVs and a major skeptic when it comes to PHEVs and pure EVs because I don't believe any battery technology is advanced enough to give Americans what they think they need. But I agree with you that what currently is bears very little relationship to what will be. This is a fun and exciting time.
I did a lot of the analysis you were talking about a couple weeks ago in:
seekingalpha.com/artic...
I took another stab at the issue this week in:
seekingalpha.com/artic...
A recurring theme throughout this series of 29 articles that you can access from the "More Articles" link is that there is much more going on in the lead-acid world than most folks are aware of. Firefly Energy and C&D have just joined forces to produce the Oasis line, which uses a foam electrode to replace the lead core and improve utilization of active material. Axion Power is actively testing a battery supercapacitor hybrid that eliminates sulfation entirely, pushes cycle life into the low thousands and slashes recharge times.
The thing I like about Pickens is exactly what you suggest, there is a lot of natural gas in North America and even if the instant conversions are not terribly efficient, the value of circulating fuel dollars in the economy instead of paying them offshore is immense. I also like nuclear with the low grade fuel systems and more efficient reactor systems that are being introduced. But that's more of a hot button issue than I care to wade into.
At the end of December I did a piece on storage for global warming agnostics that also touched on peak oil. While not firmly in the peak oil camp, I think there's a good argument for "peak cheap oil." Overall the same logic applies to uranium and most other resources. I keep going back to the touchstone point that 6 billion people on the planet know about and want to earn a piece of the lifestyles that the other 500,000 have. I'm firmly convinced that cleantech is the sixth industrial revolution and also convinced that it's drivers are fundamental economics rather than environmental idealism.
a) For $100K and higher sports/super car category, there's a strong case for EVs, as the battery pack cost can be covered, and the high peak torque to peak horsepower ratio is hard to beat with any ICE engine. That's why Tesla's business plan could be very successful, if they can just learn to run operations better.
b) For the mid-market range, battery cost limits the economics of pure EVs, and therefore hybrids and light plug-in hybrids are reasonable
c) On the low-end of the market, battery cost only works for the lightest short range vehicles, such as scooters and e-bikes. If one visits Taiwan, China, SE Asia, and some parts of Europe with their high "in the city core" penetration of scooters, one would think the US electric scooter market is still in early adoption phase (perhaps even being slowed by extremely cheap scooters that don't work well).
The above categories could easily change w.r.t. some additional factors, such as:
a) What will government Carbon strategies look like... a cap and trade system could help EV/plug-in HEV owners recover money by selling carbon credits to gas guzzler owners...?
b) Further technical advances in lower cost hydrid sources... for example, I see potential with mechanically rechargeable Aluminum/magnesium air cells (low cost, high energy density, with the byproduct recyclable)
c) Further advances in super-capacitor technology, perhaps even built-into lithium batteries.... today's hybrids have city mileage similar to highway mileage, but with better regenerative braking energy recapture, hybrids should get much better mileage in city driving, due to less losses from wind resistance. For couriers and taxis, this could allow for more battery pack in the economics.