Lead-Carbon: A Game Changer for Alternative Energy Storage

For several months I’ve been telling readers that emerging lead-carbon battery technologies will be game changers in alternative energy storage. Last week, The Economist published an article about Axion Power International (AXPW.OB) titled “Lead-acid Batteries Recharged” and I found a recent report from Sandia National Laboratories on its side-by-side testing of lead-acid, lead-carbon and Li-ion batteries. Now that Axion’s management is talking to the press and Sandia is releasing independent data, I feel free to explain more fully why lead-carbon technology is so disruptive. I don’t like table pounding, but this is probably the most important Seeking Alpha article I’ve written.

Lead-carbon batteries are different from other types of batteries because they combine the high energy density of a battery and the high specific power of a supercapacitor in a single low-cost device. The primary goals of lead-carbon research have been to extend the cycle lives of lead-acid batteries and increase their power. Basically, developers start with conventional lead-acid chemistry and add carbon components to the negative electrodes. While the carbon components do not change the basic electrochemistry, they increase specific power and reduce a chemical reaction called “sulfation” that occurs during charging cycles and is the principal reason ordinary lead-acid batteries fail. Over the last several years, lead-carbon researchers have followed three different development paths:

• Blending carbon additives into the lead sulfate paste that is used for negative electrodes;
• Developing split-electrodes where half of the negative electrode is lead and the other half is carbon; and
• Completely replacing the lead-based negative electrode with a carbon electrode assembly.

The DOE’s 2008 Peer Review for its Energy Storage Systems Research Program included a slide presentation from Sandia that summarized the results of its cycle-life tests on five different batteries including a deep-cycle lead-acid battery, two lead-acid batteries with carbon enhanced pastes, a split-electrode lead-carbon battery (the Ultrabattery) and an advanced lithium-ion (Li-FePO₄) battery. While the tests performed by Sandia focused on smoothing power output from wind turbines and used a 10% depth of discharge from a 50% initial state of charge, which means more testing will be required before comprehensive comparisons are possible, the following graph highlights the magnitude of the cycle-life improvements that lead-carbon technologies offer today.

(Click to enlarge)

This Sandia graph is the first time I’ve seen independent comparative test data for advanced lead-acid technology, advanced Li-ion technology and emerging lead-carbon technology on the same page. Since it’s coming from Sandia I have no reason to suspect a technology bias. Frankly, I can’t see the daunting cycle-life superiority that Li-ion advocates claim. When I practiced law in Houston we affectionately called that phenomenon “all hat and no cattle.”

In addition to the cycle-life data represented by the colored lines, the Sandia graph provides parenthetical power data expressed in terms of “C rates;” a measure of the time required for a battery to deliver its stored energy. For example, if a 10-volt battery has a nominal 100 Amp-hour rating, it can theoretically deliver 500 watts for two hours at a 0.5 C rate; 1,000 watts for one hour at a 1 C rate; 2,000 watts for a half hour at a 2 C rate; or 4,000 watts for 15 minutes at a 4 C rate. Historically, lead-acid batteries have had C rates of less than one while higher C rates have been the exclusive province of supercapacitors and premium-priced battery chemistries.

As the Sandia graph shows, they began testing the lead-carbon Ultrabattery at a 1 C rate, doubled the power and tested at a 2 C rate and then doubled the power again and tested at a 4 C rate. By the time the testing was completed, the Ultrabattery had survived more than 17,000 cycles at increasing C rates. This is just one series of tests, but it provides irrefutable proof that lead-carbon is re-writing the rules when it comes to both cycle-life and battery power.

Since Sandia said it far better than I can, I’ll simply reprint the summary slide from their Peer Review presentation.

(Click to enlarge)

A 10-fold improvement in the performance of any technology is by definition highly disruptive. The fact that lead-carbon achieved these disruptive performance gains using cheap and plentiful raw materials that are readily available from domestic sources and easily recyclable for use in new batteries using existing infrastructure is an absolute game changer; particularly when the closest comparable technology is based on expensive imported raw materials that are not easily recyclable for use in new batteries using existing infrastructure.

The five entities that are actively developing lead-carbon battery technology are:

• MeadWestvaco (MWV), a packaging material and container manufacturing company that is developing activated carbon additives for the lead sulfate pastes used in conventional lead-acid batteries;
• Australia’s Commonwealth Scientific and Industrial Research Organisation (CSIRO), which has developed a split-electrode lead-carbon battery that it calls the Ultrabattery;
• Japan’s Furukawa Battery (Frankfurt - FBB.F), which licensed the Ultrabattery technology from CSIRO and has successfully road tested its device for 100,000 miles in a modified Honda hybrid;
• East Penn Manufacturing, a privately held manufacturer of lead-acid batteries that is using carbon additive pastes in experimental batteries and has recently acquired an exclusive U.S. sublicense to manufacture the Ultrabattery from Furukawa; and
• Axion Power International, a small manufacturer of lead-acid batteries that has developed a formidable U.S. patent portfolio in lead-carbon battery technology that will begin commercial production later this year and has partnered with Gaia Power Technologies for a NYSERDA funded utility substation support project that was discussed in the DOE’s 2008 Peer Review.

Cycle-life test results for the MeadWestvaco and East Penn batteries with carbon-enhanced pastes are both included in the Sandia graph, as are test results for the split-electrode CSIRO-Furukawa Ultrabattery. While Axion didn’t participate in last year’s tests, presumably because it wanted to defer third-party testing until PbC batteries using manufactured electrode assemblies are available later this year, Axion’s strategy to replace the entire lead-based negative electrode with a carbon electrode assembly is the most aggressive of the three technical approaches to lead-carbon batteries. Based on my knowledge of how the various components interact in a lead-carbon battery, I believe Axion’s strategy will probably result in longer cycle-life and higher power than either the carbon-enhanced paste technologies developed by MeadWestvaco and East Penn or the split-electrode technology developed by CSIRO.

I’m a vocal critic of Li-ion technology because it requires expensive imported raw materials, the bulk of the global manufacturing base is in Asia, the batteries are far too expensive for large-scale energy storage systems and there are many alternative uses for Li-ion batteries that are largely insensitive to battery prices. I’ve previously cautioned that the best lead-acid batteries are more than adequate for many emerging energy storage applications and a new generation of advanced lead-carbon batteries will change the landscape dramatically. The Sandia graph is the first independent confirmation I’ve found, but I’m certain that more information will become available as the lead-carbon battery developers complete their testing and introduce commercial products to the market.

I’m the first to agree that normal lead-acid starter batteries do not stack up well against Li-ion in terms of cycle-life or power. However the picture changes dramatically when you understand that lead-carbon batteries are expected to offer comparable cycle-lives and power for about 40% of the cost of Li-ion. I believe Li-ion is the only rational choice for portable electronics, power tools, electric bicycles and hybrid scooters. I also have little doubt that Li-ion will retain the supermodel prize for sleek packaging, size and weight. However, when it comes to large-scale energy storage applications like HEVs and utility support installations, size and weight are simply design issues. They are not mission critical constraints that justify paying a 150% premium for comparable performance.

In the early days of the first five industrial revolutions, function was more important than form, substance was more important than style and fundamental economics drove the mass market to the cheapest solution. There is no reason to believe cleantech, the sixth industrial revolution, will be any different. Lead-carbon batteries are game changers for alternative energy storage, a coming investment tsunami.

Currently, industry leaders in the lead-acid battery group including Exide (XIDE), Enersys (ENS) and C&D Technologies (CHP) are valued at substantial discounts to industry leaders in the Li-ion battery group including Valence Technologies (VLNC), China BAK (CBAK) and Advanced Battery Technologies (ABAT). The same is true for leading developers of lead-carbon battery technology like Axion Power International, which trades at a huge discount to Altair Nanotechnologies (ALTI) and Ener1 (HEV). I expect the valuation pendulum to swing in the other direction when the market comes to grips with the fundamental economic advantages of advanced lead-acid and emerging lead-carbon batteries.

In closing I want to share an image from cartoonist Jan Darasz that was published in the Winter 2008 edition of Batteries International magazine with my Seeking Alpha article on the importance of rebuilding America’s domestic battery manufacturing infrastructure.

Disclosure: Author holds a large long position in Axion Power International, a leading U.S. developer of lead-carbon batteries. He also holds small long positions in Exide and Enersys and may make other energy storage investments in the future.

Comments

[battman]

Another great article. It appears that there are a few companies that are on the right track and appear much more concerned with running a good company than making splashy headlines with no substance (a la Zenn).

2009 Jan 18 10:11 AM

[TSVee]

Remarkable.

Admittedly this is only one type of test, but the lead carbon battery (In this case Ultrabattery) is showing just how radically different the performance is compared to the VRLA lead battery. Its not even the same creature. If this type of life cycle advantage stays true in some other test scenarios such as deep discharge, calendar life, etc, that will say lots about the future. Also, we need to examine real-world figure in terms of comparative energy density and power density.

This, however, seriously seems to be one piece of the puzzle less to query, and it connects your core assertions ... the the "costs less" piece and the "highly domestically manufacturable" piece and the "highly recyclable" piece and the "not subject to huge component price increases" piece.

A few more tests like that, and we have a an alpha-ish clarity. Must feel nice.

2009 Jan 18 11:41 AM

[joeboat]

How about the all important recharge rate? Energy storage is not very efficient if most must be spilled off during peak production due to a batteries inability to absorb.

2009 Jan 18 12:24 PM

[John Petersen]

Battman, thanks for the kind words. I work hard to stick to third-party sources, provide links to the data, and explain why I believe what I believe. I'm delighted to have drawn a really sharp reader base.

TSVee, until recently, Axion had some preliminary energy density and deep cycle life data on its website that provided a snapshot as of April 2007. At the time, they were over 1,450 cycles at 90% DOD, energy density was roughly equivalent to lead-acid in terms of Wh/Kg, but the volumetric number was a little low because of a 40% reduction in lead-content. There was no detailed specific power data, but the reported recharge speed was about 5x lead-acid. There has been a lot of development work over the last 2 years and while I don't know what the current numbers are, there are some really smart people working on getting to a manufactured electrode assembly that can be used in any existing LAB plant. When that happens, the speed of a nationwide rollout through partnering arrangements with existing manufacturers could be very fast. These are my old team-mates so I'm proud of them, but you might want to check out the Management and development team biographies starting on page 38 of this SEC filing:

www.sec.gov/Archives/e...

2009 Jan 18 12:40 PM

[John Petersen]

joeboat, the neat thing about adding supercap characteristics is that it boosts power while slashing recharge times. It's my understanding that the C rate actually measures both discharge and charge, but the engineers out there probably know better than me.

2009 Jan 18 12:43 PM

[TSVee]

The test showed recharge rates (and discharge rates), but under this test scenario, not all the one's we'd like to see.

Still, it is a major step forward in showing that lead-carbon is very very different from its predecessors. The combination of what appears to be electrostatic storage in the carbon with electrochemical storage in the lead is a tremendously different thing -- it is not just a matter of longer-lasting electrodes. These are hybrid battery-capacitors.

A 1C Rate is a rate which would fully charge the battery in one hour, as I understand it, and a 4C rate would recharge the entire battery in 15 minutes, in theory. That said, it is important to note that at (this test's) 50% state of average charge and with only +- 10% depth of charge / discharge, the C rates can be high in many technologies. (If one is levelling the output of a wind generator, one does need to move the juice in and out with high C rates, so if the battery could only handle say 0.4C, it would be a not very good.) But in this case, the 4C for both lithium Ion and lead-carbon is pretty darned nice.

Still, we can all see that there are half a dozen different linds of tests needed to characterize the Lead-Carbon concept better.

On Jan 18 12:24 PM joeboat wrote:

> How about the all important recharge rate? Energy storage is not
> very efficient if most must be spilled off during peak production
> due to a batteries inability to absorb.

2009 Jan 18 12:59 PM

[Renzo]

Thank you for another installment in a stellar series of articles. The way you logically categorize the technologies and their power/energy profiles makes the arcane understandable.

It seems that Axion and ZBB are both looking at a similar niche in the grid storage market with their Power Cube and ZESS modules. Are these products complementary or competetive? It seems that PbC provides better short term (frequency regulation) power, whereas Zn/Br is better for longer-term (peak shaving) power. Is this correct?

2009 Jan 18 01:01 PM

[tredleon]

Mr. Peterson - Your articles are very well researched and provide clear, convincing arguments on the prospects of lead-carbon batteries in the upcoming energy revolution. However, when you conclude that somehow a company like Axion is "undervalued" in relation to a company like ABAT, that is where your argument is flawed. The issue is not with ultimate value of the technology that Axion may possess, but whether the existing shareholders (or someone who may buy the stock tomorrow) will earn a better return with Axion or with ABAT. Axion's shortcoming as an investment has to do with it's lack of capital - with only $8M of cash on hand at the end of September '08 and an annual cash burn rate (i.e. operating losses and capital expenditures) in excess of $8M, unless Axion is sold at a premium, the current shareholders will have to go through a very dilutive capital raise to keep the company alive to reap the value of its technology. With the capital markets in disarray, equity offerings for micro-cap technology companies are very pricey - the biotech space is littered with companies that have had to dilute their shareholders 50%+ to raise the capital to get them to that next "milestone", where the promise of their technology will be proven. So, while Axion may have the intellectual property that will prove to be very valuable in the new energy economy, as an investment alternative today, Axion's shares present a very risky proposition. Perhaps after the cloud of potential dilution has cleared, it may make sense to invest in Axion. But unless you are hoping for a buyout, the risk of your current ownership stake in the company being cut substantially is too great.

PS Thanks for the great articles - very informative and well written.

2009 Jan 18 01:24 PM

[frflyer]

Any idea why Exide fell 20% friday? I don't see any news that would cause such a big drop on high volume.

At P/S 0.10, forward P/E 2.4, P/Book 0.79 it certainly looks cheap.

2009 Jan 18 01:37 PM

[TSVee]

Renzo:

On Jan 18 01:01 PM Renzo wrote:

> Thank you for another installment in a stellar series of articles.
> The way you logically categorize the technologies and their power/energy
> profiles makes the arcane understandable.
>
> It seems that Axion and ZBB are both looking at a similar niche in
> the grid storage market with their Power Cube and ZESS modules.
> Are these products complementary or competetive? It seems that PbC
> provides better short term (frequency regulation) power, whereas
> Zn/Br is better for longer-term (peak shaving) power. Is this correct?

I did not see a negative lead-carbon assessment for peak shaving in this study, I did see a positive assessment for short-cycle power leveling. zinc-bromide is much more developed than lead-carbon, so we'd all like to see a similar comparison in an arena like shaving. I think these things will be more common now, because we (as in the nation) need to place our bets soon.

Simply, there needs to be another test for the peak shaving application. And that test needs to compare batteries versus each other, but also in terms of other possibilities such as large scale hydro-lift and pneumatic storage. Its a separate issue, and one of several that need to be dissected with the same clarity as this study.

Tredleon:

Your comments seem reasonable, but if you take into account 50% dilution in pricing, you can make your decisions more peacefully. Yah pays to play, and the state of the finances always needs to be factored in.

The extension of your argument is that one should not touch anything that is not loaded with cash; a rather limiting prospect if one is trying to find the next disruptive thing. For me, test results are "everything", but the fact that this is a very different and potentially disruptive technology available from a very well-established domestic manufacturing base is the other "everything".

2009 Jan 18 01:45 PM

[John Petersen]

TSVee, I know there are a lot more tests that need to be performed and documented, but I suspect you have a far better idea of what they would be than I do. I have every reason to believe the research staff is doing everything to document the technology properly, but I've been out of the loop for about a year and don't have any kind of firm idea about what data will be released and what the timing will be. I'm very confident that all data will be thoroughly documented before it's released. The board wouldn't tolerate anything less.

Renzo, from what I know about ZBB, they're looking at multi-hour discharge profiles while Axion is focusing more on the 15 minute to one hour range. ZBB's prospects look pretty bright from where I'm sitting. In the final analysis, if this market grows from $25 billion to $100 billion like the experts predict, everybody will have more business than they can possibly say grace over.

Tredelon, When it comes to valuing companies, I look at the premium between market capitalization and stockholders equity. For ABAT the premium is $64 million; for ALTI the premium is $52 million; for HEV the premium is over $500 million and for Axion the premium is closer to $32 million. I like ABAT's plan to focus on things like the Veken scooter and electric bicycles. The places I see big trouble are companies that want to power EVs or the stabilize the grid with $1,300 per kWh batteries.

I wouldn't be so sure about Axion's need for a capital raise anytime soon. The board throws nickels around like manhole covers and the company has about $8 million of revenue backlogged. If development proceeds apace, Axion will have substantial recurring revenue before it needs more money, and financing roll-out of a commercial product is far different from financing R&D.

Frflyr, no idea why, just licking my wounds with everyone else.

2009 Jan 18 02:14 PM

[GloomBoom.com]

This is great technology and it is definitely a game changer. Great article!

2009 Jan 18 03:42 PM

[highplainsbubba]

Suggest you read this press release published back in Sept 2005 on Axions intentions to start a Carbon anode battery plant. At that time the plan was to have the plant up and producing batteries by 2006.

www.axionpower.com/pro...

Specifically :

Commenting on Dr. Buiel's appointment, Thomas Granville, Axion's chief executive officer said: "We are thrilled to have Dr. Buiel choose Axion as we begin the transition from processing kilograms of carbon to processing metric tons of carbon. Ed's first project will be to direct procurement and installation for our planned carbon electrode manufacturing facility. This new facility, which should be operational by the first quarter of 2006, will give us the in-house ability to manufacture carbon electrodes for our application prototypes while generating ancillary revenue from third-party sales. We believe that Dr. Buiel's experience in activated carbon manufacturing will accelerate the development and commercialization timeline for our planned HEV energy storage systems by a minimum of 6 to 9 months. In addition, his long-standing working relationships with thought leaders at the USCAR Consortium and Sandia National Laboratories should prove invaluable as we refine our e3 Supercell technology and introduce application prototypes for HEV and grid-connected applications."


Seems like there still is quite a bit of "all hat and no cattle".

2009 Jan 18 03:43 PM

[andrewjmcd]

Fireflyenergy is a battery company that split off from Caterpillar and has won DOD grants for developing their Microcell™ foam material. This carbon foam technology is suppose to dramatically increase the Wh/kg.

There claims are quite impressive.
Minutes to recharge and up to 50% weight reduction.
Deep discharge ability.
A 70% reduction of lead


Their OASIS battery is entering trials this month with some trucking companies, according to their website.

Unfortunately this is a private company.

2009 Jan 18 04:18 PM

[John Petersen]

Highplains, you're quoted press release spoke to Axion's beliefs when Dr. Buiel was hired away from MeadWestvaco. Within a couple months Dr. Buiel found an real factory that he could use as a development lab and he's spent the last three years working with an exceptional manufacturing crew developing a technology that can be easily moved into battery plants worldwide. Sometimes it's better to let the guys who know the technology and the details of quality manufacturing develop a plan and execute it. I would encourage you to read the management biographies that I referred to in my first response to TSVee. It all goes back to learning to crawl, learning to stand, learning to walk and then learning to run. The first three stages have already been completed. It will be fun watching the fourth from the sidelines.

2009 Jan 18 04:26 PM

[John Petersen]

andrewjmcd, Firefly is private, but they've entered into a manufacturing relationship with C&D Technologies (CHP) and were expecting to begin product shipments for large-scale demonstration to begin right about now. As near as I can tell, the Firefly / C&D product has some real benefits and I'm eager to learn more.

2009 Jan 18 04:29 PM

[John Lounsbury]

John Petersen - - -

I can only echo the praise of other commenters. You have so expanded my horizons in the energy storage business and in getting a much better understanding of the various technologies.

Thanks again.

2009 Jan 18 11:30 PM

[John Petersen]

John Lounsbury, you'll never know how delighted I was to find the Sandia graph because their is such a wide gulf between educated opinion and third-party test results. I've always read that it takes five years to bring a battery product from conception to reality and the toughest part is getting to a technology that works in a factory environment. Life is good.

2009 Jan 19 01:11 AM

[bartpr]

jp, you hae not mentioned johnson controls as a lead acid battery supplier.
they are one of the top three suppliers of batteries for the auto industry.
i dont see any mention of this tech in their literature.

i see tha xide offers pv storage batteries. do you know if there is any
work being done by them with pb/c?

2009 Jan 19 07:39 AM

[john s. gordon]

like wow.
> jack

2009 Jan 19 08:38 AM