Cleantech, Optimism Squared and the Battery Industry

Last November, Merrill Lynch released "The Sixth Revolution: The Coming of Cleantech," a thematic report from strategist Steven Milunovich that heralded cleantech as a new investment theme and forecast a coming age of plenty. A few days later venture capital icon Vinod Khosla warned a Palo Alto audience “500 million people on earth enjoy a lifestyle that 9 billion people will want in 2050.” The differences between these two informed viewpoints are more than a little stark, but they highlight a frightening truth about cleantech: for the first time in human history the fundamental drivers of a technological revolution are constraints rather than opportunities.

It is remarkably different this time!

Last weekend, I re-read the Milunovich report and spent several hours pondering the fundamental forces that drove the technological revolutions identified in the following table.

	Technological Revolution	Historical Era
FIRST	The "British Industrial Revolution"	From 1771
SECOND	The Age of Steam and Railways	From 1829
THIRD	The Age of Steel, Electricity and Heavy Engineering	From 1875
FOURTH	The Age of Oil, the Automobile and Mass Production	From 1908
FIFTH	The Age of Information and Telecommunications	From 1971
SIXTH	The Age of Cleantech and Biotech	From 2003

I'm not an avid historian, but I recall that the popular reactions to the first five technological revolutions ranged from violent resistance to innovations that threatened job security (e.g. Luddites in England and saboteurs in France) to polite disdain or outright derision of innovations that were not seen as threats (e.g. Fulton's Folly). I still cringe when I remember college boy conversations where I taunted classmates with questions like "You may be able to buy a home computer in ten years but why would anybody ever want one?" The point is we didn't understand how important the innovations were until we viewed them in 20/20 hindsight. This dynamic gave important technologies time to evolve naturally, establish their value and then change the world in ways we couldn't have imagined. The process invariably took decades.

Where the first five revolutions were driven by the individual desire to do something better, faster and cheaper, it seems that cleantech is driven by a different dynamic. We collectively know that water, food, energy and commodities are not resources we can waste with impunity. We collectively understand that 6.2 billion people know how the rest of us live and each of the have-nots wants a fair share of the dream. We collectively fear a tipping point where unrestrained consumption of fossil fuels will irreparably damage our planet.

We collectively worry that the world we pass to our children will face catastrophic conflict and horrific environmental consequences because of decisions that were made in a different era by our grandparents, our parents and us. So instead of viewing cleantech developments with a healthy dose of skepticism and requiring inventors to prove their worth, we collectively grasp at the latest research results and grossly overestimate their real value. A great example of this phenomenon are widely circulated stories about an MIT research project that would make it possible to recharge a GM Volt in less than five minutes by plugging it into the nearest available 125,000 watt power source.

Our problems are grave and almost everyone recognizes the desperate need for relevant scale solutions to persistent shortages of water, food, energy and commodities. But instead of acting like adults, accepting personal responsibility and doing the little things like home weatherization that could help alleviate the problems, we demand profound changes without considering whether the changes are enduring solutions or simple band-aids. We then compound the foolishness with the insane delusion that technological development is instantaneous and success is certain.

My favorite story of unbridled optimism is about a straight-laced father who thinks his son is overly optimistic and decides to teach the boy a lesson by telling him that a load of garden manure is his birthday gift. The manure is delivered and dumped in the driveway and the father puts a big red bow on top of the pile. When the son gets home from school, he promptly dives head-first into the manure pile and starts digging. When the surprised father asks what's going on, the boy replies, "There has to be a pony in here somewhere!"

It's a crazy world and an infantile time, but once the tantrum phase passes, we'll do what adults have always done. We'll get up in the morning, we'll go to work and we'll solve our problems. The first casualty will be unbridled optimism. The second will be waste in all its pernicious forms. Ultimately, rational cost-benefit analysis will prevail and we'll begin to find enduring solutions to critical problems.

Warren Buffett advocates investing in companies you understand, companies that that sell products and services you know, trust and use. Unfortunately, that methodology is almost impossible in cleantech because most of the players are new, few can point to a long and successful operating history and the principal disclosures investors rely on are forward-looking statements from people that are trying to promote an agenda or build a company; people who are by nature optimists. Any time you put an optimist's forward-looking perspective into the hands of an optimistic reader, the only possible result is optimism squared and that's a very dangerous equation for investors.

Unlike many financial bloggers, I know my opinions and outlook are far from mainstream. To compensate for that deficit, I've developed a simple technique I call the "family reunion test" to evaluate cleantech investments. It all boils down to a simple question: "How many of the people who attended our last family reunion are likely to buy this product or service at today's price?" If I conclude that most of my extended family members would be likely buyers, then it's probably a good investment. If I find myself all alone in the likely buyer class, then it's probably a good investment to avoid. Rigorously applied, the family reunion test is an amazingly accurate forecasting tool.

The battery industry is in a state of turmoil because none of the technologies we've relied on in the past are able to satisfy the extreme demands of a cleantech future. At $250 a kWh, lead-acid batteries are cheap and reliable, but they have weight, power and cycle life limitations that make them sub-optimal for plug-in vehicles. Li-ion batteries have exceptional weight, power and cycle life performance, but at $1,000 a kWh they're just too expensive for most cleantech applications. The net result is a race to the middle as lead-acid battery manufacturers work feverishly to improve performance while Li-ion battery developers work feverishly to reduce costs.

In the swamps of Degoba, Yoda told Luke Skywalker "Do or do not ... there is no try." The same wisdom holds in the battery industry. Don't talk about your plans ... talk about your accomplishments! In the meantime, investors would do well to remember that optimistic forecasts from interested parties are every bit as meaningful as the trash talk, hype and drama that precede every WWE championship.

Over the last several months I've delved into several arcane technical aspects of the battery industry. While the detail is useful for technophiles, it can be mind-numbing detail for the average reader. As penance for my past sins, I've prepared the following table that provides a simple summary overview of the differences between lead-acid battery manufacturers and Li-ion battery developers.

	Lead-acid batteries $250 per kWh of useful capacity	Li-ion batteries $1,000 per kWh of useful capacity
Manufacturing infrastructure	Efficient factories already exist and capacity can be rapidly and cheaply expanded.	Substantially all existing capacity is located in Asia and billions will need to be spent on new factories that will take years to build and equip.
Distribution infrastructure	Efficient sales, distribution and customer support networks already exist.	Billions will need to be spent on sales, distribution and customer support networks.
Recycling infrastructure	Nationwide recycling capacity already exists, over 98% of lead-acid batteries are currently recycled and the recovered materials can be used to make new batteries.	Recycling techniques are in the R&D stage, there are no large-scale recycling facilities and the recovered materials are not pure enough to use in new batteries.
Technological challenge	Improve energy density, power and cycle life; goals that appear reasonable in light of several recent advances I've discussed in prior articles.	Slash manufacturing costs by at least 50% in the short-term; a goal that is patently unreasonable for an industry that has historically achieved savings of less than 5% per year.
Raw material availability	All essential raw materials are available in adequate quantities from domestic sources.	Essential raw materials are imported and there are important unanswered questions about future availability and price.
Financial stability	The principal U.S. manufacturers are well financed and able to attract additional capital when necessary.	The principal U.S. developers are effectively bankrupt and cannot expand (survive?) without loans and grants from the government.
Market valuations	Experienced manufacturers are trading for a small fraction of per share sales.	Developers with limited manufacturing history are trading at several times forecasted sales.

We are in the early stages of a technological revolution that is unlike anything the mind of man remembers. Instead of being opportunity driven, cleantech will be constraint driven. Instead of giving important technologies adequate time to evolve naturally, establish their value and then change the world, we're trying to avoid technical Darwinism, pick a winner based on theory, conjecture and public relations, and then force decades of technical progress into a couple of years. Experience tells me that the most likely outcome is catastrophic failure.

Ultimately, it boils down to your personal goals. If you want a long-term investment that will grow over time and derive immense benefit from the coming cleantech revolution, then the low-profile lead-acid battery manufacturers including Exide (XIDE) Enersys (ENS) and C&D Technologies (CHP) are probably the best choices for your portfolio. If you want a low-cost speculation on an advanced lead-carbon technology in the final development stages, then Axion Power International (AXPW.OB) may be a good choice.

If you're more interested in fast paced trading in volatile markets then the high-profile Li-ion battery developers like Ener1 (HEV), Valence Technology (VLNC) and Altair Nanotechnologies (ALTI) may be best for you. In any event you should do your own research and understand what you're investing in before you place an order. My favorite place for reliable current information is the SEC's Edgar Website, which contains detailed disclosure from all of the companies I've mentioned.

I don't believe that Li-ion technology is doomed to fail. In fact I believe it has tremendous potential in a variety of markets where size and weight are mission critical constraints. However I can say without reservation that the challenges facing lead-acid manufacturers pale in comparison to the challenges facing Li-ion developers, even if they get all the government support they could possibly want. To paraphrase a December 2008 note in the Wall Street Journal, Li-ion developers may well secure a place in a new electric-car industry. But at current prices, investors are being asked not just to dream, but to take success for granted.

Disclosure: Author holds a large long position in Axion Power International (AXPW.OB) and small long positions in Active Power (ACPW), Exide (XIDE), Enersys (ENS) and ZBB Energy (ZBB).

Comments

[aquaculture:]

I still don't get your main point. Lead batteries start the car. But automotive looks very weak (GM bankrupt etc.)
Do you expect lead acid batteries to power roadvehicles in the future?
Or do you simply expect growth in the industrial sector, in which these companies, the stocks you mention, do sales.

In cleantech, Blackrock (BLK), (13 trln $ in assets) invests in Riverbank, aquabattery. 15 GW of electric power storage in 15 strategic locations throughout the U.S. Making further rapid growth of windpower possible.
see: cleanbreak.ca/2009/03/...

KLM-Air France is investing in 3rd gen biofuels, testing engines.
For airport passenger transportation at Schiphol and Ch. de G Paris, they looked at many technologies, Li-ion, leadbattery electric powered vehicles, but decided on compressed air storage on cost benefits.
They are now testing little 'airpods' and other at the airport. Kind of neat. They can carry 4 people 135 miles, cruising at about 40 miles/hour. It uses a carbon fibre hightech air storage tank build by EADS. They can also add more tanks if more range is needed. 2 tanks=265 miles, 3 tanks=520 miles. Refilled in minutes
But the great thing is the cost.
A 100 mile trip only costs 60 $cents! (50 eurocents/100km)
Not like people cannot afford.
Refilled in minutes. There is a lot of windmills here, and the juice can be stored in the tank. by electr. compression.
mdi.lu/english

I don't think technology is the problem.
People in power are.
They don't make refilling stations.....they make war.

Apr 01 07:30 AM

[aquaculture:]

Anyhow had some spare time before U.S market opens.

Apr 01 07:31 AM

[aquaculture:]

BTW these are not 'concept cars'
Tested extensively over 15 years.
They are ready for market.
They'll go on sale this year in New zealand.
Lets all move there...

Apr 01 08:12 AM

[aquaculture:]

Problem Big Government has with it is: you could fill these at home if you have an air compressor and say a wind mill/solar power on your property. AND HOW ARE THEY GOING TO TAX THAT?????
(You can see m thinking: Hmm how can we tax air, airtax, air air mmmm.)

So no major progress here..............just nice affordable tech that works fine but does'nt fit the larger picture at this time.
Untill there is,
a) a complete overhaul of tax code
b) revolution

Apr 01 09:05 AM

[DiggerUK:]

Hi John,
We didn't get to the moon because it was easy, as I check my watch I am reminded that it wasn't done without it's dangers.

You often refer to the 6 revolutions in technology and the possibilities that could open up in the 6th. Don't forget to factor in the developments of "unintended consequences".
One example is from the Victorian engineer Joseph Bazalgette who was chief engineer on the construction of London's' sewage system.He was from the school that said that diseases such as cholera, were spread by "miasmas" (bad air) not bacteria.
(The whole world scientific community was united on that one as well ! )
This was the whole reasoning behind an airtight system. Many metal access covers still have "airtight" cast into them. To his credit he did accept the bacteria evidence by the time he'd finished. And the sewers are still working.

Did Johannes Gutenberg imagine that the printed word could cause revolutions over such silly things as liberty, equality and freedom ? Movable type is my #1 invention ever.

In your last para you mention were "mission critical constraints" could open up opportunities for li-on, good observation, remember nobody knew what to do with Teflon or electicity when they first found them.

Apr 01 09:05 AM

[John Petersen:]

aquaculture, I keep posting links like the following that talk about lead-carbon doing the same job in an HEV for about $2,000 less

www.autobloggreen.com/.../

So yes I think there is a lot of potential for advanced lead in transportation. It probably won't work well in a car with a plug, but then again neither will anything else.

Everything else you mentioned is potentially important and should be thoroughly evaluated before we pick a presumptive winner and invest fortunes to create another unsustainable industry.

billp37, I tried to follow your link and had no luck. But if you're suggesting that we should look before we leap, I'm with you 100%

Digger, the real point is that we went to the moon because we wanted to. We are doing cleantech things because we believe we have to and many believe life as we know it will end if we don't.

There is an immense difference in psychology between "accept the challenge" and "do it or die." I don't know that anybody has thought this through to the point where they openly acknowledge a do or die mentality even though that's precisely what's driving decisions.

Apr 01 09:36 AM

[aquaculture:]

Bad air.

Apr 01 09:38 AM

[William Taylor:]

Excellent article. I am still hopeful that some sort of accidental results will come from EESTOR or, perhaps, a more viable entity like an MIT lab.

Apr 01 10:01 AM

[Hazel Hende...:]

Good stuff, John! My The Politics of the Solar Age tracks these same evolutions of industrialism , but cam out in 1981....20 years too soon! We are now seeing this politics of transitionto the Solar Age. Disclosure : long ZBB

Apr 01 10:09 AM

[aquaculture:]

-Eestor is a scam (according to Cambridge University, electr. engineers etc.) Patent is flawed. They used a wrong formula. No prottoype. Mom and Pop operation in a shopping mall in Texas-

But John, the link you provided is RESEARCH. I dont see:
-price/mile.
-Range.
-Would I have to wait 8 hours at a charging station? (girlfriend wouldnt like)
-how would Big Government tax the juice in yur scenario?

Futher Blackrock, (BLK) evaluated. Contacted them. No dummies there.
Air France/KLM. No dummies there either.

Apr 01 10:24 AM

[aquaculture:]

Please dont get me wrong, John.
I like your articles. But I am capitalist. I want to make money.
Show me how.

Apr 01 10:28 AM

[John Petersen:]

Aquaculture, the only sustainable business models that I've seen are in the core lead-acid companies that currently sell billions of dollars worth of products on an annual basis, earn a reasonable profit on those sales and are trading at 0.1 to 0.3 times sales. When it finishes the development work, I think Axion will give everybody a run for the money, but it's far more speculative and a lot of my confidence comes from years of association with the people.

Ethanol is a wonderful example of a product that promised massive cost reductions "any day now" for decades and has largely collapsed in value. I've been down the trail of broken promises before and don't want to go there again. I'm personally invested in companies that I think will be in a position to make a difference under today's conditions, not next year's anticipated conditions.

Apr 01 10:46 AM

[creativforce:]

Here's a scenario that keeps running through my mind. Imagine the great Northeast Blackout of 2003 happening in January when the temperature is hovering below zero. Imagine it lasts two days instead of one. How many of the 55 million people affected have back up generators or adequate fireplaces? How much violence would result in major cities as back up generators "change hands"? What would the cost be for frozen plumbing? How many accidental fires would start as people try to stay warm? What about the riots as refugees overwhelm warm-up centers? How many people would die of carbon monoxide poisoning? How many people would freeze to death?

It's a pretty easy scenario to imagine, since a catastrophic blackout has already happened in the summer. Our antiquated, inefficient power grid is run by local monopolies who have absolutely no financial incentive to change. Smart grid initiatives are a joke when our tax dollars are going to dumb monopolies.

The solution to this danger is simple and it solves a lot of problems at once--reduces dependence on foreign oil, reduces green house gas emissions, reduces air pollution, reduces overall energy consumption by 30 to 40 percent, creates a dynamic new green business.

Home fuel cells running on natural gas with battery back up systems.

Deregulate the monopolies. Use incentives to create a consumer market for power generation. In a consumer market, gas powered fuel cells that provide heat and electricity would be no more expensive than a furnace and water heater is today. Over a 20 year period most homes need to replace these appliances anyway. Fuel cells like to run at a constant speed, so battery systems would handle peak loads, excess could be sold back to a nationalized grid. Home energy production is 30 to 40 percent more efficient than our current system so even though it would run on NG the CO2 would be greatly diminished. A battery system with enough capacity to handle summer air conditioning, would get a home through 2 or 3 days if the NG pipeline is disrupted. Cheap back up tanks of LP could substitute.

The technology is here now. These systems are already on the market in Japan. It won't happen unless we can develop the political willpower to reorganize the local power companies. With deregulation there would be a free for all of capitalism developing lots of better ideas.

We would all be richer, safer, and healthier for it.

Apr 01 10:52 AM

[John Petersen:]

creativforce, the scenario you raise is terrifying but far more likely than many realize. A recent article in Wired magazine suggests a slightly less aggressive approach, but it's well worth reading.

www.wired.com/science/...

Apr 01 11:14 AM

[DiggerUK:]

We didn't get to the moon just because it was aspirational, it fitted in with the tactics employed in the cold war. If the programme had not had any military spin-off, there would have been no famous speech off JFK.

I don't draw swords with battery development. I just don't subscribe to the goofy "War Against Global CO2" which is today's miasma in my opinion.

There is every chance of beneficial spin-offs from the research being done though. Progress must always be welcomed.

Apr 01 11:52 AM

[John Petersen:]

still looking for that pony eh?

Apr 01 12:02 PM

[DiggerUK:]

What you saying John, there wasn't a pony ?
What day is it mmmm....

Apr 01 12:11 PM

[John Petersen:]

Digger, the pony question was not directed at you and I didn't see your earlier note till just a minute ago. What I'm thinking about right now are the differences between prior revolutions where the goal was generally aspirational (even if it fit with military and political goals) and the current one where the prevailing mentality seems to be "we have no choice" and "we're doomed if we don't do this." I think it sets up an entirely different psychological and investment dynamic; and I'm not entirely comfortable with the idea that it's a healthy dynamic.

The best historical comparison may well be the way America geared up for the war effort in WW-II, a time of great sacrifice and incredible achievement. I have every expectation that wonderful things will come from this revolution, but will hold to the premise that a business model that is not sustainable without government support does not deserve government support.

Today's article took me days to put together as I worked through the differences between cleantech and everything we've seen in the past. I think this is just a start of a new series that will focus primarily on market dynamics. I'll probably revisit storage on a regular basis, but this particular theme has gotten under my skin and won't let go.

Apr 01 12:22 PM

[Douglas Hvi...:]

In the long run, near isothermal super-compressed air is likely to pay off. However this is not for anyone who wants quick results - it is as speculative as Axion. Glad to hear that some deployment is going on now. However, while in the long run we will have a wining technology, short term is going to be a multitude of technologies!

Apr 01 12:25 PM

[windswept:]

I have my pony. Just happy that I am not chasing a donkey..... BTW nice earnings release today from Axiom. LOL.


On Apr 01 12:02 PM John Petersen wrote:

> still looking for that pony eh?

Apr 01 12:26 PM

[DiggerUK:]

I realised it wasn't, I hope the recipient realised that too.

Apr 01 12:32 PM

[John Petersen:]

Douglas, I don't believe for a minute that we'll have a single "winning technology." I'm convinced we need them all, together with a lot of things that have not been invented yet. The nation's energy storage needs are so great and so diverse that every manufacturer that stays reasonable in its aspirations and focuses on what it's technology can do well in a dollars and cents world will thrive. As an investor who wants to make money, I think my chances are better if I buy Exide's sales at $.06 on the dollar instead of buying Valence's sales at $9 on the dollar.

Windswept, I agree the earnings release was impressive. But you might want to check your spelling because its Axion with an N not Axiom with an M. Time will tell which of us has the more sensible approach, but I can assure you that if I ever have to eat crow, I will not nibble.

Apr 01 12:45 PM

[battman:]

Windswept, I'm glad to see you're an Axion supporter. I see that you signed off with the secret Axion sign off.

LOL (Long on Lead)


On Apr 01 12:26 PM windswept wrote:

> I have my pony. Just happy that I am not chasing a donkey..... BTW
> nice earnings release today from Axiom. LOL.

Apr 01 01:00 PM

[aquaculture:]

lol

Apr 01 01:23 PM

[Dave K.:]

John,
Good article but I wish to add to it from a company’s perspective, the criteria that were used in developing our competing product, yet to go into production. The list was used to determine the long term winning storage technology to become involved with
1. Lowest cost per kilo-watt-hour or competitive price target $150/kilo-watt-hour
2. Self-healing i.e. no thermal events possible (fire)
3. Long life >1000 charge/discharge cycles
4. Does no contain toxic chemicals (no toxic spill to clean up after a car accident)
5. Fast recharge <5 minutes
6. Able to tolerate wide temperatures and mechanical shock.
7. High specific power

Lead Acid battery technology or Nickel Metal Hydride were the technologies that we targeted as the ones to beat. The reasons were as follows, electric vehicles use regenerative braking (recover energy) so 200 or 500 lbs of extra battery weight doesn’t make the vehicle less efficient in stop and go traffic but it improves the ride. The cost savings of less expensive batteries more than compensate for the $500 to $ 700 it would cost to design the car to carry the extra weight. Electric cars with a range of 100 miles and speed of 90 to 100 mph would meet the main market requirements. Fast recharge batteries could be made in any chemistry, including lead acid, though with additional cost.
Most homes have more than one car so a market would exist for electric cars with added motor for extended range operation such as BD Auto or alternately these cars would use a fast recharge battery technology. It is confusing to me why Lithium-ion is even being considered for use in electric cars, especially because of its cost. For a sports car it is understandable to want low weight but for the main market it is more utility and cost of production. The Car companies got lost in bigger and more power is better, practical low cost commuting cars are still forgotten. The consumer won’t care about what type of batteries they have in their car, but they do consider the cost when they purchase.
I would be cautious about investing too heavily for long term in a car company making electric cars with Lithium-ion, unless they are sports cars or high end or investing long term in Lithium-ion battery companies. Short term with the attitude they are speculative investments not long-term keepers. Their price is being driven by industry hype rather than core fundamental or market economics. There is a number (> 4) game changing technologies any of which could materialize and obsolete batteries in the next 3 years.
Of course John you already know the company I work for could be one, if we make it into production, though ours is an ultra-capacitor technology. There was a comment about small mom and pup companies not having great technologies. The following companies were mom and pup at their start up stage, Microsoft, Apple, Google, Goodyear and Polaroid etc. Technology you can do in the kitchen is more likely to work and get acceptance. Startups that are overly secret or generate a lot of hype and miss production milestones by years well of course just pump and dump opportunities. Dave Kelly CTO of 1st Lighten The Load Inc. 1-LTL.com

Apr 01 02:22 PM

[aquaculture:]

Oh no, here is an another one of those BaTio3 capacitor nuts.
Done any permittivity testing yet? I looked into patent. Fused but same problem as EEstor: high voltage, low energy density. Very low....

Apr 01 02:36 PM

[aquaculture:]

Welcome to the SA alt energy section.
Where we can open a box with 4000 years of math history and hundreds of years of physics to prove you wrong.

Apr 01 02:39 PM

[Dave K.:]

Sorry we don't use BaTiO3. Yes a unique ultra-capacitor technology. We have provided samples to a major German company. Not vapor ware either and our technology is not the same as EESTOR, though we know why theirs won't work. Maybe better to check the website before commenting as we are not in hiding.

On Apr 01 02:36 PM aquaculture wrote:

> Oh no, here is an another one of those BaTio3 capacitor nuts. <br/>Done
> any permittivity testing yet? I looked into patent. Fused but same
> problem as EEstor: high voltage, low energy density. Very low....

Apr 01 03:11 PM

[creativforce:]

Thanks for the tip John: wired.com/science/... Everyone should read this article! It sounds like the biggest utilities, Duke, Xcel and the rest see the smart grid as a way to consolidate power. That scares me even more than the miserable place we're in now. Imagine how badly the Internet would suck if it were owned by Microsoft and everyone had to pay to use it. That's where we are headed if the Feds don't mandate a public grid with open standards.

Apr 01 04:17 PM

[aquaculture:]

Ok Dave fair enough. I read you're aware of dielectric saturation in the case of Eestor.
I just wasted some 10 minutes looking at your renewed site.
To me meaningfull scientific statements -claims that you make- are a method of verification. Since no such method is in the air, your entire content (the rest) is meaningless to me.

That said, you claim 300J/cc. with ceramic/polymer material, about 10 x better than commercial and cheap ultra-cap in marketplace today.
This high energy density is possible -only in theory!- capped at about 400 J/cc as upper limit, in three phase composite with some nano scale fraction packed.
But achieving high breakdown strength is extremely difficult. For this you have to create a packing at nanoscale without defects, with some high order-a very difficult problem on which many labs are working today. And fusing doesnt help. In fact of the billion you manufacture one might come out right.
But if you have solved one of the toughest problems in nano kudos to you...

Good luck.
aqua

Apr 01 06:18 PM

[Dirk McCoy:]

John,

I enjoyed your article. As I type this comment on my laptop, I'm glad the government let the computer manufacturers figure out how to go with computing and networking. I hope they let the transportation companies do the same with energy.

Meanwhile, google still hasn't taken my suggestion from a couple years ago to create a rideshare application that combines googlemaps and ebay technologies to let us cut down our commute expenses, nor the job swap that would allow people to trade jobs to eliminate their hour long commutes...

Apr 02 12:50 AM

[aquaculture:]

Premarket rumor.......Solarworld to bid for General Motors!!!!!!
youtube.com/watch?v=uR...

Apr 02 07:22 AM

[John Petersen:]

aquaculture, if their price estimates are anywhere close to the mark, an air car could sell for less than the battery pack for an EV. I like those kinds of numbers.

Apr 02 09:42 AM

[John Petersen:]

CNET is reporting that Google has integrated a 12-Volt backup battery into each and every one of its servers. It's hard to be certain from the photo in the CNET story, but the battery sure looks like a small format valve regulated lead acid battery to me.

news.cnet.com/greentec...;snav

One thing is certain, if the batteries were Li-ion from one of the starlets, we would have heard about it ages ago.

Apr 02 10:24 AM

[marketquant:]

creativforce,

Smart grid, and the whole grid, will likely continue to employ open standards -- e.g. see proposed modifications to IEEE 1547 regarding distributed resources. I don't think *any* utility would benefit from being proprietary because it would just drive up costs.

Where smart grid could cause unintended consequences is if

1: Lots of energy storage is installed as a prerequisite for integrating renewables -- which is being pushed at all levels: FERC, NERC, ISOs, EPRI, state energy commissions.

2: Storage is placed in locations which perform energy arbitrage while simultaneously deferring transmission upgrades and perhaps deferring generation capacity investments as well. [John: this gets around the 'single benefit' cost comparison in the Sandia chart that you included a while back. Ali Nourai of AEP backed this idea during the recent MIT energy conference.]

3: Once the storage is in place we find that it has increased the efficiency of the existing generation assets and accentuated the high cost of the solar and wind -- such that renewables become more expensive relatively.

I'm not sure how likely this scenario is, but the competitive ISOs have weirdly designed tariffs and market structures -- which are currently being revised for all this smart grid stuff. I'm optimistic that the regulators see that the public will benefit.

FWIW, I continually hear and read references to advanced Li-ion by all those groups listed above, and rarely is lead-acid mentioned.

Apr 02 10:27 AM

[John Petersen:]

Most of the articles I've seen on the subject mention NaS, which is the most common battery system in the grid today. What it will be tomorrow is all a matter of costs and benefits. Mercifully, those decisions will be made by engineers and accountants rather than bloggers.

Apr 02 11:34 AM

[marketquant:]

Ali Nourai said that their 'community energy storage' systems would use the *same* battery technology as EV/PHEV in order to benefit from mass production price competition -- NaS isn't going to be used on vehicles due to safety issues. He described the distributed storage as small boxes the same size as typical green-box transformers.

And while we're on this, Gellings, VP of technology of EPRI, said "Scarcity of suitable surface topology in the U.S. is likely to inhibit further significant development of electric utility pumped-hydro storage plants – at any price." to FERC in March. He also laid out how compressed air remains an unproven longer term solution.

The DOE grants that are coming will likely fund a bunch of things and muddy the water for a while as to what is actually viable.

On another subject, Toyota researchers and Univ de Montreal have filed for a patent for a polymeric electrolyte for a lithium battery which uses Altair's anode technology -- US 2008/0020284. Perhaps the battery chemist blogging in here could shed some light on the details. Long term cycling stability and improved power capability are mentioned several times. I am long Altair.

Apr 02 12:05 PM

[Dave K.:]

Hi aqua
Actually you have failed to understand the self-healing process that is used by the energy storage technology. The self-healing electrode structure is not an external fuse but internal, where a defect or weak spot is disconnected from the remaining bulk of the part. The following link, plasma.ece.utk.edu/pub... is from an independent research group and provides some details about how the process takes place. The exact method and construction of the self-healing structure is dependent on the materials used in the capacitor’s construction and end application. The capacitors they are testing are designed specifically for energy storage.
The difference between the 1-LTL (1st Lighten The Load Inc.) capacitor structure and those in the article is in their construction. The dielectric constant (the part where the energy is stored) of the capacitor in the article is 4 to 8 depending on the plastic film that is used with break down voltage of 350 V/micron, about 9,000 Volt per thousands of an inch. The 1-LTL ultra-capacitor construction is different in that the dielectric layer has been replaced with a material having dielectric constant about 6,000 but with a much lower breakdown voltage, about 100V/micron. This gives an energy density about 100 times that of a commercial metalized film capacitor. Our technology at 300J/cc is only 3 times the energy density of a soon to be commercial double layer-ultra-capacitor which are about 30 w-hr/kg while 1-LTL’s claim is 100 w-hr/kg. The press release for the double-layer capacitor is www.jeol.com/NEWSEVENT...
The advantage of our technology over double layer ultra capacitors is in working voltage and in single unit size and cost of manufacture. Double layer capacitors are from 1.5 to 3.5 volts while the 1-LTL’s ultra-capacitors have single unit voltages from 10 through 100,000’s of volts. This makes them easier to use in almost all energy storage applications from automotive through electric grid storage. The question isn’t if batteries will be replaced by ultra-capacitors but it is when and who will have the lowest cost to fabricate technology. In the end it will be cost of manufacture and the operating cost of the storage technology that will win. Whether it is made using green apples or oranges really doesn’t matter to the consumer so long as it is inexpensive, recyclable and can be called a green environmental friendly technology.
I hope this has answered your criticism and you now accept that the 1-LTL technologies as credible.

On Apr 01 06:18 PM aquaculture wrote:

> Ok Dave fair enough. I read you're aware of dielectric saturation
> in the case of Eestor.
> I just wasted some 10 minutes looking at your renewed site.
> To me meaningfull scientific statements -claims that you make- are
> a method of verification. Since no such method is in the air, your
> entire content (the rest) is meaningless to me.
>
> That said, you claim 300J/cc. with ceramic/polymer material, about
> 10 x better than commercial and cheap ultra-cap in marketplace today.
>
> This high energy density is possible -only in theory!- capped at
> about 400 J/cc as upper limit, in three phase composite with some
> nano scale fraction packed.
> But achieving high breakdown strength is extremely difficult. For
> this you have to create a packing at nanoscale without defects, with
> some high order-a very difficult problem on which many labs are working
> today. And fusing doesnt help. In fact of the billion you manufacture
> one might come out right.
> But if you have solved one of the toughest problems in nano kudos
> to you...
>
> Good luck.
> aqua

Apr 02 02:44 PM

[John Petersen:]

marketquant, expectations that the same technology may be used for both applications are interesting, but they are not purchase orders. Like I said, the engineers and accountants will make those decisions based on factual analysis rather than PR. Time will tell.

Like most companies, Toyota is filing patent applications whenever possible. In mid-March, their executive VP made it perfectly clear that Toyota plans to use Li-cobalt when it moves over to Li-ion because "Battery reliability comes not only from the battery materials, but also from production know-how. So far, that chemistry gives us the highest total reliability."

www.technologyreview.c.../

When dollars and cents decisions are made by informed decision makers, the Toyota position says a lot about how decisions will be made.

Apr 02 03:56 PM

[marketquant:]

> engineers and accountants will make those decisions

Ali Nourai will make the decision based on what the engineers and accountants tell him. He's in charge of it. He said it will happen by the end of the year. An energy exec told me that 'utility grade' specs require operating in the environment up to 65C (150F), surviving up to 85C (185F), so the particular battery chosen will be interesting.

> Li-cobalt

That Toyota patent specifies a Li-cobalt cathode.

Apr 02 04:43 PM

[aquaculture:]

Dave K.

No you have not answered any criticism regards 1-ltl.
No I do not accept that your tech is credible.
The opposite!! (now that its clear youre not following the route I outlined above)

Its not a matter of me not understanding self-healing. The problem is you not understanding dielectric saturation (strong electron-ion correlation as field stengthens, leading to cancellation between ionic- and electronic polarization in ceramic dielectric!)
K varies as ~1/E over much of voltage range resulting in approx. LINEAR increase in energy density with field.
You believe (common mistake!!!!!) using a 6000 K material will give you 100 x energy density.
You calculate total energy stored as 1/2 CV^2 without reporting any breakthrough on saturation issue. This invalid calculation 1/2 KE^2 then gives (.5)(8.85x10^-12 F/m)(6000)(10.6^8 V/m)= ~3x10^8 J/m3 = ~300 J/cc.
That's optimism squared!
In reality you're lucky to get 2J/cc with the link you gave...

Your website has been in the air a long time, yet:

-no patent (even though there are hundreds of US patents which make the same mistake out there -sometimes I wish the Swiss would examine all patents!)
-no energy storage measurements
-no permittivity versus field data

If you want to be succesfull in this field, the order to do things would be:
-to get a lot of Schaum's outlines, practice solving millions of problems incuding calculus.
-get mr Feynmans trilogy and complete at least part 1 and 2, be able to validate everything he says.
-then IF you get a good idea in the kitchen:
1.make it,
2. test it,
3. go to mr Peterson and get a patent,
4 get 3rd party verification of your measurements,
5 and THEN you can launch a website promising all the goodies to mankind.
And not the other way round...

Apr 03 07:59 AM

[Michael Fit...:]

i always enjoy your articles john. i couldn't help noticing how your "family reunion test" resembles my "can i fly-fish in colorado the rest of my life test". so here's the question: if natural gas vehicles were widely available at dealers, and if CNG refueling stations were abundant, would your family drive to your reunion in an NGV and would i go to the mountains of colorado in an NGV? i can answer affirmative to the later. so, it's not difficult to find a warren buffet type "known" technology...it is staring us right in the eyes and has been around for decades. unfortunately, honda appears to be the only company engaged. considering our abundant natural gas resources in this country, that is a sad commentary on america. regardless, your article was well written and made me think. good action.

Apr 03 04:08 PM

[John Petersen:]

Fitz, I've always liked CNG and think it comes far closer to meeting the family reunion test than the cars with plugs proposals. I really would encourage you to think a bit on this constraint-opportunity dichotomy because the more I consider it, the deeper the implications run.

Apr 03 04:54 PM

[Dave K.:]

Hi Aquaculture,

Excuse me but what part didn’t you get? Why would I wish to follow your flawed and incorrect comparison of apples to oranges? 1-LTL doesn’t use a ceramic-based capacitor dielectric, except for very low energy density, high frequency capacitor applications, but not for energy storage. Secondarily, our ceramic polymer dielectrics, for high frequency applications have dielectric constants that actually increase with increasing applied voltage and only show signs of saturation as they approach break down or their intended working voltage. Yes ceramic capacitors have a dielectric saturation problem, for some but not all formulations, a going up in smoke problem, because they lack self-healing and well ceramic is just brittle and breaks real easy, THAT IS WHY WE DON’T USE THE TECHNOLOGY. So please read this carefully THE 1-LTL ULTRA-CAPACITOR DOES NOT USE A CERAMIC BASED DIELECTRIC as the primary energy storage component in our ultra-capacitor technology.

You are applying apples to oranges and wrong because;

1. A Polymer based capacitor’s dielectric energy density is limited by the initial dielectric constant in combination with their break down voltage and does not have a dielectric saturation problem.

2. Double layer ultra-capacitor energy density is limited by the electrode surface area and electrolyte properties. Sorry no dielectric saturation problem here either. Their apparent dielectric value increases with increasing voltage but such effects are attributed to pseudocapacitance effects. Here is a link go read, bucky-central.me.utexa... Oops sorry you are wrong once again no dielectric saturation. Let me see 150 to 175 Farad per gram at up to 2.7 Volts. Energy 1/2CV squared => ½*125*2.75 *2.75 = 456 J/gram or by multiplying by 1000 and then dividing by 3600 gives 126 w-hr/kg. Oh yes you can argue the number should be 50 or 150 or 75 but the article proves the point I had to make. The capacitance versus voltage curves doesn’t show a dielectric saturation problem. Guess you have just been caught being wrong once again. Oops ultra-capacitor @ 125 w-hr/kg, will it be practical, will it emerge from the lab, look out batteries. There are many other published research articles with similar claims.

Neither of the above 2 capacitor technologies have a dielectric polarization problem. 1-LTL’s is polymer based and does not have a dielectric saturation problem either. So how wrong do you have to be before you quite talking about something you clearly don’t have a clue about?

So much for your pseudoscience and you have been caught red handed as a rude nasty little FAKE! So ignore the facts if you wish but please go elsewhere if you wish to make a fool of yourself.

I support my claims, whenever possible using technical sources, which are at, arms length to 1-LTL. If you are going to comment back I expect the same from you. In the future you should at least put in a few words such as “I am most likely wrong but feel” or try “I know nothing about the technology but I think that” or even better “ I am making the following up”.

As far as you having any expertise in patent applications, don’t even open that door.

Thank you for your big fat juicy mistakes, as you have been very entertaining for me.

Dave



On Apr 03 07:59 AM aquaculture wrote:

> Dave K.
>
> No you have not answered any criticism regards 1-ltl.
> No I do not accept that your tech is credible.
> The opposite!! (now that its clear youre not following the route
> I outlined above)
>
> Its not a matter of me not understanding self-healing. The problem
> is you not understanding dielectric saturation (strong electron-ion
> correlation as field stengthens, leading to cancellation between
> ionic- and electronic polarization in ceramic dielectric!)
> K varies as ~1/E over much of voltage range resulting in approx.
> LINEAR increase in energy density with field.
> You believe (common mistake!!!!!) using a 6000 K material will give
> you 100 x energy density.
> You calculate total energy stored as 1/2 CV^2 without reporting any
> breakthrough on saturation issue. This invalid calculation 1/2 KE^2
> then gives (.5)(8.85x10^-12 F/m)(6000)(10.6^8 V/m)= ~3x10^8 J/m3
> = ~300 J/cc.
> That's optimism squared!
> In reality you're lucky to get 2J/cc with the link you gave...<br/>
>
> Your website has been in the air a long time, yet:
>
> -no patent (even though there are hundreds of US patents which make
> the same mistake out there -sometimes I wish the Swiss would examine
> all patents!)
> -no energy storage measurements
> -no permittivity versus field data
>
> If you want to be succesfull in this field, the order to do things
> would be:
> -to get a lot of Schaum's outlines, practice solving millions of
> problems incuding calculus.
> -get mr Feynmans trilogy and complete at least part 1 and 2, be able
> to validate everything he says.
> -then IF you get a good idea in the kitchen:
> 1.make it,
> 2. test it,
> 3. go to mr Peterson and get a patent,
> 4 get 3rd party verification of your measurements,
> 5 and THEN you can launch a website promising all the goodies to
> mankind.
> And not the other way round...

Apr 03 05:15 PM

[Dave K.:]

John,
I wish to apologize having to reply to Aquaculture's criticisms, but I was left no choice. It is not my intention to get into side arguments that are off topic. It is unfortunate he didn't bother to e-mail me first and get his assumptions checked out. However, the readers did get a couple more links of ultra-capacitor electrical storage technology to watch out for.
Dave K.

Apr 03 05:22 PM

[renim:]

So roughly on the Li scene

BYD, Chery - (FePO4) based cathode)
Kia/Hyundai/GM - Li Polymer (Manganese based cathode)
Toyota - Cobalt based cathode (predicted)

So in summary
Chinese are going with FePO4 derived chemistries
Koreans are going with Manganese derived chemistries
Toyota is yet to show its hand
GM is going with Korean batteries
Chinese FePO4 chemistries appear similar to American 'cool' LiFePO4 startups (but without the royalties)

Mn, Fe, P and O are common elements.
So in short, amongst the Li chemistries, we won't know if there will be a dominant chemistry or not, so its hard to 'pick' a winner. Although if Project Better Place builds a battery factory in China, its likely to be LiFePO4 as the chinese are good at that, and BP's backers are Phosphate producers.

and Pb batteries are about to radically improve most properties except energy density, to such an extent that NiMH will no longer be used in Bipolar batteries. (ie suitable for vehicles)

Apr 04 08:13 AM

[aquaculture:]

Dave k

Above you gave link and said: (quote) "replaced with a material having dielectric constant about 6000"
Highest known polymer dielectric is a little over 50.
No 100 x energy density in that either...

Apr 04 02:00 PM

[Dave K.:]

Actually,
The highest polymer dielectric constant is 100,000, that I have found published and Research continues as to whether to what extent it will be useable. Not the one 1-LTL is working on/using and you won’t be able to find out, a few have already tried. For the record single crystal BT is about 100,000, (Japanese Research) but then growing single crystals and making capacitors economically is the problem. It hasn’t stopped pending and issued patents for single crystal capacitors rather than ceramic capacitors which are in actuality a fused poly-crystal structure.
Our conversation is way off topic as it is suppose to be about the battery industry and it is best to drop it at this point.

On Apr 04 02:00 PM aquaculture wrote:

> Dave k
>
> Above you gave link and said: (quote) "replaced with a material having
> dielectric constant about 6000"
> Highest known polymer dielectric is a little over 50.
> No 100 x energy density in that either...
>

Apr 04 04:42 PM

[aquaculture:]

Sorry, wrong. Can be found in the white papers here:
strategicpolymers.com

And BT is not a polymer.

And no not off-topic. Cleantech, batteries and (Optimism)^........

Apr 04 06:00 PM

[aquaculture:]

Also, but that is just my opinion, one has to realise that investors (here and elsewhere) have poured many millions of dollars in cleantech, batteries etc., so we -investment community- kind of like to keep track of current technology and its limits, if you know what i mean.

Apr 04 06:23 PM

[mycin17:]

Ok guy's this is all great science but will someone point out the heater and air conditioning switches to me. I don't live on the equator

And BTW if Li Ion batteries are beyond our marketing capabilities, I guess these guy's are wasting their time:
www.hybridtechnologies.../

Apr 04 10:12 PM

[NorthernPiker:]

John, not many of the seven categories in your summary table are issues for BYD. In fact, only distribution and recycling infrastructures will be issues and recycling infrastructure only becomes an issue when BVD expands beyond Asia, particularly into Europe, although there should be an existing recycle infrastructure for e-bikes.

China manufactured about 20 million e-bikes last year, with an aggregate of 8,000,000 kWh of batteries – 0.4 kWh of batteries per bike, 85% lead-acid and 15% NiMH or Li-ion, with these latter two types primarily for export. (Note: 8,000,000 kWh is the aggregate battery capacity of 500,000 Volts.)

pubs.its.ucdavis.edu/d...

Apr 04 11:15 PM

[John Petersen:]

NorthernPiker, it's a fascinating article and I appreciate the link. I was surprised to see that 85% of the E2W market relies on LAB instead of Li-ion and NiMH because the rider has to provide propulsion for both bike weight and battery weight when the motor is not engaged. I guess the 4x price premium for Li-ion is off-putting to the Chinese.

The real questions we need to think about are:

1. If China has to choose between giving 50 people mobility with E2W or giving 1 person mobility with an EV, which will win?

2. If China has to choose between $25,000 of industrial production for 50 E2Ws at $500 each or $5,000 of industrial production for one of their home grown EVs, which will win?

3. If China has to choose between the export revenue from 10kWh of batteries to America and using those same batteries to provide mobility for its own population, which will win?

The dynamic is great for companies like BYD, ABAT and the rest of the Chinese manufacturers who plan to market products in their home country, but it bodes very badly for people who believe China will export million of kWh in batteries to accommodate US demand.

Apr 05 02:54 AM

[John Petersen:]

Mycin, Hybrid Technologies (EVII.OB) was originally HYBT.OB, a stock that I've followed with mild amusement for several years that's had a tough time of late. At its peak, HYBT traded at an effective price of over $200 per share (after giving pro forma effect to the 1 for 7 reverse split in early 2008 and the more recent 1 for 3 reverse split). It's not a company I would speak highly of if I wrote on the EV sector.

Apr 05 03:24 AM

[Michael Fit...:]

johnP: wrt your comment on constraints/opportunity, i think that is why i am such a big nat gas transportation fan. the constraints are pretty simple and very solvable: chicken-n-egg scenario with respect to NGV and refueling availability (of both). on the electric car front (i.e. battery technology) it doesn't seem as simple to me, nor, from a time constraint standpoint, as rational as NGV's. even if electric cars were available in quantity today, they'd be re-charged by coal (bad). it will be a minimum of a decade to build the wind/solar/nuclear infrastructure needed to signficantly reduce foreign oil imports. economically, environmentally, and from a national security standpoint - the US is simply running out of time. therefore, to take the pressure off electric and hydrogen powered vehicles, and to do something proactive over the next 10 years to address the trifecta of big problems just mentioned, it seems to me the pragmatic, technically proven, feasible, and logical move is to place a big bet on NGVs. not just for fleets, but for middle class homes and electrical power generation. americans can save $trillions of dollars and prevent trillions of lbs of CO2 from entering the atmosphere over the next 10 years by taking this step. meantime, let's build the solar, wind, and nuclear infrastructure we'll need to power EV's or generate hydrogen fuel. if i missed your point on constraints/opportunity trade offs, perhaps you could clarify. thanks!

Apr 05 06:35 PM

[John Petersen:]

Fitz, I'm a firm believer that we need to use every available tool in the box and focus first on slowing the export of cash in exchange for oil. As that battle progresses, we can devote more attention to building out new power generating facilities and the smart grid and developing EV solutions that work. The biggest problem I see with trying to force longer term solutions into the short term is that you don't give the key technologies enough time to really mature. In my mind, this is one of those journeys of a thousand miles and I don't think any of us can do more than vaguely describe some of the mile-markers we are likely to pass en-route to the finish line. I'll guarantee that none of us can accurately describe 2060.

Apr 06 02:11 AM

[Dave K.:]

Try google.com, before replying next time as I have proven you wrong time and time again but you keep on trying.

I am very familiar with the work of Penn State and have been talking with a chemist, in a competing group to the ones involved with Strategic Polymer Sciences. Their polymers contain fluorine, which make them extremely expensive to manufacture and may represent an environmental disposal problem. The polymers they use are approximately 10 times the price of nonhalogenated (sp) polymers to manufacture. That is why 1-LTL isn’t considering their approach as economically viable for commercial applications and definitely not environmental friendly. You would have to get to 3,000J/cc to make the material viable and what they are 30J/cc I believe.

Time for you to quit, you are still zero unless you are a paid heckler, which means you won't go away as its your job.

O
n Apr 04 06:00 PM aquaculture wrote:

> Sorry, wrong. Can be found in the white papers here:
> strategicpolymers.com
>
> And BT is not a polymer.
>
> And no not off-topic. Cleantech, batteries and (Optimism)^........

Apr 06 03:45 AM