Game Changing Battery Technology: Is it Here Now? 28 comments
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Nearly every oil observer - Simmons, Maxwell, Jeff Rubin, many others, and least of all myself - see oil prices rising in 2 - 5 years, probably to new heights, if the global economy continues to recover. That’s based on pretty accurate visibility of new oil supply over the next 5 - 7 years, fairly certain rates of decline in old fields, plus assumptions of demand growth rates for OECD, developing, and oil exporting economies. I provided my own version of this vision in my newsletter last month, saying, “I continue to expect oil supply tightness to manifest itself in 2011, as indicated in my March analysis.
This vision of oil supply tightness is not a happy economic scenario. Very high oil prices would likely cause global stagflation and a poor investing climate. It would be particularly painful for relatively poor people and poor economies. It would help only oil exporting countries, many of which are not friendly to liberal humanitarian forms of government. So not really a very happy picture.
And yet this unhappy vision is built into the current business plan of all major global car companies - American, European, Japanese, and Chinese. They are all planning to bring on stream new hybrid gas-electric or diesel-electric or plug-in hybrid cars. Such cars will be about $7,000 - $15,000 more expensive than current standard models because of the added battery and related costs. Why do these companies think consumers will pony up so much more money for their new hybrids that perform only on a par with standard models in all ways but fuel mileage? Obviously because they think oil prices will be much higher. A future vision of stable or slow growing oil prices would not spawn the hoards of hybrids now entering into production.
I’ve often written that new technology is the only way the world can work itself out of a looming global oil shortage with minimal pain. Incremental technology improvements such as those being built into the new hybrids will be insufficient to avoid a painful period of adjustment to insufficient oil supplies. Only a major break-through could have such great impact. Only the development and rapid roll-out of a game changing battery technology will do the trick.
To be a game changer, it would need to store massive amounts of electricity at much lower costs than is currently available, be rapidly rechargeable and be safe in a crash. Such an energy storage unit would have impacts akin to the invention of the internet or to Edison’s harnessing of electricity or Ford’s development of the affordable car. We are not talking about simply a cheaper battery or a new way to make ethanol. We are talking about revolutionizing all aspects of energy use, not only transportation.
I hate to sound like a shill or a naive optimist. But I must say that it is looking to me like such a new technology could well be fairly near at hand. The technology is being developed by EEstor, a start-up company financed by a first-tier venture investment firm. I’ve written about EEstor and it’s minority owner, Zenn Motors several times in the past. I’ve noted that Zenn is an interesting speculation given the buy-in to EEstor by some very impressive people (Kleiner, Perkins and Lockheed Martin) and given that the upside potential for success would be so huge that is hard to even conceptualize. I’ve owned some modest positions in Zenn in nearly all my portfolios for about six months purely as a speculation. As with any speculation, you have to be willing to see your entire investment go down the drain if EEstor’s ESU turns out to be a dud for any reason.
Well, now I’m upping my stake in Zenn based on several recent developments. One is EEstor’s release of testing data indicating performance characteristics that exceed their objectives. A second reason is Zenn’s decision to exercise its option to invest an additional $700,000 to increases its ownership interest in EEstor from about 3.8% to over 10%. Zenn based their decision on independent analysis of EEstor’s test data. Zenn’s choice adds enormously to its potential value if EEstor pays off. Zenn also has rights to certain transportation uses of the EEstor USU.
The third factor in my decision to increase what is still a highly speculative “investment” is the release to the internet of an audio interview with EEstor CEO, Steve Weir. EEstor has been extremely quiet about it’s progress for the past few years. In fact it is known to some as a “stealth company” - in other words a company that is trying to avoid publicity. Now some enormously optimistic projections and background information has been leaked to the public via this audio interview. I’ve posted below a report of the interview by allcarselectric.com.
The report is long and detailed. Here are some key points that Weir makes:
- key to EEstor’s success is its aqueous process of barium-titanate production which eliminates impurities, plus sealing it with aluminum oxide.
- the ESU has a modular design that imparts great safety and reliability.
- a production line is being installed now and units are being assembled for Zenn. Zenn should be able to demonstrate product by year end.
- capital requirements for production are low and equipment is readily available, suggesting rapid scalability.
- raw materials are cheap and abundant in the U.S.
- EEstor’s ESU should come in at a total cost per kWh of 20% - 10% of the cost of a lithium battery.
One thing I like about the EEstor story is that it is similar in some basic conceptual ways to previously successful game changing “new technologies” such as Ford’s cars or Edison’s harnessing of electricity. First, it is not really a new technology. Barium Titanate has been around for a long time. What EEstor adds is ways to prepare the substance, protect it, and utilize it. That’s similar to how Ford took existing technology but organized it in new ways. Secondly, like both Edison and Ford - and the internet - the potential uses for the new products are nearly infinite. If it works at the suggested price point of production, it will change not only transportation but warfare, electricity generation, and living conditions in third world countries, to mention only a few categories that come to mind quickly.
The investment question is whether or not this report of product available for testing by Q4 is reliable. There seems to be a lot of smoke coming out of EEstor recently; I think it’s likely there’s a fire. Something tells me EEstor is for real. That’s only a gut feeling, but given that the payback for success should easily be a ten bagger, I feel at this point that the risk/reward level is in quite attractive territory and thus Zenn stock merits a more substantial play.
Oil and Gas
I continue to think natural gas is not a commodity of interest because recent vast increase in reserves due in part to advanced drilling technologies means that price will not change meaningfully over a long time. Yes, prices will fluctuate a bit so active traders can profit. But essentially natural gas will be cheap for a very long time. So I am not interested in gassy E&P stocks. That said, some pipeline companies could be of interest to high yield investors, particularly if they are compensated based on volume. I do believe there will be added uses for NG in electrical production and perhaps transportation thus increasing volume requirements and thus pipeline traffic.
The price of oil seems to be rising and falling in sync with movements in stock averages. I think the price of oil stocks tends to lead the commodity so it was impressive that when oil took a dive from June 30 - July 14, oil stocks (OIH and IYE) at first followed suit but then recovered back to prior levels while oil stayed under $60. I think this was a clear bullish sign by oil stocks suggesting that oil traders were generally bullish, a view that has been vindicated as oil then rose right back up to nearly the $70 level of June 30.
On the other hand there is still plenty of spare capacity, perhaps 4 - 5 mb/d. And global demand is still sluggish. Evidence of low oil demand growth comes from, among others, BP statistical review of world energy as reported by The Oil and Gas Journal (7/6/09) under the headline, “BP Reports Fastest Oil Demand Fall since 1982.” The report points out that:
- for the first time, developing countries now consume more oil than OECD countries,
- the growth rate for developing countries, 17%, was the lowest in five years,
- OECD oil demand dropped 1.5 mb/d while non-OECD oil demand increased by only 1.1 mb/d.
- oil exporting countries in general need a price of $60 minimum to meet their internal spending requirements. Prices under $60 will result in further cutbacks to future oil production capacity.
I’m becoming convinced (along with many market observers) that the OECD economies will stop sliding and will have some sort of Q4 recovery. I don’t expect rapid recovery and I do expect an excruciatingly long wait for employment to increase. But I suspect that oil usage will stabilize in the OECD. If so, growth in developing and oil exporting countries plus continuing decline in old fields and reductions in E&P cap. ex. will begin to reduce global spare capacity soon. A 1% global oil demand growth rate for the next two years would eliminate 1.5 - 2 mb/d of spare capacity. Thus, it is not unlikely that by mid-2011 there could be sufficient pressure on oil supplies to bring the price well over $100 a barrel again. Oil equities are probably a moderately attractive buy on a long term basis, I think, based on the likelihood that the commodity will continue its longer term uptrend over the next few years.
Of course if the EEstor ESU comes to market as predicted by Weir, be prepared for some fallback in oil prices, especially longer dated oil prices. A cheap, reliable, powerful ESU will give electricity a big competitive boost compared with petroleum. That advantage will take years to filter into the economy, so it will probably not prevent oil from having one more big price surge. But it could begin to dampen oil shortages starting in three to five years and mitigate oil shortages completely in ten years.
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This article has 28 comments:
Regarding EEStor -- a couple of corrections are needed to your article. EEStor's founder and CEO is Dick Weir, not Steve and Zenn's recent investment in EEStor was several million dollars, not $700K.
Supposedly, September is when EEstor delivers. Don't have to wait much Longer.
I would be significantly more pessimistic on when a recovery is likely, and so would expect demand and oil prices to stay low for longer, around the same as the IEA, which sees the earliest rise as being around 2014.
This will have more adverse effects on supplies and lead to higher eventual prices as a protracted period of low prices would cripple investment.
On EESTOR I am also rather cynical, as some qualified people say that the performance mentioned is not possible, and others that if it is attainable it is likely to remain a laboratory curiosity rather than something manufacturable in quantity.
Extraordinary claims require extraordinary proof, and so far we have had nothing.
In fact their statements to date more closely resemble those of some of the directors at the time of the South Sea Bubble - 'An advantageous project, the details of which are to remain confidential'.
To end on a brighter note, Japanese researchers have made significant progress on lithium air batteries, which would take a while to fully develop and mass produce, but whilst no magic bullet could undoubtedly do the job:
www.greencarcongress.c...
I'm really curious how a energy storage device like EEstors ultracapacitor/battery could result in a decrease in energy demand. Some sort of fuel source will be needed to charge a battery, or supply a fuel cell for that matter. So why would oil demand be offset? If the answer is electrification of transportation- then we better start really beefing up our generating capacity. It will take alot of electrons flowing through the grid to offset the loss of lets say 5 millions barrels of oil a day here in the USA.
I look forward to your perspective on this. Thanks.
The additional power required for extensive use of EV cars is in fact surprisingly modest.
Many studies have been done - here is a recent one (pdf):
www.nyiso.com/public/w...
A lot of the changes to the grid needed are to introduce smart metering so that drivers can be encouraged to charge up at night when demand is low rather than in the day:
www.theoildrum.com/nod...
There may even be some opportunities to use cars to smooth the load on the grid, especially for short fluctuations, as the battery store would be massive if many cars are electric, and so very small reductions in the individual store in particular cars would help the grid out a lot if they fed some power back in, without significantly reducing range.
Some even argue that savings in electricity use by not refining oil would mean that no more electricity would be needed at all!
evworld.com/article.cf...
Those figures seem optimistic to me, but the extra energy demand from electric vehicles will be surprisingly modest, due to their being much more efficient than gas engines, and able to run 3-5 miles on a kilowatt hour of electricity - several times better than a petrol driven car.
I raised just that question in High School, about 1967. Still waiting for an answer that conforms to the laws of thermodynamics.
The thrust of the article merely confirms what thinking people have known for decades: Europe wins. They win just because they have made the greatest effort to discourage private vehicles and encourage mass transit. You all must have heard that railroad ad: one train 432 miles on 1 gallon of fuel???? European energy consumption per capita is a fraction of US; mostly because we squander all those kilocalories on cars. Substituting batteries for petroleum won't change that, much. Making smaller cars will marginally, but only getting rid of them, and designing them out of society, is our only avenue. Too bad you're only out to make yourself rich.
Fact: that which we call progress is just increases in energy consumption per capita. We need to view progress as something which increases humanity, not merely consumption of widgets. Ya think ???????
And HP, IBM, GE, Honda would have thrown in big money into EESTOR.
Just picture all the vehicles going down a highway or main arterail near you, and picture all the enrgy it takes to move that mass. Its gotta take alot more elctricity than we currently are putting out there. Its just common sense, don't you think.
If we don't come up with alternatives for oil, like reasonably priced electricity, than we are going to have a very hard time keeping our GDP anywhere close to its current level, I fear.
I provided just one link of the many surveys and assessments which have been done, there are many, may others.
Instead of dealing with the mass of information and data provided, you choose to refer to your 'gut feelings'.
Engineering doesn't get along by gut feelings, but looks at the numbers.
Electric motors are far more efficient than internal combustion engines, a fact which you could easily verify.
This is not an intuition, but a failure to research or read up on subjects you wish to comment on.
Personal feelings are fine, and you are entitled to them, but if you wish to engage in debate with others you need to find out the basis of how things work and argue about facts.
Since we are a "I want it now!" society, I doubt folk have the patience for any thing much more than a 5 min fill-up. Why, oh why, can't we kick our addiction to oil from the terrorists and the trillions we spend defending their oil? I would be for anything, even coal or nuclear, to get us out of our impending disaster. Long term, we need renewable energy. I'm tired of the energy independence BS touted by both sides. No more studies, do it!
The Prius engineers very cleverly around the limitations on low temperature use you mention.
Altairnano also uses a lithium titanium battery which is good down to -60C, although at the moment it is more expensive.
America might 'want it now', but just like everyone else they will have to make do with what they can get.
The days of cheap and plentiful oil are ending, as current low prices just mean that not enough money is being put into finding and developing more resources, aside from absolute physical limits.
This means that current low prices will just lead to higher prices and shortages in the future.
Whether the US goes for electric cars or not, the far east and Europe most certainly will.
The US also has the alternative of using natural gas, which most of the rest of the world does not have.
It is the only fuel which would allow current US usage patterns to continue.
AS someone who drives EV's every day for over a decade and builds custom ones neither EEstor or Zenn have impressed me coming out with many statements they can't back up.
The Zenn EV can't even legally cross an over 35mph road and at least 2-3x's what it should cost.
EEstor keeps making promises that don't come true and their tech info is very iffy.
There are plenty of good batteries like A123, Kokam that already do like EEstor claims. I expect many more in the near future but none can really go into mass production, lower their costs more until they get actual orders!!!
If you have investments in EEstor or Zenn I'd pull them out and put them in something else. Sadly few pure plays on batteries or EV's other than BYD, Tesla, A123 that I see viable. There are others just I don't have enough info to say for sure.
But as EV's go 3x's as far for the same energy as an ICE and RE will stabilize electric prices vs oil going up with a bullet it's clear EV's will be the winner.
We are now buying Lithium LiFEPo4 batteries for prices under sealed lead batteries and GM has already hit their price points for them so battery costs is under control.
A couple things on EV costs is EV's cost less to build by a good amount than ICE's do with the only difference is the batteries. But the $7500 Fed tax credit easily covers the batteries so no reason EV's need to cost over an ICE.
Why is an EV motor only has a couple of parts and needs no transmission, bolted directly to the differential.
The only thing the author is correct about is oil prices are going up with a bullet!! Though even faster than he thinks as we will hit $4/gal as soon as the economy recovers and higher until the price puts us nback into recession. This will keep happening until we get off oil.
Good points, but so often we've heard experts get their projections wrong in big ways. And I've seen numerous cases where scientific studies have been conducted in ways which are designed to favor the conclusion that the author has favored- which is poor science but nonetheless gets published. So, you'll have to pardon my scepticism- it has been well earned.
My main point is that great energy storage alone is not going to cut it, when it comes to the nation electrifying the transportation in a big way. Maybe at the margins, but that won't be enough to offset the loss of affordable oil.
Cheers.
If you have not already done so, check out the link I gave earlier in the thread to the new Japanese research on lithium air batteries - here it is again for your convenience:
www.greencarcongress.c...
For readers who aren't so familiar with battery and fuel cell technology, this seems to overcome many of the problems that have stood in the way of building this sort of battery.
The reason that is interesting is that it is much more powerful and would give an electric car comparable range to gasoline one.
In addition, it would be possible to top up in a similar time to a petrol car, instead of waiting for a battery to charge:
'At a filling station, the driver of a vehicle thus equipped could exchange the aqueous electrolyte for the air electrode and refill the metallic lithium for the anode in the form of cassettes, and then continue driving without waiting for batteries to be recharged.'
We can't do this as yet, but we are much closer now to being able to.
You are wise to be suspicious, but a little 'due diligence' would set your mind at rest.
Firstly, as I said, I did not base my comments on a single study - a lot have been done.
Here is another:
www.calcars.org/calcar...
The thing to remember is that these guys are not guessing.
They are the ones who balance the gird, which involves close calculation and really, really knowing how to calculate load and usage.
The second thing is that you can confirm their ball-park calculations easily.
It is trivial to obtain well to wheel efficiencies for Internal combustion engine cars, as it is for the energy mix of the US electrical system converted to EV car power.
Any way you cut it if you do the calculations you will come up with the same kind of figures.
The issue is not a matter of opinion or guesses, but is mathematically demonstrable.
In fact, the relevant figures are shown in the links I have provided, and have not been disputed even by those such as the oil companies who might have an interest in doing so.
Scepticism is all very well, but continuing to assert that none of the electrical engineers who have spent months working out the figures know what they are doing and that electricity can't replace oil without massive extensions of the gird without producing a shred of evidence to that effect hardly seems sensible.
Hi Davewmart, Issac and All,
Not only won't EV's hurt the grid but are the key to saving it. How is they charge at night from wind or whatever power is available,and during the day can put power back into the grid as needed and recharged when the peak load passes. This is called V2G and can save the utilities billions of $/yr.
Yes Lithium air along with Zinc/Alum air are very doable battery types with 400-700 mile ranges between swapping/refilling the batts. While they are called fuel cells they are different , much more like batteries which causes much confusion. Regular fuel cells are not viable in cars. Only where their large amounts of waste heat is usable like UTC/Razor uses.
Then for well used EV's like taxi's, trucks, trains, etc there is Sodium batteries by GE, Zebra, others all of which is well known just no market because no car company would build EV's.
Good batteries are here, they just need orders to make the investments, supply them.
www.silvertipdesign.com/
The fuel savings would be very large, and electric input could be arranged.
Batteries aren't good enough for long-distance trucks.
This one, if the press releases are true, will be a thousand bagger.
I own a few thousand shares and will watch this one either shoot to the moon or burn on the pad.
Davem- I'd love these projections to be true, but I sense you are looking at this issue with an idealistic sense of optimism that will allow you to believe that we "have afree lunch " here.
I hope we get a free lunch too.
This is a flyer. If you don't see that, you are fooling yourself. No one, NO ONE, should invest in Zenn with money they cannot afford to lose. To me that doesn't indicate an overriding desire to make money... it indicates a strong desire to support game changing technology.
USAndy
On Jul 28 11:53 PM Robert0713 wrote:
> >> I'm really curious how a energy storage device like EEstors ultracapacitor/battery
> could result in a decrease in energy demand. Some sort of fuel source
> will be needed to charge a battery, or supply a fuel cell for that
> matter. So why would oil demand be offset?
>
> I raised just that question in High School, about 1967. Still waiting
> for an answer that conforms to the laws of thermodynamics.
>
> The thrust of the article merely confirms what thinking people have
> known for decades: Europe wins. They win just because they have
> made the greatest effort to discourage private vehicles and encourage
> mass transit. You all must have heard that railroad ad: one train
> 432 miles on 1 gallon of fuel???? European energy consumption per
> capita is a fraction of US; mostly because we squander all those
> kilocalories on cars. Substituting batteries for petroleum won't
> change that, much. Making smaller cars will marginally, but only
> getting rid of them, and designing them out of society, is our only
> avenue. Too bad you're only out to make yourself rich.
>
> Fact: that which we call progress is just increases in energy consumption
> per capita. We need to view progress as something which increases
> humanity, not merely consumption of widgets. Ya think ???????