Mark Twain quipped, "It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so." Truer words were never spoken, particularly when it comes to the batteries that most of us use and curse on a daily basis. If you have a car, you have a lead-acid starter battery that needs to be replaced every couple years.
Cellphones and laptops offer similar trials and tribulations unless you upgrade your electronics regularly. When our cars don't start or our electronics don't work, we invariably blame the batteries first. While most of us haven't noticed any major change in starter battery performance over the last couple decades, the utility of electronics has skyrocketed and many believe the gains come from improved battery performance. They're dead wrong.
Today's car batteries aren't terribly different from the ones we bought in the '80s and '90s and they don't perform any better or worse. We just demand more from them as we add increasingly sophisticated entertainment, passenger comfort, information and fuel economy systems to passenger cars. The same is true for the batteries we use in portable electronics. NiMH batteries performed better than NiCd batteries that were plagued by memory effects. Lithium-ion performed even better than NiMH.
Within each chemistry class however, today's batteries aren't terribly different from from the ones we bought years ago. The only truly major improvements have been longer cycle-lives – the number of times a battery can be charged and discharged before it needs to be replaced. When you cut through the fog of errant assumptions and get down to facts, the reason electronic devices work better is that clever manufacturers have found ways to slash energy use by 80 to 90 percent while increasing functionality. It has absolutely nothing to do with improving the performance of a particular chemistry.
A popular French phrase aptly describes technical progress in the battery industry – "plus ça change, plus c'est la même chose," or the more it changes, the more it’s the same thing. The following table summarizes the development history and typical specific energy of today's leading battery chemistries.
Two key takeaways are (1) the long periods between the invention and the commercialization of new battery chemistries, and (2) the slow incremental nature of progress in the battery industry. Despite a never-ending stream of optimistic press releases, no major new battery chemistry has entered the market since the launch of lithium iron phosphate in 1996.
For those who've gotten used to Moore's Law, cumulative gains of 1% a year over 153 years are not impressive. I read the same stories as everyone else and know all about the researchers who boldly promise to double or triple energy density by the end of the decade. I also understand the difference between hope and accomplishment. My inner geek will wildly cheer new developments if, as and when they prove their technical and economic merit in a free market. But my inner investor will never forget that hope is not an investment strategy and results are the only things that count.
Brief history lesson
Like all mature technologies, batteries have progressed through several evolutionary cycles over the last century as users' needs changed. Until the '60s, the two dominant classes of batteries were rechargeable lead-acid batteries and disposable dry cells. Lead-acid batteries did the heavy work like starting cars, powering equipment and providing emergency backup power while dry cells powered flashlights, toys and consumer goods, including the first wave of portable electronics.
In the early '70s a variety of low-maintenance flooded lead-acid batteries and high-performance AGM batteries were introduced. They rapidly became industry standards. They worked so well that R&D in the lead-acid battery sector plummeted because there was no need for better lead-acid batteries and the perceived value of additional refinements didn't justify the added cost.
About the same time, Japanese manufacturers launched a wave of portable electronic devices that desperately needed better batteries. So R&D spending on lightweight rechargeable chemistries soared. That trend continued through the turn of the millennium because lead-acid batteries were good enough for the work they performed while batteries for portable electronics were grossly inadequate.
Since the turn of the millennium, a new market dynamic has emerged that's driving unprecedented levels of R&D in the fields of electrochemical and physical energy storage. The primary requirements of this new dynamic are cost-effective systems that store massive amounts of energy, need little or no maintenance and deliver peak performance for a decade or longer. It's a tall order when you understand that most of the batteries we used in the past were designed for devices that needed tiny amounts of stored energy and had short replacement and upgrade cycles.
For lithium-ion battery developers, the principal technical challenges included:
- Making cells that were designed for short useful lives more durable;
- Making cells that were designed for indoor use temperature tolerant;
- Making larger cells with stable mechanical, thermal, electrical and electrochemical behavior;
- Making watt-hour sized cells suitable for use in kilowatt- and megawatt-hour arrays;
- Developing battery management systems for kilowatt- and megawatt-hour arrays;
- Increasing specific energy to a point where electric drive can be economically feasible;
- Improving safety, vibration and impact resistance, and overall abuse tolerance;
- Building new manufacturing infrastructure and materials supply chains;
- Slashing costs by 75% or more in an industry where raw materials represent 65% of cell costs; and
- Developing cost-effective recycling technologies and infrastructure for massive battery packs.
Over the last decade, lithium-ion battery developers have made significant progress on a number of fronts, although cost reductions, specific energy gains and cost-effective recycling remain as elusive as unicorns. Some bright researcher may one day crack the code and solve all the technical challenges of lithium-ion batteries, but I'm not holding my breath.
For lead-acid battery developers, the principal technical challenges were far less daunting and included:
- Making batteries that were designed for short useful lives more durable;
- Making kilowatt-hour sized batteries suitable for use in megawatt-hour arrays;
- Developing battery management systems for megawatt-hour arrays; and
- Reducing charging times to permit more frequent and deeper cycling.
In a nutshell, the lead-acid sector had a simpler and shorter path. The industry had been making heavy-duty industrial batteries for decades. More importantly, researchers had a wider variety of technology and materials options because of the 30-year hiatus in lead-acid R&D. It was almost like the researchers returned from a 30-year vacation to find a different toolbox. As they started using advanced materials and manufacturing processes to improve the performance, cycle life and charging times of lead-acid batteries, the results were astonishing.
The thorniest conceptual problem in energy storage is the variable value of a kilowatt-hour of stored electricity. The two primary determinants of value are time and place. Each of these characteristics, in turn, has a value hierarchy that ranges from very high to merely desirable.
In the simple case of a stationary application where the only variable is time, it's easy to create a value hierarchy. The three principal types of high value applications are:
- Off-grid batteries that make renewable power available when the sun isn't shining or the wind isn't blowing;
- Grid-connected batteries that insure system-wide grid integrity by smoothing minute-to-minute variation in user demand and power from variable resources; and
- Commercial and industrial batteries that provide uninterruptible power for mission critical operations.
While system reliability is the primary requirement for every high value application, total cost of ownership is a crucial secondary consideration and users are reluctant to pay a premium price for attributes they don't need. As you move down the food chain from critical reliability systems to desirable time-shifting applications, the economics get more complex and the users get more particular as they weigh the costs and benefits of energy storage against available alternatives. The complexities of the calculations are enormous, but the basic rules are clear.
- Storage systems that cycle dozens of times per day are more valuable than systems that cycle once or twice;
- Performance features that increase system cost without increasing end-user value are non-starters; and
- The law of economic gravity is inviolate – the cheapest system that can do the work will win.
There are only a few cases where size and weight are mission critical for stationary systems. Examples include installations in existing buildings that have limited floor space or weight tolerances. As soon as you start evaluating shipping containers on a concrete pad, size and weight are irrelevant and the only features that matter are price and performance.
Portable power is usually more valuable than stationary power because it offers flexibility in both time and place. The most valuable batteries I own are in my cellphone and laptop where a few dozen watt-hours are priceless. Next in line is my starter battery. Once we move away from priceless applications, every energy storage decision involves trade-offs. The following simple examples highlight the economic issues that plague electric drive by assuming free electricity, a $5 gas price and an average fuel consumption of 400 gallons per year.
- In a Prius-class HEV that cuts fuel use by 25%, a 1.3 kWh battery will save $500 a year or $385 per kWh;
- In a Volt-class PHEV that cuts fuel use by 75%, a 16 kWh battery will save $1,500 a year or $94 per kWh;
- In a short range Leaf-class EV that cuts fuel use by 100% but requires a second car for longer trips, a 24 kWh battery will save $2,000 a year or $83 per kWh;
- In a short-range Tesla (NASDAQ:TSLA) Model S that cuts fuel use by 100% but doesn't necessarily require a second car, a 45 kWh battery will save $2,000 a year or $44 per kWh; and
- In a long-range Tesla Model S that cuts fuel use by 100% and won't require a second car, an 85 kWh battery will save $2,000 a year or $24 per kWh.
The examples deliberately ignore the question of battery cost because that fact is irrelevant to the fundamental truth that the economic value per kWh plummets as battery pack size increases. When it comes to portable power, small is beautiful but big is grossly inefficient.
I used to be a big 100-miles-per-gallon guy. But I realized that we’re above the level of diminishing returns at 50 miles per gallon. So why not make a whole bunch of 50-miles-per-gallon cars and put people who are driving 20-miles-per-gallon cars into them?
It's a classic conflict where the technically possible is diametrically opposed to the economically sensible.
The last decade has been an exciting time in the lead-acid battery industry as manufacturers respond to changing market dynamics. The first major technology transition was increased reliance on maintenance-free AGM batteries that are more robust and abuse tolerant than first-generation flooded batteries. The second major technology transition is the integration of varying amounts of carbon to reduce charging times and increase cycle-life. In a presentation at last September's Asian Battery Conference, the Advanced Lead Acid Battery Consortium offered an exhaustive technical analysis on the use of carbon in lead-acid batteries and the approaches the principal manufacturers are taking.
The simplest, cheapest and most direct approach is adding fine carbon powders to the sponge lead pastes used in the negative electrodes of first- and second-generation lead-acid batteries. Extensive testing over the last decade has shown that changing the paste formulation to include up to 6% carbon by weight (±30% by volume) offers excellent cycleability and power while significantly reducing charging times.
Johnson Controls (NYSE:JCI), Exide Technologies (XIDE) and several other companies are already using carbon paste additives in enhanced versions of their flooded and AGM batteries with notable success. Others will follow. While carbon enhanced batteries have slightly lower specific energy than their predecessors, their 100 to 200 percent increase in cycle-life reduces the cost of energy storage by 30 to 50 percent.
A more complex approach is the Ultrabattery from CSIRO, Furukawa Battery and East Penn Manufacturing. It divides each negative electrode into two parts, a lead half and a carbon half. The end result is superior cyclability and power with even shorter charging times. The Ultrabattery is being tested in a variety of stationary and micro-hybrid applications and shows significant promise, including the potential to reduce the cost of energy storage by 50 to 70 percent.
The third and most sophisticated approach is the PbC battery from Axion Power International (NASDAQ:AXPW) that replaces the lead-based negative electrodes used in conventional batteries with a carbon electrode assembly. The resulting device is an "asymmetric lead-carbon capacitor" that offers the energy storage of a battery and the power and cycleability of a capacitor in a single hybrid device.
The PbC has the lowest specific energy of all the emerging lead-carbon technologies, but it offers the cycleability and charge acceptance of the best lithium-ion batteries at a fraction of the cost. The PbC has been extensively tested for stationary, railroad, micro-hybrid and military applications and shows great promise, including the potential to slash the cost of energy storage by 80 percent or more.
The road forward
Lead-acid battery chemistry is one of the oldest, safest, most widely used and most environmentally benign technologies known to man. While lead-acid batteries can cause grave health problems if they're not manufactured, used and recycled in compliance with applicable regulations, the lead-acid battery industry has a stellar track record in the US and Europe where over 98% of used batteries are recycled to make new ones.
According to USGS reports, over 95% of the lead used by US battery manufacturers in 2011 came from recycled batteries. No other closed-loop recycling ecosystem even comes close. When it comes to other types of batteries, similar closed-loop recycling ecosystems don't even exist.
The lead-acid battery sector has a massive global footprint with robust supply chains, distribution systems and recycling infrastructure. The new lead-carbon technologies have been developed to integrate seamlessly into the existing infrastructure and leverage the manufacturing base instead of displacing it. The commercial lead-carbon batteries that are rolling off the assembly lines today already offer 200 to 1,000 percent better performance than the batteries you think you know.
Lead-carbon batteries are heavy and bulky. They'll never be small or light enough for portable electronics or electric cars that need to travel long distances at highway speeds. As soon as you move away from these niche applications where size and weight are mission critical and money is no object, the advantages of lead-carbon batteries become overwhelming. Shakespeare said, "Nothing is so commonplace as to wish to be remarkable." When it comes to energy storage, however, most of our needs are fairly mundane and there's no sense paying for extreme performance when adequate performance can do the necessary work for a fraction of the cost.
The first commercial products based on R&D conducted since the turn of the millennium are being launched today. The new products use cheap classic chemistry, but offer 21st century performance that many thought was the exclusive province of lithium-ion batteries. Over the next few years, these innovations will re-energize the lead acid battery sector with products that are vastly superior to their predecessors and competitors for applications where size and weight are not mission critical constraints.
Disclosure: Author is a former director of Axion Power International (AXPW) and holds a substantial long position in its common stock.