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John Petersen
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John Petersen is the executive vice president and chief financial officer of ePower Engine Systems, Inc., a Kentucky-based enterprise that has developed, built and demonstrated an engine-dominant diesel-electric hybrid drivetrain for long-haul heavy trucks that promises fuel savings of 25 to 35... More
My company:
Fefer Petersen & Co.
My blog:
ipo-law.com
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  • What I Learned, Heard And Saw At ELBC 13 In Paris

    ELBC 13 was a tremendous event that gave me a lot of clarity on where Axion and the PbC fit into the market. It also gave me a good deal of clarity on where the competition is headed because I had an opportunity to watch presentations from JCI, Exide, and East Penn, and spend a good half-hour talking one-on-one with the CEO of East Penn.

    MY KEYNOTE PRESENTATION

    As many readers know I gave a keynote presentation at this year's ELBC. Since I thought readers might like to see and hear what I told the industry, I've put together a Sliderocket presentation that includes both my slides and the scripted version of my discussion. It's available here:

    portal.sliderocket.com/APMLF/Final-John-...

    DCA WORKSHOP NOTES:

    The DCA workshop on Tuesday taught me several things about how cycling impacts DCA. The worst-case operating regime for DCA deterioration is a conventional vehicle that only starts the engine once per trip. The presentation from Heidde Budde-Miewes showed that AGM was better than a standard flooded battery, but not necessarily better than some of the enhanced flooded batteries.

    The test cycle she's been using comes much closer to emulating the real duty cycle of a car because it cycles the battery for a half hour and then let it "rest" for five hours before cycling it for another half-hour. Even the best performing lead-acid batteries lose 90% to 95% of their DCA within a few weeks when you include more realistic rest periods. So in a quirky way, the micro-hybrid duty cycle test protocol that Axion's been talking about for the last two years is easier on the batteries than real life.

    While I'm on the topic of the test protocol, Eckhard Karden of Ford referred to the test protocol a couple times as the "Axion-BMW Protocol" rather than the Ford-BMW protocol. I found that attribution fascinating because Axion was only briefly mentioned at the back of the 2010 ELBC presentation from BMW, Ford and Moll.

    I did some digging and learned that BMW and Axion did the heavy lifting on developing the test protocol, but Eckhard Karden got top billing on the 2010 presentation because he was the first researcher to describe DCA as an issue. Despite the fact that the protocol originated with Axion and BMW several presenting companies used it to show how their innovations were improving their DCA performance. Many of them were able to shift their curves up a bit, but there was nothing that even vaguely resembled the PbC's graphs.

    The next point of clarity I got from the DCA Workshop is that automakers are measuring DCA in terms of "Amps of charge per Amp-hour of battery capacity," rather than Amps per battery.

    In effect, Axion has been understating its DCA advantage by comparing a 50 Ah PbC with comparably sized AGM batteries that have ratings in the 80 to 100 Ah range.

    If you think about it for a second the Amps per Amp-hour metric makes a lot of sense. After all, a 50 Amp current going into a 50 Amp-hour battery is twice the charge rate of a 50 Amp current going into a 100 Amp-hour battery.

    The bottom line is that the best "stabilized DCA performance" automakers are getting from Enhanced Flooded and AGM batteries is in the range of 0.05 to 0.10 Amps per Amp-hour.

    After the workshop I had a few minutes to chat with Enders about the battery Axion used in the original BMW tests. He did confirm that it was an automotive sized PbC and while he didn't recall the Amp-hour rating, he agreed with my guess that it was probably in the 50 Ah range since the bigger 30HT sports a rating in the 70Ah range.

    That means the DCA of the PbC when stated in terms of Amps per Amp-hour is roughly 2.0, while the nearest conventional competition is in the range of 0.1. While the current numbers are extraordinary, Ender's presentation yesterday said that the ongoing work under the project funded by the SBIR grant will be testing the dual battery system at a 150 Amp current (91% to the PbC and 9% to the starter battery), or roughly 3 Amps per Amp hour for the PbC.

    In light of Tom's recent public statements that the 30HT has been tested at 200 Amps, which is roughly 3 Amps per Amp-hour, my guess is they already know that the PbC can handle a 3 Amp charge rate, but want to publicize the formal claim in connection with a peer reviewed testing program, which is basically what you get when you submit the results of an SBIR Phase I project to the DOE.

    EXIDE-JCI NOTES:

    It's clear that JCI and Exide are focusing on Enhanced Flooded and AGM batteries, and they're generally satisfied with the modest performance improvements these technologies offer. For now, many mass-market automakers like Ford Europe are only concerned with meeting the CO2 requirements to continue selling cars. This makes sense if you think back to the "Best Available Technology" discussion in my ELBC presentation. For now, Ford has perfect cover for its decision to stick with Enhanced Flooded batteries because better AGM technology isn't available at relevant scale, and even better PbC technology isn't available in any scale. Their decision dynamic will change as AGM capacity ramps and then PbC capacity ramps, but for now I'm scratching Ford off my list of potential early adopters.

    ULTRABATTERY NOTES:

    I had met the CEO of East Penn, at a couple of industry conferences including EESAT 2009 and ELBC 2010. Yesterday Rachel and I were able to snag about a half-hour of face time and ask her some very direct questions about East Penn's plans for the Ultrabattery.

    Unlike public company executives who have to be guarded about what they say and how they say it, East Penn's CEO was refreshingly blunt. She explained that East Penn took two licenses from CSIRO. The first, in 2008, was limited to automotive in North America and China. The second, in 2010, was a worldwide license for stationary applications with exclusions for Japan and Thailand.

    She then explained that while automotive was a long slow grind, they'd had tremendous results implementing the Ultrabattery technology in their big 2-Volt stationary cells, and were actively building that market. They were also continuing work on the mild-hybrid market, which has been a primary target for the Ultrabattery for years. She confirmed to me that East Penn was not presently focusing on the micro-hybrid market and while she wouldn't close the door on the possibility of a future run at micro-hybrids, it was not presently a priority application for East Penn.

    Of the two applications they are working on, she sees more short-term potential in the non-utility stationary market, and says that East Penn could be ramping sales faster than they are, but is holding back because they don't want to risk "the big mistake." As CEO of a family-owned company, she apparently believes that growth in several stages is more sensible than trying to conquer the world in one giant leap.

    In this morning's presentation, East Penn indicated that they had a string of batteries on test at Penn State for Norfolk Southern which apparently wants 5-years of proven battery life. They indicated that so far the Ultrabattery is about three years through the testing cycle and performing stably. I don't see any reason to believe, however, the Ultrabattery might be a short-term competitor.

    AXION NOTES

    I'm biased, but I thought Enders Dickenson's presentation was more dynamic, positive and generally interesting than all the others combined. It explained how the SBIR project would take the BMW-Axion test protocol up a notch and use a 150 Amp current instead of a 100 Amp current.

    It also explained why the PbC performs so well in strings. The basic reason is that conventional lead acid batteries have a convex shaped charge curve like a ski-jump while the PbC has a concave shaped charge curve like an upside-down bowl. Apparently that difference tends to bring weaker cells up to standard naturally without having to engage in active current and load management in the BMS.

    In this morning's presentation about their New Mexico project, East Penn noted that their battery strings are also self-balancing to a degree, although they didn't go into much detail about how, why or when. So I guess we'll have to live with the idea that PbC is king in a string, but there may be a couple princes out there.

    BMW NOTES:

    In 2010 BMW fired a shot across the bow of the battery industry when it held up Axion and the PbC as a better solution. This year the shot across the bow described a six month single vehicle test where they used dual battery system that used a flooded LAB for starting and a 14-volt, 20 Amp-hour lithium-ion pack for the hotel loads. It was the same kind of dual battery system that Axion is proposing, but it used lithium instead of PbC as the demonstrator. In the Q&A session after the presentation, the BMW guy indicated that the cost of a dual-battery lead-acid/lithium-ion system would probably be on the order of 2.8 times the cost of an AGM battery alone. My sense from the presentation was that BMW was trying to tell the lead-acid industry "We can do this if we have to, but we'd really rather not." I saw nothing to indicate that their testing of a dual lead-lithium system was anywhere near the same stage of development as the dual lead-PbC system.

    UNEXPECTED FUN DEVELOPMENT

    One of the speakers on Wednesday was from Avicenne Energy, a French firm that does most of its business consulting for the lithium-ion, NiMH and NiCd battery world. They've invited me to speak at their lithium-ion battery conference in Nice, France next month. It may feel a bit like Daniel in the lion's den, but it should be interesting.

    OUTLOOK FOR THE NEXT YEAR

    I was very encouraged by my talk with East Penn's CEO who explained that they saw renewables integration and behind the meter systems as the clearest and easiest paths to sales becuase the customers are driven by entirely different needs than automakers and utilities. She said there was enough demand out there for them to sell 60 or 70 MW a year, but they were intentionally keeping the numbers small because they didn't want to go too big without enough experience out of concern that going to big too fast can be deadly if you end up facing an unexpected problem. She didn't mention A123 by name, but she did say that she'd hate to be in a position where she had to go to the Chinese for money because they bit off more than they could chew. I was careful to avoid asking her direct questions about Axion, but it's clear that she's impressed with the results coming out of New Castle.

    FUTURE ARTICLES

    Those of you who've seen my presentation know that it tied together several themes I've written about before, but failed to explain as thoroughly or as well. There was something about being forced to clarify the points for a brief presentation that also forced me to crystallize my thoughts on several topics that had been pretty amorphous. In the process, I planted the seeds for a series of articles that will more clearly define the issues and show where Axion and the other companies I write about fit into the broader landscape.

    I'm not sure when those articles will be published, however I am sure that I'll split the work between SA and TheStreet. This year's ELBC didn't have a single negative minute for Axion, but there were several positive hours.

    I'm pumped.

    Disclosure: I am long OTCQB:AXPW.

    Tags: AXPW, JCI, XIDEQ
    Sep 28 1:26 PM | Link | 80 Comments
  • Musings From The EV Black Knight

    In June an anonymous blogger at Clean Technica dubbed me the "EV Black Knight," the mortal enemy of electric cars. While I was flattered by the tribute, I was deeply offended by the suggestion that I might be foolish enough to impale a lithium-ion battery pack with the burnished broadsword of economics.

    Seriously, anybody who's spent any time studying battery safety knows that shockingly bad things can happen when you puncture a lithium-ion battery pack with a conductor and even a full metal jacket wouldn't be enough to protect a knight errant from the kind of explosive thermal runaway that did about $5 million of damage to a GM battery testing laboratory that was designed to safely manage catastrophic battery failures.

    Truth is I'd rather have an e-bike than a horse, I find pens mightier than swords and I think green eyeshades enhance vision while face visors lead to the kind of tunnel vision I find so appalling in ideologues and Tesla (TSLA) stockholders who apparently think we can waste massive quantities of metal for the dubious luxury of powering a car with coal instead of gasoline.

    I think the basic problem is that we're painfully aware of energy costs but blissfully ignorant of the cost of making the machines that either produce or consume energy.

    In the case of the family car, we know it burns 400 gallons of gas a year and hate the fact that each gallon costs $3 to $4. Heck, over a 15-year useful life we'll spend $18,000 to $24,000 on fuel alone. Spending as much for fuel as you spend to buy the car seems outrageous until you consider that the cost of fuel includes the cost of:

    • Manufacturing the machines that drill for and produce crude oil;
    • Manufacturing the machines that transport crude oil for refining;
    • Manufacturing the machines that convert crude oil into fuel; and
    • Manufacturing the machines that transport fuel to market.

    I've never seen a detailed analysis, but I'd give long odds that if you start with the purchase price of the family car and add a proportional share of the cost of the upstream machinery, equipment and processing facilities that keep it running, you'll find that machinery represents at least three-quarters of total ownership costs.

    While I can't pin down a precise number, most reports that discuss the economics of wind power claim an all-in power production cost of $.05 per kWh. In the typical analysis 25% of total power production cost is attributable to operations. The remaining 75% is attributable to capital cost recovery - the cost of manufacturing the turbines that turn free energy into useful energy.

    With the exception of simple devices that burn fuel directly for heating and cooking, the cost of every useful form of energy pales in comparison to the cost of the machines that use the energy and the cost of the upstream machinery, equipment and processing facilities that deliver energy to our machines in a useful form.

    If you spend enough time thinking about the supply chain, the issues become obvious.

    We don't have an energy cost and supply problem.

    We have a machinery cost and supply problem.

    Energy from wind, sun and water may be free, but machines to make that energy useful are anything but free. The same is true for coal, oil, natural gas and uranium. The in-place energy resources cost nothing, but the machines that extract, transport, refine and use those resources are expensive indeed.

    Last year we produced 1,996 kg of energy resources for every man, woman and child on the planet. We also produced 214 kg of iron and steel per capita and 19 kg of nonferrous metals.

    While energy resources are single use commodities, ferrous and nonferrous metals are essential for the manufacturing of:

    • EP - machines that produce energy and convert it to useful form;
    • EU - machines that use energy to perform useful work; and
    • NM - non-mechanical essentials of modern life including buildings, power distribution grids and an infinite variety of durable and disposable consumer and industrial goods.

    The essential conundrum of modern life is that EP + EU + NM can never exceed total metal production. If we increase metal consumption in one category we have to reduce it somewhere else unless one believes in natural resource fairies.

    According to a recent McKinsey study, "Resource Revolution: Meeting the world's energy, materials, food, and water needs," the planet supports 1.8 billion middle class consumers. Over the next 20 years that number will increase to 4.8 billion, a gain of almost 270%. Every one of them will demand energy produced by machines, energy using machines and the non-mechanical essentials of modern life. The problem, of course, is there simply won't be enough raw materials to go around.

    Something's got to give!

    Simply stated, the great challenge of our species will be overcoming persistent global shortages of water, food, energy, building materials and every commodity you can imagine.

    The McKinsey report argues that available resource productivity improvements could:

    • Offset 100% of the expected increase in land demand;
    • Address more than 80 percent of expected growth in energy demand;
    • Offset 60 percent of anticipated growth in water demand; and
    • Address 25 percent of expected growth in steel demand.

    Unfortunately the report is completely silent on more troublesome resources like nonferrous metals that are absolutely essential for:

    • EP;
    • EU; and
    • NM.

    Whether we like it or not, supply chain shortfalls will have to be overcome by wasting nothing, recycling everything and making the most efficient possible use of every natural resource.

    That doesn't leave much room for idealists that want to use non-recyclable 1,000-pound battery packs so they can choose coal instead of gasoline to power their car.

    In the battery industry the strain on metal supply chains will be immense. The problems won't be overwhelming for metals like lithium and lead that are abundant in nature but require major new investments in mines and infrastructure, but they'll be crippling for metals like copper, nickel, cobalt, vanadium and rare earths, which are already in short supply and likely to encounter even more daunting supply chain disruptions over the next two decades.

    I'm not a Black Knight wantonly attacking peaceful, frugal and righteous peasants. I'm humble scrivener with enough mining and oil and gas experience to know when the specious assumptions of aspiring eco-princelings can't work.

    I'd certainly never waste hundreds of pounds of steel to protect myself from starry-eyed fools in motley who didn't endure the cruel tutelage of Sister Mary Angelica in their formative years.

    This article was first published in the Summer 2012 issue of Batteries International Magazine and I'd like to thank editor Mike Halls and cartoonist Jan Darasz for their contributions.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jul 13 10:43 AM | Link | 55 Comments
  • What Ford Said About DCA At The AABC Last Week

    Last week Dr. Eckhard Karden of Ford Research chaired a session on "Energy Storage for Micro-Hybrids" at the Advanced Automotive Battery Conference in Mainz, Germany. The editor of Batteries International Magazine attended the AABC and was kind enough to send me a scanned copy of Dr. Karden's presentation. Since the scan isn't very good and was printed two slides to a page, posting a copy online wouldn't be terribly helpful. There are a few pages, however, that should be discussed because they help clarify what's going on in the microhybrid space.

    One of the most important distinctions Dr. Karden focused on a couple times is the difference between Gen-1 microhybrid systems that are designed to work with enhanced flooded batteries, or EFB, and absorbed glass mat batteries, or AGM, and Gen-2 systems that will require far more robust energy storage.

    In discussing "Gen-1 technology," the presentation explained

    • "most new microhybrids include alternator control strategy that maximizes electrical generation during deceleration
    • fuel economy benefit is limited by Dynamic Charge Acceptance, or DCA, of the lead-acid battery
    • DCA depends on short-term history

    The discussion was accompanied by two graphs that are unreadable on the scan, but show the DCA degradation curves we've all come to know and love.

    In discussing "Next Development Steps" his presentation set forth the following goals

    • "maximize DCA of new battery under "ideal" conditions
    • improve consistency of DCA under broad range of real-world conditions
    • allow new electric functions / ensure fast recovery of Ah balance.

    His slide titled "Storage System Requirements" he indicated that:

    • Energy throughput of EFB and AGM batteries at 25° C was generally sufficient for most mainstream applications,
    • DCA was a problem and "significant improvement [is] necessary" because EFB and AGM can't handle more than a half to a third of the power the alternator can provide.
    • Voltage Quality and Internal Resistance are major issues for Gen-2 systems and the only choices are to isolate most loads from [restart voltage] dip with a dc/dc converter or second battery
    • Basic SLI requirements include "no compromise" with regard to reliability, winter operation, high temperature durability; weight and cost reduction will form an alternative route for EFB optimization, providing basic functionality (Gen-1 plus few improvements) for cost-sensitive volume applications; significant weight reduction along with very good cycle life and DCA at moderate temperatures, may be achieved at large on-cost, with alternative technologies once they have proven maturity and reliability.

    His final slide on "Storage Technologies summarized the landscape as follows:

    • EFB: becoming widely adopted for volume applications primarily in Japan and Europe - significant improvement toward Gen-2 targets expected
    • AGM: high throughput stop/start systems, vehicles with high and/or deep cycling requirements beyond stop/start (e.g. premium cars with entertainment systems) or low-volume programs where engineering robustness outweighs part cost
    • Alternative electrochemical systems like LFP or NiZn offer weight reduction and promise longer service life at significant on-cost, but consistent reliable operations e.g. under winter conditions is yet to be proven, and system integration into 14 V power supply systems presents a considerable engineering task
    • Dual storage systems that combine a robust lead/acid battery with a small "alternative" electrochemical couple offer, at moderate cost, the advantages of maximized brake energy recuperation and redundant energy storage system (e.g. for rolling stop/start) while not compromising on the system reliability provided by the lead/acid battery
    • The alternative high power energy storage device, and potentially the generator, may operate at a higher voltage (e.g. 48 V) and then allow to syply certain high-power loads from the same second voltage level. Transition to mild hybridization (propulsion assist) may be smooth.

    My bottom-line takeaway from the Karden presentation was that reliability, DCA and cost are the big three, but the big driver of system choice will be fuel economy, which is primarily dependent on DCA.

    Until I have a chance to talk with Dr. Karden in September, I have to believe my current thinking that the PbC will most competitive in the heavy mircohybrid space in the beginning and eventually work it's way down into the medium microhybrid range if Axion can find one or more ways to reduce system cost through learning curve economies and/or economies of scale. I think it's well situated on both fronts.

    Disclosure: I am long OTCQB:AXPW.

    Tags: AXPW
    Jun 26 10:55 AM | Link | 10 Comments
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