Can lithium batteries change the status quo of energy?

Lithium-ion batteries can not only spark the electric car revolution but can even penetrate our daily lives and revolutionize today's energy situation, according to a print edition of the latest edition of the Economist magazine.

The following is the original text:

Walking about three-quarters along a serpentine line at the Nissan Sunderland plant, a worker is constantly installing fuel tanks on numerous loose passenger chassis -- most of the cars the factory makes are SUVs. But from time to time the line passes another car: an electric car called Leaf.

At this point, the worker's task will change from installing a fuel tank to installing a battery. His movements match perfectly with the robotic arm next to him, seamlessly switching between fuel cars and electric cars.

Until recently, many people thought the switch was incredible. Over the past century, the internal combustion engine has been the main engine of cars and ships. It does give it a big lead. Although Leaf claims to be the world's best-selling electric car, the Sunderland plant, the UK's largest car factory, produced only 17,500 Leas last year, compared with 310,000 free cars that year. In stark contrast, Xiaoke is in a profitable state, while Leaf is in a loss.

Last year, global electric vehicle sales were 750,000 units, less than 1% of the new car market. Carlos Ghosn, the owner of the Renault-Nissan Alliance, said in 2011 that only the two companies will double their electric vehicle production by 2016. In hindsight, this prediction is obviously too optimistic, but similar predictions are not uncommon.

However, while the timing of the launch of electric vehicles is uncertain, it is generally agreed that this technology will soon become big business.

Civilian electric vehicles with mileage close to a full tank of gasoline (such as Tesla's Model 3 and General Motors 'Chevrolet Bolt) have recently gone public, and the revised Leaf will be released in September. The Sunderland plant shows that fuel trucks and electric vehicles can already share a production line, thus simplifying the popularity of such vehicles by expanding capacity.

lithium battery Leap Forward

Many forecasts suggest that the lifetime cost of owning and driving an electric car can be compared with that of a fuel car within a few years, prompting sales to soar in the 2020s and become mainstream in the 2030s. It accounted for about half of global sales of electric vehicles last year, with an estimated 2 million electric and plug-in hybrids on the road by 2020, up to 7 million in 10 years.

The consulting firm Bloomberg New Energy Finance pointed out that oil companies' expectations for electric vehicles are much higher than they were a few years ago. The Organization of Petroleum Exporting Countries (OPEC) now expects to drive 266 million electric vehicles on the road in 2040. Both the UK and France also said that by then, pure fuel vehicles will be banned.

This is due to the remarkable expansion of the lithium battery business and the general consensus that the industry will continue to grow rapidly in the future. The first lithium batteries began selling 26 years ago and were originally used on Sony's CCD-TR1 camera. That product was popular, and the batteries it used were even more so, and it was gradually applied to computers, mobile phones, cordless devices, electronic cigarettes, and other products.

The more electronics you use batteries, the greater the demand for lithium batteries. Last year, consumer products contributed about 45 GWh of lithium batteries. In layman's terms, if all the batteries are used to power the United Kingdom (the average power consumption in the country is 34 GW), it can continue for about 1 hour and 20 minutes.

In the same year, the production of lithium batteries for electric vehicles reached half of the electronics: 25 GWh. But SamJaffe, a battery consultancy at CairnERA, expects that demand for automotive batteries will surpass consumer electronics as early as next year, making it a turning point for the entire industry. The massive expansion has begun.

Japan's Panasonic, South Korea's LG Chemical and Samsung SDI, and China's BYD and Ningde eras, the world's top five manufacturers of lithium batteries, are all ramping up capital spending and are expected to triple production by 2020. It is estimated that Tesla's $5 billion super factories built in Nevada with Panasonic can already produce about 4 GWh per year. Tesla said it would have 35GWh capacity by 2018. Just four years ago, this output was sufficient for all lithium products in the world.

Super factories are not just built for electric cars. After hearing about the power regulation in South Australia, Tesla founder Elon Musk told the country’s prime minister in March that Tesla could provide enough battery capacity by the end of the year to ensure that the grid never Goodbye.

At the super factory, they are now trying to cram 129MWh of capacity into order to keep their boss's promise. When installed on the other side of the Pacific, it will become the largest of its kind in the world based on power grids. However, many similar systems will be deployed in the future.

As grid operators look for ways to smooth the intermittent supply of solar and wind energy, industrial-scale lithium batteries are becoming more popular -- in particular, they splice together many of the batteries used in cars and adjust their chemical and electronic components. In order to support faster charging and discharging speed.

Consumers who want to be independent of the grid can buy smaller batteries -- or store their own electricity to be sold to the grid during the day or at night when the electricity price is highest. Batteries have become an integral part of a truly low-emission vision for the future.

Global production capacity soars

The basic principles of lithium batteries are easy to understand. When the battery is charged to a potential, lithium ions are pulled deep into the graphite electrode. During use, these lithium ions return to the more complex electrode, the cathode, made of a compound of lithium and other metals through the liquid electrolyte.

On the other hand, the basic operating model of the battery business is very opaque, mainly because suppliers pay too much attention to secrecy and the unpredictable economic situation of the Asian giants who are market leaders.

The situation in the past few years shows that all large manufacturers are increasing production capacity, in part because this can drive down unit costs. As a basic component of the battery, lithium batteries cost more than $1,000 per kWh in 2010 and fell to between $130 and $200 last year. GM said that when the company purchased a 60kWh battery pack for Bolt, the price paid to LG Chem was $145 per kWh (the cost of the battery pack was higher than the cost of the battery due to labor, materials and electronic components. ).

Tesla said that the price of the Model 3 battery is cheaper. Low cost is not the only improvement. A large amount of R&D investment has achieved higher energy density (increased capacity per kilogram) and greater durability (increased charge and discharge cycles). Bolt's battery warranty lasts for 8 years.

But in this way, price cuts can not only produce batteries that are cheaper and of better quality but also lead to severe overcapacity. CairnERA estimated last year that lithium battery capacity is one-third higher than demand. Both the agency and BNEF said that for every car battery produced, battery manufacturers either lose money or can only make a small profit.

Despite oversupply, they all plan to continue to expand, in part to further reduce costs. Jeff explained that this kind of thinking belongs to the "traditional Asian giant model": in exchange for profit margins in exchange for market share.

This seems to be a good strategy as the future of electric vehicles is bright. But now, it seems a bit nervous. Although Jeff believes that the growth in demand for electric vehicles and storage facilities can support this rapid expansion, he now also believes that "this is like a gold rush without gold."

But it does contain some other valuable metals. To produce more batteries, you need more lithium, as well as a variety of other metals, including cobalt used to make cathodes. These metals account for about 60% of the cost of batteries. For battery manufacturers, ensuring the continued supply of these materials is as important as mastering electrochemical technology.

Since 2015, Simon Moores of consulting firm BenchmarkMineralIntelligence has said that lithium prices have tripled, cobalt prices have doubled, and prices of nickel-containing chemicals used in cathodes have also risen.

Morse said it is not difficult to find a new source of lithium. The world's lithium reserves are at least 210 million tons, and the current annual output is only 180,000 tons. The new lithium mine is gradually being mined. Chile's SQM, the world's largest lithium producer, announced in July that it would invest $110 million in Western Australia to form a lithium joint venture.

The situation with cobalt is even more tricky. Not only supplies scarce, but many are from the Democratic Republic of the Congo. There are both ethical issues in this region (need to rely on child labor) and business problems (no one wants to rely on warlords for important resources). LG Chem has said that the company is trying to reduce the amount of cobalt used in the battery while continuing to improve performance. In the future, recycling this metal from used batteries will increase the sustainability of the entire industry.

One of the reasons why manufacturers are still confidently expanding their production capacity in the face of rising raw material prices is that lithium batteries currently have few rivals. There are often other battery technologies that claim to have a greater advantage in principle - but no technology can change from a simple idea to a dominant technology, like a lithium battery, through decades of development. The entire process has spawned a number of complementary technologies, including fine manufacturing, electrolyte selection, and even more complex metal cathode nanotechnology.

Kainan·saxin, head of CaMX Power, a supplier of cathode materials in the United States, said that the cost and weight of lithium batteries, the number of repeated cycles, durability, and safety are all achieved through countless adjustments, not overnight.

He likens battery chemistry to the drug discovery process in the pharmaceutical industry. "It's really hard. Whatever you want to do on a scale, you must accept the side effects," he said. This is hard for a potential usurper to imitate. In the foreseeable future, progressive lithium battery technology -- possibly using new solid-state electrodes -- will continue to lead and benefit from the continued proliferation of applications it supports.

Until now, the most mainstream is the cylindrical 18650 battery. It is about 65 mm long and 18 mm in diameter and has an energy density of about 250 Wh per kilogram. (As a comparison, the energy density of gasoline is about 50 times higher, but the battery can store hundreds of times more energy.)

Tesla and Panasonic are currently developing 2170 cores, which are slightly longer and wider than 1,8650. It would be the densest battery on the market, Mr. Musk said. The company said that the cost of driving Model 3 delivered at the end of July was half that of any previous model. At the launch of the car, Mr. Musk's announcement that he would be able to produce 500,000 vehicles next year was awe-inspiring. "Welcome to the production hell," he said to the assembler.

Tesla announced on August 7 that it would issue $1.5 BN worth of bonds to support the company's expansion plan, giving the stock market a much-needed respite -- often financed by the stock market -- and its share price has risen by two-thirds over the past year.

The company has said it has received 455,000 pre-sale orders for the Model3, which will generate enough cash to shore up its finances before the end of the year. If everything goes according to plan, Musk hopes that the Super factory will become the largest building in the world, with a capacity of 100 GWh per year. The company could also build superplants elsewhere, and the next one could be in China.

All this suggests that electric cars will flourish. There is no doubt that these products are getting better and cheaper. But there are other factors that limit its practicality, most notably charging. In Britain, 43 % of car owners don't have roadside parking, so they can't recharge their cars at home. Using an 11kW charger to charge a 90kWh battery for 6 hours, it is possible to burn the fuse.

Rapid charging stations are a solution, a sort of gas station. Some car companies have begun to build such facilities to ease the "mileage anxiety" characteristic of electric car owners. But it remains to be seen whether the speed at which such facilities expand will support the industry's ambitions.

It is the uncertainty about the growth rate of electric vehicle use that makes storage an attractive option for battery makers. The San Diego Gas and Electricity Company (SDGE) recently built such a facility in a parking space on the outskirts of San Diego is not as shiny as the launch of a new car. It's actually a car battery disguised as a trailer park with 384,000 cores. This is probably the dullest Transformers ever.

But SDGECOO Caroline Winn said that the ordinary is its charm. The purpose of this facility is to provide electricity at peak electricity usage. The modular building makes this 120 MWh facility – a facility slightly smaller than Tesla's commitment to building in South Australia – took just eight months from construction to commissioning. Its noise is very small and almost inaudible.

If the same work is done through gas turbines, the cost can be reduced, but it takes several years and it is impossible to obtain the consent of local residents. The battery is "much more beautiful than a gas turbine," says Mr Wynn.

Ultimate energy source.

For Tesla and other battery makers, grid storage is the most attractive part of the electricity market, taking advantage of what could otherwise be excess capacity. In addition, self-use storage systems can also increase battery demand. Tesla entered the market through Powerwall home batteries, hoping to supplement the company's solar panels.

Nissan is also exploring its own storage market. The company worked with Eaton, an American power management company, to provide used Leaf batteries to companies and factories as backup power supplies to replace diesel generators. Their first major customer was Amsterdam Stadium, home of Ajax Football Club.

Such systems may not be very competitive in terms of price, but the government will provide them with various subsidies. In May, New York State regulators gave ConEdison, a utility company, the right to install batteries in Brooklyn and Queens to power the grid.

New York's power grid has fallen into disrepair, dating back to the era of George Westinghouse and Nikola Tesla more than a century ago. Efforts are currently being made to absorb more renewable energy sources as a source of electricity, and energy storage facilities offer new ways to cope with peak demand for electricity. The state's energy official, Jason Doling, said the project was ideally suited for installation in high-rise buildings, which could power the elevator during the morning and evening hours.

But fire authorities in New York are still worried that lithium batteries in buildings could start fires. Last year's Samsung Galaxy Note 7 "Bomb Door" made the world realize that if the lithium battery is not properly designed, it will burn because of a short circuit. But on the whole, the new materials and ceramic coatings used on the electrodes have made car batteries very safe.

In addition to security concerns, companies that install their own power storage systems say they are hampered by outdated regulatory and insurance issues. AnilSrivastava, the head of the Swiss battery maker Leclanché, said that this limited their ability to obtain funds. They also need to find ways to make power storage worthwhile.

At times, this is almost the only regulatory solution (as in San Diego): the California utility board was worried about a power outage in Los Angeles after the 2015 leak of the Aliso Canon tank. When the price is the main target, the battery is looking for more than one service to provide to the user. This program is called "revenue superposition." For example, a system can not only power the grid for short-term frequency regulation, but also serve as a response to peak demand.

It may sound complicated, but finding more than one way to sell the same thing is an inevitable trend in the battery industry, just as it customizes different products for different markets and different sizes of use. While today's boom may seem daunting, in the long run, the industry does seem to be heading for good.

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