I Like Big Batteries - We Demand Supply

The Supply Crunch

EV popularity is increasing. EV sales from 2012 to 2021 are up 13 fold and the upward trend seems unstoppable. Well, almost unstoppable; there may be one thing that could slow this trend: battery cell availability. 

Battery materials (such as Nickel, Lithium, and Cobalt) costs have skyrocketed over the last two years. Prices are being driven by high global demand and a tight supply of refined materials. Lithium carbonate prices per tonne were up 88% year-to-date in October of 2022.

As you can see in the two graphs below, in 2022, Nickel hit a 10-year high and Lithium hit an all-time high. 

Nickel price history via tradingeconomics.com

Lithium Carbonate price history via tradingeconomics.com

But all is not lost.

More Mining, Refining, and Recycling

Obviously, these higher material costs are not going to help make EVs or energy storage more affordable, but there is a plus to the higher prices. Inflated prices mean it's more profitable to mine and refine these materials. This will bring in more investment and more of the needed materials. 

Once these materials are mined and in batteries, they will be available for this generation of battery tech and the next and the next, ad infinitum. These materials are not consumed like fossil fuels. They are not emitted from a tailpipe or smokestack into the atmosphere. The Nickle that is put into batteries today, will be recycled and put into new, better batteries in the next decade.

The increased cost of raw materials also makes it more profitable to recycle batteries. More on recycling later, back to mining and refining.

Caterpillar's First Battery Electric Large Mining Truck

Mining Is Getting Greener 

Most EV makers have goals to have zero emissions manufacturing. This starts with mining. More mining equipment is becoming electrified. In some cases, the very materials they are mining are the same ones used in the batteries powering the mining equipment. 

Normet SmartDrive battery electric mining vehicle

Demand for EV battery raw materials such as graphite, Lithium, Cobalt, and Nickel is currently outpacing supply. According to Benchmark analysts, unless 384 new mines are up and running in the next ten years, the EV transition will be slowed as carmakers struggle to source battery materials. They estimate that 74 Lithium mines, 62 Cobalt mines, 72 Nickel mines, and more than 100 graphite mines and production plants are needed. 

For comparison, there are currently about 3,760 active coal mines. So, assuming the above estimates are correct, EV batteries will need about one-tenth the number of mines that are currently active, just for coal. 

Battery Recycling 

The good part about these battery materials mines is that they are not consumed after they enter the battery lifecycle stream. The materials can be recycled and placed in new batteries after they degrade beyond usefulness. It can become a closed loop. So unlike coal mines, these materials will reach a state where nearly all of the needed materials can come from recycling streams; rather than a never satiated gaping maw. 

The recycled material streams will be of higher purity since the recycled materials have effectively been refined multiple times and this will result in better batteries. Additionally, recycled materials will be less subject to supply chain disruption and more affordable than newly mined materials. The recycling plants will be near where the batteries are produced, rather than wherever the random vein of various materials happens to lace the Earth.

"Ephemeralization" - computers from the 1960s used to take up an entire room, now the smartphone in your pocket has far more computing power. This same march of progress is happening for batteries, albeit at a slower pace. Battery energy density is increasing by about 5% each year. 

This wraps up part 2. Part 3 (prices will drop) is coming soon.

Three Parts: 

Big Batteries Part 1 - Why

Big Batteries Part 2 - We Demand Supply

Big Batteries Part 3 - Battery Prices Will Drop

I Like Big Batteries - Why

Today, we use batteries in everything from our electronics (phones, watches, tablets, earbuds), to power tools, toothbrushes, and electric cars. Battery tech is more important to our daily life than it's ever been. And now that the tech is maturing, it is being bundled together into bigger batteries than ever before for new purposes.

We'll look at how batteries, specifically big batteries, are being used and (more importantly) how this is laying the foundation for the "Electrify Everything" future. 

Why Big Batteries...

Two primary markets use big batteries: energy storage (residential and industrial) and long-range electric vehicles (personal transportation and transportation of goods).

Battery-based energy storage is vital to our renewable energy future from moving people and goods to smoothing out the intermittent nature of renewable energy. For transportation, to replace all the towing, hauling, and road trips that internal combustion vehicles are used for today, we're going to need EVs with big batteries. For renewable energy to power the lights, air conditioners, and heat pumps in a major city, we're going to need big storage batteries.

Grid Stabilization & Renewable Energy Storage

The sun doesn't always shine and the wind doesn't always blow, but this does not mean renewables are unviable. A big battery can fill in the gaps and absorb the excesses. This applies to whether it's industrial-scale wind or home solar. 

Power inverters outside the battery building at Moss Landing Energy Storage Facility in Moss Landing, California. Credit: David Paul Morris/Bloomberg via Getty Images

Industrial Energy Storage

One example of a massive industrial-scale battery is the Moss Landing Energy Storage Facility in California. It has 4,500 lithium-ion battery racks stacked for a total of 1.6 GWh of capacity. This battery bank can fill in when there are short-term outages, it can maintain the grid frequency, and it can make a renewable portfolio a viable part of the grid production. Fully charged, this facility could power over half a million homes for 24 hours.

Home Energy Storage

Residential batteries are great. They allow you to time-shift your grid usage to the cheaper hours of the day and provide you with blackout protection. We've had home batteries for about 2 years. These batteries kept the power on when snow and ice took our grid down on Valentine's Day 2020, they make our solar production more valuable, and they charge up (just in case) when wildfires plague the state.

In addition to this blackout protection, the time-shifting ability makes our solar worth about 75% more, since we can use solar energy when prices are the highest, instead of just when the sun is shining. 

Measured in mere kilowatt-hours, residential batteries have far less capacity than an industrial energy storage system (measured in gigawatt-hours), but there are far more residential installations and these little residential packs can be ganged together into a virtual power plant, working together to significantly offload the grid during peak demand periods. 

Big Batteries Can Move People and Goods

Batteries are the powerhouse for the future of transportation from scooters to semi-trucks. Personal transportation, hauling, towing, deliveries, and more will be battery-powered.

Personal Transportation

Recently we published an entry about the need for some people to have long-range electric vehicles. A big battery in your electric ride provides the range needed, even in adverse weather conditions. It provides future-proofing against degradation or the curveballs that life can throw at you (detours, evacuations, new commute due to a new home and/or job...). With a big battery pack, if you can't plug in every night or if you forget to plug in, you're not stranded. 

A personal vehicle with a big battery provides versatility. 

Electric trucks with big batteries are available now and more are coming soon. These vehicles can provide vehicle-to-load (V2L) services, allowing you to plug electrical tools directly into the vehicle. Power your saws and drills right from the truck bed. Have a job site that doesn't have electrical power yet, no need to haul a separate generator, just plug in and get the job done.

With the right equipment, these large battery vehicles can even power your house during a blackout. Vehicle-to-home (V2H) blackout protection is something that only vehicles with big batteries can do.  

Electric Semi-Trucks

On-highway and medium-duty trucks from Freightliner are shipping now. These freight trucks currently have 150kWh to 300kWh of battery capacity depending on the intended use. These are not small batteries.

Tesla's all-electric class 8 commercial semi-truck completed its first 500-mile trip with a full load in November of 2022. The first customer deliveries started in December of the same year. Musk has said that Tesla aims to produce 50,000 semi-trucks in 2024. As I write this, the full specs have not yet been released. However, the pack is estimated to be more than 900kWh. We'll be seeing megawatt-hour packs soon.

Electrifying semi-trucks is very important. Today, semis are primarily Diesel-powered. In the US, they are only about 1% of vehicles on the roads, but they have a very outsized pollution impact; they generate about 20% of vehicle emissions and about 36% of particulate emissions. This directly has an impact on health and air quality.

One additional advantage of electric semis is regenerative braking. Regen braking is nothing new for EVs, but semis take this to a whole new level. Coming down an incline, hauling a heavy load, a Diesel semi will have to use engine braking or jake brakes and brake pads. This creates noise and particulates from the brake pads. An electric semi, on the other hand, will be able to use regenerative braking coming down that same incline. This means at the bottom of the incline, the e-semi will have more charge than it had at the top of the hill and the brake pads will last significantly longer.  

This concludes "Part 1 / Why" of our big battery series. Check out part 2 (Demand) next week.

Three Parts: 

Big Batteries Part 1 - Why

Big Batteries Part 2 - We Demand Supply

Big Batteries Part 3 - Battery Prices Will Drop

Tesla Master Plan 3 is About Moving to Earth 2.0

Earth 2.0 by Dall-e2

Tesla recently held their Investors' Day event. This is where they unveiled Master Plan 3. 

Master Plan 3 was not laid out as simply as the few lines of text that Master Plan 1 and Part Deux, but there were a few clear messages: 

1. A sustainably powered world can be a world of abundance 
2. Electricity gets more done with less
3. Battery energy storage enables a renewable energy economy 
   
   

One, A World of Energy Abundance 

Many people think that a sustainable energy future requires a future of energy austerity and deprivation. This is the opposite of the truth, as we've covered previously. When you have a finite energy source, such as fossil fuels, this is when you must ration it, because by definition, you have a limited amount of it and it will eventually run out. 

Two, Meet All Your Energy Needs More Efficiently

Today, only about one third of the energy that we use actually does what we want it to. The rest is waste. This is as if you had a car with a big hole in the gas tank. You would get the tank fixed if you were spilling two thirds of the gasoline as you drive. Well, if you drive a gas car, you are spilling 2/3rds of the energy as waste heat. Electric vehicles are the solution. An EV with a 75kWh battery pack is about the energy equivalent to about 2 gallons of gas. Yet it can drive you around about the same as 8 to 10 gallons of gas. Given this efficiency all transportation will move to electrification.  

Similar, ratios exist for home and building heating as well. Heat pumps are the answer there. 

 Three, Big Batteries 

Batteries enable renewable energy. They absorb the surplus and supply power when you need it; all at a rate far faster than any generator could spin-up. This makes the grid more stable, more reliable, and more affordable. Much more on the benefits of big batteries coming to this blog later this month.

Four: No Miracles Required

All of this can be done today and with less mining than our current fossil fuel economy. We have more than enough raw materials available. As lithium prices increased, the amount of reserves increased significantly based on new prospecting. This transition can be done with less (yes, less) investment than we are currently spending on the fossil fuel economy. 

Master Plan 3 is one small step for our planet on the Kardashev Scale.