A battery future
Lithium-ion batteries have enabled products that would not otherwise exist. A mobile electronic device - a cellphone, tablet, or a PC, say - would look very odd if it were powered by an internal combustion engine, and would not be mobile if the device had to be plugged into the wall to function.
Batteries are vital in their role as technology enablers. Since the dawn of high-powered lithium-ion batteries in mobile electronic devices, we have seen the widespread introduction of similar batteries in power tools, gardening equipment, drones, behind-the-grid and utility scale energy storage units, robots, medical devices, and a long list of other applications.
However, the single biggest end-use application is electric vehicles, and that will remain the case in the coming years. It is undeniable that the future of mobility is electric. Within a decade, an internal combustion engine vehicle owner may be regarded much as a cigarette smoker is today – with some degree of disdain. According to the US Environmental Protection Agency, road vehicles emit 28% of the nation’s greenhouse gases, and in urban areas particulate matter pollution is each year responsible for thousands of premature deaths.
The technology required to eliminate particulate emissions and, to a large extent, greenhouse gas emissions from road transport is already here. The subsidies essential to get people to change their purchase habits – a choice between an internal combustion engine vehicle and an electric vehicle – have been introduced in many parts of the world, but more telling of the electric mobility future are the many regulations which will outright ban or make prohibitively expensive the future ownership of internal combustion engine vehicles.
The dawn of the electric vehicle era in which we currently live is one where the world will rapidly shift from a reliance on crude oil to a dependence on battery raw materials. Demand for core battery materials, including lithium, cobalt, nickel, and graphite, will undergo a long period of phenomenal demand growth over the next few decades.
Integrated battery raw material miners will take the place of integrated oil, although there will be ample space for newcomers.
As with oil extraction, mining requires large amounts of capital and new projects carry long lead times. Commodity prices are characterised by cyclicality, which is in turn reflective of the ebbs and flows of capital which finds its way to new projects depending on historical price levels.
Moreover, battery materials mining is likely to become more expensive over time. Although economies of scale and technological advancements have historically resulted in lower mining costs, particularly in bulk commodities, the ‘easy pickings’ of battery raw materials projects have for the most part already been commissioned. New deposits will be more expensive to develop.
The good news is that there is ample battery raw materials in the ground. The bad news is that commodity prices have to be sustained at higher price levels for longer in order for these deposits to be financed.
To the mining industry, capital scarcity is a much bigger problem than resource scarcity.
Battery producers can help the mining industry by being forthright with regards to the future demand for battery raw materials. The promise of eliminating certain raw materials from battery chemistries may alleviate upward price pressure derived from speculative stock build in the short-term, but the pain of absolute shortages in the long-term, should the elimination of these raw materials not come to fruition, will be a much bigger problem for the battery industry.
Resource and supply chain security
The battery industry will also have to contend with a growing desire for stronger supply chain security. The Democratic Republic of the Congo provides close to 70% of mined cobalt output on a yearly basis. This is unlikely to drastically change. China’s dominance in battery materials processing – by some estimates reaching 80% in 2021 – is however likely to be challenged in the future.
Battery materials are becoming increasingly important from a strategic perspective. It is unlikely that Europe and North America will continue to rely on China for intermediate battery raw materials processing in the long-term. Both have already taken steps to attract battery cell manufacturers. The next step is to provide support to battery materials processing capacity.
In addition to facilitation of capital and improving the ease of processing battery materials from a regulatory perspective, western governments should reward domestic battery materials projects by levelling the playing field with China. A positive move in this direction would be Europe’s carbon border adjustment mechanism. China’s refineries are predominantly powered by thermal coal-powered grids. We have an opportunity, now, to create low-carbon battery supply chains in North America and Europe which reflect the environmental objectives of the electric vehicle revolution.
Unlike oil, battery raw materials are not combusted and left to pollute the air we breathe. With the right recycling infrastructure in place, from collection, shredding, and processing, battery commodities can be reused with minimal material loss, indefinitely.
Over time, recycling will form an increasingly large part of battery raw material supply; until, at some point in the next 200 years or so, primary raw material extraction through mining will fall to a bare minimum.
Renewable energy and energy storage systems
While the lithium-ion battery cannot be credited with the introduction of renewable energy, it will likely be credited with the major reduction of coal, oil and gas power generation over the next few decades. The intermittent nature of solar and wind power generation requires storage capacity. This can come in many forms, from pumped hydro to flywheels, but no technology is as unintrusive and reliable as batteries.
Over the past few years, we have seen a rapid deployment of battery energy storage systems (BESS) on a grid and behind-the-meter basis. Analysts at investment bank Cowen have said that the grid will “see more changes over the next ten years than it has in the prior 100.”
BESS are emerging as the leading technology globally for new projects, and lithium-ion batteries are becoming increasingly popular as a result of falling cell costs. These BESS allow intermittently generated electricity to be stored for long periods of time, and with very short activation periods, reducing both the need for thermal power generation and, importantly, the generation of excess grid power. They also ensure energy supply security and maintain power supply in the event of wider power generation outages. We are already starting to see them replace diesel generators in places requiring continuous power like hospitals. BESS also helps in load balancing, ensuring a consistent supply of energy via national grids by storing energy at times of oversupply and topping up when required.
Utility grade renewable energy, with behind-the-meter solar and wind power, smart management of electric grids, combined with batteries, will improve both the reliability and efficiency of electricity supply.
In the future, electricity will be generated everywhere, stored everywhere, and power everything. This would not be possible without batteries. Currently, the largest lithium-ion battery installation is located in South Australia, powered by Tesla, boasting 100MW of capacity to power 30,000 homes when dispatching at peak output. In its first two years of operation, the project was estimated to have saved consumers over USD 150M. As the costs of renewable energy fall, the number of giant lithium-ion BESS projects are picking up around the world, bolstered further by government incentives. In 2010, the US had just seven BESS, accounting for 59MW of power capacity. By the end of 2018, the total number of operational BESS increased to 125 with a total installed power capacity of 869MW.
One drawback of lithium-ion BESS is that lithium cells can experience thermal runway, which causes them to release hot, flammable, toxic gases. In large storage systems, failure of one lithium cell can cascade to include hundreds of individual cells. However, as a result of a series of high-profile fires in Arizona and South Korea in 2019, enhanced safety technologies and standards are being developed, which will mitigate against such risks in the future.
In the 21st century, batteries will find their way into every end-use product which requires energy.
Two pillars of future development will also be enabled by batteries. First, the internet of things envisages a future – in which we, to some degree, already live – where all physical objects are connected, exchanging data with other devices and systems over the internet. The reliability of such devices will only be ensured through batteries, either within each device, or on a microgrid level, or (most likely) both.
Second, robotics. As technical tools, unburdening humans of the more trivial and dangerous tasks at work and in life generally, robots are bound to develop and expand into all branches of human activity in coming decades. Future robots will be increasingly mobile, and mobility requires batteries.
Looking towards the future
It has been more than 200 years since Alessandro Volta developed the first real battery, 150 years since the first rechargeable battery was created by Gaston Planté, and more than three decades since rechargeable lithium-ion batteries were invented by the Nobel Prize-winning trio of John B. Goodenough, M. Stanley Whittingham, and Akira Yoshino. With the support of numerous wildly intelligent people that have not received the same accolades, batteries have facilitated products and technologies which would not otherwise have been possible.
The electric vehicle revolution not only favours humans’ continued existence on earth through the reduction of both particulate matter pollution and greenhouse gas emissions, but also enables the application of batteries everywhere. The vehicle industry is carrying the necessary burden of revolutionizing the battery industry, increasing production capacities and lowering costs, so that batteries can be more widely and cheaply applied in other sectors in the future.
By Benedikt Sobotka, CEO of Eurasian Resources Group and Co-Chair of the Global Battery Alliance, and Michael Insulan, Vice President, Commercial at First Cobalt Corp
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