The Energy Storage Future: New ideas, New Innova- tions, New Collaborations Group 14 Technolgies Group 14 Technolgies

Table of Contents

Driving Toward a 5 Clean Energy Economy by Bob Lutz

Manufacturing Gap 6 Stifles U.S. Innovation by Doug Morris

Will the U.S. Compete in Clean Tech? 8 by Steven Visco

Better Batteries are Just the Beginning 10 by Dr. Henry “Rick” Constantino

Energy Storage Breakthroughs Are 12 Coming – and They Will Be Game Changers by Jun Liu

A Clean Power Future Requires 14 Faster Innovation Time to Pick up the Pace of Battery Innovation by Daniel Schwartz Q&A with John Chen 16 G14 and John Chen

Conclusion 18 by Rick Luebbe Group 14 Technologies

4 Group 14 Technologies

Driving Toward a Clean Energy Economy

Building a broad-based clean energy To get EVs to a tipping point, we will economy in the United States would bring need to improve both cost and perfor- major benefits. Despite our recent gains in mance to compete with gas powered domestic oil and gas production, America’s engines. And those same improvements industries and everyday citizens are still could stimulate related innovations that vulnerable to price hikes and supply shocks make our computers, phones, appli- from overseas producers. Volatile supply ances and gadgets work better, last and pricing have plagued our economy longer, charge faster and cost less. for too long. Reducing our dependency on All of this requires advances in tech- petroleum by expanding the use of renew- nology and materials, which is the focus able electricity would stimulate economic of Group14 Technologies. It has assembled growth and increase our energy security. a team of brilliant minds focused on commercializing cost-effective, advanced Reducing our depen- silicon-carbon composite anode materials for lithium-ion batteries -- breakthrough dency on petroleum science that will help push batteries to by expanding the use the next level. They know the importance of cost and scalability. They know that BOB LUTZ of renewable elec- showing impressive lab data is a long way GROUP 14 TECHNOLOGIES tricity would stimu- from a successful product, and even farther BOARD MEMBER from creating a change in the industry. late economic growth and increase our By driving innovation that dramatically improves lithium-Ion battery performance, energy security. Group 14 Technologies is pushing us closer to the day when electric cars are the stan- dard. And that in turn will unlock potential In support of this goal, our government, U.S. economic growth, powered by stable, industry leaders and research labs have reliable domestic sources of energy. spent a lot of time and money exploring technology needed to build electric vehicles. But today, EVs are still no more than a niche product. That’s because the current price and performance of EV batteries is not competitive with internal combustion engines. EVs are too expen- sive, still have limited range, and are inconvenient to re-charge. We need to build cars that consumers want to buy. Obviously they must be affordable for everyone. Tesla, for example, makes some beautiful EVs, but they are too expen- sive for most people. Even the sales of more affordable EVs and hybrids often slump when gasoline prices are low.

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Manufacturing Gap Stifes U.S. Innovation

The historical decline in U.S. manufacturing developing a new cell can be so difficult capacity has spurred vigorous discus- and so expensive that they end up settling sion on the loss of domestic factory jobs, for the next closest thing they can find. That notably to China and greater Asia. But that usually means their product won’t perform decline also creates less obvious prob- as well as it could. If we were able to lems. Namely, it stifles innovation here at produce cells in the United States that could home, leaving promising new consumer enable product manufacturers to get special product technologies just out of reach. sizes and special chemistries more freely, a tremendous boost in access to new and In the energy storage industry, a lot innovative new technologies would occur. of cutting edge research is driven by smaller companies working to make batteries more powerful, longer lasting, In the energy storage less expensive and faster charging. Many new technologies have been delayed industry, a lot of for years simply because they can’t find cutting edge research an easy path into a factory. It can take a decade or even longer to develop the is driven by smaller DOUG MORRIS new materials to enable these improve- companies working to CEO, POLARIS BATTERY LABS ments. And that’s just too long. make batteries more Imagine if your laptop computer or cord- powerful, longer lasting, less drill had 50 percent longer battery life, or if you could fully charge your phone less expensive and in 15 minutes at an airport kiosk. Even bigger benefits could come in the electric faster charging. Many vehicle market. Today, you might sit in a new technologies have coffee shop for an hour waiting for your car to charge. Technology in the works now been delayed for years could let you pull in to a service center simply because they and swap out a depleted battery for a new one, or to fully recharge your existing can’t fnd an easy path battery, in less than five minutes, much into a factory. It can like a visit to the gas station today. And better storage technology on the power take a decade or even grid is one of the few remaining barriers longer to develop the to a massive expansion of cost-compet- itive renewable energy across the U.S. new materials to enable

To accelerate commercialization of these these improvements. new technologies, startup companies need And that’s just too long. smaller batches of raw materials that are currently expensive and difficult to obtain from suppliers based in Asia. Larger orig- Asian suppliers have longstanding cost inal equipment manufacturers (OEMs) like advantages over U.S. industry, but today Apple and Samsung can generally get what that price gap is only 5 to 10 percent. Most they need at scale. But for many others, of that advantage comes from lower labor

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costs and government support. But the It might be possible to reduce labor costs full cost of Asian sourcing includes addi- through automation. Fully automated tional factors that aren’t easy to quantify. battery production lines are feasible, For example, support costs can be much along with technological improvements higher for a U.S. manufacturer relying that could lower production costs. Well- on a supplier in Asia. Quality control – placed government supports could assessing inventories and shipping them also reduce or eliminate the price gap back to a supplier – can come with signifi- between U.S. and Asian suppliers. cant costs in both time and money. Competitive pricing would certainly Supply assurance can also be more get the attention of large OEMs. But risky. Many Asian cell suppliers look at more important would be the ability to supporting U.S. contract business as kind buy better performing advanced cells, of a side note. If they’re in a slow period using new materials and new enhance- and they have some extra capacity, they’d ments that aren’t available today from be happy to have the work. But if they get suppliers in Asia. Supporting current busy, their interest can wane, even to the innovation occurring in the U.S. with point of ending the partnership. Major dedicated, nearby manufacturing muscle manufacturers buying in large quantities could accelerate production of more can find supply more readily. It’s the smaller flexible, versatile specialized cells that niche players than can get locked out. OEMs have waited years for. Until that time, OEMs will continue to buy the best Lastly, the lack of intellectual property product they can get at the lowest price, protection in some parts of Asia is a serious and consumers will continue to wait for concern, especially for companies that tantalizing product enhancements that have developed some kind of new tech- will forever seem just around the corner. nology. Not knowing that your manufac- turing partner will protect your secrets is risky and scary. And in general, that’s the case in China. If you could add up all the hidden costs and risks of sourcing from Asia, the price advantage compared to U.S. suppliers might evaporate completely. So, what would it take to bring battery manufacturing back to the United States?

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Will the U.S. Compete in Clean Tech?

A friend of mine with a Ph.D. in chem- Much of the problem stems from short- istry once worked for a major consumer term thinking among business and political battery manufacturer, where he led a leaders. Big U.S. industrial companies are team researching rechargeable lithium very good at supply chain management, metal batteries. Shortly after launching his manufacturing, and cost reduction, but project, he presented his plan to senior struggle to foster a culture of innovation. company managers, one of whom said, U.S. battery companies are mostly stand- “Nice job, but to be fully honest with you, alone entities. They do employ Ph.D.s and I hope you fail.” The company was making research teams, but they aren’t focused lots of money selling throwaway batteries. on generating breakthrough technolo- Why would they want to mess with gies. They are often tasked with near term complicated, unproven new technology? goals such as incremental improve- ments for existing products to help the Technological advances like lithium company meet quarterly earnings targets. batteries are essential for the growth of renewable energy, electric cars and a wide Meanwhile, several leading Asian elec- range of compelling new products and tronics companies have built battery services. But indifference -- or even resis- innovation into their vertical structures, STEVE J. VISCO, tance -- to innovation, from both compa- designing products that integrate their own CEO AND CTO AT POLYPLUS nies and the federal government, have new technologies, which creates a market BATTERY COMPANY left the U.S. far behind other countries in for them and supplies steady research the pursuit of next generation technology. funding. Companies like Samsung, Pana- We have ceded crucial new industries to sonic, LG and Amperex Technology (ATL) competitors, mostly in Asia, where heavy employ thousands of researchers, dwarfing investment in research and ample govern- the staffs at their U.S. counterparts. ment support have helped create good jobs and new markets for cutting edge products. On the government side, the U.S. did supply stimulus funds for renewable energy In stark contrast, the U.S. government companies during the Obama administra- provides only tenuous support for renew- tion. Although well intentioned, the urgent ables, with limited tax credits and incon- focus on creating manufacturing jobs incen- sistent research funding. Current federal tivized some dubious choices that did not budget proposals include big cuts in end well. Several promising small ventures funding for important research at the expanded too quickly in order to qualify for Department of Energy. President Trump federal support, instead of incubating their is focused on reviving the failing coal innovative new products. In the aftermath, industry and withdrawing from previous public support for clean tech funding commitments to reduce air pollution. dwindled. In countries like China, Japan and South Korea, government support If we stay on that shortsighted path, the is much more consistent, encouraging results could be disastrous for our energy longer-term research and development. sector and our economy. New technolo- gies that could boost growth, increase And yet, there may still be time for the U.S. our energy independence, and benefit to compete. To be sure, it’s very tough to the environment will go elsewhere, along directly challenge large, established compa- with thousands of research jobs. Scien- nies that have already depreciated their tists working at our national labs and at equipment and have tremendous manufac- small companies will likely move to China, turing experience. The cost of lithium ion Japan, or South Korea, where they can find technology is rapidly declining – which was funding for their work. If we surrender all an unanticipated and an exciting develop- that brainpower, we may never catch up. ment. It couldn’t have come at a better time.

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Tesla plans to expand its production of The U.S. Department of Energy and a electric cars to 500,000 a year and Volvo number of industrial outfits have been recently committed to an all-electric or looking at grid storage and batteries hybrid fleet in 2019. Demand for electri- in particular for a long time. Today, the fied transportation is surging. All of this is U.S. is not a significant competitor in great for the consumer, but it’s extremely the lithium ion market. Even Tesla’s difficult for U.S. battery manufacturers Gigafactory, which builds car batteries to compete in such an environment. in Reno, Nevada, uses cell technology developed by Panasonic in Japan.

Much of the problem For the U.S. to be a major player in any clean tech field, it’s going to take stems from short-term renewed, reliable government commit- thinking among business ment to the development of emerging technologies, plus increased investment and political leaders. Big from big industrial companies. Industry U.S. industrial compa- collaboration would help incubate new products and build integrated supply nies are very good at chains to compete with Asian compa- supply chain manage- nies. Funding from patient investors, such as Breakthrough Energy Ventures, ment, manufacturing, can augment government support.

and cost reduction, Without additional support, the U.S. but struggle to foster a will be relegated to second-tier status in an enormous and strategic industry. culture of innovation. We can choose to bolster our economy by investing in energy innovation and But we could win with step change tech- tomorrow’s technology, or we can watch nology – innovation that offers a huge other countries build entire new, clean advantage in terms of performance. tech businesses and reap huge economic One such possibility is the develop- rewards. It’s not too late to catch up, ment of rechargeable lithium metal but it will be if we don’t act soon. batteries, which are expected to double the energy density of competing Li-ion batteries (half of the weight and size for an equivalent energy content. Commer- cialization of this technology domesti- cally would give U.S. manufacturers a significant competitive advantage.

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Better Batteries Are Just the Beginning

Early in my career I worked in the phar- improvements in battery materials and maceutical industry, developing advanced components to make better batteries. drug delivery systems for complex thera- Fortunately, energy researchers can operate peutics such as peptides and proteins. much more nimbly than drug developers, For example, I advanced a technology who build products that affect people’s to reversibly open the tight junctions of health, and are therefore subject to rigorous nasal mucosal cells, allowing for the safe protocols and multi-year processes and rapid permeation of large-molecular- mandated by the federal government. By weight drugs across those surfaces. This contrast, we in the energy field conduct our was a significant breakthrough, which tests on mechanical devices, not human helped our partners in the biopharma- subjects. I can test a new concept for a ceutical industry to develop more conve- battery material in the lab in mere days nient and effective dosage forms for the to weeks. If I can make enough of that drug in their development pipeline. material quickly, I might have a customer testing it on a related device in a matter You might ask: what does improving drug of weeks to months. Compared to phar- delivery have to do with building better maceuticals, energy storage technology energy storage systems? Plenty, it turns out. can be developed, tested, and commer- DR. HENRY “RICK” cialized at a remarkably rapid pace. COSTANTINO In the pharmaceutical world, you need devices that reliably deliver precise drug CHIEF TECHNOLOGY OFFICER, dosages at the desired time to the correct The therapeutic beneft GROUP14 TECHNOLOGIES site of action. Moreover, the drug formu- lation needs to remain stable over a depends on proper prescribed time frame – a two-year shelf formulation, storage life, for example. The therapeutic benefit depends on proper formulation, storage and delivery. When you and delivery. When you compare drug compare drug delivery delivery with energy delivery, the challenge is conceptually very similar. We need to with energy delivery, the provide electrical energy in the correct form challenge is conceptually and in an extremely stable and reproduc- ible way to power the next generation very similar. We need to of vehicles and consumer electronics. provide electrical energy Our main goal today is to increase the in the correct form and energy density – or the power stored – in battery materials, so that our part- in an extremely stable ners can produce reliable, longer-lasting and reproducible way to batteries that expand the range of elec- tric cars or ameliorate the time and power the next genera- frequency for charging our personal tion of vehicles and electronic devices, especially cell phones. Just as drug makers need support consumer electronics. from researchers to make their product more effective, battery producers need

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That also means that battery improve- Again, we can look to the pharmaceutical ments can be made relatively inexpen- industry as an example. New drugs are sively, especially if those improvements approved to treat specific health issues. comprise a platform technology compatible But researchers may also find new indica- with existing energy storage systems. This tions for that drug long after it’s been devel- situation reminds me again of my experi- oped. Even venerable aspirin, originally ence developing a nasal drug delivery used to relieve pain and fevers, continues platform, wherein the intent was to provide to find new uses in the 21st century. compatibility with existing and future pharmaceuticals. Likewise for energy At G14 Technologies, we’re working on storage, those new and improved battery breakthroughs that could drive similar materials meant as a “drop in” for current innovation for decades to come. Power battery systems will not require existing storage and distribution systems will play battery makers to “start from scratch” with a critical role in the global transition to a whole new technology. We’re seeing safe, reliable renewable energy – lowering steady incremental gains in energy density costs, easing air pollution and reducing today by upgrading materials and compo- fossil fuel consumption. To meet this need, nents, without requiring a huge invest- we are developing a rationally-designed, ment in a new production infrastructure. high-performing silicon-carbon composite Those performance improvements open material to augment conventional graphite up new possibilities for battery-driven in lithium ion anodes. It’s hard to know products and systems, including some that exactly which applications and which aren’t even on the drawing board today. manufacturers will lead the energy storage market into the future. Fortunately, we And that’s where things could get really don’t have to know. We’re working with interesting. When we develop new mate- different battery companies across a rials to deliver higher energy density at a variety of applications, all with the same lower cost per energy storage unit, it leads overall goal - to improve energy delivery. to lighter, smaller, and cheaper lithium ion batteries. That in turn could enable develop- ment of new miniature devices, wearable computers and other mobile technology.

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Energy Storage Breakthroughs Are Coming – and They Will Be Game Changers

The U.S. power grid delivers more than Long-term duration needs include aligning $400 billion worth of electricity every the supply of power with the demand, year on aging, inefficient equipment that which tends to peak during the day, espe- badly needs upgrading. The system is cially on hot days, and taper off at night. vulnerable to storms and natural disas- Storing excess power for release during ters, struggles to meet peak demand, consumption peaks can reduce power and is stifling the growth of clean renew- outages, increase reliability and lower able energy. We can solve many of these costs. Known as “peak shaving”, this problems, and save billions of dollars process reduces the amount of energy each year, by improving our ability to purchased from a utility during peak store electricity. The good news is we are hours, when the costs are highest. It also very close to some major breakthroughs. creates a market for power produced But to finish the job, we need a final during low demand periods, which is push of research and development, with otherwise wasted or sold at a loss. support from the technology sector, utili- ties and government policy makers. Long-term storage also lowers the cost of renewable power sources by eliminating The power system is complex, with the problem of intermittency. Solar panels JUN LIU 707,000 miles of high-voltage transmis- don’t produce power at night, and wind- BATTELLE FELLOW, sion lines, 55,800 substations and 6.5 mills are idle when the wind is calm. Even PACIFIC NORTHWEST million miles of local distribution lines. hydropower, which runs more consistently, NATIONAL LABORATORY, This sprawling infrastructure is governed sees significant waste. Much of the excess DIRECTOR, BATTERY500 and regulated by multiple independent power produced today has to be dumped. CONSORTIUM, UNITED STATES authorities and agencies, which makes it difficult to agree on modernization strate- Storing that power, and selling it at prices gies – and who should pay for them. comparable to coal or gas fired genera- tion, would remove a bottleneck that has A simpler alternative would be to delayed the mass-scale introduction of expand power storage capacity, which renewables. In a study by PNNL, we found would make the whole system more that new renewable power generation efficient, more reliable and less expen- needs to be accompanied by storage for sive. It would also reduce the need 10 percent of that capacity. Cost effective to build costly new power plants. storage at that level could pave the way for renewables to provide 20 to 30 percent Storage can serve many functions, which of power generation in some regions. we can divide into two categories: short- term duration and long-term duration. A storage breakthrough will bring many Short-term needs include stabilizing the other benefits. Electric cars will charge flow of power while plants are ramping faster. Neighborhood substations could up or down, and regulating power store and deliver electricity at peak times frequency to customers, which keeps and during blackouts. It’s even possible electrical devices working properly. These that some homes equipped with solar changes need to happen in seconds panels could store enough power to or minutes, and can be managed by a operate independently from the grid. fast-discharging lithium-ion battery.

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That breakthrough – a viable, afford- sands of cycles. Lithium-ion batteries still able storage system that can accelerate cost more, but that cost is coming down renewables, boost efficiency and resil- rapidly. Today, it ranges from $200 to iency, is very close. And the market will $400 per kilowatt hour and we are reason- be huge. Consider, for example, that even ably optimistic that lithium-ion batteries one potential market segment – emer- could hit about $150 or so per kilowatt gency breakers that provide backup hour in the next few years. That would power to homes and businesses – is be a game changer. Lithium-ion batteries worth billions and billions of dollars. could replace lead-acid at that point.

Better storage could also reduce the Big U.S. industrial hundreds of billions of dollars spent on grid controls and equipment required companies are very good to manage voltage and frequency of at supply chain manage- power sold to industrial customers. Modern batteries could meet much of ment, manufacturing, that need for far less money, creating and cost reduction, a huge potential new market. but struggle to foster a Unfortunately, technology is not the culture of innovation. only challenge to modern power storage systems; several non-technical challenges must also be addressed. Everyone knows Most power storage today is handled by that implementing new architecture on the lead-acid batteries, which were invented grid will bring big benefits, but they also in 1859. This is the battery in most cars require investment. Deciding who should and it’s the cheapest battery available pay for those investments is a very compli- today. But lead-acid batteries have two cated issue. Should it be the customer, the problems. One is environmental. Lead municipality, or the utility? The regionaliza- is highly toxic, and thousands of tons of tion of the U.S. power grid allows for flex- it are released to the environment from ibility at the local level, but makes it more industry, despite widespread battery recy- difficult to build consensus for nationwide cling. Another problem is that a lead-acid projects. Different places have different battery will die after a couple of winters needs. Choosing the right path will require and need to be replaced. You can’t keep research to understand which system recharging them over long periods of time. upgrades will provide the best value.

Power from lead-acid batteries cost roughly But whatever upfront costs are required, $150 per kilowatt hour. Our calculations they will be dwarfed by the payoff from our show that for larger scale applications, investment. We are very close to achieving the cost needs to be around $100 per a cleaner, more reliable, and less expen- kilowatt hour on a battery that also lasts sive power system. We’ve made great up to ten years. Newer types of batteries strides in reducing the costs of renew- can almost do that, including lithium-ion able energy generation. It’s time to do the batteries and redox flow batteries. They same with our power storage technology. can last thousands, even tens of thou-

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Time to Pick Up the Pace of Battery Innovation

Consistent improvements in energy vehicle electrification has a clear tech- storage technology are bringing us ever nology roadmap and price-performance closer to the day when clean, afford- metrics. While electric car sales account able electricity from renewable sources for just 1 percent of the overall U.S. becomes the dominant source of market today, carmakers expect strong energy in our economy. Incrementally, consumer demand for well-designed, energy storage is becoming cheaper affordable electrics in coming years. and better all the time. But we need And as the price comes down, and range to pick up the pace of innovation. increases, consumers will get a better product for their money; electric vehicles Sustaining innovations in battery chem- are quieter and have extraordinary accel- istries, and in manufacturing capabilities, eration, to name just two enhancements. are pushing down lithium-ion battery prices by 14 percent a year, on average. Costs came down 19 percent in 2016 alone. Truly enabling two-way But to reach the tipping point – where performance and economics ensure our fow of electricity vehicle fleet, homes, and businesses between vehicles and DANIEL T. are all “battery powered” will require SCHWARTZ more rapid and disruptive innovation. the grid will require DIRECTOR, CLEAN ENERGY improved battery infor- INSTITUTE The greatest impact will come through BOEING SUTTER PROFESSOR OF improvements in materials and manu- matics – a validated and CHEMICAL ENGINEERING facturing. For example, there is a global automated method to UNIVERSITY OF WASHINGTON race to develop new classes of elec- trode materials that can truly bend the know a battery’s current performance-to-price curve for the next generation of Li-ion batteries. Some of state of health, along these new materials can work with existing with the predic- tive electrolyte chemistries and battery components, and are manufactured using algorithms that enable similar equipment, so they plug right into us to decide the impact the existing supply chain and infrastruc- ture. This is the fastest way for materials a certain charge or innovations to reach the market. Looking discharge process will farther out, new manufacturing method — producing more complicated three- have on the battery’s dimensional architectures, for example future usable life. — will have compounding impact on the power and energy capabilities of batteries. On the other hand, large regulated utili- Each battery application — whether ties often exist in a business climate that established portable electronics markets, does not allow them to invest in grid- growing electric vehicle and building scale energy storage, even when it would energy management markets, or emerging improve the performance of renewable grid-scale energy storage market — brings energy sources being demanded their a different balance of market risk vs. tech- customers. So, today, vehicles market nology risk. Among the newer markets, appear to be lower risk than the grid,

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where the connections between customer fluctuating renewable source, such as a wind demand, state or district policy, and pricing or solar farm, has a drop in production, the makes for a confusing and fragmented market. grid would send out a price signal offering to Of course, both the grid and vehicles come buy energy. Let’s say the offer is for $0.50 per with challenging technological requirements kilowatt-hour because that is what a back-up (including safety). The high energy and power diesel generator would cost to operate for this density needed for transformational electrified purpose. Every car in the fleet that is plugged in vehicle propulsion systems increases their tech- could review the offer and determine its value. nology risk for delivering truly transformational all-electric vehicles that meet current fossil fuel A Chevy Bolt sitting in a cool garage may vehicle performance expectations and price. say “sure, I will take that deal for 10 kW-h, because I’ll make $5.00, but the degradation While all true, much of what we are will cost me only $1.00 in reduced lifetime, discussing represents a set of dichotomies and my owner’s Outlook calendar shows she driven by our fossil energy past — vehicles is on vacation, so I’ll be able to recharge at vs. grid, market risk vs. technology risk – low prices before she’ll need a full battery.” not the fully electrified energy future. A Nissan Leaf may say “no deal,” because it is sitting in the direct sun, so the degra- Whether we choose to upgrade storage systems dation rate for the hot battery would for the electrical grid or to power vehicles, or cost $6.00 in reduced lifetime. both, our success will depend critically on our ability to fully integrate the two. A major chal- This would be a great business model for a verti- lenge in two-way electricity flown between cally integrated company with a suite of products vehicles and the grid (called V2G) is that every including solar generation, electric vehicle and charge-discharge cycle of a Li-ion vehicle battery battery manufacturing, as well as home and grid causes a small amount of degradation that energy management systems – exactly the set shortens its life – that costs the owner money of businesses Tesla is committed to building. – but the charge and discharge cycle can make This kind of micro-transactional energy future the owner money on a transactive smart grid. would help improve the economics of electric How does the vehicle owner decide the real- cars, battery makers, intermittent green power time market price that makes it worth selling production and wholesale distribution. But it will some of the vehicle energy back to the grid? only happen with major innovation and invest- ment in informatics for batteries and the grid. Truly enabling two-way flow of electricity between vehicles and the grid will require Current research and innovation into storage improved battery informatics – a validated technology and Li-ion batteries will sustain and automated method to know a battery’s incremental performance improvements for current state of health, along with the predic- the foreseeable future. But to make the rapid tive algorithms that enable us to decide the gains necessary to truly disrupt our current impact a certain charge or discharge process energy production and distribution system, will have on the battery’s future usable life. we’ll need to make targeted investments in materials, technology and information Let’s imagine a world that has integrates electric systems that lead to compelling changes in the vehicles and a transactive smart grid, where a economics of electric and renewable energy. trusted battery informatics technology works in a fully automated energy market place. If the

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Q&A with John Chen

How will the U.S. lead in energy maximized and meet customer expecta- storage innovation? tions. The decision to invest in the GigaFac- I see the U.S. as the leader for energy tory was also a very smart move to bring storage research and innovation for at down costs of the major component of the least the next decade, from anode and EV. But I would not say that this strategy cathode chemistries to novel separa- is earth shatteringly innovative. It’s basic tors, electrolytes and cell and pack design supply chain management and achieving and management. But manufacturing of manufacturing economies of scale. energy storage solutions has left the U.S. and is firmly in Asia, increasingly China. As a result, the U.S. will continue to play What would grid defection enable, a pivotal role in shaping how the industry if it were to increase? evolves and, therefore, downstream For the foreseeable future grid defection markets like automotive, consumer elec- will remain a niche opportunity. If grid tronics, and Internet of Things. The U.S. is defection does occur, certain compa- generating key intellectual property and nies and technologies which serve this has created a vibrant startup ecosystem market will obviously benefit. But grid which will contribute to the economy. defection is just one of many drivers JOHN CHEN, However, I don’t see the U.S. as a major impacting the energy storage market. MANAGING GENERAL PARTNER, leader in manufacturing of energy storage PHOENIX VENTURE PARTNERS – with isolated exceptions, like Tesla. How will the next generation of electrode materials for Li ion batteries be deployed? What would be the downside of the U.S. The answer to this question depends on not being a leader in the global energy how disruptive and new the next genera- storage market? tion of electrode materials is, whether it The energy storage market is going be cathodes or anodes. If the new elec- to be experiencing rapid growth due trode material represents an incremental to automotive and grid storage and if improvement, which is compatible with the U.S. does not maintain a leader- existing manufacturing processes and ship position in at least the innovation works in concert with the balance of the front end, the country will completely system, (i.e. anodes, separators, electro- miss out on a major growth driver. lytes etc., such as LiCoO2 -> NMC), then I can imagine the path of least resistance would be as a drop-in replacement. What is Tesla doing right and what would However, if the next generation represents it take to replicate it? a major change in the overall battery chem- Tesla has been successful in changing istry such as Li Sulfur, new manufacturing market perception of EVs as uncool or processes and likely new separators, elec- sacrificing performance and stimulated trolytes etc. will have to be developed in both the demand side and supply side parallel, increasing the barrier to adoption. for EVs. Tesla has done a phenomenal job on design, engineering, creating a viable charging infrastructure to support their cars, and innovating around the battery pack so that performance and lifetime are

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The energy storage market is going to be experiencing rapid growth due to automotive and grid storage and if the U.S. does not maintain a leadership posi- tion in at least the innovation front end, the country will completely miss out on a major growth driver.

Who will be the first market adopters of How will energy storage on the grid evolve new technologies: grid storage, consumer relative to vehicle electrification? Are they electronics, or vehicle electrification? separate or interconnected markets? This is a hard question. It depends on When it comes to energy storage on the exactly what the new technology is, e.g. grid for vehicle applications, the market electrodes capable of faster charging vs. and consumers will adopt distributed higher capacity vs. longer cycle life vs. energy storage solutions at the point of safety. Grid storage would favor high reli- use, which may often also be part of an ability solutions with a low $/Whr or $/W overall energy storage solution for renew- and high capacity. Consumer electronics able energy buffering like solar as well. To would favor fast charging, high cycle life leverage energy arbitrage, these distrib- and higher energy density. EVs would favor uted solutions will most certainly also be safety, higher voltage, low $/Whr, good interconnected to the grid in one market. cycle life and high capacity. The challenge is that each of these markets is conservative There is a natural synergy between resi- when it comes to adopting new, unproven dential solar and EVs or vehicle electrifi- materials technologies for energy storage. cation. Furthermore, I’d say that multiple renewable or more sustainable power generation at the home/point of use Will the energy storage approaches ranging from solar, to wind, to CHP, etc. for the developing world leapfrog with energy storage solutions which are technology used by the first world, physically co-located and also intercon- similar to what happened with mobile nected from a market perspective is a phones in some cases? natural evolution of what is happening I do not believe the leapfrogging effect and will constitute one distinct market. will be as pronounced in energy storage As for large-scale commercial renewables, as compared to mobile phones. The differ- i.e. solar farms, wind farms, etc., it is not ence in penetration and drive to adopt practical that energy storage solutions will renewables and electric vehicles is not be connected to or physically co-located so great between developed and devel- with residential energy storage/EVs/ oping nations. Both markets started residential renewables and this will be a from a grid centric infrastructure which distinct market and observe different rate only differs in reliability between the and pricing structures as well. Of course, developing and developed world. So both residential and commercial energy there isn’t as much of an environment storage will feed into the same physical for leapfrogging. That said, the degree grid but will have to be distinct markets. to which leapfrogging takes place will The sheer differences in magnitude of vary from country to country. If the U.S. power and energy flows and daily varia- falters on its commitment to sustainable tion across the two markets will necessitate energy, countries like China may in fact that they be regulated differently, also. leapfrog the U.S. in energy storage. However, I could see the potential integra- tion of commercial scale renewables with commercial transportation, electrification of commercial shipping by rail or trucks, and large utility-scale grid storage solutions.

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Conclusion

Reflecting upon the rapid advancement the intersection of materials science of energy storage technology today, innovation, start-up activity, manufac- I am reminded of the ancient Indian turing challenges and opportunities, and parable of the Blind Men and an Elephant. how they all impact market dynamics for Each blind man touches just a part of energy storage and battery development. the elephant, and describes this new complex thing from the experience of Our panel of experts provided the one part. Lacking cooperation, none significant insight. Some of the of the blind men can ever reach a true highlights for me included: understanding of the elephant’s nature. Daniel T. Schwartz on improvements in materials and manufacturing: Energy storage inno- The greatest impact will come through improvements in materials and manu- vation is both a huge facturing. For example, there is a global economic opportunity, race to develop new classes of elec- trode materials that can truly bend the and a critical bottleneck performance-to-price curve for the next RICK LUEBBE limiting our society’s generation of Li-ion batteries. Some of CO-FOUNDER AND CEO these new materials can work with existing GROUP 14 TECHNOLOGIES ability to transition electrolyte chemistries and battery to a renewable energy components, and are manufactured using similar equipment, so they plug right into economy. We must and the existing supply chain and infrastruc- ture. This is the fastest way for materials will continue to think, innovations to reach the market. Looking create, inspire, and in farther out, new manufacturing methods – producing more complicated three- the Edisonian tradi- dimensional architectures, for example tion, perspire to make – will have compounding impact on the energy storage tech- power and energy capabilities of batteries. nology better and better. John Chen suggesting greater intercon- nectedness in the future: When it comes to energy storage on the The lesson to be learned, of course, is grid for vehicle applications, the market that all viewpoints should be consid- and consumers will adopt distributed ered, and that cooperation is required to energy storage solutions at the point of understand a complex issue. Certainly, use, which may often also be part of an energy storage is a complex problem, overall energy storage solution for renew- and there are numerous industrial and able energy buffering like solar as well. academic efforts, each trying to under- To leverage energy arbitrage, these distrib- stand a different aspect. Consider the uted solutions will most certainly also be variety of viewpoints presented in this interconnected to the grid in one market. publication, Technology and Innovation in Energy Storage. Each chapter provides a different and valuable perspective about

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Jun Liu predicting energy storage breakthroughs depends on proper formulation, storage and delivery. will create benefits beyond electric cars: When you compare drug delivery with energy delivery, A storage breakthrough will bring many other benefits. the challenge is conceptually very similar. We need to Electric cars will charge faster. Neighborhood substa- provide electrical energy in the correct form and in an tions could store and deliver electricity at peak times extremely stable and reproducible way to power the and during blackouts. It’s even possible that some next generation of vehicles and consumer electronics. homes equipped with solar panels could store enough power to operate independently from the grid. The contributors to this gallery are all brilliant in their fields, and deeply experienced in the energy storage Doug Morris advocating closer connections between industry. And each have different angles on the collec- material science innovators and manufacturers: tive technical and innovation activities, challenges and To accelerate commercialization of these new technolo- impacts the energy storage industry faces. Like the gies, startup companies need smaller batches of raw blind men in the parable, each contributor has direct materials that are currently expensive and difficult to experience with an element of a huge and complex obtain from suppliers based in Asia. Larger original equip- new thing (the evolution and progress of energy ment manufacturers (OEMs) like Apple and Samsung storage) and all describe their part with great detail can generally get what they need at scale. But for many and accuracy. Yet only when taken together do their others, developing a new cell can be so difficult and so interpretations illustrate the challenges we face as expensive that they end up settling for the next closest we push the edges of energy storage technology. thing they can find. That usually means their product won’t perform as well as it could. If we were able to Energy storage innovation is both a huge economic produce cells in the United States that could enable opportunity, and a critical bottleneck limiting our soci- product manufacturers to get special sizes and special ety’s ability to transition to a renewable energy economy. chemistries more freely, a tremendous boost in access We must and will continue to think, create, inspire, and to new and innovative new technologies would occur. in the Edisonian tradition, perspire to make energy storage technology better and better. I don’t know if our Steve Visco’s call for greater innovation future will be a series of small but continuous innova- at U.S. battery manufacturers: tions like the miracle of compound interest, or if we Much of the problem stems from short-term thinking will experience huge disruptive advancements like the among business and political leaders. Big U.S. indus- discovery of electricity. I am certain though, that our trial companies are very good at supply chain manage- energy technology will continue to advance because of ment, manufacturing, and cost reduction, but they the incredible effort every day from all of the scientists lack a culture of innovation. U.S. battery companies and engineers committed to this challenge. As Thomas are mostly standalone entities. They do employ Edison said: “To have a great idea, have a lot of them.” PhDs and research teams, but they aren’t asked to come up with new ideas. They are asked to help the company meet quarterly earnings targets. Rick Luebbe And my colleague, Dr. Rick Costantino, comparing Co-founder and CEO energy storage materials innovation to the Group 14 Technologies pharmaceutical industry: In the pharmaceutical world, you need devices that reli- ably deliver precise drug dosages at the desired time to the correct site of action. Moreover, the drug formulation needs to remain stable over a prescribed time frame – a two-year shelf life, for example. The therapeutic benefit

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