# The Future of Energy Storage: A lost opportunity for the U.S.?

by Felix Barber
figures by Rebecca Senft

## Why are batteries important?

Ask yourself what a future with a sustainable economy would look like. Such a future would likely exploit sources of renewable energy, such as solar and wind, to power the electric grid, with personal transport in the form of electric vehicles (“EVs”) that would draw their power from that same grid rather than from burning fossil fuels. However, there is one essential item in our grocery list of “green” technologies that is often overlooked: the battery. In a world where human activity is driving climate change, the future of batteries could not be more vital. It is therefore essential that the U.S. increase its investment in the development of the next generation of battery technologies, rather than simply scaling up production of current technologies.

To understand why batteries are important, we first need to understand a little about electric grids, that is the networks that take power from producers and direct it to consumers. Electric grids function by matching supply and demand for energy instantaneously, and at present this means generating the power in real time. Because of this, most electric grids are powered by a number of power plants that are on constantly, with additional plants being brought on at busy times throughout the day to meet increased demand.

Despite its sparse use at present, energy storage, and in particular batteries, could dramatically change the nature of this system. This could happen by both offsetting the maximum power supply required from these power plants, and by allowing renewables to provide a larger contribution than is possible with conventional electric grids. As shown in Figure 1, energy storage can work in a grid by storing up energy when you have too much power being generated (i.e. your supply exceeds your demand), and releasing energy when the supply is too low. This can make electric grids more efficient in multiple ways: firstly, by offsetting the peak load, batteries can reduce the need for less efficient, dirtier  “peaking” plants that can be brought online to meet demand at high usage times. Secondly, energy storage can make a variable power source more consistent, and therefore more appropriate for powering an electric grid. This latter point is crucial for solar and wind to be ever become more than minority electricity suppliers to electric grids, due to the intermittency of these power sources. By intermittency here we just mean that the wind doesn’t always blow, and the sun doesn’t always shine.

Energy storage can take several forms, with pumped hydroelectric storage being the most widely adopted grid-scale storage at present. Despite its low cost and use in most energy storage installations to date, pumped hydro is not an effective general solution due to its specific geographical needs; if you don’t have a large water supply and a hill handy, batteries will likely be a key component of your energy storage future.

## Lithium ion batteries

The most widely used batteries rely on lithium ion chemistry. Over time this technology has kept improving, but further advances are still necessary. The lithium ion battery was first marketed in 1991 by Sony Corporation, and is employed in a huge range of applications, from the everyday technologies you may take for granted, such as cellphones and laptops, to powering EVs anddominating newly installed grid energy storage capacity. As shown in Figure 2, lithium ion batteries have been developed extensively to improve their cost. Their energy density (how much energy batteries can store per unit weight or volume) has also improved, allowing us to make smaller, higher capacity and cheaper batteries. Despite these improvements, there’s still further to go. Further decreases in lithium ion battery costs are likely to be essential if this technology is to drive wide expansion of grid-scale energy storage. Decreasing costs are also important for EVs to reach thetipping point at which they would break even with the price of internal combustion vehicles.

## Strategies for improvement

There are two distinct strategies for how to improve the battery status quo: to scale up existing technology and hope that the associated gains in efficiency take care of the decreasing costs, or to invest in developing better technology for future use. The former strategy has the advantage of using ready-made technology, avoiding some of the uncertainty in research and development (R&D) outcomes. In contrast, investment in R&D has the potential to produce new, more effective technologies. This strategy comes with the added benefit that having an array of solutions allows one to meet different energy storage needs. As an example, decreasing costs and longer lifetimes (the number of full charge-discharge cycles a battery can undergo) are more important for grid-scale energy storage than increasing energy density. This makes sense, since the size of the battery is of less importance when it can stay in a fixed position. In contrast, both factors are important for EVs. We can also think of developing a variety of battery technologies as “hedging one’s bets,” since the impact of variation in lithium supply will be diminished if other battery types are available. Ultimately both scale-up and R&D investment will be essential to meet consumer needs, but different countries are better positioned for one over the other.

## China leads the stage in scaling up lithium ion production

At present most batteries are still currently produced by South Korea and Japan, with an increasing production base in China. As an example, Chinese lithium ion giant CATL plans to produce 50GWh of storage capacity annually by 2020 (1GWh = 1 Giga Watt hour, enough storage capacity for 40,000 EVs to each travel 100km). These companies are supported by protectionist government policies, making it difficult for western EV companies like Tesla to gain a foothold in the Chinese market(the largest car market in the world). Additionally, recent years have seen an increase in Chinese investment in lithium mines in Chile and Argentina.

In contrast, U.S. domestic battery production is led by the development of the gigafactory in Nevada, a joint private sector venture between Tesla Motors and Panasonic. Although impressive, this factory’s goal of producing 35GWh of lithium ion batteries per year will be insufficient to match Chinese production rate. With a regular raw materials supply, rapidly increasing production, and no shortage of domestic buyers, it would appear that China’s edge over the U.S. in leading the scale up of lithium ion battery technology is substantial.

While the economic gains from producing and selling batteries are clearly important considerations, energy security is also vital. The recent energy crisis in Puerto Rico has provided a clear example of the disastrous consequences for inadequately strengthened electric grids. Domestic battery production could help this by facilitating independence when supporting a country’s electric grids with energy storage. Additionally, western governments are increasingly concerned about reliance on asian battery imports, as evidenced by a recent meeting hosted by the EU. Tesla’s gigafactory may seem to downplay these concerns for the U.S., but this should not be taken as a reason for complacency. Instead, the U.S. should expand its investment in developing new battery technology. This would reduce its reliance on foreign lithium ion batteries for its electric grids, decrease the risk from potentially variable lithium supplies, and increase its standing in an expanding market.

## Will the U.S. lose the chance to produce the next generation of battery technology?

In contrast to China, the U.S. has a history of driving the innovation that underpins advanced enterprises. This is a role of vital importance in the future of batteries, with further R&D needed to make grid-scale storage feasible, and to allow EVs to become cost competitive. Ambri inc. is a good example of such government-funded innovation: their novel battery design uses common, molten metals to circumvent the shorter lifetime associated with lithium ion batteries, and could play a large role in the future of grid-scale energy storage. It’s important to realize that this didn’t just happen on its own; Ambri’s technological development only became possible with a $6.95 million Advanced Research Projects Agency-Energy (ARPA-E) award in 2009. Google X’s Project Maltafurther demonstrates the influence of the U.S. in driving new energy storage solutions, this time with thermal energy storage. As we can see, the potential of the U.S. to lead R&D in new battery technology is vast. This role also comes with the chance to gain a foothold in a market worth$40 billion by 2025. However, such an approach will require commitment and further investment. Unfortunately, this need stands in stark contrast to proposed budget slashes, including proposed cuts of almost 75% to the ARPA-E budget, threatening research on many other advanced battery projects.

## What’s the punchline?

The world needs cheaper, higher-energy-density batteries to address the ever-worsening threat of climate change. This urgency brings with it huge potential benefits for whoever takes the next step forward in the race towards effective energy storage technology. The U.S. should increase government spending to fund research in this direction now, in order to secure its own political and economic position in a rapidly burgeoning field, while helping to address one of the greatest issues of our time.

Felix Barber is a Ph.D. student in Molecular and Cellular Biology at Harvard University.

This article was written in collaboration with the Harvard GSAS Science Policy Group.