Scaling Energy Storage Manufacturing is Essential for U.S. Energy Independence

Scaling Energy Storage Manufacturing is Essential for U.S. Energy Independence

For the United States to get even close to energy independence it needs to invest not only in traditional energy infrastructure—especially the electric grid—but also in the new technologies to enable that infrastructure. And the most important piece of that more broadly-defined infrastructure is, arguably, energy storage.

Why? Even if the clean energy provisions that were pushed out of the infrastructure bill are revivified in a reconciliation bill, the United States cannot meet its clean energy goals without moving rapidly to electrify (almost) everything and doing that requires massively scaling energy storage.

Just as investment in the grid’s transmission is essential to move energy from where it is produced to where it is needed, investment in energy storage is essential to move energy from when it was produced to when it is needed.

This goes both for short-term energy storage—moving energy produced by wind mainly at night or by solar in the height of the day to the early evening peak—and long-term energy storage—moving summer’s excess solar production to the middle of the winter when days are shorter, and panels may be buried by snow. It also applies to energy needed for mobility: EVs, electric buses and urban electric vehicles and electric micro mobility are all part of electrifying everything.

Aiming for energy independence

Energy independence involves having some control over the materials in energy storage, as explored in our recent blog U.S. Energy Independence Depends on a Smart Supply Chain Strategy. But it also involves having some control over energy storage manufacturing.

Most people don’t think about infrastructure until it fails. When it’s headline news—a pipeline shut down by hackers leading to gasoline shortages, abnormally cold weather resulting in a massive grid failure, extreme fire danger prompting preemptive power shutdowns—infrastructure’s essential role is brought into the spotlight. However, the time to think about infrastructure is before you need it, because planning and building infrastructure takes time. The same is true of the means of production for infrastructure.

Just as investment in the grid’s transmission is essential to move energy from where it is produced to where it is needed, investment in energy storage is essential to move energy from when it was produced to when it is needed.

Like mining and refining energy storage materials, manufacturing energy storage is largely done in other countries. If the U.S. wants better control of the supply chain, that has to change.

Time is not on our side. It will take decades to create lithium battery infrastructure, both materials and manufacturing plants.

Innovation in energy storage manufacturing

The good news is there is a way to leapfrog the conventional path of mining lithium battery materials, setting up plants to refine the material and building new Gigafactories.

The U.S. can meet this urgent need with an innovative approach. We already have significant manufacturing capability and capacity when it comes to lead acid batteries. The U.S. can take advantage of that energy storage manufacturing by converting existing lead acid plants and NiMH/NiCad plants to make advanced zinc-based batteries. Taking those factories’ output capacity in terms of specific energy, this effectively doubles or triples their energy storage manufacturing capacity.

We need to think outside the lithium-ion box if we are to move towards energy independence. By taking advantage of our existing leadership in lead-acid manufacturing plants we can make them Gigafactories in two years instead of ten, catapulting the U.S. into advanced battery manufacturing far sooner and with a lower capital investment while retaining and expanding American jobs.

Image: Idaho National Laboratory’s Battery Test Center includes test chambers for batteries of all shapes and sizes. 

Diversifying energy storage is vital for the global industry’s health

Diversifying energy storage is vital for the global industry’s health

The battery industry is at risk of falling into the trap of becoming too dependent on a single ingredient, and failure to diversify and address the issue now will hinder the energy transition in the long run, writes Michael Burz, CEO, founder and president of Enzinc. 

A glance at any energy analyst’s predictions shows demand for batteries is strong and only getting stronger as the energy and transportation industries embrace decarbonisation. And while the industry may feel well established to those who have been working in it for the past decade, it’s still relatively early days when it comes to influencing the mix of batteries deployed.

The battery industry can derisk this coming wave of demand by ensuring that it meets the needs with a diversity of technologies.

Risk of battery chemistry concentration

The energy storage industry only needs to look as far as the solar industry to see why it’s unwise to tie a fast-growing industry to a single input or region. More than half of the key ingredient for solar panels, polysilicon, comes from one province of China.

Not only has it meant that the country producing it, China, is getting first dibs on the volume produced, but also it opened the rest of the industry to political risk as evidence of human rights abuses in China’s Xinjiang Province mount and supply chain risk as trade tensions wax and wane.

Even in established industries, lack of diversification harms markets. The recent disruption to global fossil fuel markets has reminded governments and consumers alike of the power wielded by OPEC members, which control 60% of all petroleum exports. It’s a lesson gasoline-powered car drivers have revisited many times since the 1970s oil shortages.

Today, lithium-based batteries dominate the emerging energy storage markets, from EVs to home energy storage, to utility-scale batteries.

While the industry’s nascent, it doesn’t seem problematic. However, as the industry matures, today’s concentration will seem shortsighted. Why? Because the rapidly rising demand for batteries means growth may be stymied by a lack of supply of lithium globally if we don’t diversify now.

U.S. Energy Independence Depends on a Smart Supply Chain Strategy

U.S. Energy Independence Depends on a Smart Supply Chain Strategy

For the renewable energy industry in the United States, the new administration brought with it hope: hope for a voice in the country’s energy policy, hope for incentives that support the growth of renewables, and hope that the federal government’s focus on clean energy infrastructure will bring states slow to encourage renewables into the fold.

But hope is not enough. Neither are policy, incentives, and a shared will. Meeting the President’s energy independence and climate change goals will take something a whole lot more basic. And without it, even a move to 100% clean energy won’t result in true independence.

Energy independence is not just about producing and storing energy, but also about having some modicum of control over the means to produce and store energy. The clean energy industry is learning this the hard way.

The oil and gas industry likes to claim it has made America energy independent by producing energy using on- and off-shore reserves and exploiting less-accessible reserves reached through fracking. It produces so much energy that the United States is now a net energy exporter, but what is the value of energy independence if it results in climate change? Carbon-based energy independence leaves America vulnerable to forces much larger and more chaotic than global markets. The United States will never be energy independent while we depend on dirty energy.

Challenges to energy independence

The solar industry may have limitless access to its input—sunshine—but it is far from independent when it comes to the means of production. The U.S. controls very little of the materials and manufacturing facilities that make the solar panels, inverters, and steel mounting or tracking hardware in a solar PV system.

With almost half of the global supply of the polysilicon that is used to make solar cells coming from one region of China, 45% comes from Xinjiang Province, and another 35% coming from other regions of China, the industry is vulnerable to supply limits. The issue is not just that China’s support of its solar industry has pushed down global prices and driven foreign competitors from the market, or that China’s rapid scaling of its solar industry is consuming much of the output, but—most concerningly—there is increasing evidence that China may have built its dominance using forced labor.  The United States has dipped its toes in the roiling political waters by banning imports from one supplier that is alleged to use forced labor, and the industry is scrambling to develop protocols to verify supply chain integrity.

The energy storage industry faces similar issues: little of the lithium and the cobalt used in lithium-ion batteries comes from the U.S. or even from friendly countries. Globally, the largest lithium reserves are in Bolivia, Argentina, Chile and Australia, though Australia leads production. While production is being ramped up quickly—so quickly that prices are taking a hit—the United States only produces lithium in one place: a brine  operation in Nevada. This is why energy storage innovation is critical.

The solar industry may have limitless access to its input—sunshine—but it is far from independent when it comes to the means of production. The U.S. controls very little of the materials and manufacturing facilities that make the solar panels, inverters, and steel mounting or tracking hardware in a solar PV system.

But Australia’s friendly and stable, so concerns about the lithium supply chain are not as great as concerns about cobalt’s supply chain. About 95,000 of the 140,000 metric tons of cobalt produced globally comes from the Democratic Republic of Congo, which also has more than half of the world’s known accessible deposits. When it comes to ethical supply chains, DRC is about as far from Australia as can be. It is not stable, its mines are alleged to have a range of human rights abuses, and on top of that, China has a near monopoly on refining DRC’s cobalt, again leaving the United States with little to no supply chain autonomy.

There is no quick fix here. It will take years for the U.S. to develop any significant sources of polysilicon, lithium and cobalt, and it may never get close to supplying its own needs. This means that the U.S. clean energy industry also needs to diversify not only where it gets its inputs from today but also what materials it needs.

But there are other ways to increase energy independence.

Materials-based energy storage innovation

Energy storage innovation—Enzinc’s reason for existing—means looking at alternative battery chemistries that leverage metals other than lithium, metals such as iron, lead, zinc and vanadium. The batteries being developed may not be suited for every application, for example, both iron and vanadium are used in bulky flow batteries which may work well in stationary applications such as deployment at a utility-scale solar plant but will never be used for electric vehicles.

Zinc stands alone in energy storage innovation. It occupies the ideal position in the Venn diagram of the dream battery: it’s mined in the U.S., it’s plentiful, it’s inexpensive, it’s not prone to thermal runaway, it’s fully recyclable, and it can be used to make energy-dense batteries. While not quite the same energy density as lithium-ion batteries, without the need for thermal management systems and protective casings, it’s a serious contender for all mobility applications like Urban Electric Vehicles, that is, anything except the longest-distance vehicles.

Ultimately, it’s unlikely that the U.S. will develop, or even want to develop, complete independence all the way back to materials extraction. However, today all of our clean energy eggs are in other countries’ baskets, leaving the industry at risk. We will be stronger the sooner we both support U.S. manufacturing and develop new clean energy technologies that have a supply chain that starts in our own backyard.