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19 May 2022

Alternative chemistry batteries come alive with real GW class deals

US renewables developer Pine Gate has cut two deals this week with two different forms of energy storage – both chemical replacements for lithium ion batteries – each with different advantages – proving that developers everywhere are now on the search for alternative chemistries.

This is the firing gun to a landgrab for alternative chemistries to lithium for multiple reasons – the most important of which is the huge accelerating scale of the electric vehicle industry, making it likely to leave grid energy storage as an after-thought – and the other reasons being technical such as repeated thermal runaway problems with lithium.

The two breakthrough orders are four and five year agreements, one with EnerVenue, for 2.4 GWh for its Nickel Hydrogen battery, and the other with Urban Electric Power (UEP) which has an MoU to supply 4.5 GWh of rechargeable zinc alkaline batteries over five years – both to the same company Pine Gate. It is not clear that these are alternatives to one another, but we distinctly get the impression that the UEP technology is for tight bonding with solar installations, and the EnerVenue will be used standalone and closer to the grid.

Pine Gate openly says on its website that it has 15 GWh of storage development in the US, which suggests that lithium will only be used in about half of this and alternative chemistries in the other half. Installation includes both stand-alone projects or tightly coupled to solar projects and we have reached out to Pine Gate to ask it how it intends to use the technologies, but have not yet heard back.

Both agreements are signed against a backdrop of stalled projects – with developers worrying how to avoid the same fate as the two phases at Moss Landing, the largest energy storage battery project in the world (400 MW), which has seen 1.6 GWh of Lithium Ion battery installed, only for two accidental sprinkler triggers to take both phases offline for several months – with no clear signal of when they are coming back online. That site is supposed to grow to 1,500MW/6,000MWh for Vistra Energy, but development must now be stalled. The problems have been blamed on a bearing in an air conditioning unit, but the Battery Management system should be designed to shut down any cells which overheat in the first place.

Similar problems have just surfaced about the Australian installation managed by French renewables firm Neoen, using Tesla powerpacks at the Big Battery in Victoria. This was only recently reported, but happened in 2021 and was put down to thermal runaway during a testing stage when two power packs caught fire, when the Battery Management System was unhooked, and Tesla had no feedback that the battery was overheating.

The rising tide of thermal runaway on leading and highly public projects has led to suppliers of lithium ion battery invoking harsh warranty clauses – mostly relating to how frequently lithium ion batteries can be re-charged (typically once a day) limiting the potential for profit from stand-alone batteries.

Warranty issues, thermal runaway, the low numbers of lifetime re-charges must all be added to the fact that supply and demand in the US in particular, is starting to make it tough to source sufficient batteries for grid projects, at sensible prices – especially if developers want to avoid sourcing Chinese product. This was caused by the late investment in battery from US native car-makers – General Motors, Ford and Stellantis – something we identified in our recent Gigafactory research paper.

At Rethink Energy we have said repeatedly that there being no standard for installation and safe management of lithium ion battery, plus low US supply lines halting the fall in prices of battery, has created a three year window from 2022 to 2025, at the very least, during which alternative batteries chemistries must scale, grow their own base and prove their business case, before solid state lithium batteries arrive there in volume and remove most of the fears around design issues.

Of the two deals announced this week, we take the EnerVenue announcement more seriously, as it has $112 million in funding and is gearing up for intelligent automated manufacture. UEP still does not have anything like the money to build 4.5 GWh of rechargeable zinc alkaline batteries and will need to take this MoU and somehow leverage it into funding for a manufacturing round. This effectively puts the company at least a year behind in being able to produce this volume of product, unless it does it through a partner under license.

We have previously highlighted EnerVenue as a company with the right type of partners, for instance Schlumberger New Energy put money into EnerVenue, and took a non-exclusive license to the technology in Europe, the Middle East and Africa. Big partners in a rapid ramp, are good partners.

And almost simultaneously this week a number of alternative chemistries have woken from their slumber and made a bid for stardom – we are sure they are conscious of the urgency behind that 3 year or so window we have identified.

Two new sodium-ion battery manufacturing facilities have been announced this week, one in the US and one in Sweden, both set to start production in 2023.

Sodium-ion battery maker Natron Energy has a deal under the wing of larger battery maker Clarios International, whereby it will build a plant at its existing lithium facility at Meadowbrook, Michigan – geared up to make 600 MWh a year of Natron batteries – not quite a Gigafactory, but most of one. It has been a long wait for this technology, about 10 years, but it finally realizes its moment is now or never.

Swedish startup Altris said it has sourced its sodium-based cathode material from Sandvik Materials Technology, around 2000 tons a year of the material Fennac, which enables 1GWh of sodium-ion battery to be made – so gearing up for a gigafactory there too.

All of these chemistries have zero thermal runaway dangers and can support multiple charge -recharge cycles each day. Quite clearly few of them are a danger to lithium ion’s main business, which is powering individual passenger vehicles, but that’s because none really approach lithium ion battery density either in volume (per liter) or weight (per kilogram).

Sodium ion batteries have been under wide scale assessment for some time, and even giant Chinese LFP specialist battery maker CATL has some ambition down this route.

Also this week Energy Vault, the company that lifts and stacks massive physical weights up and down using pulleys and turbines to store energy as potential energy, had some good news, announcing an extension to its contract with DG Fuels after it agreed to double the size of its initial energy storage project, which will power green hydrogen production used to make sustainable aviation fuel. This adds some $217 million in project revenue on top of the previously announced $520 million that Energy Vault had initially. We have pointed out before that this entire deal was dependent upon a Department of Energy loan – which has since been agreed.

We continue NOT to be a believer in this form of energy, but it is worth pointing out that individual projects may well make money, but Rethink Energy feels that a gigafactory with a multi-layered distribution network is the right way forward for an alternative battery technology to make a global difference.

For Energy Vault it was contracted to provide 1.6 GWh of storage capacity to in October 2021, in partnership with Black & Veatch as EPC and HydrogenPro as the electrolyzer provider.

Energy Vault has also just reported its numbers for Q1 2022 with revenue of $42.9 million, driven by an earlier $50 million licensing deal with Atlas Renewables, which resulted in a net loss of $20.8 million. It also said it has begun construction of a Chinese deployment of a 100 MWh EVx gravity-based storage system in partnership with Atlas and China Tianying.

All of these companies came out of stealth or on the scene 2 to 3 years ago (along with a number of others) and have taken this long to mature, and most of them are targeting the medium term and long term duration markets.

However yet another story ran this week in the Shanghai Metals Market News, pointing out that the China’s State Power Investment Corp (SPIC) has put its first spade in the ground to build a 20GW lead-carbon battery production line in Baicheng, Jilin through Jidian Electric Valley. This line is either supposed to supplant lithium ion in EVs, or will be used alongside them in some kind of hybrid arrangement, as well as for energy storage on the grid.

It is not the first time SPIC has speculated on alternative chemistries, and it made investments in iron-chromium flow batteries in the past, but this anticipates a new gigafactory initially for 5 GWh of battery a year, rising to 20 GWh, with a spend of just $571 million (4 billion yuan).

Lead-carbon batteries too are seen mostly as replacements to Lead Acid batteries, but have been used in the past to power EVs. Again it is a chemistry considered safe, stable and cheap, which will work better in cold climates.

Finally a voice, almost back from the dead is Enerox GmbH based in Austria, which has inherited the Candium brand name CellCube. It has come out of a long term re-organization with the news that it has signed a 1 GWh deal in Southern Africa, with Kibo Energy – which is just a promise to take 1 GW of vanadium redox flow batteries over five years. Kibo will target these to support microgrids, including gated communities. It may result in 1 GW of sales over 5 years, but the moment when Vanadium Flow looked like it might have a long term healthy future has long since passed and this has only been resurrected because lithium batteries right now are trending upwards in price.