Dr. John Chen, Managing General Partner, interviewed in white paper published by Group14 Technologies on “The Energy Storage Future: New ideas, New Innovations, New Collaborations”, (Full PDF attached below, see page 16).
How will the U.S. lead in energy storage innovation?
I see the U.S. as the leader for energy storage research and innovation for at least the next decade, from anode and cathode chemistries to novel separators, electrolytes and cell and pack design and management. But manufacturing of 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 a pivotal role in shaping how the industry evolves and, therefore, downstream markets like automotive, consumer electronics, and Internet of Things. The U.S. is generating key intellectual property and has created a vibrant startup ecosystem which will contribute to the economy. However, I don’t see the U.S. as a major leader in manufacturing of energy storage – with isolated exceptions, like Tesla.
What would be the downside of the U.S. not being a leader in the global energy storage market?
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 position in at least the innovation front end, the country will completely miss out on a major growth driver.
What is Tesla doing right and what would it take to replicate it?
Tesla has been successful in changing market perception of EVs as uncool or sacrificing performance and stimulated both the demand side and supply side 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 maximized and meet customer expectations. The decision to invest in the GigaFactory was also a very smart move to bring down costs of the major component of the EV. But I would not say that this strategy is earth shatteringly innovative. It’s basic supply chain management and achieving manufacturing economies of scale.
What would grid defection enable, if it were to increase?
For the foreseeable future grid defection will remain a niche opportunity. If grid defection does occur, certain companies and technologies which serve this market will obviously benefit. But grid defection is just one of many drivers impacting the energy storage market.
How will the next generation of electrode materials for Li ion batteries be deployed?
The answer to this question depends on how disruptive and new the next generation of electrode materials is, whether it be cathodes or anodes. If the new electrode material represents an incremental improvement, which is compatible with existing manufacturing processes and works in concert with the balance of the system, (i.e. anodes, separators, electrolytes etc., such as LiCoO2 -> NMC), then I can imagine the path of least resistance would be as a drop-in replacement. However, if the next generation represents a major change in the overall battery chemistry such as Li Sulfur, new manufacturing processes and likely new separators, electrolytes etc. will have to be developed in parallel, increasing the barrier to adoption.
Who will be the first market adopters of new technologies: grid storage, consumer electronics, or vehicle electrification?
This is a hard question. It depends on exactly what the new technology is, e.g. electrodes capable of faster charging vs. higher capacity vs. longer cycle life vs. safety. Grid storage would favor high reliability solutions with a low $/Whr or $/W and high capacity. Consumer electronics would favor fast charging, high cycle life and higher energy density. EVs would favor safety, higher voltage, low $/Whr, good cycle life and high capacity. The challenge is that each of these markets is conservative when it comes to adopting new, unproven materials technologies for energy storage.
Will the energy storage approaches for the developing world leapfrog technology used by the first world, similar to what happened with mobile phones in some cases?
I do not believe the leapfrogging effect will be as pronounced in energy storage as compared to mobile phones. The difference in penetration and drive to adopt renewables and electric vehicles is not so great between developed and developing nations. Both markets started from a grid centric infrastructure which only differs in reliability between the developing and developed world. So there isn’t as much of an environment for leapfrogging. That said, the degree to which leapfrogging takes place will vary from country to country. If the U.S. falters on its commitment to sustainable energy, countries like China may in fact leapfrog the U.S. in energy storage.
How will energy storage on the grid evolve relative to vehicle electrification? Are they separate or interconnected markets?
When it comes to energy storage on the grid for vehicle applications, the market and consumers will adopt distributed energy storage solutions at the point of use, which may often also be part of an overall energy storage solution for renewable energy buffering like solar as well. To leverage energy arbitrage, these distributed solutions will most certainly also be interconnected to the grid in one market. There is a natural synergy between residential solar and EVs or vehicle electrification. Furthermore, I’d say that multiple renewable or more sustainable power generation at the home/point of use ranging from solar, to wind, to CHP, etc. with energy storage solutions which are physically co-located and also interconnected from a market perspective is a natural evolution of what is happening and will constitute one distinct market.
As for large-scale commercial renewables, i.e. solar farms, wind farms, etc., it is not practical that energy storage solutions will be connected to or physically co-located with residential energy storage/EVs/ residential renewables and this will be a distinct market and observe different rate and pricing structures as well. Of course, both residential and commercial energy storage will feed into the same physical grid but will have to be distinct markets. The sheer differences in magnitude of power and energy flows and daily variation across the two markets will necessitate that they be regulated differently, also. However, I could see the potential integration of commercial scale renewables with commercial transportation, electrification of commercial shipping by rail or trucks, and large utility-scale grid storage solutions.
Source PDF, see page 16: Group14_ebook FINAL