Better Batteries Could Fuel a Paradigm Shift in Global Energy

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My colleague Phil Anderson studies history with a purpose.

At Cycles, Trends & Forecasts, he shows that while history doesn’t repeat exactly, it certainly rhymes. Every generation comes up with some form of new technology to power productivity to a higher level. And most of the gains are taken up by higher prices for land.

The world is on the cusp of a paradigm shift in the way energy is produced.

Our energy needs have been based on fossil fuels for as long as we can remember.

This has begun to change as alternative energy sources become cheaper and significantly more effective.

Governments in a number of countries have already announced the shutdown of nuclear power plants and coal-fired generators. We’re moving from a world that relies on commodities to one that increasingly relies on technology.

This could lead to a revolution in pricing.

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The future could herald an era of lower prices

The current era is marked by higher demand leading to higher prices for limited commodities. The future could herald an era of lower prices led by improvements in technology.

Advances in technology in many areas have kept prices down amid dramatic improvements in performance. The first laptop computers in the 1980s cost more than $10,000, weighed around 10kg and lasted only a couple of hours on battery power.

Today’s laptops are hugely more powerful at a fraction of the cost. This is a significant benefit for users. Manufacturers benefit from the massive uptake in usage.

If history is any guide, the energy market will be no different. Once some form of new energy technology takes hold, old reliance on commodities will be gone. The scale of a shift in technology is becoming more and more rapid.

One area that stands out in our changing energy needs is the market for electric vehicles (EVs). Most people accept that the majority of vehicles will be electrically powered in years to come.

We know that change is coming, but most of us are not quite ready to take the plunge. We still take comfort in the proven technology of our petrol-driven engines developed over more than a century.

One of the biggest weaknesses of today’s EVs is the limit of current battery technology. Lithium-ion batteries have come a long way since their development. Yet they still face issues that we’re not prepared to deal with.

One of these issues is how far we’re able to travel before needing to recharge.

Tesla’s extended-range Model S is the current long-distance champion with a range of up to 540km, but it doesn’t come cheaply. The Model 3 is estimated to run for 350km on a single charge. This comes with an optional long-range battery pack for an extra US$9,000 to boost the range to 490km.

Outside Tesla, the Chevy Bolt has the longest range with 380km. The popular Nissan Leaf can now run for 240km on a single charge. This is 50% longer than the previous model.

Other popular vehicle makers still have a little way to go. The Volkswagen e-Golf has a range of 200km while the Ford Focus Electric and the BMW i3 each run for 180 km before they require recharging.

Current models probably have enough range for most of our daily travel needs. Yet they’re not quite up to the range that we’re used to. Most small vehicles can run for more than 600km without refuelling.

Then there’s the problem of recharging. When you get low on petrol, you can simply pull in to the nearest fuel station and refuel within a few minutes.

It takes around half an hour to recharge 80% of the capacity of batteries in an EV. We’re not used to that kind of inconvenience. Many people would panic if they were low on power while they were on the way to work.

There’s also the risk of fire in the case of an accident.

We’d expect improvements in technology to solve these issues. Toshiba released the first laptop with a lithium-ion battery as recently as 1995. The technology has since improved dramatically.

Tesla’s Model S already has an extended range. Nissan improved the range of its Leaf model by 50% within a year.

Like most conventional batteries, a lithium-ion battery has two metal electrodes separated by a liquid electrolyte. This liquid is what you see when a battery is punctured or when it corrodes.

Scientists are working to solve the limitations of current battery technology. They’re looking to replace liquid electrolytes with solids to form a solid-state battery. They have the potential to dominate the next generation of batteries.

These ideas have been around for decades. Engineers began tinkering with them back in the 1950s. The technology is slowly inching its way towards commercialisation.

In a solid-state battery, a solid electrolyte is compressed between the electrodes in three flat layers. This results in a smaller battery that can hold as much energy as its larger liquid-based counterpart. A similar-sized battery with a solid electrolyte could hold a much longer charge.

Research suggests solid-state batteries could hold five times the capacity as conventional batteries and recharge in a 10th of the time. They would also be safer with no flammable liquids available to catch fire.

Issues with the current technology

There are significant problems with current technology in the area. The search is on for the best material to use for the solid electrolyte.

Researchers have tried ceramics, but enormous pressure is needed to maintain correct contact with the electrodes. This leads to constant repairs for breakages.

There’s also a problem with lack of performance in cold weather. This doesn’t help a significant part of the world’s population who live in areas that dip below freezing.

Another major hurdle to overcome is the expensive cost of production. There are no economies of scale to help resolve this issue just yet.

Carmakers have grand ambitions for the technology.

Japan’s Toyota currently pushes out electro-petrol hybrids, but wants to close the gap with leaders in the EV market. It’s working on a new car powered by solid-state batteries that have a long range and can be recharged in just a few minutes. It aims to begin sales by 2022.

Volkswagen, the world’s biggest carmaker, is planning to use solid-state batteries in its vehicles by 2025. It made an investment of US$100 million in battery maker QuantumScape to speed up the process.

This technology is still in the early phase of development and could take years to reach commercial production.

We’ll keep an eye on its progress as the story grows.


Terence Duffy,
Associate Editor, Cycles, Trends & Forecasts

PS: What’s Driving This ‘Green Energy’ Stock Frenzy? Download this free report to find out.

About Terence Duffy

Terence Duffy is an analyst and chartist, specialising in researching economic trends and cycles.  His primary focus is housing and land affordability. But you can also depend on him to offer his unique analysis of stock market charts. As Terence will show you, the charts often forecast, well in advance,…

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