0:02

Latitude Media, podcasts at the

0:04

frontier of climate technology. If

0:08

you look at any chart showing global battery

0:10

storage installs, they are up and to the

0:12

right. I'm looking at a chart

0:14

right now from Bloomberg New Energy Finance showing

0:17

yearly storage capacity and in 2016 there's a

0:19

little blip that represents hundreds of megawatts of

0:21

installations. It seemed big at the time. And

0:24

then there's this huge spike in 2023 when 110 gigawatts,

0:26

representing 372 gigawatt hours

0:31

of capacity were installed. And if you go all the way

0:33

to 2030, we see 650 gigawatts and more than 1.8 terawatt

0:35

hours of

0:39

capacity. It illustrates the

0:41

battery storage era has firmly arrived.

0:43

Gosh, there's so much that has actually

0:46

changed. It's always an exercise of like

0:48

learning new things about the market dynamics

0:50

and adjusting our view as a result

0:52

of that. Yayoi

0:57

Sakine is the head of energy storage at

0:59

Bloomberg New Energy Finance. She's been covering the

1:01

market since 2016. Among

1:03

the trends that caused adjustments last year,

1:06

the surge in gigawatt hour scale projects

1:08

and a record drop in system costs,

1:10

which both helped battery installs surge way

1:12

beyond what was expected. I

1:14

feel like every time we sit down

1:16

to do a forecast, it's

1:19

a little bit like there's

1:21

something that's surprising. And

1:23

I think over the course of the last two

1:25

years in particular, that was China. China

1:28

has long dominated battery manufacturing and

1:30

critical minerals processing. And now

1:32

China is becoming the dominant market in installing

1:35

those batteries on the grid. The

1:37

policy over the course

1:39

of like post pandemic during pandemic years

1:42

really shifted towards like building big

1:44

batteries in China. And

1:47

that's to the scale of like increasing our

1:49

forecast by 40% from one half to the

1:51

next. Is it part of the ritual

1:53

every year to just keep adjusting the numbers upward? We

1:56

do have to constantly be reconsidering

1:59

our assumptions. And that's

2:01

kind of like part of what is fun

2:03

about the job is because the market is

2:05

changing so rapidly. But the scale

2:07

at which it's been happening is really informing

2:09

the way we're thinking about the pricing and

2:11

battery environment today. The

2:18

battery storage market is changing quickly,

2:20

from manufacturing expansions to accommodate EVs,

2:23

to new chemistries and designs, to

2:25

shifts in duration for grid-connected systems.

2:28

It's one of the most dynamic sectors of the

2:30

clean energy economy. I

2:33

think now we're currently at an environment

2:35

where the industry is actually

2:37

able to sustain itself in terms of

2:39

its own battery manufacturing and supply chains.

2:42

And I think that's a pretty big shift,

2:44

and that's happened very recently, and a very

2:46

exciting time to be following the market. This

2:51

is the Carbon Copy. I'm Stephen Lacy. This

2:55

week, a conversation with Yayoi Sekine of

2:58

BNOS on the pricing, tech, and deployment

3:00

trends that are shaping battery storage. What

3:09

are you reading to help understand the industry? If

3:12

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3:14

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3:41

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and you'll get lots of stories from our team

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the topics we cover on this show. Thanks for

3:52

reading. put

4:00

out a report on 10 things to watch

4:02

in storage, covering both stationary grid connected systems

4:04

and EV batteries. So I sat

4:07

down there to walk through many of those

4:09

trends. The first one we tackled, pricing. In

4:12

2022, we saw battery prices rise for

4:14

the first time in history, a reflection

4:16

of the price spikes in commodities and

4:18

lithium. Then a couple things happened. Materials

4:21

prices eased, and Chinese producers ramped up

4:23

fast. In an oversupply in the

4:25

market, push battery packs and turn key system

4:27

costs downward once again. That ramp

4:29

up was quite significant over the course of 2022 and 2023. In the

4:31

end of 2023, we

4:36

have about 2.6 terawatt hours

4:38

of commission capacity confirmed

4:40

globally. We haven't tallied

4:43

up all the capacity just yet, but it's

4:46

likely to be more than three terawatt hours

4:48

in terms of total lithium ion battery cell

4:50

manufacturing capacity. And that's more or less a

4:52

40% growth just in terms

4:54

of capacity to produce battery cells

4:57

in 2023. So it's pretty impressive in terms

5:00

of growth. And we've seen a significant

5:03

growth across other components

5:05

as well, so cathode, anode, and

5:07

electrolyte, and other components in

5:09

the value chain as well. And then

5:12

further, even further back to that, a lot

5:14

of mining supply also coming online. So I

5:16

mentioned lithium. A big function of that is

5:18

the fact that a lot of lithium mines

5:20

and refining capacity came online in

5:22

2023. But the

5:25

other piece that I think

5:27

gets a little bit underappreciated, but obviously has

5:29

an all kind of effect around prices, is

5:32

the fact that EV demands, like electric

5:34

vehicle demands, it didn't

5:37

actually slow. It was a record year. But

5:40

according to a lot of the industries

5:42

and companies' expectations, the market, it was

5:44

a bit slower than the growth that

5:46

was expected. So that has an

5:48

all kind of effect around the demand for

5:51

lithium and obviously price for lithium, which

5:53

ended up actually pushing prices

5:55

down. Yeah, well, let's just talk

5:57

about where we think pricing will head this

5:59

year. and beyond. Are

6:01

we on a continued downward

6:03

trajectory? Yeah, our

6:06

expectation at BNS is that prices

6:09

will drop this year, so drop

6:12

about 6%. So we

6:15

averaged last year as a pricing point, we

6:17

averaged at about $139 per kilowatt hour on

6:22

a volume average basis, so that includes

6:24

all segments that we track. And

6:27

our expectation is that it will drop about 6% this year

6:30

to about $133 per kilowatt hour. And the way we

6:35

actually do the

6:37

forecast, or the expectation for battery prices

6:39

for this year and the next three

6:42

years, is based on, firstly,

6:44

like industry expectation on metal

6:46

prices. So this

6:48

is taken to consideration the

6:51

expectation that lithium, nickel, yeah,

6:53

I think those are the two main ones, but cobalt as well.

6:56

The prices for those major battery metals

6:58

will come down. And

7:01

then essentially using those metal prices to

7:03

inform and calculate what our near term

7:05

expectations for prices will be over the

7:07

next three years. So generally, prices

7:09

will come down, but not as much as we

7:11

saw between 2022 and 2023, where it was a

7:13

14% drop, but still progressing

7:18

downwards over the course of this year.

7:21

Can you provide, for those who are

7:23

not in the battery industry, can you

7:26

provide a little context on what that

7:28

kind of pricing actually means in

7:30

terms of electric vehicle

7:32

costs, in terms of cost of projects out

7:35

in the field, stationary storage projects out in

7:37

the field? What does this enable you

7:39

to do? Yeah, so

7:41

those prices are what we call

7:44

battery pack prices for EVs and

7:46

battery rack prices for

7:49

stationary storage. In the EV space, the

7:52

actual cost of the battery relative to

7:54

the total car really depends on

7:56

the vehicle size and the battery capacity.

8:00

we kind of ballpark it at 30%, but

8:02

it could be much higher than that if

8:04

it's like a very big battery pack in

8:06

a smaller like, depending on the vehicle frame.

8:09

But say it's about a third, it could be

8:11

more than that. In the stationary storage

8:13

space, the battery racks are

8:16

the biggest portion of the storage

8:18

system costs can range between 50

8:20

to 60% of a total

8:22

turnkey energy storage

8:26

system. So if you can't

8:28

get the battery prices down, then it's very

8:30

hard for you to actually compress the prices.

8:32

So the fact that the thermometer and battery

8:35

prices have dropped like 90% over the last

8:37

decade, that's been a huge way in

8:39

which like EVs have become cheaper,

8:41

and stationary storage has become more affordable. So

8:44

let's talk a little bit about this ramp up in manufacturing

8:47

capacity, it's starting to put some

8:49

pressure on smaller

8:52

producers. I can remember

8:54

at the turn of the last decade

8:56

when we saw the great solar shakeout,

8:58

and the dominance of Chinese solar producers

9:01

caused a lot of European

9:03

North American companies to go out of

9:05

business or consolidate, and even many smaller

9:07

Chinese manufacturers went out of business pretty

9:10

quickly. So what kind of, is

9:12

that something that you see happening

9:14

in the battery space? Like what kind of market shakeout

9:17

do you see coming here? I think

9:19

there's a lot of parallels to what

9:21

has happened and is happening in the

9:23

solar market with what

9:25

we're seeing with the battery industry today.

9:28

In particular, last year and this year

9:30

are where we see these dynamics pretty

9:33

similar in terms of the way we

9:35

expect the industry to shake out. We

9:38

can't yet make a call as to which

9:40

companies might lose out, but we can generally

9:42

say like when you have 3x battery

9:45

like manufacturing capacity relative to total demand in

9:47

the global market, which is where we are,

9:49

where we were in 2023. You kind of

9:52

expect there

9:54

to be some some shake up because not

9:56

every company is able to ramp up a

9:59

gigawatt hour factor. factory, and then

10:01

run it at a production rate

10:03

that will make sense for them

10:05

if the whole industry is doing

10:07

that. That means there's a massive

10:09

oversupply of batteries. But

10:12

you can't also not run the facility and

10:14

then actually expect to make some money out

10:16

of it. So a lot

10:18

of companies are in this really awkward

10:21

position of, OK, we need to produce,

10:23

and we don't

10:25

want to run at a loss. But what

10:29

is the alternative? So we'd rather

10:31

produce and run and actually cost

10:33

these batteries at cost

10:35

or even lower. We've seen

10:37

very, very low lithium-ion battery prices in

10:39

China and towards the end of last

10:41

year, beginning of this year. And that's

10:43

really a function of these

10:45

market tensions that we're seeing. I do

10:48

think it actually looks different. So if you

10:50

compare companies that are big

10:52

and already have large standing contracts, with

10:57

large OEMs or large automakers, because

10:59

in a way, they already have

11:01

an anchor customer, they might have

11:03

a bit less of

11:05

a demand if that customer didn't have as

11:07

much EV sales as they were hoping for.

11:10

But in a way, you're kind of shielded from just

11:12

being in a market where you're just producing

11:15

batteries and hoping to find a customer, which

11:18

is the case of a lot of these

11:20

newer battery manufacturers, battery cell manufacturers who are

11:23

scaling up gigawatt hour factories and

11:26

trying to find a master supply agreement

11:28

with a storage integrator, but actually

11:31

being a market where there's tens

11:34

or tens or maybe hundreds of companies trying

11:36

to do something similar. What's the end

11:38

result? I mean, are there a

11:40

lot of companies that go out of business?

11:43

And then what will that do to capacity?

11:46

Yeah, so I think there's two things. Probably

11:49

some consolidation and some companies

11:51

losing out, like the

11:53

market can sustain itself. If

11:55

we are to simply look at the overall

11:57

capacity that's expected to come online.

12:00

The phone company announcements between now and

12:02

Twenty Twenty Five that factor that I

12:04

mentioned three x I'm a battery capacity

12:06

relative to demands today or and Twenty

12:08

Twenty three That actually becomes worse over

12:11

the next couple of years. Some so

12:13

really like if you're building a are

12:15

having plans to go to get your

12:17

factory you're probably make an assessment now

12:19

came to I want to move forward

12:22

with this plan. Some is that is

12:24

that dynamic is just going to become

12:26

worse over the next couple of years.

12:30

And. So I guess what we're

12:32

seeing in says in the Us context.

12:35

And perhaps again tied to that like

12:37

it's so easy. demands are suing gross.

12:40

So in the growth of the the

12:42

demand some is that companies are slowing

12:44

their their capacity expansion plans. I think

12:46

that's the first thing that happens so

12:48

they might still go forward to this.

12:50

They're were with the facility under construction

12:52

and that they might slow the rate

12:54

at which they're adding. you say production

12:57

lines within that? Yeah. And then on

12:59

the supply side of. Things are as

13:01

their companies that are. Yeah, there are

13:03

probably. Going to Say or a sister

13:05

can't produce to market that wants to

13:07

buy their songs. They.

13:10

Run out of at a loss

13:12

and that you can't really sustain

13:14

the long term. So I think.

13:16

There's a lot of potential for consolidation

13:19

and so companies my biology each other's

13:21

equipment or months of two minds and

13:23

then then expand their own as don't

13:25

make sense? Yeah, and in, what about?

13:28

Companies. That are setting up shop in

13:30

the Us after in the weight of states

13:32

and station reduction or to mean will we

13:34

see a shake out here even though we're

13:37

You know the a lot of the incentives

13:39

are promoting a ramp up. Production.

13:41

In the Us? Yeah! And the Kiss of

13:44

the U S is very different because it's

13:46

a very. like nice and spring manufacturing

13:48

market there will be some impacts of

13:50

what's happening in china was and with

13:53

how the chicks south in the us

13:55

and been in a lot of ways

13:57

to say like sensation reduction act is

14:00

It's quite an important, I

14:02

guess, piece of legislation supporting

14:04

the battery manufacturing industry and

14:07

providing incentives for the production of

14:09

batteries and modules in the US. So

14:12

that $35 per kilowatt hour for the cells and

14:14

plus the $10 per kilowatt hour for the modules

14:18

that helps to provide that cushioning in

14:20

terms of the cost competitiveness with China.

14:23

And then there are other things like in the EV credit,

14:25

you are required to

14:28

manufacture battery components in

14:30

North America, which essentially means if you

14:32

want to qualify for half that credit,

14:35

then you have to have the manufacturing

14:37

facilities within North America. So there's a

14:39

lot of structures that help support the industry

14:41

in the US. That said,

14:43

there has been a few examples

14:45

already. So even though last year

14:48

we saw a record number of

14:50

commitments towards clean energy supply chains

14:53

in general in the US, most of

14:55

which were for EVs and

14:59

batteries. So more than $100 billion

15:01

committed towards EV and battery supply

15:04

chains. We

15:06

have seen a couple of examples like LG

15:08

Energy Solutions, Our Next Energy

15:10

actually slowing down the ramp up

15:12

of their manufacturing plans

15:15

over the next couple of years. And

15:17

yeah, of course, there are other

15:19

examples of automakers actually slowing their EV

15:21

plans or just pushing out their EV

15:24

targets. So I think that

15:26

these are going to obviously have a knock on effect

15:28

on the battery manufacturing space. But

15:30

I don't think the whole industry is at

15:32

risk. We probably see just delays around some

15:34

of the plans. I

15:42

want to tell you about a few

15:44

things our team at Latitude Media is

15:46

working on that you should check out.

15:48

Firstly, if you missed our January 31

15:50

frontier forum with Alfred Johnson of Crux

15:52

on the transferable tax credit market, you

15:54

can watch it at latitudemedia.com/events. It

15:56

was a great conversation, tons of good info and

15:58

questions from the audience. about how the

16:01

market is shaping up. In

16:03

mid-February, we've got a big report coming out

16:05

that our research team has been working on

16:07

for months. It's a first-of-a-kind

16:09

study on the pathways to adoption

16:11

of AI solutions in the power

16:13

sector. It is very comprehensive. It

16:15

includes what utilities are doing, the

16:18

characteristics of different kinds of utility

16:20

adoption and the vendor landscape. Go

16:23

to latitudemedia.com/research to find out

16:25

more. It'll be worth your

16:27

time. And finally, subscribe to our

16:29

newsletter. We're covering tech deals and markets

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across a range of sectors, from solar to

16:33

storage to microgrids to carbon removal. Go

16:36

to latitudemedia.com/newsletter to sign up

16:38

for free. And thanks so much.

16:48

So I want to look at stationary

16:50

storage and electric vehicles.

16:54

Let's go to stationary storage first and

16:56

talk about some of the trends driving

16:59

that application. First of all, the stationary

17:02

battery deployments hit a new record in 2023 at

17:04

100 gigawatt hours, according

17:06

to your analysis. And the dominant

17:08

markets are China, the US, and

17:11

Europe, with China being

17:13

the dominant market. What are

17:15

the similarities and differences in each of these

17:17

markets? I

17:19

think the main similarity is the fact

17:21

that a lot of these markets are

17:24

suddenly getting a huge scale up in

17:26

terms of new projects and capacities coming

17:28

online. But the business

17:31

models and the use cases for batteries

17:33

are actually very, very different across the

17:35

markets. So in the case of

17:37

the US, which is about 30% of

17:40

the total market in terms of deployments in

17:42

2023 on a gigawatt

17:44

hour terms, it's a

17:46

fairly diversified market. So we see

17:48

a lot of different states doing different

17:51

things. A lot of the utilities

17:53

contracting different types of projects. And

17:55

then on the utility scale front, in terms

17:58

of which markets were the biggest markets. in

18:00

the US. It was

18:02

California, not surprisingly,

18:05

still building a lot of big batteries.

18:07

There was the Moss Landing battery project,

18:09

which by itself was more than one

18:11

gigawatt hour. The

18:14

second biggest regional market was actually

18:16

the Southwell last year. So

18:19

that's like Arizona, Nevada, New Mexico,

18:21

bringing in a lot of big

18:23

projects online. A lot

18:25

of these are tied to solar

18:27

and storage PPAs or capacity driven

18:30

contracts with a utility. And then

18:32

Texas, which is in itself

18:35

quite distinct to those two other regions,

18:37

where a lot of the battery projects that

18:39

are being built there are primarily for

18:41

merchant purposes. Initially targeting

18:44

ancillary services, doing

18:46

a bit more on energy, especially

18:48

in the summer where there's a

18:50

lot of volatility in the energy

18:53

prices and a lot of peak

18:55

prices in specific days. That's the

18:57

US, a very diversified market accelerated

18:59

obviously with the Insulation Reduction Act

19:02

and the relevant ITC, the investment

19:04

tax credit supporting the industry there.

19:07

But if you look at China, which actually in

19:09

gigawatt hour terms was bigger than the US

19:11

by just a little bit. So it represents

19:13

about 45% of

19:16

the total global market in gigawatt hour terms.

19:18

In gigawatt terms, it's actually higher,

19:21

it's almost half the global market.

19:23

And that's because the batteries in

19:25

China are closer to mainly

19:27

two hour projects compared to the US where

19:29

a lot of the projects are going towards

19:31

four hours. And

19:33

in the case of China, it is

19:35

still a regionally like different market. But

19:38

generally, the one story is

19:41

renewable integration mandates actually drive

19:43

the market. So essentially in

19:45

China, about more

19:48

than 26 provinces

19:50

in China have mandates for if you

19:52

want to build a new solar project

19:54

or a new wind project, you

19:56

need to attach batteries to it. And the reason

19:58

why is because the ratio at which

20:00

you attach batteries actually depends on which

20:03

province and which technology you're connecting. So

20:06

it can be between 5% to over 20% in some cases. And

20:11

the reason why they're doing that is in

20:13

part to push the storage market, but

20:15

it's also because they're adding a lot of

20:18

wind and solar capacity. And

20:20

so the grids are becoming quite a constraint in

20:22

terms of adding new build and trying

20:24

to help that connection and an integration

20:26

of new storage or new wind

20:29

and solar projects there. And

20:31

then let's go to Europe now. What's happening

20:33

in Europe that makes it particularly unique? With

20:36

Europe, I would say the piece

20:38

that really was interesting over the

20:40

course of the pandemic in particular

20:43

was and is the residential market.

20:46

So the residential market is still an important

20:49

part of the US, but it's a much

20:51

smaller percentage of total build compared to Europe.

20:54

Just for some context around the

20:56

residential storage market in Europe, the

20:58

biggest markets there

21:01

are essentially Germany, which

21:03

historically had been heavily supported

21:06

through subsidies, but

21:08

increasingly just transitioned to a market

21:10

where anyone who's adding a PV

21:13

system to their home just wants to add a

21:15

battery. So the attachment rates there are quite high.

21:18

And most of that is actually not

21:20

driven by subsidies. But

21:22

the other market that's really interesting is Italy. And

21:26

that's definitely subsidy driven. They

21:29

provided, they actually stuck that down,

21:32

but essentially provided a super bonus.

21:35

I kind of like the name of that

21:37

scheme of anyway, a super bonus, which is

21:40

essentially already

21:43

a 110% tax credit for

21:45

any investment made to home

21:47

energy efficiency improvements. And

21:49

so everyone who wanted to build a battery was just

21:52

rushing to claim that bonus.

21:54

And that's driven quite a

21:56

few gigawatt hours of residential

21:58

batteries in Italy. And

22:00

then when we look at long-duration

22:02

storage deployments, you're seeing those

22:04

increase. What durations are we talking about when

22:07

we talk about long-duration energy

22:09

storage, and what applications are

22:12

you seeing LDes storage

22:15

projects meet? I feel like there's,

22:17

if you go to different people in

22:19

the industry, they'll say long duration is

22:21

a very different bracket depending on where

22:23

they sit in that technology map. The

22:27

way we see it at BNF, we typically

22:29

categorize anything that's long duration as more than

22:31

six hours. The

22:33

DOE, for example, they categorize 10

22:35

hours plus. If you go

22:38

to China, four hours plus. We

22:40

stick in six hours because it gives us a

22:42

good sense of, okay, you can divide the day

22:44

in four, and that's more or less like a

22:46

cycle that's a longer duration compared to the

22:48

typical four hours that we see today. And

22:51

for the much longer duration

22:53

storage projects that are maybe

22:56

over six hours, are there any particular

22:58

unique applications there? Yeah, so

23:00

there's definitely a difference between that

23:03

initial six hours to what we

23:05

might call a diurnal pattern of

23:07

charge and discharge versus having

23:09

a weekly or seasonal type of storage

23:12

where you're just holding the energy for

23:15

different parts of more different seasons of the year.

23:19

Today, the L-Des market is not

23:21

a huge market. What

23:24

we see is more like pockets

23:26

of specific projects and companies developing

23:28

different kinds of projects, either supported

23:31

by some form of policy mechanism

23:33

or grants. We see a lot of

23:35

grants in the case of the US or

23:38

like some kind of pilot program, which

23:40

I guess is the case of some

23:42

of the California projects supported

23:44

by the idea that companies

23:47

and utilities think that long duration

23:49

energy storage will be important over

23:51

the coming decades. But

23:54

then they kind of want to start

23:56

now to figure out how to structure

23:58

those contracts, support them. technologies that

24:00

might be needed once we get down to

24:02

the 2030s when there's more requirements or

24:05

more need for long-duration energy storage. The

24:09

very, very long, long-duration energy storage, the

24:11

stuff that we might call seasonal energy

24:13

storage, I think the more

24:15

the activity that we see more, more

24:18

investment around that is actually around

24:20

hydrogen and that economy. We have

24:22

a whole team that covers hydrogen.

24:24

But yeah, I think the

24:27

question is more like between that seasonal

24:29

use case versus the more like diurnal

24:31

and weekly use cases, what kind of

24:33

technologies and what are the actual needs

24:36

are we going to see in the storage

24:38

market or in the elders market. Yeah,

24:40

I don't have one answer just yet. It's research

24:43

that is ongoing in terms of what we're

24:45

doing. And it depends very

24:47

much on the market. So

24:49

different parts of the US that use

24:51

case will look very different between California

24:53

versus PJM, similar

24:55

globally. Let's go to

24:57

electric vehicles now. I want to

24:59

talk about some tech shifts that

25:01

we're seeing in EV

25:04

battery manufacturing. The first is

25:07

that lithium iron phosphate batteries

25:09

are picking up market share.

25:12

This is a technology pretty common in China.

25:15

Why are lithium iron phosphates gaining

25:18

so much traction right

25:20

now? And talk about the difference

25:22

in technology compared to lithium

25:25

ion battery with cathodes that use nickel

25:27

and cobalt. It's definitely this

25:29

long history that's

25:32

culminated in this current snapshot

25:35

of what we see is like this race

25:37

between LFP, lithium iron phosphate

25:40

versus the NMC and CA

25:42

cathodes. So I

25:46

can say like currently in terms of

25:48

the fundamentals around why companies

25:51

would choose LFP, that's definitely

25:53

cost. The input

25:55

cost for lithium iron phosphate is

25:57

lower than for cathodes that use nickel. nickel

26:00

and cobalt and aluminum or

26:03

manganese. And generally speaking, so if you

26:05

can, and because the cost is

26:07

an important factor for you to drive

26:10

costs around EVs and stationary storage, that's

26:12

a huge factor as to why you would

26:14

go for LFP. But

26:17

in the past, it wasn't like a

26:19

slam dunk or seen as a slam

26:21

dunk technology necessarily. The

26:23

reason why was because energy density was not

26:25

quite where it had to be in order

26:28

for you to have long range vehicles. That's

26:30

a huge factor in the US market, for

26:32

example, where the expectation is for you to

26:34

have 300, 400 miles of driving range. We

26:39

want our cars big and we want them to drive for a

26:41

long period of time. Unfortunately,

26:43

or fortunately, however you want to

26:46

see that, the

26:48

function of how the market is

26:50

structured or consumer preferences. So

26:53

you still need quite a big battery that ends up

26:55

being very heavy. And the heavier it is, the

26:58

harder it is for you to take it

27:00

farther if you have a

27:02

chemistry that's not very energy dense. But

27:06

over the course of the last, I would

27:08

say, like five years, maybe

27:10

even a bit less, there's been

27:12

significant improvements in the pack, the

27:14

cell to pack integration of the

27:17

batteries. For LFP in

27:19

particular, that's been a huge gain

27:21

in terms of the pack energy density

27:23

improvements. And that's had

27:26

a significant impact on the uptake

27:28

of LFP for electric vehicles. So

27:30

we're seeing a lot more of the companies. Obviously,

27:32

we had seen a lot of LFPs

27:34

in batteries and EVs in

27:36

China. But actually now

27:38

we see like VW, Ford, GM,

27:42

all committing to a product

27:45

roadmap of EVs that includes

27:47

LFP batteries. So it is a

27:49

very important part of a lot of the

27:51

company's strategies in part to reduce costs,

27:53

but also recognizing that the performance is

27:55

actually at a place where they can

27:57

offer these to consumers at a good

27:59

range. Are there any other

28:01

major developments happening in EV battery

28:04

manufacturing, either on the performance

28:06

side or on the capacity expansion

28:08

side that are worth talking about?

28:11

Yeah. So the three that

28:13

we looked at last year at BNEF

28:15

were, the first

28:17

was like next generation anodes. So

28:20

in the past, there's been a lot of

28:22

focus around cathodes, which is the most expensive

28:25

part of the batteries. But actually, there's

28:27

a lot of innovation happening on the anode

28:29

side, which is really exciting. And

28:32

the reason why there wasn't so much focus was

28:34

in part because it was primarily graphite, which is

28:36

a very low cost material. But

28:39

once you get to a level of energy

28:41

density where you want to increase the energy density on

28:43

the cathode side, you also have to kind of up

28:45

the energy density on the anode side as well. And

28:48

one of the ways you can do that is

28:50

by like adding something like silicon into the graphite.

28:53

And you can essentially improve the

28:55

energy density or the energy capacity,

28:57

the specific energy capacity, as you

28:59

call it, to improve the energy

29:01

density of a battery. And

29:04

then there are other innovations that are happening, like potentially

29:07

moving to more silicon, maybe eventually even

29:09

using like pure lithium metal on the

29:11

anode side. So there is a lot

29:14

of innovation actually happening. A lot of

29:16

US based companies actually focusing on those.

29:19

So quite exciting. The

29:21

other one, not an utility exclusive, I suppose,

29:24

but the other one is like gets a

29:26

lot of attention is solid state batteries. So

29:29

that's essentially like using a solid

29:31

electrolyte instead of what today is

29:34

incumbent technology, liquid electrolyte. A

29:36

lot of the companies are testing with something like

29:38

solid and like a hybrid

29:40

electrolyte. So using both solid and liquid.

29:43

But of course, if you are able to

29:46

fully do it as a solid, you actually

29:48

can have a lot of the benefits around

29:50

energy density and fast charging that you

29:52

can't necessarily achieve in the

29:54

current lithium ion battery technology

29:56

space. And you can also just

29:59

change the way you design. the batteries, which can

30:01

be really exciting. You can design new types

30:03

of vehicles because the batteries can be designed

30:05

in a different way. So there's

30:07

a lot of interest and investment

30:10

going to say batteries. Our

30:12

view is in terms of mass commercialization

30:14

that's probably like around like post 2030

30:16

with a lot of investment actually going

30:18

into that now. So like QuantumScape and

30:20

other companies trying to do that are

30:22

kind of moving in the past. That's

30:24

hard to do, but we expect

30:28

that eventually we'll eventually

30:30

get there. And the question is just around

30:32

like will lithium ion batteries, like incumbent technology

30:34

drops so much in cost by then and

30:36

improve so much by then, then

30:38

maybe there isn't as much of a huge

30:41

market share for solid state batteries. And

30:44

will they primarily be focused on very

30:46

in more high performance applications? So

30:49

things like aviation or

30:53

aviation is a good example

30:55

there. So if we look out

30:57

to the end of the decade 2030, are

31:01

there any storylines that you think are

31:03

going to dominate by then

31:05

that either are emerging today

31:08

or are kind of unknowns that you think

31:10

will be fully formed by the end of

31:12

the decade? There are so many. I think

31:18

the fully formed ones are

31:21

probably around gigawatt hour

31:23

scale projects. We see a couple of

31:25

examples of those today, but I think

31:28

expecting them to be the norm of how like

31:30

a lot of large scale projects might go

31:33

forward. I imagine that's going to be

31:35

the case, like that becoming a standard

31:37

of large scale developments, gigawatt hour

31:39

scale batteries. On

31:42

the technology front, there's

31:44

a fair bit. I mentioned a couple

31:46

of the technologies. The other one that

31:48

we're looking at is like say something

31:50

like sodium ion batteries or other technologies

31:52

that just don't use lithium. That would

31:54

be important in the case where there

31:56

was like some supply crunches in the

31:59

lithium head. or in particular because

32:01

we need to build up a lot of mining

32:03

capacity for lithium. So, potential

32:05

of sodomized batteries to even take a portion

32:08

of the market share in either or both EVs

32:12

and stationary storage, I think

32:14

that's pretty exciting. And then

32:16

I think the other thing

32:18

is just around like

32:21

how much of a norm will be

32:23

building batteries together with new solar and

32:25

new winds and what is the role

32:27

of those combinations together with something like

32:30

hydrogen as well. So,

32:32

I think those are still questions that are

32:35

up in the air and excited to see where

32:37

that goes. Well, Yayoi, thank

32:39

you so much. We'll be following the analysis.

32:41

I really appreciate it. Thank you, Stephen.

32:43

Great to be here with you. That's

32:52

going to do it for the show this

32:54

week. The Carbon Copy is a production of

32:57

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32:59

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33:44

Transcribed by https://otter.ai