Just over a year ago, the World Health Organization (WHO) officially declared a global pandemic. At the time, there was a great deal of uncertainty about how COVID-19 would impact the energy industry. Almost 12 months later, we witnessed a 20% drop in oil demand, a 5% reduction in electricity consumption, and the largest year-over-year reduction in global CO2 emissions. However, through it all, the energy transition continued to move forward at an accelerated rate.
Using our news commentary feature, we have been tracking key developments in the energy industry over the first year of the global pandemic, covering nearly 650 individual developments across more than 10 of our major topic areas. These innovation-related events range from partnerships and investments to recent R&D and policies. Each news commentary includes information about the companies involved and our take on the development.
The news trends analysis is one of the main factors shaping the Lux Energy Team's outlook for 2021 and beyond. Many of the transformational developments that occurred directly influenced the Energy Program's four key themes – Evolution of Electricity Networks, Decarbonization of Industry, The Business of the Energy Transition, and Future Energy for Mobility – and shaped our 2021 predictions. In the below figure, we analyze the activity over the past 12 months within one of our main topics, energy storage.
As we enter the second year of the global pandemic, we take a look back at the "Truly Disruptive" and "Very Important" developments over the past 12 months. We have also selected the most read and discussed innovation-related events.
Application – mobility:
- Battery fires prompt an expensive recall of 81,701 Hyundai electric vehicles. The event is the latest in a series of concerning cell failures. With more than 80,000 vehicles getting their batteries replaced at an assumed cost of $150/kWh and an average pack size of 60 kWh, this would result in a $720 million battery price tag for the recall.
- Nio's "battery-as-a-service" model is the most promising battery leasing model yet. A favorable model proposed by Nio is battery swapping, as it offers more flexibility to introduce new battery chemistries and allows customers to change their battery size while owning the vehicle.
- Tesla opts for LFP over NCA in the Chinese market. Tesla opted for LFP over NCA to help insulate itself from nickel feedstock shortage and to compete in the Chinese market, where several companies are Tesla "copycats."
- QuantumScape goes public via SPAC at a $3.3 billion valuation as the EV bubble continues to grow. QuantumScape became the latest startup to go public via a special purpose acquisition company (SPAC). The company became the first battery company to go public, with a valuation of $3.3 billion.
- Hyundai reveals the E-GMP platform as automakers continue to design dedicated BEV platforms. The company revealed the details of a dedicated electric platform for the first time. Standardized modules and a flexible platform mean it can increase part sharing for reduced costs, with improvements in energy density and costs compared to previous models built on modified internal combustion engine (ICE) platforms.
Application – STATIONARY:
- Southern California Edison to procure 770 MW of energy storage to replace natural gas peaking plants. The aging natural gas power plants were replaced by new projects as California utility Southern California Edison (SCE) announced that it would procure 770 MW of Li-ion battery energy storage to be brought online by August 2021.
- Shell signs an off-take deal with a 100 MW storage facility in the U.K. Slated to be Europe's largest battery storage facility upon completion, Shell agreed to a multi-year off-take deal for the project, which consists of two 50 MW lithium-battery units.
- UC Berkeley reports that solar, wind, and Li-ion batteries can cost-effectively help the U.S. grid reach 90% carbon-free electricity by 2035. A study by UC Berkeley suggested that $1.7 trillion invested into 1,100 GW of new wind and solar, 150 GW of four-hour storage, and modest increases to transmission capacity would result in a 10% reduction in wholesale electricity prices by 2035.
- Highview Power receives a $46 million investment from Sumitomo Heavy Industries, raising the company valuation to $330 million. The investment by Sumitomo Heavy Industries will aid Highview Power as it seeks to commercialize its liquefied air energy storage system globally.
- Solar Electric Solutions installs the largest second-life battery storage project in the U.S. Targeting a capacity of 17 MWh and usage of 2,000 batteries, Solar Electric Solutions, a solar project developer, and its affiliate second-life battery company B2U completed an installation of a 1.2 MWh pilot stationary energy storage system using 200 Nissan Leaf batteries.
- Zenlabs validates 1,000 cycles for 12 Ah cells with silicon anodes. Idaho National Laboratory validated Zenlabs' 12 Ah pouch cells with 315 Wh/kg to have a cycle life of 1,000 cycles at a C/3 charge rate and 896 cycles at 4C. Zenlabs uses 50% to 80% silicon loading in its silicon-graphite composite anode, much higher than commercially available cells, which can use up to 5%.
- Researchers at the University of Texas create cobalt-free cathode material. The research group claimed to sidestep the need for cobalt by ensuring even distribution of metal cations through coprecipitating the material rather than substituting via calcination.
- VW announces NMC 811 batteries, a tipping point for Ni-rich chemistry. Li-ion batteries composed of Ni-rich cathodes, such as NMC 811, were introduced in a handful of models in China, including the BMW X1 and Nio vehicles; VW's announcement is the first firm indication that vehicles outside of China will get the chemistry.
- Solid Power shares new battery data demonstrating progress toward commercialization. The company revealed details on the 2 Ah cells it delivered to validation partners; the products show cycling stability at near room temperature at C/10 discharge rates, with rates up to 3C possible at 70 °C.
- QuantumScape finally shares some data but fails to justify the hype. QuantumScape showed data from single-layer pouch cells that indicated fast charging (15 minutes to 80% SoC) and 800 cycles at a 1C charge/discharge rate, which represent some of the better lab-scale results. The company has yet to release data on multilayer pouch cells.
- Solid Power produces and delivers its first-generation 10-layer, 2 Ah cells on an MWh-scale roll-to-roll pilot line. The cells exhibit improved room-temperature operation and discharge rates up to 5C as Solid Power delivers hundreds of cells to its partners.
- Sila Nanotechnologies plans battery materials factory after $590 million investment. The manufacturing plant will eventually produce enough silicon anode material to make 100 GWh of cells each year; it is slated to open in 2024 and ramp up production enough to supply materials for BEVs in 2025.
- Svolt to begin manufacturing zero-cobalt NMX cells by mid-2021. This multilayered, single-crystal cathode material utilizes a doping process to provide the stability that cobalt is traditionally used for.
- CATL to invest $1.86 billion in battery production in China. The battery producer will build out three new facilities in Guangdong, China. By the end of 2030, CATL plans to install a capacity of up to 150 GWh. This is in addition to the announced 80 GWh of capacity by 2023.
- Graphene battery to be mass-produced by GAC Group in September. China's GAC Group is in the final vehicle testing phase for its graphene-based battery that can withstand up to 6C charge rates. This announcement indicates that innovations in carbon nanotechnology will become increasingly important for competing with silicon-based anodes.
Energy storage innovation interest remains at a critical high, and 2020 marked a turning point in demand. Electric vehicle sales spiked, and automakers are now rolling out dedicated platforms to build many electric vehicles, foreshadowing supply chain challenges that will shape the industry over the next decade.
The chemistry roadmap is mostly set – a combination of iron-based and nickel-based cathodes in the near term, with a shift to silicon anodes and solid-state electrolytes in the longer-term roadmap – but new demands related to battery safety and recycling create new innovation opportunities.
In stationary storage, larger projects will be announced more frequently as the nascent space grows rapidly. While Li-ion is the dominant chemistry today, opportunities in long-duration storage will benefit from Li-ion supply chain concerns, creating opportunities for Zn-air, flow batteries, and other alternatives.