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Lithium: A Game-Changer for the Electricity Grid

By Andrew Brodkey

Lithium batteries have become ubiquitous in laptop computers, smart phones and many other devices. And they are increasingly being used in new generations of hybrid and electric cars, like the Toyota Prius, Chevy Volt and Nissan Leaf.

Yet there’s another use of lithium batteries that gets far less attention—but which has the potential to revolutionize how electricity is supplied and delivered across the nation. The idea is simple: Hook up big batteries to the electricity grid.

 That solves at least two huge problems.

To understand why, consider first how the nation’s vast electricity system works. At every moment, the amount of electricity generated must match the demand for power. But obviously, demand rises and falls dramatically as people come home from work and switch on the lights and TVs, or when temperatures rise and air conditioners kick in. As a result, utilities and electricity grid operators must manage their hundreds of powerplants and millions of miles of transmission lines with the precision of an orchestra conductor leading a Beethoven symphony.

Typically, a certain amount of electricity—so-called baseload power—comes from powerplants that run almost constantly, such nuclear plants and some coal facilities and wind farms. When demand rises more than the amount of baseload power, operators turn on or ramp up natural gas-fired boilers, which produce steam to turn generators. Even this isn’t enough for frequently-occurring short spikes in demand, which may last for only a few seconds but which require instant power. To supply these sudden surges of electricity, utilities use gas-turbine-powered generators. Some of these gas turbines are even kept spinning without generating power, held in reserve just in case sudden sharp spikes in demand hit—an approach called a ‘spinning reserve.’

The problem is that supplying electricity to meet the peaks in demand is enormously expensive. The peak power plants are costly to build and costly to run. And they may only be needed for a few hours a month or a year. Indeed, this peak electricity can be ten times more expensive to produce—and buy—than normal baseload power.

The high cost of today’s peak power creates a major opportunity for energy storage. If electricity generated during periods of low demand can be successfully stored, that electricity is then available to instantly flow onto the grid when demand spikes. Suddenly, utilities would no longer need expensive gas-fired peak power plants. In addition, having stored electricity at the beck and call of grid operators makes it far easier for them to instant match electricity supply to demand.

Batteries hooked up to the grid also solve a second problem. They make it possible to add large amounts of solar, wind and other renewable electricity to the nation’s power supply. Wind turbines only produce electricity when the wind blows. Solar panels only generate power during the day. The problem is that the supply of electricity from these sources often doesn’t match the demand. The strongest winds in the Great Plains typically come at night when demand is low, for instance. In fact, the Bonneville Power Administration has even been forced to shut down wind turbines because they produce too much power at times when it’s not needed. (http://www.nytimes.com/2011/12/08/business/energy-environment/bonneville-power-ordered-to-change-wind-rules.html).

Storing the excess energy until it’s needed is the obvious solution. As Energy Secretary Steven Chu has said, “energy storage is critical to grid operations.” Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission believes that energy storage systems could be worth four times as much as new generating facilities.

Batteries aren’t the only approach for energy storage. Utilities are experimenting with flywheels, compressed air storage, and so-called pumped storage hydro, where excess electricity during periods of low demand is used to pump water up to a reservoir above a hydroelectric dam. “The market is ripe with opportunity,” says a recent report from Pike Research. “Energy storage on the grid is reaching turning point.” (http://www.pikeresearch.com/research/energy-storage-on-the-grid).

In fact, Pike predicts that energy storage will jump more than 100-fold in the next 10 years. A 2010 report from Sandia National Laboratories foresees a $200 billion opportunity (http://www.altenergystocks.com/archives/energy_storage/flywheel).

It’s not yet clear which technology will be the most widely used. But batteries—especially lithium batteries—have a number of advantages. Compared to compressed air and pumped hydro, batteries store and supply electricity much more quickly. And compared to other types of batteries, lithium batteries hold their charge better. If not used for a month, they still lose only about 5% of the stored power. They also have no `memory` effect, a problem that plagues NiMH batteries, among others. That means they don’t have to be fully drained of juice before being recharged. And most important, they are capable of rapidly delivering the very large jolts of power needed to keep the grid’s delicate balance between supply and demand.

That’s why key companies are already making bets on lithium batteries. For instance, the giant multinational corporation AES has set up an Energy Storage Division, which is proposing to build a 400 MW lithium battery storage unit for the Long Island Power Authority. The battery would be the biggest in the world—and would be a less costly and less polluting alternative to building a whole new natural gas power plant. (http://www.greentechmedia.com/articles/read/aes-bringing-real-utility-scale-energy-storage-to-the-grid/)

In short, lithium batteries on the electricity grid could be a game-changer for the nation’s electricity system and we believe may increase long term demand for that most essential of elements—lithium.

Lithium: It’s Elemental

By Andrew Brodkey

If Hollywood were to remake the classic movie, The Graduate, today, the one word of wisdom that Mr. McGuire would give to Dustin Hoffman would not be “plastics.” It would be “lithium.”

Lithium is an element. It’s one of the lightest elements, with an atomic number of three, right after helium (atomic number two). But what makes it so important is that it’s the key ingredient for making the best practical batteries that engineers have been able to concoct. Lithium batteries power hundreds of millions of iPods, laptops, cell phones, flashlights, and other devices. And their use is about to skyrocket in the automobile market. The Tesla sports car gets its power from lithium ion batteries. Coming soon are the all-electric Nissan Leaf and the General Motors Volt—and a potential slew of others, all with lithium batteries.

In fact, the lithium battery is one of those key technologies that open the door to a new world of products. Tiny iPods wouldn’t be possible without lithium batteries, which are smaller and more powerful than any previous type of battery. Ditto for the electric car.  A typical lithium-ion battery can store 150 watt-hours of electricity for every kilogram of battery weight. That’s more than twice the power to weight ratio as the nickel-metal hydride (NiMH) batteries in, say, the Toyota Prius. And it’s six times better than traditional lead-acid batteries. Imagine how much better GM’s fabled EV1 electric car would have been if the car was powered by today’s advanced lithium batteries instead of lead-acid batteries, or by early generations of nickel-metal hydride batteries.

Light weight isn’t the only advantage of lithium ion batteries. They hold their charge better than many other types. If not used for a month, they still lose only about 5% of the stored power. They also have no `memory` effect, a problem that plagues NiMH batteries, among others. That means they don’t have to be fully drained of juice before being recharged. Other types of batteries will ‘remember’ the amount of remaining power and not allow a full charge. And lithium-ion batteries can be charged and discharged many times.

They aren’t perfect. Remember when Sony recalled some of its notebook computers because the lithium batteries could suddenly burst into flames? The lesson learned from that debacle is that the batteries have to be manufactured to very high tolerances. If the parts aren’t precisely where they should be, internal shorts can spark a fire.

Part of the story of the lithium battery, therefore, is how much the design and manufacturing techniques have improved. Those innovations, then, are making possible all the new applications. There’s also a key policy angle. The Obama Administration has made electric and electric hybrid vehicles one of the centerpieces of its technology and stimulus policies, handing out hundreds of millions of dollars in grants to companies building advanced battery plants in the U.S.

The bottom line: Lithium is becoming a huge business, with the market for lithium ion batteries estimated to grow from $877 million this year to $8 billion by 2015, according to Pike Research. (Cited in http://www.time.com/time/magazine/article/0,9171,1975337,00.html). If the electric car takes off, the numbers could go far higher.

So in my next blog: Where does lithium come from and who will reap the profits from selling it?