3 ways to make energy storage more innovative and sustainable

After more than a year and a half of negotiations, the US Congress and President Biden have passed two pieces of legislation that will be instrumental in building America’s future as a leader in green energy and industrial manufacturing. Together, the CHIPS and Science Act and the Inflation Reduction Act will enable those in the clean energy sector, who have mostly been operating in silos, to collaborate more effectively. This paradigm shift is critical to addressing one of the most pressing climate issues: electrifying the energy and transportation sectors.

Frequently, these two missions are seen as separate, but they are deeply intertwined by the need for better energy storage systems. An electric vehicle’s battery, for example, constitutes 40% of its total cost, and the battery is the number one determinant of the vehicle’s range. Consumer surveys indicate that those two factors, high cost and limited range, are the single largest barriers to electric vehicle (EV) adoption. Therefore, decarbonising the transport sector requires more robust battery technology.

Increasing the use of renewable energy also depends on energy storage technology. By storing energy produced during the day, grid-scale batteries allow consumers to rely on solar power when the sun is not shining. A recent study from the state of Michigan indicates it needs 2,500 MW of energy storage by 2030 to meet its renewable goals. Currently, the state has virtually none.

To meet the needs of an electrified system, energy storage companies must think strategically. As a US-based energy storage manufacturer, at Our Next Energy (ONE) we have three core strategies for growth:

EV batteries often outlast the life of a car. A systems-first strategy recognises that instead of discarding or recycling an EV battery from a broken down car, it can be integrated into our electric grid to provide critical storage capacity. Since it’s feasible to transition a battery from a transportation application to a grid storage one, and not the other way around, ONE immediately scales our automotive products. And, as we grow our manufacturing capacity, we can begin manufacturing products that are optimised for grid storage, unlocking further decarbonisation benefits.

Material scarcity is a long-standing issue for energy storage manufacturers. Historically, batteries have used nickel and cobalt. This combination of metals was critical for driving the energy density levels necessary for electric vehicles to compete with traditional ones. However, both of these metals are increasingly hard to access. About 20% of pure nickel on the market, for example, is sourced by a single Russian mining company.

After western countries sanctioned Russia in response to its invasion of Ukraine, nickel prices doubled to a record $100,000 per ton and trading on the London Metal Exchange was halted. Even companies that don't use Russian nickel are affected by this dramatic price increase. Consequently, as Bloomberg reports, supply chain disruptions for critical battery metals will cause EV battery prices to rise for the first time after a decade of rapid, continuous decline. Some analysts believe that this price increase could last until 2026, which could stall EV adoption. But, through direct pay provisions, the Inflation Reduction Act will help reduce price volatility for raw materials, strengthening our supply chain.

To ensure our products maintain price stability, we have developed a high-performing lithium iron phosphate (LFP) battery that does not require rare and expensive metals, such as nickel and cobalt. Through novel design, our LFP Aries pack is equipped with industry-leading energy density, enabling longer range at a lower price. Additionally, using an iron-based chemistry allows ONE to seek sustainable inputs at a very low cost, including extracting iron from recycled steel. ONE’s factory – to be announced by the end of 2022 – will be among the largest LFP producers in North America, and we are eager to prove to the industry that the future of energy storage lies in sustainable, low-cost iron-phosphate batteries.

Currently, only 5.5% of lithium-ion batteries are manufactured in North America, according to a recent report. While overseas investments have helped the EV sector to grow, there are several problems with overseas production. In many emerging markets, for example, mining and manufacturing regulations do not protect the safety of people and the planet. Inefficient global shipping routes increase the indirect emissions that current EV batteries are associated with. These additional emissions can and should be reduced through onshoring.

At ONE, we decided to manufacture products in the US We commissioned an independent analysis, which indicated that by implementing a North American supply chain and onshoring cell manufacturing, ONE could reduce greenhouse gas emissions for our LFP cells for our Aries pack by 34%, and 29% for the anode-free and LFP cells for our second product, Gemini. Reducing indirect emissions from our products is vital for their long-term sustainability.

No company can accomplish all its goals alone; to create a truly accessible and resilient energy storage market, the industry needs leadership in raw material extraction. Increasing North America’s ability to produce irreplaceable raw materials, such as lithium, is vital for our long-term energy independence. In the US, efforts are being made to extract lithium from traditional mining sources, as well as through novel brine extraction. The collective ingenuity and commitment of the American materials sector bode well for the future of the energy storage industry, as does the Inflation Reduction Act.