Energy Management

Zinc-Air, an Emerging Solution for Better Battery Storage

Do you ever get frustrated when your smartphone constantly seems to be running low on battery? Well then, you have an energy storage issue. Batteries are a small and, at times, a primitive form of energy storage. From Duracell to your car battery, they are all small storage devices that use power when it is needed and can sometimes fail when needed the most.

Our reliance on batteries continues to grow, whether it’s smartphone or automobile-related. In fact, it is estimated that by 2025 lithium batteries – known for their long-life span – will be a $94 billion global industry, according to a Market Research Report.The domination of lithium by the Asian market and its high demand has the potential to make the commodity more expensive and less accessible.

China’s Domination of Lithium Ion and its Impact

Over the years not much has changed with batteries. Most come in a small cylindrical form with a very limited lifespan, and some have recharging capabilities. In the 1990s, lithium-ion batteries became popular for laptop and high-tech applications. Lithium-ion batteries have also been called upon for many applications, automobile and electricity storage being the largest.2 For example, Tesla is building a factory to mass produce lithium-ion batteries in the Nevada desert for use in electric vehicles. Lithium-ion batteries are destined to power home power storage units (i.e., a backup generator). This makes lithium-ion batteries the most viable large-use storage solution but there are challenges to keeping prices low and ensuring their long-term accessibility.

Lithium-ion batteries are comprised of both lithium and cobalt. Over the last few years, China has quietly bought access to about 85% of the world’s cobalt3 and has control of more than half of the world’s lithium production.4 With China cornering the cobalt market, access to the product will become more difficult and more expensive. Since 2016, the price of cobalt has risen ~260%, and consumers have already been scouring the world for unconventional access to both cobalt and lithium.3

Over the last few years, China has quietly bought access to about 85% of the world’s cobalt and has control of more than half of the world’s lithium.

These challenges are leading more companies to find a comparable alternative that is more accessible. BMW and Volkswagen are two companies that have been looking for alternate sources for quite some time. Anticipating these challenges, Exelon, Constellation’s parent company, invested in Volta Energy Technologies, a startup company that identifies and evaluates promising new storage technologies, particularly alternative chemistries. Learn more about Volta’s mission in Bloomberg article.

Finding an Alternative to Lithium-Ion Batteries 

So far there isn’t a commercially feasible alternative to lithium-ion batteries, but that may be about to change. Zinc-air batteries, originally tested by Thomas Edison, are one of several potential alternatives to lithium-ion batteries. Zinc-air batteries are powered by oxidizing zinc with oxygen from the air. An energy technology company owned by entrepreneur and engineer Dr. Soon-Shiong, has implemented zinc-air batteries in more than 100 villages in Africa and has found that the benefits to using zinc-air batteries are plentiful:5 

  1. They have worked successfully without a grid.  
  2. Their cost is appealing with a cost of $100 a kilowatt hour vs ~$250 for lithum-ion.
  3. They do not come with a risk of anyone cornering the zinc market with zinc being a common material.  

What’s Next? 

Zinc-air for automobile applications, such as electric vehicles, will impact the energy industry and the auto industry. The introduction of zinc-air as a solution to effective battery storage makes visions of automobiles with 500-mile range and inexpensive batteries plausible. Most companies are still in the early stages of developing zinc-air batteries, with some not taking their first commercial orders until sometime next year.5

Interesting in learning more about energy storage? Hear Constellation’s CEO Jim McHugh’s thoughts on the need for improved battery storage for continued growth in renewable energy in the third video in a past blog post.

References: 

  1. https://www.grandviewresearch.com/press-release/global-lithium-ion-battery-market 
  2. https://www.scientificamerican.com/article/how-lithium-ion-batteries-grounded-the-dreamliner/
  3. https://www.mining-technology.com/features/inside-chinas-move-monopolise-cobalt/  
  4. https://qz.com/1292202/china-now-effectively-controls-half-the-worlds-lithium-production/ 
  5. https://www.nytimes.com/2018/09/26/business/energy-environment/zinc-battery-explain.html

Guest Author: Ed Fortunato, Managing Director – Fundamental Analysis
Ed Fortunato is the Managing Director of Fundamental Analysis at Constellation, an Exelon Company and responsible for providing fundamental views of the economy, oil and natural gas. Ed has spent more than 15 years with Exelon having begun his career managing the proprietary trading book, the short-term analytics group and has lead the implementation of trading strategies in both the prop and hedging books since his arrival. Ed has an MBA with high honors in finance from Boston University and a BBA from Baruch College.

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