How Big Oil set the energy storage revolution in motion
A scientist, Stanley Whittingham, was working in a lab researching alternative energy production and storage.
He was, to be precise, looking at how to make and develop a fully functioning rechargeable battery.
Rechargeable batteries had been around for decades when Whittingham first got to work in the early 1970s. But they were bulky, lead-acid cells – the kind still found in many cars today.
Although the disposable carbon-zinc batteries that power your remote control were prevalent, replacing them after each charge of an energy-hungry device such as a computer was frustrating and expensive.
Early research had suggested that the highly reactive metal lithium could be used to store energy, although no one had yet worked out how to make it happen at room temperature without the risk of explosion.
No one, that is, until Whittingham.
Whittingham and his team discovered that lithium ions held between plates of titanium sulfide could allow the ions to move back and forth between the positive and negative contacts, creating electricity.
Other entities including General Motors, Sohio and the US Argonne National Laboratory were developing lithium-based batteries at the same time, but only Whittingham’s invention worked at room temperature.
His design of a titanium disulfide cathode and a lithium-aluminium anode would eventually result in the first commercial lithium rechargeable battery.
In fact, it provided the basis for modern lithium-ion batteries.
Lithium-ion batteries are now found in everything from mobile phones, laptops and, most significantly of all, electric vehicles.
Perhaps the most surprising aspect of the story is the name of the company Whittingham worked for.
It’s not a company you’d automatically think would be behind a technology that would eventually power not just cars, but electrical grids, scooters, ferries and airplanes.
Whittingham worked for the largest oil company in the world, no less.
Exxon.
Exxon, you see, already believed that petroleum production would peak likely after the turn of the millennium. It was time to diversify.
As it turns out, Exxon was right about the future of lithium-ion batteries – it was just marginally off with regards the timeframe.
You see, it now looks like oil demand could peak in the next generation, around 30-odd years after Exxon’s original forecast.
You can catch my high-priority briefing in full, here.
The cause?
Battery-power electric vehicles.
Indeed, huge uptake from automakers has caused demand for lithium-ion batteries to surge, creating efficiencies of scale that have sent prices plummeting. Last year alone, the price of battery packs fell 24%, according to Bloomberg New Energy Finance (BNEF).
BNEF predicts that lithium-ion battery prices, already down by nearly 80% per megawatt-hour since 2010, will continue to tumble as electric vehicle manufacturing builds up through the 2020s.
These cost declines, in turn, are encouraging the continued expansion of battery power outside electric vehicles.
Power grids that are based on inconsistent power sources like wind or solar power are also beginning to rely on massive lithium-ion batteries to store energy for times when demand exceeds output.
Falling costs will bring more batteries on to electrical grids as well as homes that have solar panels and buildings seeking backups during power outages.
In fact, this batteries boom will enable half of the world to get half of electricity from wind and solar by 2050, BNEF said in a report last week.
What’s more, BNEF forecasts more than $100 billion will be invested in energy storage by 2030, transforming how grids operate.
Investors are now starting to flock to the battery market to grab a slice of the battery storage pie.
A growing number of small-scale lithium-ion battery projects are mushrooming across the UK as battery technology costs drop and government funding takes hold.
But lithium batteries aren’t the only show in town. Not by a long stretch.
Indeed, while lithium-ion batteries remain the technology of choice for most battery storage applications, there is growing acceptance that they won’t be enough alone to reach the required electricity storage capacity to back up intermittent renewable production in the future.
That’s because they can only store energy for a certain amount of time – weeks, at most. As soon as the charging source is removed, they start to lose the charge.
That might not be a problem if they’re paired up with solar or wind to iron out the peaks and troughs of daily use, but less useful if they’re meant to cover for longer-term seasonal demand. London’s peak energy demand comes during the coldest days of winters, when people burn natural gas to heat their homes and offices.
Peak energy demand, whether for heating or cooling, can be as much as 20 times the energy consumed on an average day.
Lithium-ion batteries also suffer from ageing, as you will all know from the batteries in your phones or laptops. The capacity of batteries falls over time until it eventually runs out altogether.
They have other shortcomings. They don’t consistently behave the same way and the energy density of lithium-ion – how much energy can be packed into a particular volume – is currently limited. Hence the large-sized batteries being put into electric vehicles today.
Hydropower is by far the most widely used source of seasonal storage currently, but the potential to build more hydropower capacity in Europe is limited by a lack of natural resources.
There are only so many hills where you can build big dams on, after all.
Other energy storage technologies are starting to emerge, eying the gap in the market.
These options including flow batteries, compressed air and liquid air, among others. All of them are starting to play a crucial role in energy markets, moving from niche applications to mainstream interaction as they help balance out intermittent renewables.
Earlier this month UK company Highview Power launched the world’s first grid-scale liquid air energy storage plant.
The plant, based in Bury, near Manchester, has a capacity of 5 MW and can store 15 MW of power – enough for around 5,000 average-sized homes.
The technology works by cooling air and transforming it into a liquid that is stored at low pressure in insulated tanks. The liquid air is then pumped to high pressure and heated, with the high-pressure gas being used to power a turbine and create electricity.
All good in theory but, like its compressed air counterpart, its delivery response isn’t particularly quick, so it’s not reliable at times of peak demand.
Another such technology is developing hydrogen through power-to-gas technology. German utility Uniper has two pilot demonstration facilities that have capacities of 1.5 MW and 2 MW.
Effectively, the plants use wind energy to transform renewable electricity into hydrogen and in a second step synthetic natural gas, which can then be injected into the gas network. That way, the plants store renewable energy for an indefinite amount of time in underground gas storages and the gas network.
The advantage is that unlimited amount of synthetic gas could be stored into European gas infrastructure. However, efficiency is limited – some energy is lost during the process – while the technology is also currently not commercially viable, in part due to unfavourable regulation.
What is clear is that we haven’t yet found the holy grail for energy storage.
There remains a gap in the market for a scalable, cost-effective, safe, a geographically unlimited energy storage option, one that is suitable for longer timeframes than lithium-ion batteries and lasts a lot longer.
One technology – spearheaded by one small company – is emerging to fill this gap.
What’s more it doesn’t just provide electricity. It also provides heat.
Although heat energy requirements are often underestimated, global thermal energy needs are actually larger than transport or electricity. Industries, for instance, have critical needs for heat for processing, manufacturing and greenhouse growing of food – and increasingly demand clean, carbon free heat.
I’ve been researching this stock for months. It is an absolutely perfect exponential energy stock. I’d recommend you buy it right now… if you could.
But – given we’re in the very early stages of this trend – there’s a snag.
The business isn’t public…
Yet.
At the end of July that all changes.
For investors set and ready ahead of time, I think we’re looking at an extraordinary opportunity… one that doesn’t come round often.
I’m delighted to say my readers will have my complete appraisal of the situation – risks, potential rewards, factors which could accelerate this company’s growth yet faster – in a matter of days. I’m working on the finishing touches now.
They’ll have more than enough time to get themselves among the very first private investors in on the ground floor.
Meanwhile there’s another situation unfolding within the energy markets, which seems to have slipped under the radar of the mainstream entirely.
If you’re an avid reader of Harry’s work, you’ll have caught his email re IOTAs long anticipated Q project, an update Harry describes as giving IOTA “the functionality of Ether, but with unlimited scaling and free transactions”.
In other words, a very big deal.
But, what nobody seems to have realised, is that IOTA could be on the brink of a partnership with a tiny small cap energy company.
A partnership I believe could facilitate perhaps the most dramatic and long-lasting scale up in energy market history.
A deal you absolutely want to be ahead of if you’re interested in small stocks, with a BIG potential, and in imminent trigger on the horizon.
Until next time,
James Allen
Exponential Investor
