Wednesday 20 September 2017

European battery makers charge-up to take on Musk's Tesla

Anna Hirtenstein

Battery-making gigafactories are about to arrive in Europe, challenging a lead Elon Musk's Tesla is building at a plant in Nevada and opening the way for a quicker shift toward green power for both cars and utilities.

German Chancellor Angela Merkel is scheduled to break ground at a €500m plant to assemble lithium-ion energy-storage units for Daimler, which produces Mercedes-Benz and Maybach luxury cars.

The facility 130km south of Berlin highlights a push by both major carmakers and power companies into energy storage. The technology is crucial to drive the next generation of green vehicles and to hold electricity from wind and solar farms for when it's needed most. With two dominant industries moving in the same direction, the cost of batteries is likely to plunge quickly, according to Bloomberg New Energy Finance.

"As battery costs fall and their energy density increases, we could see cheaper battery-electric cars than their fuel-burning equivalents by 2030," said Nikolas Soulopoulos, an analyst with the London-based research arm of Bloomberg.

Global battery-making capacity is set to more than double by 2021, reaching 278 gigawatt-hours, up from about 103 gigawatt-hours now, according to BNEF. Europe's market share is expected to almost double over that time from 2.5pc.

Large-scale factories planned in Sweden, Hungary and Poland, as well as Daimler's battery assembly plant in Germany, are expected to feed demand from carmakers such as Volkswagen and Renault. That will cut the cost of lithium-ion packs by 43pc and make electric cars a mainstream reality, the researcher estimates.

For the utilities, cheaper batteries reduce the cost of storage units that smooth the variable flows of electric power to the grid from renewables.

At Enel SpA, the biggest distributor in Italy, pairing a battery with a wind farm helped grid managers improve forecasts for electricity output from the plant by as much as 30pc.

"Batteries are clearly a key enabler for renewables penetration," said Riccardo Amoroso, the head of innovation at Enel.

"We have seen impressive results in our pilot industrial scale projects, especially in terms of increased programming and reduced intermittency."

Finland's Fortum Oyj is similarly testing batteries for its gigawatt-sized plan for solar and wind projects, according to Chief Financial Officer Markus Rauramo.

Used since the early 1990s in consumer electronics such as computers and phones, lithium-ion batteries have made a leap into the transport and power industries. But because of their cost, their application on the grid and in cars is only now starting to spread. The battery boom will be most evident to consumers in electric vehicles, with most major automakers planning plug-in models by the middle of the next decade.

Currently, electronics makers in Asia control the battery business. South Korea's LG and Samsung SDI are among the top vendors.

Car makers are moving quickly to secure battery capacity. Wider use of lithium-ion batteries is still in its early days.

"You still need a crystal ball to operate a system on batteries," said Bridgit Hartland-Johnson, head of energy storage at Siemens Energy Management. "There are still some unanswered questions."

(Bloomberg)

Irish Independent

Also in Business