Will a Simple Battery Reshape the Future of Energy?

Energy storage and transportation has long been one of the greatest challenges for the energy industry. Oil is such a great source of energy because it's easily transported around the world and has a high density of energy. Natural gas hasn't been as widely used because it isn't as easy to store or transport, which is a big reason why the world doesn't run on natural gas vehicles.

But the energy industry is changing rapidly and the future of energy likely lies outside of these traditional fossil fuels. More and more industries are looking for ways to efficiently store energy and the same battery that's in the device you're reading this on may play a big role in transforming the entire energy industry.

The electrical vehicle revolution
The most visible change in how we use energy can be seen in concept and production cars from automakers. Electric vehicles have been the talk of the auto industry for nearly a decade, but it wasn't until Tesla Motors (NASDAQ: TSLA  ) made the Model S that we really saw the potential of EVs emerge. The Model S was the first car that could fit a family, travel 265 miles on a charge, and provide performance usually reserved for sports cars.

Tesla Model S battery pack, made of lithium ion batteries and integrated into the vehicle's frame.

The success of Tesla hasn't gone unnoticed, with GM, Ford, and Nissan following its lead aggressively. By the end of the decade, every major automaker will have an electric vehicle offering and the batteries at the core of those vehicles are key for advancement. Right now, the lithium ion battery is what powers electric vehicles and in the near future this battery technology will only grow in popularity.

Energy storage
Batteries have also emerged as a great way to store electric energy for commercial or home use. The same lithium ion batteries that power your computer and power a Tesla Model S are now being turned into energy storage devices for Tesla's sister company SolarCity (NASDAQ: SCTY  ) . The product is initially being offered to commercial customers and is paid for by offsetting demand charges or peak energy costs, but the road map for solar and energy storage is easy to see. Solar power is an intermittent power source and a place to store energy would smooth out supply and demand, potentially even making going off-grid a possibility.

SolarCity's energy storage pack using Tesla Motors' technology. Image courtesy of SolarCity.

SolarCity isn't the only one looking into batteries as a way to grow solar. SunPower (NASDAQ: SPWR  ) has multiple test locations up and running and CEO Tom Werner told me a few months ago that they would likely partner with another company to build energy storage systems.  

Electric vehicles are a big potential market for batteries but energy storage may be even bigger. It's reasonable to predict that a 100 kW-hr or larger system will be commonplace in homes within the decade, opening up a huge market for battery makers.

Who is making all of these batteries?
There were once a few ways to play the future of auto batteries, but they've long since flamed out. Ener1  and A123 Systems  filed for bankruptcy before the potential of their markets could be achieved and any remnants are now under private ownership.

What's emerged is a battery industry dominated by more established companies. Panasonic (NASDAQOTH: PCRFY  ) makes batteries for both Tesla and SolarCity, giving it a great position in this emerging market. LG Chem has partnered with GM and Ford on the Chevy Volt and Focus Electric, respectively, just two of many EV partnerships.  

One interesting company to watch is Johnson Controls (NYSE: JCI  ) , which is known more for traditional lead-acid batteries than lithium ion batteries. That could change soon because Johnson Controls is launching a lithium ion system it says packs more energy into a smaller space than traditional lithium ion batteries.

Building out battery manufacturing facilities is capital intensive so I'd rather bet on multinational corporations surviving long term than start-ups. Panasonic, LG Chem, and Johnson Controls look like three long-term winners if EVs and energy storage take off.

The future of batteries
What's interesting about all of these companies developing battery solutions is that they're using essentially the same lithium ion batteries you have in your phone, tablet, and computer. Their sizes are different and the way energy is managed has to change but the fundamental technology is the same.

The technology may change in the future but for now the lithium ion battery is the best hope we have in reshaping the auto industry and energy storage. Tesla, SolarCity, and SunPower will be leaders in deploying the technology to end markets while Panasonic, LG Chem, and Johnson Controls are the best ways to play manufacturing and new technology. This is a high-potential industry and investors would be wise to keep an eye on how it plays out.

3 more companies shaping the future of energy
The Motley Fool is offering a comprehensive look at three energy companies set to soar as the energy industry evolves and the U.S. plays a bigger role. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 


Read/Post Comments (16) | Recommend This Article (28)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 26, 2014, at 8:27 PM, normgarry wrote:

    A battery only stores energy. The key is "where the energy actually comes from". There is no "0 emission" completely clean energy source.

    Industry has given me absolutely no proof that the electric vehicle does not require the same type of energy input and pollution as a standard vehicle.

    Lithium mining is dirty.

    Aluminum mining is dirty.

    We already know that fossil fuels are dirty- but the brain problem is fossil fuels are the basis of energy on the earth's surface thanks to photosynthetic plants and the sun.

    I see no way that consumerism could ever be clean. Those electric vehicles will eventually be recycled and people will want to buy newer and improved electric vehicles. Recycling is not green. It requires a lot of energy and emits large amounts of toxins.

  • Report this Comment On January 26, 2014, at 8:35 PM, OneHundredxFifty wrote:

    The key to mainstreaming EVs and renewable energy is low cost storage. Batteries are dropping in price quickly as volume ramps. This is similar to solar modules, flat panel displays and pretty much any other manufactured product. See post here on battery cost reduction: http://handlemanpost.wordpress.com/2013/12/24/cost-projectio...

    There are concerns about lithium supplies but it looks like there is plenty even in the event of a spike in demand from EVs: - http://handlemanpost.wordpress.com/2013/12/24/will-we-be-hel...

  • Report this Comment On January 26, 2014, at 9:16 PM, Mentallect wrote:

    When oil becomes secondary to lithium ion, then America will prosper all the more, and the world.

  • Report this Comment On January 27, 2014, at 2:46 AM, willy325 wrote:

    Batteries are miniature toxic chemical plants. They have a high carbon footprint to manufacture and create a costly and polluting disposal problem. They have a limited working life and a considerable replacement cost.

    We need another decade or two in order to develop a super capacitor that works…if that is ever even possible.

    Without a miracle breakthrough batteries are not the answer at all.

    How many billions ( of taxpayer money), has our government thrown at battery development without any success at all? Look it up and weep. It's YOUR money!

  • Report this Comment On January 27, 2014, at 3:13 AM, tappindatass wrote:

    Companies who use lithium-ion to power devices are no different than companies who use fossil fuels to provide energy. There is a limited supply of lithium in the world, just as there is a limited supply of oil and coal. It is harmful to the environment to get lithium out of the earth, just as it is with oil and coal.

    While I completely agree that it has applications where it is a better solution than fossil fuels, it is not a cure-all, and those who profit from its use are no greater than the oil and coal tycoons of the 20th century.

  • Report this Comment On January 27, 2014, at 3:25 AM, ddcmall wrote:

    In the end a good design for a hydrogen storage tank will be far more efficient and economically stable than toxic batteries made with materials supplied from geopolitically volatile countries. Get over the bull about the Hindenburg. Hydrogen is the most efficient means of energy storage. Not batteries.

  • Report this Comment On January 27, 2014, at 5:01 AM, danwat1234 wrote:

    Modern lithium ion EV batteries aren't very toxic.

    They don't contain

    Lead

    Mercury

    Cadmium

    Hexavalent chromium (chromium xxx or Cr6+)

    Polybrominated biphenyls (PBB)

    Polybrominated diphenyl ether (PBDE)

    and much of it is recycled at end of life.

    http://www.teslamotors.com/blog/mythbusters-part-3-recycling...

    BTW, hydrogen will never ever take off. Needs capturing of Hydrogen (electrical energy use there), needs big infrastructure; trucks to truck it to the stations (and influenced by big oil) or big infrastructure similar to natural gas lines, then you have losses in the car's fuel cells, converting it to electricity to guess what, power the electric drivetrain in that hydrogen car.

    Electric with a little gas generator is good for now and eventually when battery tech gets better, no need for the engine.

  • Report this Comment On January 27, 2014, at 10:58 AM, DrGripe wrote:

    A biased slanted article with little if any investment insight value. I seriously wonder if the Motley Fool even reads let alone evaluates such shoddy self serving and narrow minded articles.

  • Report this Comment On January 29, 2014, at 5:55 PM, RobertC314 wrote:

    Flow batteries are worth looking in to. Nothing commercially viable yet, but basically they work like a hydrogen fuel cell, but are a closed system and can be recharged. Capacity can be arbitrarily increased by increasing the size of the storage tanks. There have been recent breakthroughs in basing them off common organic components instead of expensive/rare substances.

    This technology is much more suited to the usage patterns of a vehicle, and you could even imagine fueling stations where they take your "spent" fuel, refill you with "charged" fuel, and recharge it for the next customer - recyclable gasoline!

    And the argument that batteries need to get their energy from somewhere, while true, is a bit tired and not really relevant for the EV debate. Utility scale electricity is much more efficient to produce, regardless of source (even if you only charged batteries with oil-based electricity you'll still see a dramatic increase in efficiency over gasoline engines). Furthermore, most existing and future alternative energy technologies can not be scaled to fit on a car - wind, geothermal, tidal/wave, fusion, or even solar solar (yes, you can put solar panels on a car, yes, there are solar cars, and no, it won't provide enough power for anything commercially viable). Any way you slice it, cars have to go electric at some point.

  • Report this Comment On January 29, 2014, at 6:18 PM, Aquest wrote:

    Lithium ion batteries are far from the solution or only solution.

    Lead acid batteries are still the best method of storing electricity cheaply. Approximately 95% of them are recycled safely (something that can't yet be said for lithium ion batteries).

    Companies like Axion Power are developing better lead acid batteries which may end up being the economically better decision for large battery storage installations for use with the grid.

  • Report this Comment On January 29, 2014, at 6:47 PM, billmichael wrote:

    This may be a dumb comment so please pardon me if I don't know any better; BUT, I heard that the U.S. Environmental Protection Agency (EPA) recently shut down the last U.S. based lead smelting plant in the US and I just wonder if this will have any effect on lead-acid battery production. Maybe this is something else we are already out-sourcing to China, eh?

  • Report this Comment On January 29, 2014, at 7:03 PM, CollinsIR wrote:

    Our client Flux Power Holdings (FLUX) is bringing Lithium-Ion technology to a range of new applications like motive power, including forklifts and tug and pull equipment, that is traditionally powered by lead-acid batteries.

    Other applications include solar power systems for the military, robotic mining equipment and even power for on-location media and entertainment production. LI batteries enable some of these applications or in the case of portable power, provide a more attractive source than generators with their noise, fuel requirements and pollution.

    Environmental issues aside - Lithium Ion provides a lower cost of ownership than lead-acid when you factor in the cost and useful life of the batteries, the absence of watering & maintenance, the lower weight and the improved operating performance and shorter charging.

    While there are other options and certainly new technologies coming - LI power offers very compelling ROI that seems to be attracting the attention of a growing base of applications and industries - and that doesn't seem to be slowing.

  • Report this Comment On January 30, 2014, at 4:56 PM, sportysun wrote:

    well hydrogen will do well. just not now. of course the big problem is, (how do we get the little hydrogens to go where we want) I believe mr. Nocera might be able to get to that. given his team cooperates.

  • Report this Comment On January 30, 2014, at 4:59 PM, sportysun wrote:

    thank u travis for the very good report. There is one thing though not all batteries are exactly the same, but some yeah fundamentaly

  • Report this Comment On January 31, 2014, at 4:34 PM, Sterlingbmw1 wrote:

    Interesting that everyone appears to be hung-up on Lithium-Ion - when there is a potentially superior mineral available but with little inventiveness being directed towards.

    Vanadium has the ability to store much more energy than LI, appears to not lose its charge; holds its charge significantly greater than Li, etc., etc.,

    Another example of exhausting an inferior product before bringing out the new glamour one.

  • Report this Comment On May 06, 2014, at 4:10 PM, emarshall12 wrote:

    Thank you for your post. The information you have provided on batteries is fascinating. I am definitely interested in preserving energy with better batteries.

    Emily Marshall | http://www.sheltonbatterylv.com/

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2808557, ~/Articles/ArticleHandler.aspx, 12/19/2014 3:12:10 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement