Battery Metals

Hawaii shut down its last coal plant on September 1, 2022, eliminating 180 megawatts of fossil-fueled baseload power from the grid on Oahu — a crucial step in the state’s first-in-the-nation commitment to cease burning fossil fuels for electricity by 2045.

But the move posed a question that’s becoming increasingly urgent as clean energy surges across the United States: How do you maintain a reliable grid while switching from familiar fossil plants to a portfolio of small and large renewables that run off the vagaries of the weather?

Now Hawaii has an answer: It’s a gigantic battery, unlike the gigantic batteries that have been built before.

The Kapolei Energy Storage system actually began commercial operations before Christmas on the industrial west side of Oahu, according to Plus Power, the Houston-based firm that developed and owns the project. (The company just had the good sense to wait to announce it until journalists and readers had fully returned from winter holidays.)

Now, Kapolei’s 158 Tesla Megapacks are charging and discharging based on signals from utility Hawaiian Electric. The plant’s 185 megawatts of instantaneous discharge capacity match what the old coal plant could inject into the grid, though the batteries react far more quickly, with a 250-millisecond response time. Instead of generating power, they absorb it from the grid, ideally when it’s flush with renewable generation, and deliver that cheap, clean power back in the evening hours when it’s desperately needed.

“It feels incredible to be part of what Hawaii and Hawaiian Electric are doing to get to 100% renewable energy and to play this enabling role to help them get one step closer,” Plus Power Executive Chairman Brandon Keefe told Canary Media.

The construction process had its setbacks, as did the broader effort to replace the coal plant with a roster of large-scale clean energy projects. The Kapolei battery was initially intended to come online before the coal plant retired. Covid disrupted deliveries for the grid battery industry across the board, and Kapolei’s remote location in the middle of the Pacific Ocean didn’t make things easier. By summer 2021, Plus Power was hoping to complete Kapolei by the end of 2022, but it ended up taking another year. Even then, it has joined the grid before several of the other large solar and battery projects slated to replace the coal plant’s production with clean power.

Batteries replace key coal plant functions

Grid batteries operate in a fundamentally different way than coal plants, so Hawaiian Electric and Plus Power crafted a new framework to replace what needed to be replaced. The old coal generator provided three key values to Oahu, Keefe explained: energy (the bulk volume of electricity), capacity (the instantaneous delivery of power on command), and grid services (stabilizing functions for the grid, wonky but vital to keeping the lights on).

The battery directly replaces the latter two: It matches the coal plant’s maximum power output (or ​“nameplate capacity,” in industry parlance), and it is programmed to deliver the necessary grid services that keep the grid operating in the right parameters. The grid runs within a certain frequency, but events can cause the frequency to stray out of bounds, say if another power plant trips offline or a sudden rush of solar production outstrips consumption. The Kapolei project provides a first line of defense, called ​“synthetic inertia,” responding to and correcting grid deviations in real time. If the situation continues to deteriorate past a specified threshold, the battery’s fast frequency response kicks in as a second line of defense.

With 565 megawatt-hours of storage, the battery can’t directly replace the coal plant’s energy production, but it works with the island’s bustling solar sector to fill that role. ​“We’re enabling the grid to add more clean renewable energy to the system to replace the energy from the coal plant,” Keefe said.

Hawaiian Electric’s modeling suggests it can reduce curtailment of renewables by an estimated 69% for the first five years thanks to Kapolei Energy Storage, allowing surplus clean electricity that would otherwise go to waste to get onto the grid.

The utility also requested ​“black-start capability.” If a disaster, like a cyclone or earthquake, knocks out the grid completely, Hawaiian Electric needs a power source to restart it. The Kapolei batteries are programmed to hold some energy in reserve for that purpose. Plus Power located the project near a substation connected to three other power plants so the battery ​“can be AAA to jump-start those other plants,” Keefe said.

The combination of all these abilities in one site — capacity, grid services, black start — leads Keefe to call Kapolei ​“the most advanced battery energy storage facility on the planet.”

Model for a reliable clean-energy grid

The new battery is just the latest dispatch from Hawaii’s long-held spot at the vanguard of the energy transition. This is the state that hit mass rooftop solar adoption first and crafted the first utility-scale solar-battery plant in Kauai (not coincidentally, Plus Power CCO Bob Rudd had a hand in that project during his tenure at Tesla).

But when renewables growth and fossil-plant retirements pass a certain threshold, as they have in Hawaii, simply adding more wind, solar or batteries isn’t sufficient. The clean technologies, which run on digitally controlled inverters, have to start maintaining the grid, not just feeding it.

Plenty of other batteries provide frequency services to other grids, and a few of them are larger than Kapolei. But this is the only large-scale battery that we’ve seen capable of combining the basic peak capacity, frequency response, synthetic inertia and grid-rebooting tasks. That’s because Kapolei plays a more central role in its grid than battery plants do elsewhere.

After years of construction, California’s grid battery fleet surpassed 5,000 megawatts installed last year, but that only equates to 7.6% of the mammoth nameplate capacity of the state’s grid. Kapolei alone constitutes about 17% of Oahu’s peak capacity. Hawaiian Electric needed it to take on more responsibility than batteries elsewhere have ever had to.

Take inertia, which stabilizes grid frequency, as one example. Old plants provide this passively, through the spinning mass of their turbines; inertia didn’t need to be defined and compensated for separately in bygone decades because it was part of the package of running a power plant.

Now, across the country, the grid is moving to a model of maximizing cheap renewables when they are available and burning fuel when renewables aren’t. But the thermal plants need to be spinning to provide inertia — sometimes, on the mainland, renewables get curtailed to keep old coal plants running so they can deliver these grid services, Keefe said. This can be a bad deal for electricity customers, not to mention the climate.

Advanced batteries provide a synthetic version of this inertia through savvy programming of their inverters. This offers a more economic alternative while avoiding unnecessary carbon emissions. They also are faster and more precise — Keefe likened the Kapolei battery to a zippy electric sports car compared to the lumbering diesel bus of old thermal plants. That makes batteries a good technical fit for grids that are becoming increasingly volatile due to the fluctuations of renewable production.

Longer-term, U.S. climate goals require a phaseout of fossil fuels from the electric grid. Hydropower and nuclear plants help deliver valuable grid inertia without carbon emissions, but they aren’t on track to grow.

That’s why this project matters to the clean energy shift everywhere: It’s one of the first real-life examples of how to shift critical grid functions from fossil-fueled plants to clean energy plants. And eventually, the kind of grid services Kapolei has pioneered will have to scale nationwide.

Stellantis announced on Friday that it is investing in French sodium-ion battery startup Tiamat to diversify its portfolio and mass-produce electric vehicles while reducing exposure to scarce resources.

The exact amount of the investment, which is part of an initial fundraising of 150 million euros from Tiamat, was not disclosed.

The funds will be used in part for the construction of a battery factory in northern France, Tiamat Chief Executive Herve Beuffe told journalists.

This site, the fifth so-called gigafactory for the electric vehicle supply chain in the region, should have an initial capacity of 0.7 gigawatt-hours by 2026, which could be increased to 5 GWh by 2029, he added.

Born out of France’s state institute for scientific research CNRS in 2017, Tiamat claims it can produce competitive batteries without lithium, a metal highly sought after due to the global electrification boom, which it replaces with far more abundant sodium.

Its batteries, which are cheaper but also offer less mileage, will be suited to small vehicles. Their reduced reach can be compensated for by faster charging capacity, Tiamat says.

“Exploring new options for more sustainable and affordable

batteries that use widely available raw materials is a key part of our ambitions of the Dare Forward 2030 strategic plan that will see us reach carbon net zero by 2038,” said Ned Curic, Director of Engineering and Technology at Stellantis.

A meltdown in some of the most-hyped energy-transition metals is wreaking havoc across the mining world, stalling projects, scuppering deals and triggering a scramble for cash that promises to reverberate through the industry for years.

Lithium — the ultra-light metal used in electric-vehicle batteries — has plunged more than 80% from a late-2022 record, as the market whiplashed from shortage fears to a mountain of surplus inventories. Nickel and cobalt have also tumbled, weighed down by an influx of new production amid concerns that the shift to EVs may not be as smooth and quick as predicted.

It’s a dramatic reversal from the ebullience of recent years that sent prices soaring and sparked a rush by some of the auto industry’s biggest players to secure future supply. Now, carmakers are getting cold feet and abandoning deal discussions, according to mining investment bankers and industry executives. The low prices are making it harder for mine builders to raise money from more traditional sources as well, at a time when the industry is also grappling with rampant inflation driving up the cost to build new projects.

Chemaf Resources Ltd. last year put itself up for sale after a slump in the cobalt price left it struggling to finish key projects in the Democratic Republic of Congo, and London-based Horizonte Minerals Plc scaled back work on its Brazilian nickel mine as it searches for funds to complete construction, and announced an emergency $20 million financing late last year.

Junior producers have been particularly hard hit. Australia’s Core Lithium Ltd. said last week it would halt mining operations at its Grants open pit mine until conditions improve, warning of a writedown, while nickel miner Panoramic Resources Ltd. is suspending its flagship mine after entering voluntary administration late last year when it failed to find a buyer or partner.

The turmoil is likely to have long-term ramifications for supply, and stands in stark contrast to the growing emphasis by governments on securing future access to critical minerals.

Building new mines takes years and sometimes decades, and stalled projects can often be hard to restart. And while most crucial battery markets are now in surplus, shortages are already forecast toward the end of the decade as the greening of the economy accelerates.

In the case of lithium — a once-tiny commodity market that has been catapulted into the global spotlight due to its vital role in EV batteries — the extreme boom and bust of the last few years shows the difficulties in trying to forecast future supply-demand balances and prices, for both producers and their investors.

“There’s nothing magical about EV input markets like lithium and cobalt: when their prices collapse, projects and supply are cut — just like any other commodity market,” said Tom Price, head of commodities strategy at Liberum Capital. “Investors should wait to see evidence of this type of re-balancing among the world’s lithium and cobalt miners, before they think about buying exposure.”

Battery metals have been a bright spot for the mining industry in recent years. As the longer-term demand outlook for old stalwarts iron ore and coal has dimmed, an explosive new demand story for materials ranging from copper to lithium presented an opportunity for growth as governments and manufacturers around the world rushed to secure future supplies.

They’ve also offered a chance for reinvention in an industry synonymous with pollution and environmental damage — the mining industry has sought to present itself as a solution to climate change, supplying the materials needed to break humanity’s addiction to fossil fuels.

Yet supply charged ahead as demand growth underwhelmed, and the result has been a price freefall.

Lithium has plunged to levels not seen since 2021, amid a growing supply glut that some analysts now expect to last through 2028. Cobalt has lost two-thirds of its value since a recent peak in 2022, with top-two supplier Glencore Plc forced to build stockpiles of the metal. Nickel tumbled 45% last year, weighed down by a flood of low-cost supply from Indonesia, where new techniques to produce battery-grade material are threatening to completely upend the industry.

The price plunge has made it more difficult for companies seeking to sell mines or stakes. The auto industry had shown signs of becoming an key source of funds, as companies such as Ford Motor Co. and General Motors Co. swooped to buy stakes in mines or sign deals to lock up future supply.

However, that trend is now stalling, according to bankers and executives who work in the space. Speaking privately, bankers say that multiple deals they were working on last year with automakers have failed, as the potential buyers start to take a view that the push for EVs will be slower than first expected and the need to secure materials is less urgent.

Appian Capital Advisory’s $1 billion sale of two Brazilian nickel mines fell apart after a London-listed special purpose acquisition company backed by Glencore and two automakers cooled on the deal as prices plunged. Sigma Lithium Corp. has been talking to suitors for at least a year, and has extended a strategic review that was supposed to be finished by the end of 2023.

The scramble for cash will put increasing focus on those investors still willing to put money into the industry. In the past year, Saudi Arabia has emerged as a new pivotal player as it seeks to diversify away from fossil fuels, and after agreeing to buy a 10% stake in Vale SA’s nickel and copper business. The kingdom’s annual mining conference taking place this week has drawn a high-profile roster of top CEOs gathering in Riyadh, alongside key industry bankers, investors and analysts.

And while some buyers have backed away, the drop in share valuations has helped spur an increase in dealmaking interest in certain corners of the mining industry, such as Western Australia’s small and mid-sized lithium producers. Analysts have suggested the recent flurry of activity in the region is likely to continue.

Developers plan to expand US battery storage capacity to more than 30 gigawatts (GW) by the end of 2024, according to the US Energy Information Administration (EIA).

Planned and currently operational US utility-scale battery capacity totaled around 16 GW at the end of 2023. Developers are expected to add another 15 GW of battery storage in 2024, and around 9 GW in 2025.

US battery storage capacity has been growing since 2021 and is anticipated to increase by 89% by the end of this year if all planned energy storage systems are brought online.

California and Texas currently account for the majority of battery capacity additions. Utilities are now mandated to install energy storage in California, and Texas has faster grid connection and permitting, which incentivizes developers.

California has the most installed battery storage capacity of any state by far, with 7.3 GW, followed by Texas with 3.2 GW. Both states have seen enormous solar and wind growth, which in turn spurs battery storage growth. The batteries store excess clean power in periods of low electricity demand, and release power when electricity demand is high.

The other 48 states have a total of around of 3.5 GW of installed battery storage capacity.

The Biden administration’s Inflation Reduction Act investment tax credits have played a huge part in spurring battery storage growth in the US. Developers expect to bring more than 300 utility-scale battery storage projects online in the US by 2025, and around half of the planned capacity installations will be in Texas.

Solid-state batteries promise a number of advantages over traditional lithium-ion batteries currently used in many EVs from the standpoint of weight savings, energy density, thermal safety, and battery life. This is why EV makers are in a race to field the first production models with this battery type—solid-state technology is expected to be nothing short of a game-changer.

But as the technology itself inches to production, every once in a while we get a glimpse of just what these battery compositions could offer in real-world cars.

VW has recently revealed the results of charging cycle testing of QuantumScape’s solid-state battery, having subjected it to more than 1000 charging cycles. The battery maintained a 95% capacity, significantly exceeding the requirements in the A-sample test, and also far exceeding typical lithium-ion battery lifespans.

VW noted that the number of charging cycles the battery was subjected to represented a total mileage of half a million kilometers, or about 621,000 miles, for a car with a WLTP range of 500-600 kilometers, or 310-372 miles.

The solid-state cell itself is composed of 24 layers, which corresponds to VW’s planned series-production cell design. This means it’s as close as possible to what the automaker hopes to be able to mass produce in the coming years.

“These are very encouraging results that impressively underpin the potential of the solid-state cell,” said PowerCo CEO Frank Blome. “The final result of this development could be a battery cell that enables long ranges, can be charged super-quickly and practically does not age.

QuantumScape’s solid-state designs are also being tested for fast-charging capability, self-discharge characteristics, and safety performance, with VW indicating that this composition has met all of these requirements.

However, just as with several other solid-state developers, QuantumScape and PowerCo are now facing the challenge of mass producing these cells, having largely solved all other issues on a lab scale.

“While we have more work to do to bring this technology to market, we are not aware of any other automotive-format lithium-metal battery that has shown such high discharge energy retention over a comparable cycle count under similar conditions,” said Jagdeep Singh, founder and CEO of QuantumScape.

Of course, there are a number of other solid-state battery developers that have recently touted impressive results with their own compositions, with plans for testing in prototype vehicles starting this year. Even plans for such tests won’t address all the anticipated difficulties in achieving solid-state cell mass production, which is now viewed as the main barrier to their market debut in EVs.

But it’s clear that automakers are confident in the designs currently being tested. Let’s hope the production half of the equation will be solved far quicker than the cell design and composition phase.

According to a report on Sunday from Nikkei Asia, Honda could be set to spend as much as $14 billion on an upcoming EV plant in Canada, which would represent one of the automaker’s largest investments yet if pursued. The automaker is looking at multiple potential locations in the North American country, including a site in Ontario that’s near a currently existing auto plant.

Honda would be aiming to have the facility operational by 2028, and the company is planning to decide on a specific location by the end of this year. The site would also be the Japanese automaker’s second North American plant, following a U.S. factory that’s currently under construction.

In June, Honda and LG Energy Solution (LGES) broke ground on a new EV plant in Jeffersonville, Ohio. The facility is expected to employ a total of 2,527 workers, and Honda expects the facility to be completed by the end of 2024. It’s also expected to help the automaker gain access to EV tax credits in the U.S. under Inflation Reduction Act (IRA) rules mandating that vehicles are built domestically.

Canada has enacted a plan to ban the sale of new internal combustion engine (ICE) vehicles by 2035, dubbed the Electric Vehicle Availability Standard, and following in the footsteps of the European Union (EU) and U.S. states, California, Maryland and New Jersey.

Honda and General Motors (GM) had also planned a partnership to develop affordable EVs and compete with market leader Tesla, though the automakers said in a joint statement in October that they would be canceling those plans.

“After extensive studies and analysis, we have come to a mutual decision to discontinue the program,” the companies said in the statement. “Each company remains committed to affordability in the EV market.”

Interestingly, Honda is also targeting another market with electric motorcycles, and the automaker plans to launch 10 or more fully electric motorcycle units by 2025 — with as many as 3.5 million sales per year by 2030.