18 October 2016

We're entering an age where pretty much everything we take for granted will rely on at least one battery. One great example that everyone uses is the cloud where we store our music, videos and other content -- it's actually a collection of massive data centers that relies on lead-acid batteries for emergency backup should the supply of electricity fail.

The ability to effectively store and transport electrical energy is going to define the next era of human existence. We have to start making better use of the remaining fossil fuels, renewable energy and the infrastructure used to transport electricity. In this new world, the efficient storage of electricity will be increasingly important.

With this in mind, we took a contrarian approach to look at something that's incredibly unpopular: lead-acid batteries. We realized that these batteries may provide for a more efficient future if we're able to develop a cleaner way to recycle them.

We started looking at how lead-acid batteries have been used and found that the most successful grid scale storage product ever run was in Chino, California. For 10 years, the facility stored 40 megawatt-hours of electrical energy and delivered up to 12 megawatts every day at peak demand. This amount of energy is sufficient to power 6,000 homes or several large factories, and it was 100% lead-acid based.

Why lead-acid batteries when pundits in the battery world share a universal belief that they'll go away? The thought is that these batteries will be replaced with something cheaper, cleaner and better performing. Today, that replacement is assumed to be lithium-ion batteries because they offer a high cell voltage and are lightweight despite their risks. But after spending two decades in advanced battery technologies and the emerging grid scale storage industry, I came to realize that there are fundamental misunderstandings of the new technologies, including lithium-ion batteries, and the new challenges associated with them.

Lead Doesn't Have to be That Toxic

I founded Aqua Metals because I am convinced that over time, we'll see a reemergence of the lead-acid battery in a new, more powerful and longer-lasting form. The challenge is that most people focus on lead-acid batteries being toxic -- this is understandable as the lead-acid battery industry did an appalling job of cleaning up its act in its early days. The reality is that modern lead-acid production facilities have an excellent environmental and safety record and that lead-acid batteries are 100% recycled, unlike any other competing technologies.

Unfortunately, the technology used for recycling lead-acid batteries is smelting, which is old and inefficient. It's a very high temperature process that's expensive and technically difficult to bring into compliance with Western environmental standards. As a result, in many parts of the world, this method of lead recycling creates an unconscionable level of pollution.

The lead-acid battery industry has been slow to recognize this growing and potentially existential problem. Since so many assume that lead acid is going away, getting the industry focused on the need for alternatives to smelting has been difficult.

We decided to take on that challenge by building a company focused entirely on this opportunity. We have created a new electrochemical recycling process that operates at room temperature in a biodegradable and water-based liquid. Unlike current lead recycling, our liquid based process can't make lead dust, acid rain emissions, carbon dioxide, toxic solid waste or fugitive emissions. Our process also uses far less energy than smelting, requires less investment and produces a higher-value product.

The ability to effectively store and transport electrical energy is going to define the next era of human existence.
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Lithium Has Its Own Issues

Lithium is an attractive material for batteries because it offers a high cell voltage and is lightweight. Small amounts of lithium are used in lithium-ion batteries, but because lithium is highly reactive with water and oxygen, the only chemically stable electrolytes that can be used in the battery spontaneously ignite on contact with air and the combustion byproducts are highly toxic. As such, lithium-ion batteries must remain tightly sealed from the environment during manufacture, use and disposal.

Recycling is difficult and expensive, and used batteries are ground up in a way that contains the explosive reactions and then the residue is landfilled. Sadly, as a whole, the lithium industry appears to be repeating the mistakes of the early lead-acid industry by ignoring the recyclability and disposal issues of their batteries and battery materials.

Part of the problem is definitional. To me, recycling means taking the most problematic component and figuring out a way to recover and reuse it along with everything else. There are examples where the control systems, metal cases and maybe a small amount of lithium are recovered. However, commercial recycling of the corrosive and flammable electrolytes is not economic, so it's not performed on any meaningful scale

What the lithium industry has done instead is focus on second use. The leading idea is to take a battery pack out of a vehicle at the end of its life and repackage it as an energy storage device that can be installed in someone's home. That effectively punts the issue of eventual disposal to the homeowner, which to me is unconscionable.

What's Cheaper -- Lead or Lithium?

Most people will tell you that lead-acid batteries will cycle, or can be recharged, about 750 times before they fail, but that's the kind of battery used to start a car engine -- it's designed for that use and will fail in a deep cycle application. However, lead-acid batteries designed for deep cycle applications, like those used in forklift trucks and other industrial equipment, last 2,000 to 5,000 cycles. The lead-acid batteries designed for the Chino project lasted more than 10,000 cycles.

You also have to look at cost, and the most important measure is dollars per kilowatt-hour of capacity. Going back 20 years, lithium-ion batteries cost tens of thousands of dollars per kilowatt-hour. Now, they're $250 to $500 per kilowatt-hour.

Many economists and researchers have tracked this cost reduction over time. Important industry players, such as the Department of Energy, Tesla and Panasonic, seem to agree that lithium-ion batteries could become as cheap as $130 per kilowatt-hour -- impressive given where they started. However, if you plot that cost against time or dollars spent in R&D, you'll see that the curve is asymptotic and that the rate of cost decrease eventually slows such that you almost need an infinite amount of effort to reduce the price further.

So what's the industry consensus on the lowest practical cost for lithium ion in any meaningful time frame? About $130 per kilowatt-hour. This sounds fantastic in isolation, but right now, I can buy a lead-acid battery off a production line at a price between $60 and $80 per kilowatt-hour.

To me, recycling means taking the most problematic component and figuring out a way to recover and reuse it along with everything else.
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Again, most people assume that lead-acid batteries are at the end of their development cycle and can't get any better. The reality is that meaningful R&D ended in the 1960s. In the US, the major battery funding agencies, such as the DOE and the Advanced Battery Consortium, effectively denied R&D funding in lead acid. Over the last 40 years, R&D funding for lithium ion has been vastly higher than lead acid while lead-acid chemistry remains almost untapped for improvement potential.

If you apply the same cost improvement curve to lead acid in terms of dollars and performance, there is massive performance and cycle life potential waiting to be tapped. If we believe that the price of lithium-ion can go from $240 to $130 per kilowatt-hour, then it's equally believable that the price of lead-acid can decrease from $60 to $20 per kilowatt-hour for an equivalent cycle life. If we brought the tools and material science that delivered the goods in lithium ion to bear on lead acid, there's a more than reasonable chance that lead-acid batteries go to $20 per kilowatt-hour in the next few years.

Will facilities like the GigaFactory overwhelm lead-acid production?

What most people don't understand is the massive difference in the cost and scale of battery production facilities between lithium ion and lead acid. In the lithium-ion world, a facility that produces five gigawatt-hours per year is considered huge while that level of production is considered small in the lead-acid world.

After 20 years of development, the cost ranges between $1 billion and $2 billion to build lithium-ion production capacity of one gigawatt-hour per year. Lead-acid production facilities are in the range of $100 million per gigawatt-hour per year to build. Now consider that 96% of the batteries produced each year are lead acid. If you plan to replace all of that production capacity with lithium ion, you will need to find half a trillion dollars to fund it.

Why isn't the lead industry jumping into this market?

It's not big enough yet. The market for grid storage is only at the level of a few hundred megawatt-hour per year, which isn't large enough to justify a dedicated production line for a lead-acid battery optimized for this application. However, as the grid storage market accelerates, the lead-acid industry has the potential to undercut and outperform lithium ion.

We're cleaning up the lead-acid battery

Lead-acid production facilities in North America are exemplary in terms of health and safety. There's one production facility on the East Coast where the ground water leaving the site is cleaner than the groundwater entering it. While the industry has done incredible work in cleaning up the production side, they've been slow to address the recycling side until now.

We are focused entirely on this issue and have built a 130,000-square-foot, 12-acre recycling facility in Nevada. When the facility reaches full capacity, it will be consuming 300 tons of dead batteries daily to produce 160 tons of high quality lead, with the balance being the plastic and water. Everything we extract goes back into making batteries.

This can very well be the starting point for reversing lead's image as an environmental pariah. We think the lead-acid battery will soon emerge as the poster child for the zero emissions circular economy.

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