Cleantech LA/PwC Panel Flags Battery & Grid Challenges

Aex Fay: Thanks. I work for a company called Quallion. We manufacture lithium ion batteries, the very same batteries used in electric vehicles, laptops, and cell phones—there’s probably a hundred lithium ion batteries in this room right now.
    What’s interesting about our company is that we’re both very broad and very deep. We’re very broad in that we make batteries for a lot of different applications, from various small batteries for medical devices—some of which get implanted in the human body, like pacemakers or neuro-stimulators for people with Parkinson ’s disease. We also make batteries for satellites, aviation, and other military projects.
    This breadth is really important because there are a lot of innovations in lithium ion batteries happening, but they don’t make sense for the electric vehicle market because the price point’s just not there to support it. To give you a ballpark figure, an electric vehicle battery nowadays costs between $500-1000 per kilowatt-hour. Some of the batteries that we’re making for satellites cost close to 100 times that, on a per kilowatt-hour basis. At that price point, when you’re making a specialty product, squeezing every last drop of energy out of your batteries is worth doing. So I want to talk about some of the stuff we’re doing to make batteries better that I think may trickle down to improve electric vehicles.
    Like I was saying, at Quallion we manufacture batteries for a lot of different things, but we’re also a deep company because we’re vertically integrated. We start with manufacturing the powders, gels and metal components that go inside each individual battery cell. (A little nomenclature: what most people think of as a battery, like a AA or AAA battery, that’s one cell, and if you put multiple cells together that whole unit is called a battery. A Chevy Volt battery, for example, has over 200 large cells in it).
    We make the lithium ion cells, build the cells into larger battery packs, and build the battery management systems, which are the computers that govern how the battery works. That piece of technology is probably more important than any other in an electric car. It’s the limiting factor on a lot of vehicle performance.
    Electric cars right now only use about half of the battery capacity that you’re driving around. Thus the battery in your Volt weighs about 500 pounds, and you’re carrying about 250 pounds of useless metal in the form of unused battery capacity because batteries get stressed if they’re too full or too empty. You want to keep them in that sweet spot in the middle state of charge. If you keep batteries happy, in the right temperature, in their sweet spot, they will last for a long time. We’ve made batteries for satellites that can last for ten years and perform 100,000 charges and discharges, if we keep them in that middle range state of charge.
    We’ve taken it a step further in putting a sensor inside each individual cell to know exactly how stressed out the battery is. Generally, these battery management systems guess based on the temperature, the voltage, and the current going in and out of each cell, and that guess is maybe 10 or 15 percent accurate, which means you have a lot of fudge factor on either end. This means you need a bigger buffer on your battery to account for the statistical error and make sure the battery doesn’t get too full or too empty.
    When we put sensors inside each individual cell we know exactly where its state of charge is with maybe one percent accuracy, and that means we can reduce that buffer zone on the battery so you don’t need to carry around 50 percent of unused battery capacity. Instead you can carry around 20 percent of buffer zone and still get long-lasting battery life. That is really valuable if you’re launching a battery in a satellite, where every pound really counts. Every pound of material you are launching costs an enourmous amount in fuel. For cars, it’s not quite there yet, but I think we’ll see that car batteries become more efficient with less unused capacity.
    There’s also a big safety issue with lithium ion batteries that, I think, is key to all these discussions around electric cars or renewable energy storage, or even the batteries in your laptop and cell phone. Sometimes they overheat and blow up. When they blow up on airplanes, it’s really not a good thing, and that’s happened.
    The Department of Energy is putting together a program to start investigating and investing in safety technologies because they’ve seen that the safety issues with lithium ion batteries could become a detriment to their adoption. From the performance perspective, if you have to build such a robust cushioning and cage system to protect that battery so it doesn’t blow up in a crash, then you may end up adding another 200 pounds to a car that totally offsets the efficiency gains of having an electric car. Can you make a battery that is so integrated into the car that all throughout your vehicle’s tubular steel or aluminum structure there are batteries? At a recent conference we attended there was a presentation about how do you make batteries integrated in the surfaces of the car, so that your car roof, car hood, and car door panels are all, themselves, energy storage devices.
    There are all kinds of crazy stuff on the horizon, and I think we’ll see some of this trickle down to electric cars and make the technology more affordable. But it’s not going to happen any time soon; batteries will continue to be expensive, probably for the next decade, until there’s another breakthrough. There are a lot of materials that go into batteries; they cost a certain amount of money; and there’s not that much more efficiency of scale that hasn’t already been exploited. Big Asian companies like Sony and Sanyo, make tens of millions of battery cells a year. It’s a totally automated process with few labor costs, yet the batteries are still expensive.
    Looking at a smart city, in most cases you’re better off investing in energy efficiency and the smarts for demand-response and distributed generation rather than buying a bunch of batteries for energy storage. The grid really is the best battery that you have. It’s easier and cheaper for a computer program to send a message to my thermostat, and all the thermostats in town, to say, “Ease off on the air conditioning,” than to buy a giant lithium ion battery to help store the same amount of energy. It’s always going to be cheaper to do demand response and those kinds of things first. So I think investing in the smarts of the smart city is always going to be a better solution than just buying more of the same old hardware.
    We talked a lot about electricity, but I don’t want to be totally focused on that because we mentioned water when we started. I think that we’ll be able to do all the same stuff with water. Another little gadget that I have is a smart sprinkler controller made by a company based in Los Angeles called Cyber Rain, and it allows you to program your sprinklers to come on based on what the temperature is and what the humidity is, by checking the weather every day through your internet connection. You can also turn your sprinklers on and off from your iPhone, but normally the system manages all your sprinklers for you to achieve maximum efficiency. I think we’ll see more water efficiency technologies as water gets more expensive and becomes priced more in accordance with its value.
    There’s another Los Angeles-based company focused on public transportation using GPS and sensors to help buses run more efficiently. Most transit vehicles run fixed routes, and the drivers are given a schedule telling them to make sure they’re at this stop by this time. But once on their routes, they really have no idea what the whole fleet and system look like, and it’s hard to adjust for traffic delays and ridership patterns. So this company called Synchromatics developed a hardware-software solution that uses a GPS sensor and a passenger counter. It takes a positioning signal every six seconds and feeds that into algorithms based on traffic, the location of other buses in the network, and the ridership numbers to say, “Maybe you have extra buses that you don’t need on your route.” You can pull those off and that saves the city a lot of money because it doesn’t have to buy more buses, pay more bus drivers, and maintain those unnecessary buses. The technology also helps bus riders know when the next bus is arriving at their location by checking a website on their smartphones. So there are places where intelligence and using the data side of clean tech will be a better investment than buying more buses or cleaner buses.
    Synchromatics is reducing the carbon footprint of their transit customers by using the buses they already have—diesel buses, propane buses—more efficiently, and it’s a lot cheaper than buying a fleet of electric buses. That’s probably going to be the theme in clean tech for the next five or ten years, since manufacturing is really difficult. It’s expensive to build a plant and to get a new product qualified for safety and performance. It’s much more capital efficient to just do things smarter with most of the hardware we have now. One of the previous speakers was talking about how difficult it is for a startup to raise money. You don’t need as much money to launch a company that uses software to manage resources more efficiently. So if I was going to be the crystal ball investor, I would say look for companies that are doing that—how do we use data to make more efficient use of resources - that will probably be the next wave.
    In my previous position, I worked in the City of Los Angeles for Mayor Villaraigosa, and part of my job was to look at how we could line up the City’s infrastructure assets with up-and-coming technology companies to make the City more efficient and help create local jobs at the same time. I think Los Angeles is a great place for this clean economy to start because under the umbrella of the Los Angeles City or County Government you have a massive wastewater treatment system, a massive water company, an electric company, and big transit fleets. All these infrastructure assets—airports, seaports—are spending billions of dollars upgrading their infrastructure, on fuel, and on electricity, so there’s a lot of potential for savings there. I think if city government can orient itself to prioritize that efficiency and steer that business towards local companies, that could make a really big impact on the local cleantech economy.