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Is battery technology a fortune or a “stranded asset”? Sep 08, 2018

Currently, the reference to stranded assets is often used to describe fossil fuel projects that have become useless after strict regulation. In the future, the transformation of energy storage equipment means that investment in battery technology will also lose money, although it seems that it is at the heart of energy system reform.

Gradually, people began to use "stranded assets" on battery technology.

Due to the rapid development of the industry, many of the latest battery technologies have been abandoned in the future.

From Silicon Valley in the United States to Shenzhen in China, scientists are experimenting with new materials, hoping to improve traditional lithium-ion batteries and find new ways to store electricity. Investors are now beginning to worry about whether they have missed the technology.

For example, James Frith, energy storage analyst at Bloomberg New Energy Finance, said that if you suddenly achieve a technological breakthrough and have a battery technology that provides higher energy density, everyone wants Adoption as soon as possible means that many people must invest in new production equipment; even worse, the entire factory needs to be rebuilt.

According to data from the Cleantech Group, startups investing in new batteries in the first half of this year invested more than $1.5 billion, twice the amount invested in 2017.

Volkswagen, Hyundai, Renault-Nissan-Mitsubishi Alliance are vying to invest their money in battery companies. Japan's New Energy & Industrial Technology Development Organization announced that they will spend $90 million on the development of solid-state battery devices with numerous universities and battery manufacturers.

Peter Carlsson, founder and CEO of NorthVolt AB, said that there is now a lot of money flowing into battery research, which will eventually lead to a technological revolution.

There are thousands of technologies to be tested in the battery research and development industry, including many startups and universities, but not every one can succeed.

Even lithium-ion batteries, which are widely used in electric vehicles and smart phones, have different procedures in the manufacturing process. Different lithium-ion batteries have different formulations and chemical compositions, and different chemical compositions have different variants.

Automakers at home and abroad have launched electric vehicles. Due to the prevalence of electric vehicles, the competition in the battery industry has become more intense. Now, battery capacity can reach 100 million kWh, and by 2030, the demand for batteries may increase to 1.784 billion kWh.

According to Bloomberg New Energy Finance, it has cost about $16.7 billion worldwide to build a traditional battery factory. By 2022, the investment in equipment for the battery factory will cost $42 billion.

According to the International Energy Agency, lithium-ion batteries are still the dominant source of electric vehicles in a decade. After 2025, new technologies will enter the market one after another.

There will be two possibilities: either the lithium-ion battery is no longer available, or the emerging technology fails to meet the expected standards. Either way, it seems to be unprofitable for investors.

In addition, the process of bringing a battery from the laboratory to the market is long and costly. The batteries used today contain many expensive metals such as manganese and nickel. Scientists are trying to save money by using some common substances such as sulfur and oxygen to reduce the weight of the battery pack.

Recently, a startup in New York, Conamix Inc., raised $2 million and is trying to develop a cobalt-free battery. Since cobalt is mainly produced in the war-torn Republic of the Congo, the price of this material is very high, and it has also brought a lot of cost pressure to many battery manufacturers.

Bala Nagarajan, investment director of Norwegian investment agency Equinor Energy Ventures, said that energy storage is the most important factor for them, and that the use and popularity of clean energy and electric vehicles will require more technological advances. .

He said that if someone asks if the investment in energy storage technology will end in failure, the answer is no doubt.