Hopes that renewable energy could blunt the worst of climate change used to face a seemingly insurmountable hurdle: the need for better batteries. After all, the wind doesn’t always blow and the sun doesn’t always shine. But those better batteries are on their way, thanks to a myriad of small improvements that will both add life to the phone in your pocket and speed the day when electric vehicles (EVs) overtake those that run on gasoline. Now there’s a different worry: Can we turn batteries out fast enough? Fulfilling a vision of a clean-energy future — where wind turbines and solar panels are knit into a new kind of power grid — depends on creating an almost entirely new industry. 

The Situation

In China, where the government is throwing its weight behind the electric-car industry, plans have been announced for factories that could produce enough batteries every year to hold 120 gigawatt-hours of storage capacity — enough to tide Italy over an hour-long blackout. Those plans include a 10 million square-foot factory opened in 2018 by the world’s biggest EV supplier,  BYD Co.,  and another of similar size it broke ground on in February. That’s enough to equip 1.2 million cars, according to the manufacturer, which is backed by Warren Buffett. That’s larger than Tesla Inc.’s giant Gigafactory battery plant in the Nevada desert, though Tesla plans to expand that facility and build as many as four more big battery factories in the U.S. And General Motors proposed building a factory with Korea’s LG Chem Ltd. if it can overcome union opposition to the shift to EVs, whose simpler workings could mean steep job cuts for manufacturers and suppliers. Giant battery plants are also planned in Germany and Sweden, and Europe is set to overtake the U.S. as the second-largest market for EVs in 2020. The price of a lithium-ion battery pack holding a kilowatt hour of electricity has already plunged and is expected to fall by more than 90 percent from 2010 to 2030. Utilities are also boosting battery installation. California is requiring power companies to install a combined total of close to 2 gigawatt-hours of storage by 2024 — more than twice what existed in the U.S. at the end of 2017. Not counting car batteries, global storage capacity is expected to rise from 7 gigawatt-hours now to 305 gigawatt-hours in 2030.

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The Background

Benjamin Franklin and other inventors experimented with Leyden jars, now known as capacitors, which hold and release an electric charge. Alessandro Volta of Italy is credited with inventing the first electric battery in 1799, a stack of zinc and copper disks in brine. Thomas Edison created a nickel-iron battery for the earliest electric cars. The oil shocks of the 1970s spurred investment in new research that led to Stanley Whittingham’s discoveries that made possible the first functional lithium ion battery — for which he and two other scientists were awarded a Nobel Prize in chemistry in 2019. Sony Corp. brought the technology to market in the early 1990s, and lithium ion batteries have underpinned the digital revolution ever since. They’re durable, energy-dense and easy to recharge, even if manufacturing glitches have led to high-profile cases of fires in new products, such as Samsung Electronics Co.’s Galaxy Note 7 mobile phone and Boeing Co.’s 787 Dreamliner jet. Utilities that need large-scale storage are pursuing a variety of technologies, from pumps and reservoirs to solid-state lithium ion batteries to flywheels that store energy as momentum.

The Argument

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Some countries, such as Germany and Japan, offer subsidies for batteries integrated into renewable energy systems. More often, demand for batteries has been indirectly fed by subsidies for wind and solar production. Those payments are now being phased out in the U.S. For homeowners, adding batteries to solar panels saves on electricity costs at night and provides security during blackouts. For power companies, adding batteries to solar panels or wind turbines may let them sell their electricity at a higher price by qualifying as a reliable energy source. Some new ventures are using batteries to create what’s known as a virtual power plant, tying rooftop solar panels together and selling their output. It’s an approach gaining popularity in Europe and being tried in new developments in the U.S. It’s also creating conflict with utilities that say solar and wind producers are piggybacking on the billions of dollars spent to maintain and upgrade power grids. Proponents say the spread of household battery packs will lead to a decentralized network of microgrids that will be more resilient and efficient.

Logan Goldie-Scot contributed to this article.

To contact the writer of this QuickTake: Chris Martin in New York at cmartin11@bloomberg.net

To contact the editor responsible for this QuickTake: John O’Neil at joneil18@bloomberg.net

First published May 1, 2015

©2019 Bloomberg L.P.

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