Whether it’s advanced batteries for EVs or for energy storage, foreign pressures on strategic resources and the global supply chain are at odds with our domestic energy policies and ambitions.
Steve Christensen is executive director of the Responsible Battery Coalition.
As the use of renewable energy by electric utility providers continues to grow, the U.S. electric grid faces increasing pressures to both serve a growing fleet of electric vehicles and withstand the worsening impacts of weather.
For perspective, the U.S. power grid is comprised of more than 7,300 power plants, nearly 160,000 miles of high-voltage power lines, millions of miles of low-voltage power lines and distribution transformers, all connecting 145 million homes and businesses across the country.
Imagine a U.S. in which telephones, cell phones, the internet and television cease to operate, cars, trucks, trains and airplanes are idled because fuel pumps and charging stations are disabled, banks and ATMS are inoperable, home heating and air conditioning systems no longer work, food and clean water supplies dwindle and run out, and hospitals and other emergency services are largely unavailable.
Against this backdrop, large-scale battery storage systems can play a key role in supporting electric grid stability and reliability. For example, during the recent heatwave in California, thousands of megawatts of stored electricity were dispatched from stationary batteries to keep the Golden State’s grid operational. Similar systems are being installed across the country.
But a somewhat less-than-obvious set of battery-related challenges could threaten the long-term viability of this key option.
First, we have a foreign supply chain issue — in particular, we are reliant on China to supply many critical materials for manufacturing advanced lithium-ion batteries. Benchmark Mineral Intelligence estimates that almost 60% of lithium refining in 2022 occurred in China, which also dominates the production of battery-grade cobalt, nickel and manganese. By controlling materials production, China is the de facto gatekeeper for the global supply chain. This situation was compounded during the pandemic, and today more than 1.1 GW of U.S. energy storage projects have been delayed up to a year due to foreign supply chain delays.
China is not unaware of the leverage its materials dominance provides, and not unconcerned about the implications of recent U.S. efforts to develop a domestic battery supply chain. This concern was voiced, albeit in a somewhat veiled manner, at last year’s Detroit Auto Show, when China’s ambassador to the U.S. warned against America building up domestic battery materials production, claiming that it could “upset” the global supply chain.
U.S. policymakers cannot afford to ignore the threat posed by China, given broad federal and state mandates to further electrify the transportation sector, and to replace more and more carbon-based electricity generation with renewables. Whether it’s advanced batteries for electric cars, trucks and even airplanes, or for electric energy storage to meet peak grid demand, foreign pressures on strategic resources and the global supply chain are directly at odds with our domestic energy policies and ambitions.
The Biden Administration recently acknowledged this pressure by issuing $2.6 billion in grants to help build up America’s battery materials processing and recycling capabilities. This is a small but constructive step toward building more reliable and sustainable domestic capacity to produce batteries for EVs and the U.S. grid.
The second part of the solution is to ensure that all advanced batteries, those being made now and those under development, are sourced and manufactured with participation in the “circular economy” as a core goal. The concept is simple — from raw materials extraction through processing, manufacturing and charging during its full useful life — all the battery materials and components are designed with recycling in mind. Following the example set by lead-acid batteries, which are 99% recyclable, companies are today developing viable solutions for high-volume and cost-effective lithium-ion battery recycling.
The importance of recycling lithium-ion batteries cannot be overstated. While a recent report from the University of Michigan estimates sufficient lithium resources exist to support vehicle electrification demand until at least the end of this century, that conclusion is based on a 90% to 97% recycling rate for lithium-ion EV batteries. Given the nascent technology and current challenges in recycling these batteries, this availability is shortened significantly.
There are some steps that can be taken, as identified by The Center for Sustainable Systems at the University of Michigan in 2016. With support from the Responsible Battery Coalition, or RBC, the center developed a series of “Green Principles” for stationary energy storage systems, which is now applicable to EV batteries, as well. The principles focus on the importance of sustainable battery production, preventing serious degradation during useful life, and planning for recycling at the end of life. Putting these principles into policy can help bring increased battery production to the United States, support the creation of a circular economy for batteries, and prolong the useful life of key materials.
On the utility side, while electric companies are not likely to venture into the battery manufacturing or recycling industries for a variety of reasons, they do have economic and public policy roles to play by supporting the increased use of batteries for storage, conducting research on best practices, carefully evaluating which types of batteries are best for grid storage and promoting circularity as an important public policy initiative.
New pilots are already underway to begin addressing these challenges. Ford Motor Co., an RBC member, has begun a test pilot program with Duke Energy to allow the utility to draw energy from the batteries in Ford’s all-electric F-150 Lightning during times of peak demand. And companies such as Li-Cycle, another RBC member, are also rapidly advancing lithium-ion battery recycling in addition to new startups seeking to reuse and refurbish the 1.7 million EV lithium-ion batteries that will be available for recycling and reuse by 2030.
The electric grid is a remarkably reliable, constantly evolving machine, regularly deploying new technology to meet a variety of changes and challenges. And while batteries are not, per se, new technology, they do have an important, perhaps even critical, role to play in the electric grid of the future. As a nation, we cannot leave ourselves overly dependent on foreign suppliers of raw battery materials. A circular economy for batteries reduces supply chain risks, creates jobs and advances a cleaner economy.
