The energy industry is set for upheaval, as coal-powered stations become ‘stranded assets’. Accountants use the term to describe assets that become obsolete or non-profitable. Energy Voice says Bloomberg thinks the rapid development of new battery technologies could render yesterday’s obsolete sooner than we think.
Investment in New Battery Technologies Skyrockets
“If you suddenly have a step change in technology that offers higher energy density, people will want to adopt that quickly. Therefore, this could mean that they’ll have to reinvest in manufacturing equipment again,” said James Frith, energy storage analyst at Bloomberg NEF researchers.
Startups developing new battery technologies attracted $1.5 billion in the first half of 2018. That’s twice the amount for 2017. However, how many of those will achieve economies of scale sufficient to compete with established major players. If Tesla decided to adopt a new battery technology, it might have to change its manufacturing process. Because this could render its current equipment obsolete.
International Energy Agency Thinks Lithium Has a Decade to Go
The IEA believes lithium ion “will remain the dominant power source for electric cars and storage units for the next decade”. During this period, new battery technologies entering the market may fail to disrupt the industry, although there is an outside possibility of a spectacular success.
Taking batteries from laboratory to market is time-consuming and expensive. Because with so much research going on, these start-ups may be unable to raise the capital to do so. Moreover, heavyweights Volkswagen AG, Hyundai Motor Co. and Renault-Nissan-Mitsubishi are muscling into the marketplace with huge amounts of capital.
Bloomberg asked Bala Nagarajan, investment director at Equinor Energy Ventures whether any of their battery investments could fail. His bold answer was “definitely yes”, thereby suggesting new battery technologies could burn more than a few fingers.
“Many investors … are betting on technology that will require new manufacturing processes,” says Jeff Chamberlain, at Volta Energy Technologies. “We see this as a flaw because of the current capacity being built on the planet.”
Preview Image: Squeezing More Energy From Batteries