Is Peak Oil Demand in Sight?

Most lifestyle improvements of the past decades have been facilitated in some way or another by hydrocarbons. From long-haul transport and refrigerated goods, to medical equipment and telecommunication devices, all the way to home heating and electricity generation have been made possible by reworking the hydrocarbon molecules into the myriad of usable products. Along the years, not just have hydrocarbons helped upgrade our standard of living, but they have become an integral part of our lifestyle. We have become increasingly attached to hydrocarbons, and particularly crude oil.

Crude oil is part of most things we conveniently use daily. The uptake of oil in consumption took off in the period post 1965 as global economies expanded. It passed the 30Mb/d mark in 1965 and nearly doubled within a decade. The pace of the uptake has not been matched since. From 1980 onward consumption grew more steadily as economic development reached developing and underdeveloped nations. It passed the 70Mb/d mark in late 1990s and it has settled in the range of 90Mb/d in after 2010. The declining number of additional barrels consumed daily can be interpreted as maturing demand for crude oil, which opens speculation about peak-oil demand.

The first aspect which needs clarification is what does peak-oil mean? Peak-oil is a hypothetical point in time when crude oil consumption attains structurally a maximum level, thereat demand will gradually decline.

The second aspect which needs to be explained is the supporting evidence which sustains the peak oil debate. Two aspects are emphasized: the decoupling of GDP from energy consumption (and crude oil respectively) and the shift in the paradigm of oil market functioning.

Decoupling of GDP from energy consumption

The first piece of evidence signaling a structural is the decoupling of energy consumption from global GDP. Since 1990, the average annual GDP growth was 2.8% while average energy growth in consumption was 0.6% and crude oil 1.5%. The gap between the two indicators, which used to follow each other prior to the fall of the Soviet block, grew wider. The decoupling of economic value from the energy used to generate it, is also reflected in the energy intensity of the global economy which came down 30% from 7.5 MJ/$2011 ppp GDP in 1990. The main reasons for the decoupling are associated with structural removal of inefficient energy consumers from the market, fuel switch and the adoption of energy efficiency measures. As the map below depicts the aggregate energy intensity figure conceals a disproportionate reality (both by country and by fuel).

world bank energy intensity 1990

Energy Intensity Level of Primary Energy  (MJ/$2011 PPP GDP) in 1990 |Source: The World Bank

Shift in the paradigm of energy market functioning

Three energy market paradigms have been challenged: (i) energy sources and markets operated separated from each other; (ii) the business model based on long-term investments was disproved; and (iii) technological development can be disruptive.

For decades, the energy sector and commodity markets operated dislocated from each other. In oil markets, investments required long-term financing, predictable off-take volumes underlined by a wide spanning production curve of conventional assets. That has changed with the emergence of the US shale which reduced financing needs because of shortened production cycle.

The US shale revolution shook up another oil industry paradigm, that technology in this conservative industry can be disruptive. Technological innovation in the oil and gas exploration and production has generally followed an incremental path. It emerged from an existing techological solution into another following procedural upgrade. The learning curve of fracking showed how quickly alternative exploration and production techniques can take off, backed by the prospect of sufficient returns.

Peak oil demand to 2040

The decoupling of crude oil consumption from GDP is a gross indication that global economies are close to demand maturity. Further inroads into energy efficiency as well as fuel switch will absorb most of the increased demand in peripheral markets. An additional limits to growth will come from the paradigms shifts that have settled into the oil markets, especially the financing aspect of short-cycle oil production. Given the legacy it is safe to say that further expansion of oil consumption will not stop, only largely decelerate.

If oil market circumstances were to stay put, the discussion about peak oil would not yet be opened. What the peak oil debate builds on, aside from the mentioned legacies, are changes in at the structure of oil demand with permanent downward consequences. They are:

A. Electric vehicle penetration

B. Efficiency gains reinforced by slow economic growth

C. Crude oil substitution in heavy transport and chemical industry

Academics, consultancies, policymakers and industry participants are splitting hairs about the magnitude and impact of each of the three potential developments. There is yet no consensus, but some common ground is evident from their assumptions.

A. Electric vehicle penetration. [1] Status quo numbers 2million electric vehicles on the road, most of which are in Asia. If the electric vehicle fleet were to increase by 1million vehicles/yr to 2040, most of which would take place in OECD countries, and battery price falls below $100/kwh then peak oil demand can be expected between 2025 and 2030. Transport accounts for more than 65% of crude oil consumption meaning that any change in the sector’s demand can have a large impact in absolute terms.

B. Efficiency gains reinforced by slow economic growth. [2] The IMF has been revising downwards the global economic growth projection 5-times-in-a-row. This is to say that the 3% posted figure that currently circulates in economic models is short lived, and expected to be replaced by a less promising prospect. Considering 3% as a starting point and compounded by energy efficiency gains consequent to tough regulatory standards, could bring demand for oil to peak soon after 2025.

C. Crude oil substitution in heavy transport and chemical industry. Natural gas, a hydrocarbon energy and feedstock resource more abundant than crude oil, whose price has been pegged to a basket of oil-products is gradually breaking free. Benefiting from a larger resource pool, a freely traded gas would be structurally cheaper than the oil-indexed volumes. US produced gas is a case in point as the US hub marker Henry Hub trades at a structurally lower price than the European hubs which partly trade oil-indexed contracts.

Feedstock and industrial oil consumption represents about 25% of the global oil demand. A switch from naphtha (crude oil derived feedstock) to ethane (natural gas derived feedstock) is contingent to the ethane-naphtha spread. In case gas remains at an advantage for a prolonged period it can lock-in a structural effect which plateaus oil demand around 2025.

 

After browsing over the main qualitative and quantitative estimates for global peak oil demand it is apparent that the peak is near. In the narratives presented, each development has been analyzed individually but synergies, for example, between efficiency and substitution could emerge and generate exponential effects. Additionally, the impact of pricing, not just of oil, but alternative energy sources and technology, are important considerations where one can only speculate looking towards 2040.

Despite the uncertainties that such an exercise surfaces, a few implications are undeniable.

a. Adaptation to a new demand environment will cause business models to change.

b. Resource competitiveness maximization will shift the positioning of market shareholders along the supply curve. Effects will be visible in their investment focus, oil versus gas portfolio optimization and non-fossil fuel diversification.

c. (hydrocarbon) Resource rich nations will favor domestic interests and national development. This can contribute to geopolitical shifts in managing the transition and create new avenues for collaboration.

Overall, there are multiple avenues that could lead to peak oil before 2040 but demand for the hydrocarbon resource will continue to remains between 70 and 80Mb/d. Global economies remain attached to crude oil for at least three decades on, particularly in oil producing countries. The effectiveness of policies aimed to reduce oil demand is contingent on their socio-economic impact.

[1] Electric vehicle fleet translates mostly into passenger cars and a small share of heavy transport. Plug-in hybrid trains are not included in the analysis, although they could be more disruptive than electric trains only.

[2] Regulatory standards are reflective of vehicle fuel consumption, which are considered to halve current fuel use. The most impactful fuel consumption curtailment would be on passenge vehicles, but heavy dusty trucking would make up a significant share of the absolute fuel use curtailment.

 

 

China Bans Solid Waste Imports

After decades of ignoring soil, water and air pollution within its jurisdiction the Chinese government has notified the WTO that it will ban ‘foreign garbage‘ imports. To make room for the rapid economic growth that propelled China to the status of global manufacturer its authorities chose to shut an eye on the various environmental misdeeds consequent to economic expansion. That involved a tripling of waste generation within less than a decade. The decision to ban waste imports such as plastics, paper and industrial residues, is an indication that Chinese authorities are ready to deal with the negative externalities of their economic growth.

China imports 24 types of waste, most of which come from neighboring economies. The import ban covers almost exclusively solid waste such as plastic, paper, slag from steelmaking and textile waste, which are classified as a source of pollution resulting from their incineration or landfill deposition. While there are reasons to cheer for China’s ambitious to reduce domestic pollution and for that matter ban waste imports, this decision is poised to harm Chinese recycling businesses in coastal areas. The decision, due to enter into force towards the end of 2017, will shut off $3.7 billion worth of plastic waste and $1 billion worth of unsorted paper.

The impact of the ban is also not something of scale.  Waste imports account for a small share of domesticaly produced Chinese waste volumes. For examples, imported plastic waste amounted to 7Mt in 2016 while domestically produced plastic waste was about 30Mt. A similar story applies for other waste streams. A follow-up on the import ban should, in consequence, be tackling domestically produced waste with hazardous consequences when incinerated or disposed in landfills.

 

A number of aspects emerge from the waste ban news, as:

  • Chinese authorities are using their centralized power to tackle a sensitive issue such as waste, but their starting point is external (smaller) source rather than from within (the larger). Their impact can only be limited.
  • This could also be a sign of maturity from the part of China, who is also committed to the decarbonization pledges made with the Paris Climate Agreement unlike some developed nations.
  • Allegedly, the waste contamination problem of coastal Chinese provinces has been heavily under-evaluated with implication for water, soil and air contamination which could take a minimum of two generations to mend.
  • The announcement to the WTO sends a political message to the neighboring economies who relied on China to off-take their polluting waste streams. This means that other economies in the region could take the role china has been playing so far, or these nations need to develop domestic disposal measures for the polluting wastes.

 

 

 

Could Hydrogen be a Solution to Seasonal Energy Storage?

Hydrogen is considered one of the promising energy carriers to support global efforts to decarbonize global economies and one of the few viable solutions for the transport sector. It can be produced via two routes. The cheapest and widest available route is steam methane reforming, and as the name suggests, it is derived from hydrocarbons (typically natural gas). Alternatively, hydrogen can be produced by splitting the water molecule into hydrogen and oxygen via electrolysis, a process which is a few times more expensive in the current market conditions.

The high costs of electrolysis is only partly related to the equipment necessary to enable the molecular split. The largest cost component of the electrolysis-derived-hydrogen-production comes from its high demand for electricity, which in order to deliver the climate benefits it prides itself on, should be sourced from renewable sources. In such case, the electricity used would result from surplus power production when electricity prices are very low (even negative).

But why convert electricity into hydrogen when electricity can be used itself as an energy source for heating, lighting and propulsion. In case of power shortages over wide geographical region, peak demand or in the absence of alternative clean sources, hydrogen offers system back-up. From the available energy storage technologies available, hydrogen can deliver the 1GWh to 1TWh within 1h to 1month, in comparison with batteries whose storage range is a factor of 100.000 lower than hydrogen.

 

energystorage

A few energy storage options are available at the moment in the market. Some are expected to improve retention capacity and discarge time, but the main solutions for large-scale energy storage feature pumped storage and hydrogen. Graph source

An additional benefit of hydrogen is that it can cater to all the energy system’s functions (low-temperature heat, high-temperature heat, power and mobility), a characteristic which can make the molecule a one-stop-shop solution.

But a hydrogen economy has its hurdles as it requires consumer acceptance, a new layer of system integration, infrastructure retrofitting or even additional new infrastructure. And it all comes at a cost which needs to be swallowed by someone in the value chain.

Millennials

It has been a while since I last posted on the blog, and I have to excuse my absence with a research spree into the growing belief among economists that most of the developed world is close to the levelling of growth potential. This fascinating topic has by now a plethora of facets, with various opinions being debated in both social and academic circles. I found the discussions on energy and decentralization some of the most fascinating ones, since they are so closely connected to what I am working. Nonetheless, I will address one thing at the time.

To set the scene, the developed world is changing from within. The current economic model, which enjoys a widespread acceptance is capitalism (or liberalized market economy). What happens when this market functioning model is reaches the limit of productivity growth? It then enters a lethargic state of stagnation, or even decline. Its spill overs are increasingly turning into the breeding ground for a business models based on collaborative commons (shared economy). It is often argued that the communication revolution and subsequent changes of energy regimes serve at the onset of a powerful configuration which is gradually eroding the supremacy of capitalism, challenging its status-quo.

As for every system reshuffle the social engine is the force behind the shift. In this case, the emergence of a well educated generation of conscious individuals with a strong moral compass, which promotes the implementation of climate change mitigation options and is an early adopter of technological innovation, has the potential to set off a paradigm shift for the way society participates in the economy. This social force is generically called ‘the millennials’ (also denominated ‘generation Y’).

Millennials are the most educated generation to date and although education is no substitute for wisdom, millennials are critical and curious about the products and services they purchase. The wide range of diversity among millennials means that they access almost equally diverse consumer goods and services. They are less sensitive to price (as their previous generation) but claim a higher ethical standard for their investments.

Millennials need to be passionate about the work they do, and recruiters have seen an increased propensity of young professionals to opt for jobs in circular economy, recycling, renewable energy and smart technologies. Perhaps these jobs being less pervasive as conventional ones acts as a psychological ‘mush have’, which is why competition for engineers in the renewable energy sector is increasingly higher.

Millennials value transparency, which means that environmental wrong doing, such as emission and legislative frauds, are treated with anguish today and may very well be a death blow argument tomorrow.

Millennials are selective. They are interconnected and have access to pre-screened information channels. That is, marketing campaigns recurrently incorporate a social media dimension and Netflix has become yesterday’s television.

Millennials are political at need but not fanatic. The few instances when millennials have passionately contributed to poles representation have been the instances when their values were at stake.

Having millennials behind the steering wheel to foster system decentralization by building on the spill overs of capitalism by means of the internet-of-things platform has the potential to turn the emerging and niche applications of collaborative commons business models into ubiquitous success stories.

There are various thresholds that millennials need to cross over in order to be taken serious. I believe that the issue of timing and time is of the essence now. Does the momentum of the environmental movement provide enough thrust for them to take off, and if so how long will it take until their impact is significant as to structurally alter incumbent economic models?

Nuclear Power: Friend or Foe?

Recall the tone around the role nuclear in the EU energy mix in the wake of the 2011 Fukushima Daiichi nuclear disaster? It was hostile. It was as hostile as the appetite for saturated fats these days. It’s easy, satisfies the needs and consequences nowhere in sight until they break the scale. But time forgets, the same way the memory of the Japanese nuclear disaster half-lived with the passing of years.

But soon after the hazard stroke, a wave of reactions prompted by the Fukushima Daiichi disaster emerged across the EU Member States. Mycle Schneider, the international nuclear energy consultant, deemed the disaster a ‘unique chance to get it right’ on energy policy by accelerating Germany’s nuclear phase out by 2022. In Italy, the population voted 94% against the government pursuing new nuclear projects, in a referendum. But the boldest of statements came from the nuclear hungry French administration which announced the intention to curtail by one third nuclear usage towards 2050. France is the largest nuclear power producer in Europe, accounting for half of the EU(28) nuclear electricity production and three quarters of its own gross electricity. Widely, EU Member States shared a bitter sentiment towards nuclear energy soon after the disaster, and action was proposed to be undertaken to diminish its role in the future.

Let the Fukushima disaster be only a reminder of how expensive nuclear disasters have become and how far reaching they are in time. It ended up costing the Japanese government $105 billion in the five years since the disaster, with an additional $23 billion awaiting to be spent in the clean-up process. This represents twice as much compared to what Japanese authorities predicted back in 2011. Radiation clean-up and compensation to residents make up the largest part of the cost, which are far reaching in time as the full scale of the impact has not entirely been accounted for.

Comparative life-cycle GHG emissions of different energy sources

Comparative life-cycle GHG emissions of different energy sources (Source: WNA report)

Before tragedy stroke, nuclear energy enjoyed a positive reputation among energy sources. It is clean, concentrated and mildly affected by security of supply. It’s life cycle emissions are significantly lower than those of fossil fuels, hovering in the same emission cluster with renewable energy sources. Aside from generating very low emissions, nuclear is a highly concentrated power source. 4g of enriched uranium can generate the same amount of energy as 300cm gas/350kg coal/250 litres of oil. Because of its high concentration and the fact that uranium ores are more vastly available across the globe compared to some fossil fuels, nuclear has lower security of supply risks.

Despite the wide range of benefits, the potential of nuclear is shadowed by the risks of nuclear waste and the cost of capacity decommissioning. In Europe, the first generation of capacity built in the 1960s is approaching closure and decommissioning. The discussion has been gently postponed with the nuclear life-time extensions awarded since the 1990s, about the issue is surfacing back causing friction between tax payers and utilities. Moreover, the issue with nuclear waste is not fully resolved given there is a lack of sensible long term implications of the way underground storage behave.

Nuclear Reactors

Upon COP21 though, EU Member States are faced with an ironic choice. The targets set out in the EU energy framework regarding GHG emission reduction targets, the adoption of renewable energies and energy efficiency are all binding for Member States. In consequence Member States vouch their efforts to decommission their energy mix, a task that can be carried out either by subsidizing renewable capacities or with the integration of nuclear in the mix. If memory serves well, the stand on re-adopting nuclear is hostile as some utilities deemed it a ‘loosing value proposition’.

One of the most vocal EU Member State to look away from nuclear energy by 2022 is Germany, a country with a green plan. The firm pursue for renewables in the energy mix is paying off for Germany, as their contribution reached 40% of primary electricity consumption in 2015. The country is way on its way to achieve the GHG emission reduction targets it so strongly hangs on, by 2030.

Unlike their neighbour, Belgium and France are in a delicate situation. In Belgium, nuclear capacity contributes to 45% of the total gross electricity production in 2014, with decommissioning prospects sending the energy mix in a tight situation. The country is in ‘urgent’ need for additional capacity to replace part of the nuclear whilst keeping electricity prices competitive and complying with the GHG emission reduction targets. Just as in the case of France, the renewable energy potential is limited and its implementation costly. Such issues are sending governments back to the drawing board to re-assess the decarbonisation framework.

The emission reduction targets act as a constraining factor for EU Member States to reconsider their position on nuclear for the energy transition. Slovakia recently added two reactors, France and Finland have reactors under construction and the UK has started negotiations with the French utility EDF for the construction of a new reactor at Hinkley Point. This is an indication that after the diffusion of the nuclear crisis the sentiment is warming up towards nuclear, at least at the surface.

The pressure is stronger for Member States which have little RES potential while in the meantime can’t afford to spend significant amounts from their budgets on technologies which have not proven their maturity value. Cases in point are the UK and Poland which need to face the pain of moving away from coal while they have little RES potential. For the UK the financial aspect is not as problematic as for Poland, that is why the Hinkley Point debate is making headlines. Poland keeps tapping the argument that its hungry energy economy can’t support the cost of nuclear or RES subsidies for now.

In the near future, when the European Commission is going to press the binding decarbonisation targets against the door, Member States such as Poland will have to decide quickly whether nuclear will still be a foe, or it will become their energy friend in the transition.

Who is hungry for LNG?

In early 2000s, gas markets were flooded with optimism towards what was then called ‘the golden age of gas’. The rising demand in East Asian markets alongside high prices on long term contracts spurred enthusiasm amongst venture capitalists. This stopped abruptly in 2012-2013 when coal underwent an unexpected ‘renaissance’, displacing gas in power generation across a number of domestic markets. The cheap and plentiful US coal supplies took advantage of the ETS’s (EU carbon permits trading scheme) collapse, which allowed for CO2 to be emitted without being taxed. Currently gas markets are experiencing hard times with LNG (liquefied natural gas) suffering most.

LNG demand is barely staying afloat. In the past 3 years demand for LNG has been flat whilst prices have been steadily going down. For example, Japan the largest LNG importer, was paying at the beginning of 2015, the lowest price level since 2010. It is indeed a ‘golden age for gas’, but for gas consumers rather than producers. The newest exploitation projects of Exxon Mobil and Shell are meagerly holding up to the expectations of their venture capitalists. Since 2014 LNG market response was close to an anxiety attack, which lead to stalling all near future investments projects.

Looking ahead, the sector doesn’t look particularly dependable across a number of regions, as challenges abound. Political instability, the most critical of risks, is present in a number of LNG prospective regions across the globe. In these areas, political regimes are deemed unstable or the tactical political forces have the potential to derail the market. One such example comes from the US market where in 2012 governmental intervention temporarily limited LNG exports under claims that it negatively impacts domestic gas prices. Besides political challenges, logistics have been posing difficulties for LNG project developers. Industry history of construction delays and cost overruns have become the norm rather than the exception. This often happens because of insufficient tanking infrastructure and/or skill labour market tightness, which often push construction costs higher. An independent study by Ernst and Young (EY), a consultancy firm, argued that besides political and logistic challenges, LNG developments are vulnerable to legal ambiguities. Emerging markets are often confronted with immature legal and fiscal systems, which render the first years in the project development highly litigious.

Despite the general pessimism in the air, LNG is projected to see better days, even ‘golden’ ones by some forecasts. In 2014, EY published an extensive report on the future of LNG markets, advocating for the golden future of the fossil fuel. International Energy Agency (IEA) is sympathetic to this forecast, which projects that LNG demand will near 500 mtpa by 2030, almost double compared to the demand level of 2012. This begs the question, in this pessimistic energy climate who is hungry for LNG?

EY LNG forcasted demand

EY LNG forcasted demand

The projections indicate that LNG markets are to undergo a transformation rooted in market behaviors. There are two scales at which changes are to unfold. The first scale is national markets, and the second is international industry sectors.

A wind of change is blowing in international LNG trade. Countries such as Russia, which has maintained a strong position in LNG supply is planning to consolidate that even further till 2030. The 2014 Russian-Chinese deal to export 38 bcm/yr, alongside the investment-exploration project with the French firm Total, will tap closely to its goal of controlling almost a fifth of global LNG supply. The US, which until a few years back was building import capacity at the Louisisana LNG terminal, is now planning to use it for LNG exports. Projections are that operations will start in 2016, and the export capacity will near 75bcm/yr by 2018. Across the globe LNG terminals are planned ahead. The IEA projects that from the number of nations holding LNG facilities will almost double by 2020, reaching 50 from 29 in 2012. Among the latest nations added to the list are Israel, Singapore and Malaysia, but Poland, Croatia, Indonesia and Algeria are moving fast to catch up.

An indication of where the LNG demand is nested comes firstly from nations that are building LNG terminals, such as Indonesia, Singapore and China. In the case of Indonesia, currently a LNG exporter, supply is slowly decreasing at a time when the nation is struggling to keep up with the surging power demand. The government is pushing forward ambitious plans to build the necessary import infrastructure while at the same time ensuring long term supply contracts with the US and Eastern African nations.

The example of Indonesia is not singular in the region. Other nations, such as Singapore, Malaysia and China, are confronted with similar issues. The highest LNG imports in the region will continue though to be absorbed by Japan, who uses the fuel to compensate for its inactive nuclear capacity. This is projected to stay flat, as long term supply contracts are due to run till 2020.

Elsewhere in the world, appetite is building up. Europe is expected to gradually shift to LNG in case Russian gas threatens to run short. Lithuania, which is struggling to free itself from overpriced Russian pipeline gas, as bought a floating regasification terminal. With this, the nation paid itself for fruitful bargaining power, and other nations as such should follow. And other nations are following. Poland and Croatia are prospecting LNG terminals in the future which can bring a breath of fresh air for security of gas supply in the region.

The additional LNG demand is argued to serve nations chiefly for power generation, but sectorial dynamics are bubbling up. The most significant one is the shipping industry which is making efforts to green itself. Maritime transport could greatly benefit from GHG emission cuts by replacing the heavy fuel oil with cleaner LNG. A first notable attempt in this direction comes from the CLEANSHIP project, a Baltic Sea shipping group which pleads for a switch in shipping fuel.

In conclusion, future LNG demand is rooted in Asia, but Europe and African nations could account for a portion of the additional demand if the political climate alters security of supply for oil, and the infrastructure developments incur some degree of urgency. Until then, Asian nations are prone to bring about most of the additional LNG demand. It is reckoned that the fuel will be mainly used for power generation, but also the shipping industry could slowly shift gears to replace oil for LNG as fuel.

Despite all this I reckon that there are important aspects two aspects to be aware of when looking forward at LNG markets. First is that although the share of LNG in natural gas trading has increased in the past decade, the fuel is still mostly traded in long term contracts. For this commodity to start running a viable market there is an increased need for spot trading, as volume is already catching up. Second aspect relates to the over optimism of the forecasts in some markets such as Japan. It is my opinion that some shadow should be casted on the Japanese LNG demand forecasts, as the nation has recently announced that it is planning to soon restart some of its cheap nuclear capacity.

The Battery Support

The pervasive issue with renewable energy sources such as solar and wind is that their abundant availability trips on intermittency. Storing the excess energy from solar and wind requires large storage capacities at cost competitive levels. It is safe to state that there is currently no fully commercial battery technology capable of meeting the demanding performance requirements of the grid, namely the high power, long serving lifetime and low cost, despite the compelling need for such technology. This means that grid level storage if solved could revolutionize the energy transition of our generation.

In a 2012 TED talk, Prof. Donald Sadoway of MIT revealed how could the grid level battery look like in the future. He reckoned that his battery story “is more than an account of inventing technology, it is a blueprint of inventing inventors” as the development process tracked un-conventional wisdom full spectrum. The inovative technology made of a three-layered battery using liquid metal is claimed to empirically suited to shut-up the clamor around the solar and wind intermittency.

The humble beginnings of battery technology are attributed to A. Volta who pioneered the field of electro-chemistry and brought about a new technology – electroplating. The first battery was made of a stack of zinc and silver coins separated by cardboard soaked in brine. This was the starting point for designing a battery. Two electrodes – in this case metals of different compositions – and electrolyte – in this case salt dissolved in water. The science is that simple!

Prof. Sadoway found inspiration for the liquid metal battery in a modern aluminum smelter. In the cell house of an aluminum smelter shelters roll after roll of cells are aligned inside a long room. The inside of these rolls resemble Volta’s battery with some important differences. Volta’s battery works at room temperature, is fitted with solid electrodes and an electrolyte that is a solution of salt and water. The aluminum smelter operates at high temperature (a temperature high enough that the aluminum product is liquid). The electrolyte is not a solution of salt and water, but molten salt. This combination of liquid metal, molten salt and high temperature allows us to send high current through this thing.

In economic terms currently virgin metal from ores can be produced at a cost of less than €1/kg. This economic miracle of modern electro-metallurgy compelled the inventor’s motivation to take advantage and encapsulate the technology driven economy of scale for the liquid metal battery.

Prof. Sadoway succeeded in doing so by making both metals liquid and using molten salt for the electrolyte. He put low density liquid metal at the top, a high density liquid metal at the bottom and molten salt in between. The choice of metals was carried out to meet:

(i) the constraints of Earth abundance,

(ii) different opposite densities,

(iii) high mutual reactivity.

He felt the thrill of realization when coming upon the answer. Magnesium (Mg) for the top layer and Antimony (Sb) for the bottom layer.

Design Liquid Metal Battery   - AMBI -

Design Liquid Metal Battery
– AMBI –

To produce current Mg looses 2e to become Mg ion which migrates to the electrolyte where it accepts 2e from Sb and mixes with it to form an alloy. The electrons go to work in the real world powering devices. To charge the battery, the technology needs to be connected to an energy source which reverses the current and thus forces Mg to de-alloy and return to the upper electrode restoring the initial constitution of the battery. The current passing between the electrodes generates enough heat to keep it at temperature.

The theoretical model of this battery proved rather lengthy to implement and test in lab conditions. The technology initially set at 1Wh cell was perfected by operating more than 400 of them, refining their performance with the “plurality of chemistry” (currently is not just Mg-Sb). The model proved expandable at 20Wh cells and 200Wh with very encouraging results. The technology was proving itself to be robust and scalable.

Having a piloted idea seemed to be for Prof. Sadoway and his team insufficient to advance and commercialize the liquid battery technology. This prompted them to open a company (LMBC) and attract venture capital. The unit battery produced today at LMBC is .4m in diameter at a storage capacity of 1000 Wh (=1kWh). The next project on the horizon is a .9m diameter battery with a storage capacity of 4kWh.

Design of liquid metal battery scales - AMBRI -

Design of liquid metal battery scales
– AMBRI –

Further down the road, the company envisions that the 4kWh modules can be stacked in modules and aggregated in 40 foot shipping containers that can store up to 2MWh of energy. This represents the current average consumption of 200 American households.

This silent and emission free (when operational) technology can prove to be the support renewable energy technologies need to become competitive with fossil fuels. Besides the various environmental benefits that it offers, this technology addresses in a simple manner one of the most sensitive issues in the energy transition cost: this technology was designed to the market price without subsidy.

This ought to look sunny for the future of remote renewable power installations!