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NEMA Supports Advanced Battery Industry


01/12/2011 12:00AM

(Rosslyn, Va.) The National Electrical Manufacturers Association (NEMA) will use the results of the recently published report of the Advanced Batteries Cafe to outline actions that need to be taken, in the short and long term, to enable a viable U.S. battery industry.

The National Institute of Standards and Technology (NIST) uses the café discussion process to foster collaborative dialogue, effective engagement, and constructive possibilities for action. NEMA plans to use the Advanced Batteries Café report as a call to action for advanced battery performance, safety, and testing standards, as well as to request additional legislation and incentives in support of the advanced battery industry.

Interest in advancing battery technology for electric vehicles (EVs) and electricity storage has grown rapidly over recent years because it has the potential to reduce the use of fossil fuels in transportation and electricity generation, thereby reducing greenhouse gas emissions. Stationary electricity storage technologies make possible the use of intermittent renewable resources as reliable electricity generators, increasing our options for domestic resources of electricity generation and reducing our dependence on foreign oil.

The public sector has shown support for the industry with monetary awards for battery development and manufacturing. In 2010, the Department of Energy (DOE) created the $25 billion Advanced Technology Vehicle Manufacturing Incentive Program, issuing re-tooling loans for auto makers and supply chain vendors.

An additional $2 billion in loan guarantees for advanced battery manufacturing and $200 million to encourage EV technologies was promised by the federal government in 2010. More recently, however, Congress has failed to act on key policies that could stimulate the advanced battery market. In November, the Senate withdrew a motion to vote on the Promoting Natural Gas and Electric Vehicles Act of 2010 (S 3815), which included millions for advanced battery development.

Electric Vehicle Charging Stations

A federal tax credit that provides incentives to consumers and businesses to install EV charging stations was set to expire December 31, but Congress extended it through 2011. An important caveat is that the 2011 credit reverts to the smaller credit that was in place before ARRA temporarily increased it for 2009 and 2010. This incentive, created by the Energy Independence and Security Act of 2007, provides a 30 percent federal tax credit of up to $1,000 for individuals and $30,000 for businesses and will continue to spur the EV industry.

NEMA formed the Electrical Vehicle Supply Equipment/Systems (EVSES) section to represent manufacturers of products or assemblies that are installed for the purpose of safely delivering and managing electrical energy between an electric vehicle and an electrical source. The section will align the strengths of major stakeholders in the electric vehicle market, including auto manufacturers, utilities, and government.

By developing consistent positions for domestic and international codes and standards, EVSES will ensure safety and interoperability of equipment. For more information, contact Harry Massey at 703-841-3287 or harry.massey@nema.org.

 

Advanced Battery and Component Factories

 

Advanced Battery Capacity vs. Production

Federal funding has provided a much needed boost to the advanced battery manufacturing industry. In 2009, the U.S. had only two factories that manufactured advanced batteries. In 2010, the government funded 13 new battery plants and promises a total of 30 battery plants by 2015, with a capacity to support 500,000 plug-in and hybrid vehicles.[1]

Speaking outside of a new battery plant in Michigan on July 15, 2010, President Obama expressed his optimism for the advanced battery industry in the U.S.

“Just a few years ago, American businesses manufactured only 2 percent of the world’s advanced batteries for electric and hybrid vehicles—2 percent. But because of what’s happening in places like this, in just five years we’ll have up to 40 percent of the world’s capacity—40 percent," he said.

But capacity and production are two different concepts, as anyone who resides in the Rust Belt can tell you. Miles and miles of steel production capacity have been left abandoned and rusting. If there is no market demand for advanced batteries, then we are developing capacity for a non-existent or underdeveloped market.

Much of the public has pinned their hopes, and funding, on the EV as the only market and the sole reason for manufacturing advanced batteries. The vehicle market in the U.S., however, is a fraction of the global market and the number of vehicles produced in this country is relatively minimal compared to other countries[2].

2009 Vehicle Production by Country

 

2009 Production Statistics Data
Source: International Organization of Motor Vehicle Manufacturers

 

Because of size and the ever tightening shipping restrictions on advanced batteries, it is more economical to manufacture and assemble battery packs in close proximity to the market. In 2009, the U.S. produced 6 percent of the vehicles in the global market and only 1.5 percent of the vehicles produced globally were hybrids electric vehicles (HEVs). In order to establish and maintain an advanced battery industry in the U.S., we need to ensure there is a market for the 40 percent of the world’s capacity that we are developing.

There are more applications for advanced batteries than just EV power sources. Most experts would agree that there is a huge market potential for further applications of advanced batteries beyond the EV, which as a stand-alone market cannot support an advanced battery industry.

In fact, a recent ARPA-e (Advanced Research Projects Agency—Energy) report projected a $30 billion market for lithium batteries by 2020; some near-term estimates put the advanced battery market at $11.35 billion by 2012.

While other applications may not sound as exciting as powering a new EV, they are no less important, and are more critical to our energy infrastructure. A large increase in the application of advanced batteries is likely to be in uninterruptible power supply (UPS) and smaller remote stationary applications to protect data during power outages.

The advanced stationary market is expected to reach $3.7 billion by 2012, with UPS expecting to make up a large portion of it. Other applications include the relatively mature market of motive power, including use as traction, marine, and aviation batteries. At $4.2 billion, advanced portable applications, including use as power sources for portable computers and wireless power tools, are expected to see the largest growth.

In comparison, the HEV and plug-in segment is only expected to reach $1.5 billion by 2012[3]. Niche markets, like military and healthcare, can also provide specialized opportunities for advanced battery market development. No single application can support the advanced battery industry alone. It will take market development in each of these segments to establish and maintain a market-driven advanced battery manufacturing industry in the U.S.

Federal incentives, loans, and awards have been instrumental in supporting the manufacturing of advanced batteries, as well as creating the market and the demand for EVs. For the U.S. battery industry to succeed, however, federal funding is needed for every application of advanced batteries and throughout all levels of the value chain. Ultimately, if the manufacturing industry is to flourish, it will need to be driven by a market and not just our tax dollars.

NEMA’s Energy Storage Council

In December, NEMA announced the release of a report on the Advanced Batteries Café, hosted in cooperation with the National Institute of Standards and Technology (NIST) in early September.

Café participants focused on identifying issues having a positive or negative impact on the creation and maintenance of a market-driven U.S. advanced battery industry. Experts from the battery industry, academia, national laboratories, and government agencies explored a vision for the future; broad drivers and issues (political, societal, economic, and others); and technical barriers and challenges, including measurement.

The Advanced Batteries Café began as a collaborative effort between NIST and NEMA to identify the major technical and measurement challenges to developing the U.S. advanced battery industry. This program was supported by NEMA's Energy Storage Council (ESC), and NIST's External Needs Assessment workshop series, which provides opportunities for customers and stakeholders to lay out external drivers and/or opportunities for specific technology focus areas.

ESC was established in 2008 to advocate for policies, necessary standards, and funding to ensure market adoption and swift commercialization of advanced applications of energy storage technologies to be safely and effectively integrated with the electrical grid.

To learn more about this report or NEMA’s actions regarding advanced batteries, contact Battery.Cafe@nema.org.

A copy of the Advanced Batteries Café Summary Report is available here.

NEMA is the association of electrical and medical imaging equipment manufacturers. Founded in 1926 and headquartered near Washington, D.C., its approximately 450 member companies manufacture products used in the generation, transmission and distribution, control, and end use of electricity. These products are used in utility, industrial, commercial, institutional, and residential applications. The association’s Medical Imaging & Technology Alliance (MITA) Division represents manufacturers of cutting-edge medical diagnostic imaging equipment including MRI, CT, x-ray, and ultrasound products. Worldwide sales of NEMA-scope products exceed $120 billion. In addition to its headquarters in Rosslyn, Virginia, NEMA also has offices in Beijing and Mexico City.

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[1]U.S. DOE Vehicle Technologies Program

[2]International Organization of Motor Vehicle Manufacturers Production Statistics, http://oica.net

[3]Global Market for Large, Advanced Batteries Worth $11.35 Billion by 2012, Military and Aerospace Electronics, Jan 24, 2008, www.militaryaerospace.com