Is this the next Tesla?

Wednesday, 26 December 2018
Melbourne, Australia
By Selva Freigedo

Editor’s note: Bernd Struben, Sam Volkering and the staff at Port Phillip Publishing are taking a break for the holidays. We’ll be back at our posts on 2 January 2019. While we’re away, we hope you’ll enjoy some complimentary back-issues of Global Investor.

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The following article was originally published on 13 September 2018.

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Back in the 70s, an English scientist named Stanley Whittingham discovered the basis for creating modern lithium-ion batteries.

Since then, these batteries have become common in our everyday life. We use them in electronic devices, solar power storage, electric vehicles…you name it.

And it is very likely that their use will continue to increase as we step up sales for electric vehicles.

The graph below shows the global monthly electrical vehicle sales for the years 2016–18. As you can see, sales for 1Q of 2018 have been much higher than in previous years.



chart image

Source: EV-Volumes.com
Click to enlarge

Yet as James Allen — this week´s expert — tells us, lithium-ion batteries have some big flaws.

If you are not familiar with James, he runs the Exponential Energy Fortunes service back in the UK. I had the pleasure of meeting him during our Paradox of Prosperity conference earlier this year. We also featured James in Global Investor in April.

Back then, James introduced us to the notion of decentralised energy. That is, the idea that instead of getting our energy from a centralised provider, each of us produces and consumes our own power.

James calls these users ‘prosumers’, and he envisions each prosumer will be connected and will be able to trade any spare energy with other prosumers through the blockchain.

If you want to know more about how all this could turn out, you can read about it here.

So, what are some of lithium-ion’s big flaws?

Well, for one, as James wrote in Exponential Energy Fortunes on 24 August, they are expensive:

Tesla and all major battery and device manufacturers need ever-increasing quantities of “rare earth” metals such as cobalt, nickel and lithium. But as demand increases, their costs are skyrocketing out of control.

The price of cobalt is around £67,000 per tonne, having hit near ten-year highs in March. It’s up fourfold since the beginning of 2016.

Nickel is around £10,600 per tonne, having recently hit its highest level in more than two years.

Lithium, the other main components in Tesla’s battery chemistry, has also seen significant increases in price, soaring by more than 300% in the past two years alone.’

Another problem is that lithium-ion batteries don’t last long:

‘[A]s batteries are a chemical cycle, there is a certain amount of energy lost every time you charge and discharge. That also means batteries have a limited life, because their capacity declines.

In effect, lithium-ion batteries suffer from ageing, as you will all know from the batteries in your phones or laptops. The capacity of batteries falls over time until it eventually runs out altogether […]’

Another problem is that once the battery runs out, it has contaminants that make it difficult to dispose of.

As James continues, these flaws may mean that we need to look at different alternatives for the future.

This is not to say that batteries are bad, only that they won’t be enough alone to reach the required electricity storage capacity to back up intermittent renewable production in the future.

Bloomberg New Energy Finance forecasts more than $100 billion will be invested in energy storage by 2030, transforming how grids operate.

There remains a gap in the market for a scalable, cost-effective, safe, geographically unlimited energy storage option, one that is suitable for longer timeframes than lithium-ion batteries and lasts a lot longer.

But what if we could make more efficient batteries?

One company from South Australia is trying to do just that.

As James told us:

Rather than use cobalt, nickel or lithium to make batteries, 1414 Degrees has developed a storage device that uses silicon, the second most abundant element in the Earth’s crust. It’s primarily found as a major component of common sand.

It’s so abundant, it costs only £1,125 [about AU$2,060] per tonne and has actually fallen in price over the last few years. Plus, silicon is so efficient and dense, that less than a metre cube can store enough energy to power a large UK home for a month.

1414 Degrees’ chairman, Kevin Moriarty, says the company’s process can store 500 kilowatt hours of energy in a 70-centimetre cube of molten silicon – about 36 times as much energy as Tesla’s 14KWh Powerwall 2 lithium-ion home storage battery in about the same space.

Put another way, he says the company can build a 10 MWh storage device for about $700,000. The 714 Tesla Powerwall 2s that would be needed to store the same amount of energy would cost AUD$7 million before volume discounts.

That’s exponentially better.

1414 Degrees’ thermal energy storage system (TESS) stores electrical energy by using it to heat a block of pure silicon to melting point — 1,414 degrees Celsius.

1414 Degrees has patented technology that is cheaper and generates more energy.

Silicon is also widely available, it’s non-toxic and recyclable. It can be heated and cooled many times without decreasing capacity, which means it can last longer. While Tesla’s lithium-ion batteries last around 10 years, 1414 Degrees believes its TESS lasts for around 20–30 years.

But, as James tells us, there is something really interesting about 1414 Degrees. You see, the company is not only setting its sights on the electricity storage market, but on the heat market too.

As James continued:

In Australia, where 1414 Degrees is based, industrial heat is about 33% of total energy use in Australia larger than electricity at 27%. Transport is just under 40%.

In Europe, heating and cooling are about 50% of total energy compared to just 18% for electricity and 32% for transport […]

In fact, the heat requirement in the world is two to three times that for electricity.

Indeed, it’s easy to underestimate the sheer volume of energy used globally to produce heat. From district heating to industrial food processing; greenhouses to manufacturing paper; beer brewing to textile production; every process uses energy to make heat. Generation of heat can account for up to 92% of the total energy requirements for industry, services and households.

In industrial processes alone Australia uses over 53 GWh of natural gas per annum, much of which is used to produce heat.

And this is exactly where 1414 Degrees has its sights on…

So far, the company only has a working prototype and a lot could go wrong once they start to commercialise. But you may hear about this little Aussie company a lot more in the near future.

We’ll keep you posted.

Please note this isn´t a recommendation, and should only be used as something to look at and research in your own time.

Best wishes,


Selva Freigedo Signature

Selva Freigedo,
Editor, Global Investor

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