Senior executive at battery giant CATL on power storage, lithium, etc.
From the Tsinghua PBCSF Economic Forum on Carbon Neutrality
Continuing from a call for more nuclear power stations by the head of China National Nuclear Power Co., LTD., this is the second newsletter from Pekingnology of a series of speeches made by guest speakers at the 2021 Tsinghua PBCSF Economic Forum on Carbon Neutrality held on September 16. (China is also hosting the COP15 - Fifteenth meeting of the Conference of the Parties to the Convention on Biological Diversity - in southwest Kunming which highlights environmental issues. )
The forum was widely covered in Chinese media but not so much in English so your Pekingologist wishes to present a more domestic detailed, technical discussion from the forum on reaching China’s carbon goals - China aims to reach the carbon peak before 2030 and carbon neutrality before 2060 - has been updated to replace the original and inaccurate version reaching carbon peak in 2030 and carbon neutrality in 2060.
This particular speech is made by Meng Xiangfeng, a senior executive of Contemporary Amperex Technology Co., Limited (CATL), a battery giant that’s been making a lot of headlines in recent years.
Batteries are already essential in electric cars and, according to Meng, will be important in storing energy as a vital link in the new power generation system. Meng’s speech touches quite some points in the battery industry’s technology and resources - including lithium, perhaps the latest darling resource after rare earths - but is readable and doesn’t require a Ph.D.
The translation is based on a transcript in Chinese of the speeches shared by the forum’s organizer with over several dozen Chinese media journalists in a WeChat group, and full video documentation of the forum is available at Tsinghua PBCSF’s Twitter account with simultaneous translation in English. Therefore, technically the speech was already in the public arena, but in case you want to quote something here, a link or mentioning of Pekingnology is appreciated.
Please note this is a partial translation, to save both your and our time. The full transcript in Chinese will be pasted at the end of this newsletter for reference.
Meng Xiangfeng, Senior Executive at Contemporary Amperex Technology Co., Limited (CATL)
Today, everyone has repeatedly mentioned that energy storage is an important supporting technology and key infrastructure of a new power system. Energy storage is a kind of peak-shaving resource. The traditional way for peak-shaving is pumped storage. Now there’s a new technology called electrochemical energy storage, or electrochemical energy storage based on lithium-ion batteries. Compared with pumped storage, lithium battery energy storage has some advantages. For example, it has a faster response time and can achieve millisecond response. It is not limited by geography. Pumped storage has the geographical limitations of water, mountains, and altitude difference with small time difference. So, lithium battery energy storage has obvious advantages in these two aspects.
Electrochemical energy storage has also been widely used in recent years and has drawn public attention. Why couldn’t lithium-ion batteries be used to store energy before? Now there is such an opportunity, mainly because the technology, cost, and service life of lithium-ion batteries have made rapid progress in recent 10 years with the popularization of new energy vehicles.
Over the past 10 years, China has introduced the world's most perfect policy system to support the development of new energy vehicles, including car purchase subsidies, purchase tax exemption，differentiated traffic control measures such as unlimited travel and purchase for new energy cars, as well as subsidies and support for charging technology facilities. It is safe to say that with the support of these policies, China's new energy vehicles have achieved great success. Many people suspected what we used to call “overtaking at the curve” before, now, at least preliminary results have been achieved. In the field of new energy, China is a global leader in technology, scale, and key core parts.
I would like to add that many experts also talked about the electrification of cars or family cars today. It is difficult for large vehicles such as some ships and other vehicles with large power demand. This was the case a few years ago, and a breakthrough has been made at present. CATL cooperates with customers and implements pure electrification in boats on rivers and short-distance heavy trucks, including 49 -ton and 100-ton heavy trucks. Construction machinery, such as excavators, loaders, and port vehicles, have also been electrified. These have many applications.
For example, China Molybdenum Co., Ltd works on molybdenum mine. All vehicles in the mine have been electrified from transportation to loading to crushing, which is unmanned and intelligent. This is mainly about future lithium battery applications, not only in new energy vehicles or cars for families but also in applications in all power sources.
What are the aspects of technological progress? In the past 10 years, the performance of lithium batteries has increased three times. The performance mainly means that its service life has increased three times, its energy density has increased three times, and its cost has decreased by 90%. At present, the cost with lithium batteries is less than 1 yuan per watt-hour. The purchase cost of new energy vehicles is a little higher than that of petrol vehicles, but its usage is relatively cheap, so the new energy vehicles are more competitive than petrol vehicles in the whole life cycle.
And about energy storage, today I’ll mainly talk about energy storage. Since its founding, CATL has always regarded power battery and energy storage battery as the two wings of our development, and we have also carried out a lot of work on energy storage. In terms of energy storage, we have undertaken China’s key research and development plan – that is, the only project of electrochemical energy storage – during the 13th Five Year Plan period. With the support of this project, we mainly broke through the bottleneck in the service life of energy storage batteries.
When used in cars, a battery can be charged from 1000 to 2000 times in the past if the car is driven 300,000 kilometers in total. If a battery is used for energy storage, it needs to be in service for 10, 20, or even 30 years. Its service life used to be a weakness. During the 13th Five Year Plan period, we increased the service life from about 3,000 times to 12,000 times, which is a breakthrough and is leading in the world. This breakthrough provides conditions for the application of lithium battery energy storage in large energy storage power stations.
In the past years, we have also worried about the safety of energy storage batteries. From the perspective of batteries, the safety problems have also been solved. Now there may be problems concerning multiple aspects. Some have to do with system integration, and the integration between different industries in the whole engineering is not enough. In addition, some low-level products have entered the market, resulting in safety problems.
In terms of the promotion of energy storage batteries, 12,000-time high-performance batteries have been promoted for energy storage plants in China. A 100-megawatt hour independent energy storage power station in Jinjiang, Fujian has been officially put into operation, and the technology has begun to be exported in large quantities. We have undertaken the battery supporting business of about 150 energy storage power stations at home and abroad. Last year, we shipped about 3 GWh in the energy storage field. Three GWh was the total amount of the cumulative installed capacity of the whole country by the end of last year. This year, the shipment in the energy storage field will reach more than 10 GWh, which is an increase of between 3 to 4 times. This is some of the progress in the field of energy storage.
In the long run, if we really want to achieve carbon peak and carbon neutrality, we need a new power system with new energy as the main body, and photovoltaic, wind, and hydropower as the main installed and power generation body. The stability of the power grid requires a lot of flexibility resources. At present, even if all the qualified pumped storage energy in the country is developed, the gap is still very large.
By the end of last year, the total installed capacity of electrochemical energy storage was about 3 GWh, and when translated to power generation that was about 1.5 GW. From the perspective of carbon neutrality, it is estimated that the demand for battery energy storage in the future is about 1,400 GW, which is about 1,000 times that of last year's 1.5 GW, so the room for growth is quite huge.
Since the gap is so large, is it enough in terms of the whole reserves in technology and resources? The people here also care about these two issues.
First on technology. Batteries are different from petroleum. Batteries are technology-dependent. Technological breakthroughs and continuous innovation mean that there is a lot of room to improve the batteries’ performance and efficiency and reduce their costs. This year, we also brought up a slogan, "Electrochemistry should be the magic cube of energy." There is still a lot of room for innovation. Now the unknown in electrochemistry is far greater than that of the known. There has been a lot of technological progress, and there is still a lot of room for cost reduction. This is the technology aspect.
Second, from the aspect of resources. Are there enough resources? There is a lot of lithium, nickel, and cobalt used in lithium batteries. This year, people started to worry that these resources may not be enough or that they may be controlled by foreign countries. In addition, their prices have indeed risen a lot this year, and lithium-related stocks have also risen a lot. We still feel that there might be a shortage.
In fact, resources such as lithium, cobalt, and nickel are sufficient in terms of reserves to realize the electrification of all vehicles across the world and to meet the demand for energy storage and batteries. The problem is that the production capabilities, as in mining and extraction, cannot keep up with the rapid development. It is a short-term supply shortage, but the reserves of resources are sufficient. This is my opinion.
My second view is that lithium batteries are different from petroleum. Petroleum is gonna be exhausted. If it’s burned, it’s burned, and it is not renewable. Lithium battery or electrochemistry is an energy storage medium. It will only have performance degradation, but the resources are not exhausted.
So, this, once again, goes back to the second question asked by the moderator: What happens if the performance of the battery declines to the scrap level, no matter the battery is in the car or used for energy storage? Now, the recovery technology of lithium batteries is mature. At present, CATL has also made a relatively good layout in recycling and cascade utilization. In 2014, we acquired the largest lithium battery recycling company in China, which is called Brunp. Now, Brunp mainly recycles scrapped lithium batteries from the factory, also from the market, and then makes them into materials that can be used to manufacture new batteries in CATL.
This recycling efficiency is very high. The recovery rate of lithium, cobalt, and nickel is more than 90%, and that of cobalt and nickel can reach 98% and 99%. Therefore, when reaching a certain stage, resources can support the subsequent new incremental demand through recycling, which is very similar to the concept of carbon neutrality.
The future is not only about lithium batteries. Many new electrochemical systems will appear. This year, sodium-ion batteries have been released. There are no scarce resources in sodium-ion batteries. The main resource is sodium, the element in salt, which is very rich in reserves. Now the main problem is to establish the supply system of raw materials. Once the technology problems have been tackled and breakthroughs have been made in the whole production and processing technology of raw materials, the remaining main problem is to increase the volume of production. We will have a production line for sodium-ion batteries next year, and it will also be an important technology route for energy storage in the future because it is safer and cheaper.
The full speech in Chinese for your reference. Please note the English above is a partial translation based on content selected by your Pekingnologist. Full video documentation of the forum is available at Tsinghua PBCSF’s Twitter account with a simultaneous translation.