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The Case for a Domestic Energy Storage Manufacturing Hub

image credit: Advanced Energy Group
Graham Warnock's picture
Lead Fellow Advanced Energy Group

A young professional passionate engage leaders in clean energy and innovation

  • Member since 2020
  • 2 items added with 1,815 views
  • Dec 8, 2020

The critical obstacles presented by Speaker Challengers at the AEG 20Q3 Chicago Stakeholder Challenge ranged from developing equity-based clean energy infrastructure in Chicago, to codifying data that shows a positive cost/benefit return in sustainable commercial real estate development. Listening to each of the Speaker’s critical obstacles, there was a recurring theme: the inevitability of ultimately confronting each problem in Chicago and in the United States more broadly. 

When it came time to choose which problem the group would confront in Part 2: The Breakout Room Challenge, I cast my vote for Sue Babinec, Program Lead for Grid Storage at Argonne National Laboratory. Babinec presented the obstacle, “Regarding IoT, Technology and Innovation, to achieve Chicago’s 2050 carbon and equity goals, the most critical obstacle to overcome is the lack of a Chicagoland Manufacturing Innovation Hub for energy storage.” Though each of the stakeholders presented thoughtful and critical issues, I felt that the scale of Sue’s problem was particularly pressing, and offered an opportunity to engage with prolific, complex hurdles to developing a greener economy. I believe that the solution to Sue’s problem could combine equity, resilience, and an entity seemingly rarer than lithium or nickel, bipartisanship. In this particular vein, I will further explore Babinec’s argument.

Demand for Homegrown Batteries

           One driving issue that Babinec highlighted was the paradox of offshoring US developed technology abroad, namely to China. With respect to solar technology, much of the research that brought photo-voltaic technology to scalability and price parity with fossil fuels originated in the United States. However, China commands the manufacturing market for PV. If unchallenged, China, as well as Europe, South Korea and Japan, will become the world’s factories for the batteries required to decarbonize electricity generation and transportation. As Babinec argues, this trajectory is not yet set in stone. The development of a domestic supply chain for energy storage manufacturing currently has support across the political spectrum. This year the Trump Administration unveiled the Energy Storage Grand Challenge through the Department of Energy to incentivize domestic energy storage supply chains. More broadly, investment in manufacturing hubs for batteries offers a seldom monolithic opportunity of broad agreement for politicians to deliver promises of job creation, economic growth, decarbonization, and equity and economic resilience. 

            A manufacturing hub in the Midwest could draw investment from large automotive manufacturers and big tech companies. As ESG considerations become a greater staple of mainstream investment, onshoring this supply chain offers the opportunity for companies to commit to equitable, environmentally conscious procurement of batteries used in EVs, and utility and corporate power purchase agreements. Midwestern car makers could both maintain and expand their domestic workforces while reducing their costly reliance on international supply chains. Tesla, for its part, has already endeavored to onshore its battery supply chain. In doing so, Tesla frees itself from reliance upon the intensely problematic cobalt mining in the Democratic Republic of Congo, and highly polluting lithium refining in Indonesia. Tesla refines lithium that originates in the U.S., Chile, and Argentina through companies in North Carolina, and will ship this to their new manufacturing plant in Nevada. Tesla’s Nevada battery factory highlights the necessity of immediately confronting this issue as onshoring this supply chain is no small undertaking but will ultimately offer significant benefits.

Overcoming Homegrown Headwinds

           The sourcing and refinement of elements used in modern battery chemistry (spodumene, lithium, cobalt, manganese, nickel) present a substantial obstacle to domestic battery manufacturing. The energy storage market that already powers cars and will increasingly store energy from intermittent solar and wind power, is currently dominated by lithium-ion technology. While the United States does possess measurable lithium reserves, other components required for current lithium-ion batteries are unfortunately not possible to source domestically in the volume needed to meet demand.

           One solution is to invest in the scalability of using more accessible elements for batteries, such as zinc and vanadium. Technology using these elements already exists but requires more research. Perhaps, Babinec’s conceived manufacturing hub for energy storage could begin and later double as an incubator for battery technology. Chicago’s mHUB incubator could serve as a model for such an energy storage incubator. mHub is a hard tech and manufacturing innovation center for technologies including smart buildings/cities and unmanned vehicles. Babinec’s vision could be realized by an mHUB - Energy Storage, dedicated to advancing research in battery chemistry, grid resiliency, and manufacturing innovation. 

Such a solution would also channel public and private investment to address issues central to developing this supply chain. For instance, private sector investment and formal diplomacy could leverage relationships with Australia, Chile, and Argentina – the world’s leaders in lithium mining. Furthermore, as political rhetoric against China is increasingly uniform in Democrats and Republicans, bilateral relationships with these countries for climate resiliency could be marketed as an endeavor in national security. And ultimately, Babinec’s vision would demonstrably contribute to unifying the vast capability of public and private American institutions to develop an equitable, homegrown green economy.

Homegrown Solutions to Homegrown Problems

           On a recent phone call, a mentor of mine, who is an expert in battery chemistry and engineering at the University of Colorado Boulder, highlighted another intersection of equity and clean energy that Babinec’s vision might demonstrably confront: education. Currently, a dearth exists in the chemistry and engineering expertise necessary to advance energy storage research. Additionally, little financial incentive exists to motivate someone to dedicate the better part of a decade toward attaining this expertise. Thus, income inequality and generational wealth inherently factor into the lack of professionals skilled in this necessary science. An energy storage incubator in Chicago could help address this issue through collaboration with local education leaders in Chicago and world renowned higher education institutions throughout the Midwest. From the graduate level to high school STEM programs, this incubator and manufacturing hub could have an explicit intention of empowering science programs locally, with an emphasis upon Chicago’s historically underserved communities.

           Babinec’s proposed challenge is not without its snares and headwinds. Yet, a fundamental driver behind the opportunity of an energy storage incubator and manufacturing hub should be to assert the United States as a leader in energy storage, and in clean technology more broadly. Investments in education and skill training would lead to growth in clean energy jobs for the citizens of Chicago and Illinois. With these jobs will come a sense of cultural pride and consumer confidence in clean technology produced in the United States. Babinec’s vision forgoes platitudes asserting ‘we’ no longer make things in America anymore, and commits to asking, “what should we make in America?” With respect to investing in an equitable domestic supply chain for manufacturing the technology vital to decarbonization, I see an energy storage incubator and manufacturing hub in Chicago begging the question, “why not?”

Matt Chester's picture
Matt Chester on Dec 8, 2020

It's interesting to hear about the focus on 'homegrown' batteries-- of course economically it makes sense for leaders to want to keep potentially lucrative businesses like these within the borders. How much of this will be dictated by where the minerals and materials are mined, Graham?

Graham Warnock's picture
Thank Graham for the Post!
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