Energy storage is big business, but is it safe?

By Lou Covey, Editorial Director

Judging from the number of companies that exhibited at the Intersolar/EES joint conference in San Francisco, energy storage is the next big thing in green energy. It resolves the problem of intermittent over-and under-production that plagues sources like solar and wind. It comes, however, at a high cost to the pocketbook, the environment and personal safety. The good news is that there are alternatives to conventional storage technology. The bad news is those technologies are only now coming to market and are facing an uphill battle with the technology status quo.

SAN FRANCISCO, CA - Intersolar North America Conference at Moscone Center West, Tuesday July 8, 2014.

First, let's look at the most popular technologies dealing with storage and why storage is even necessary in the first place.

Wind and solar are the most popular sources of green energy today, but they are also two of the most inconsistent, inefficient and costly sources of electricity. Wind only produces power when the wind is blowing and only at a narrow range of wind speed. If the wind blows too fast or too slow, your wind turbine becomes, essentially, useless. Solar produces power most effectively between the hours of 11 a.m. and 4 p.m. which just happens to be the same off-peak hours when less electricity is needed. Production from solar panels disappears during peak demand times. Adding a storage technology allows systems to save up electricity during peak production times providing "clean" power during peak demand. Because most systems are designed to store between 48 hours to a week of electricity without recharge, they also serve as a valuable source of energy when the wind doesn't blow or the sun doesn't shine.

The two most common forms of storage technology are lead-acid batteries, similar but larger than the kind of batteries in internal combustion cars, and lithium-ion (Li-ion) batteries, like those used in electric and hybrid cars and mobile devices. The average lifespan for these two popular technologies is about 10 years. That's where cost comes in as a significant factor.

Since windmills and solar have a stated maximum-generation lifespan of 20 years it means the batteries must be replaced or enhanced at least once during their lifetime (just like you do in any other device) long before the generators die. Both technologies require significant and sophisticated hardware and software technology to charge, maintain and manage the flow of power efficiently and safely. When you combine all that together you get a cost of $1000-$2000 per kilowatt/hour. The average system needs to hold a minimum of two days worth of power, so a 5 kW/hr solar storage product will cost between $10,000 and $20,000 for 10 kW of storage. That's added on top of the $30,000 the energy system cost, and, as stated, it will have to be completely replaced at least once during the life of the energy system. The minimal cost for energy storage, then, is more than half of the cost of the energy system. Even with subsidies that puts the cost of green energy out of the hands of many residential and commercial users. Storage systems have other significant costs that should not be overlooked.

Now let's consider the environmental costs.

Stationary lead-acid battery system (SLABS) have a significant list of environmental compliance, enforcement, and liability concerns because the active ingredients are sulfuric acid and lead -- two of the most toxic substances on earth. A spill may result from the improper handling of hazardous material discharge or a slow and undetected corrosive breach in the battery housing that can cause injurious, if not lethal exposure to employees, workers, or tenants. Overcharging a battery, due to a failure in the software control system, can result in the release of hydrogen sulfide gas, a colorless, poisonous, flammable substance that smells like rotten eggs.

Lead is highly toxic metal and once the battery becomes inoperative, it must be properly collected and recycled. A single lead-acid battery disposed of incorrectly into a solid waste collection system, and not removed prior to entering a resource recovery facility for mixed waste, could contaminate 25 tonnes of waste and prevent the recovery of the organic resources because of high lead levels.

Sixty-four percent of all the lead produced through mining goes into lead-acid batteries and the harmful effects of improper recycling are giving (even in third-world countries where regulations are less stringent) pause in using them from energy storage. The government of India is mandating the elimination of the technology for anything but automotive use. The reason for the ban is that lead from storage batteries placed in unlined landfills is contaminating groundwater.

Lithium Ion

Li-ion batteries have advantages over lead-acid in that they are smaller and lighter making them preferable to electric cars and mobile devices, but they are in their relative infancy in large-scale use.

“We are at the very beginning in energy storage in general,” says Phil Hermann, chief energy engineer at Panasonic Eco Solutions. “Most of the projects currently going on are either demo projects or learning experiences for the utilities. There is very little direct commercial stuff going on."

Moreover, Li-ion is highly unstable and without proper power management, usually via a software solution, they tend to burst into flame (e.g. the hoverboard). Every vendor we talked to at the EES conference dismissed safety concerns, essentially saying that the problem exists with other vendors, not them.

One company, a start up called ElectrIQ Power, provides a turnkey system in a box including the batteries, inverter and control software, which is touted as their claim to safety superiority. Like all other Li-ion system suppliers the warranty for their systems is for 10 years. At that point the battery capacity is 60% of what it was when new, requiring the purchase of a new system or an additional 5 kWh booster pack at the end of the 10 year period.

However, at present they have no plans on helping customers deal with the disposal of the batteries at the end of their useful life. No other Li-ion vendor could answer questions about eventual disposal either.

Video: ElectrIQ Power simplifies home energy storage

Here's an interview with the founder of ElectrIQ Power:

Electric Power is a software company integrating and managing multiple energy storage technologies into a single unit. The system is based on standard Lithium-ion battery technology with hybrid investors.

But beyond safety, the environmental issues facing the production of LI-ion is most troubling. An EPA 2013 report concluded that batteries using lithium, nickel and cobalt, have the “highest potential for environmental impacts”. It cited negative consequences like mining, global warming, environmental pollution and human health impacts.

Take, for example, the Tesla factory near Reno, Nevada. As Nevada is the only source of elemental lithium in the United States locating the factory in that state was an obvious choice and the Nevada government has always been open to toxic industries. Elemental lithium is flammable and very reactive. In nature, lithium occurs in compounded forms such as lithium carbonate requiring chemical processing to be made usable. Typically found in salt flats in areas where water is scarce, the mining process of lithium uses large amounts of water. Toxic chemicals are used for leaching purposes, chemicals requiring waste treatment. There are widespread concerns of improper handling and spills, like in other mining operations around the world. Even in first world countries, Li-ion battery recycling is in the single digit percent range. Most batteries end up in landfill.

Finally, we have nickel-cadmium batteries (NiCd). This is a very old technology that has been in in commercial production since the 1910s. While not as expensive as Li-ion and have more recharging cycles, they are bulkier, have lower power densities, and must be completely discharged before recharging, They also survive longer then Li-ion and have not been know to explode when overcharged.

Ni-Cd batteries have been used early energy-storage applications. For example the 27 Megawatt wind farm operated by the Golden Valley Electric Association In Alaska has used a 3 Megawatt Ni-Cd system stabilization on the island of Bonaire since 2010. But their lack of density and the need to completely discharge power before recharge has made them less valuable to the renewable energy industry. NiCd mining and production is just as toxic as Li-ion and recycling is so toxic they have been banned in the European Union.

So, when it comes to adopting the most popular forms of energy storage in the world the question the market needs to answer is, "how much do we want to damage the environment for it?"

There are alternatives, though. We look at those next.

To be continued...

Wind power has a cost... in human life

This is the next chapter of our series on energy production. We take a look at wind power, it's history, application and challenges. The first time wind power was put to use was in the sails of boats and for more than two millennia wind-powered machines have been a cheap source of power for food production and moving water. It was widely available, was not confined to the banks of fast-flowing streams, and required no fuel. The Netherlands used wind-powered pumps to push back the sea and wind pumps provided water for livestock and steam engines for over a century.

With the development of electric power, wind power found new applications in lighting buildings remotely from centrally generated power, birthing the concept of distributive power systems. Starting in the 20th century saw wind plants for farms or residences and larger utility-scale wind generators that could be connected to electricity grids for remote use of power.

By 2014, over 240,000 commercial-sized wind turbines were operating in the world, producing 4% of the world's electricity. Today we hear news about wind turbines delivering almost all the energy needs for countries like the Netherlands and Germany... for one or two days a year.

What they don’t report as often is the failure rate of those turbines and the loss of life associated with them.

Approximately 120 wind turbines catch fire every year in the UK alone, according to a joint 2014 engineering study at Imperial College London and the University of Edinburgh. Beyond fire there are multiple accidents that don’t result in system failure but do result in the death of engineers servicing the systems. In England, there were 163 wind turbine accidents that killed 14 people in 2011. Wind produced about 15 billion kWhrs that year, so using a capacity factor of 25%, that translates to about 1,000 deaths per trillion kWhrs produced (the world produces 15 trillion kWhrs per year from all sources). Even using the worst-case scenarios from Chernobyl and Fukushima brings nuclear up to 90 deaths per trillion kWhrs produced, still the lowest of any energy source.

The United States appears to be the country that is most concerned with windgen safety, as it boasts the lowest number for deaths, injuries and catastrophic mechanical failures of wind turbines in the world. Even so, there are annual protests regarding the relative safety.

So why do countries continue to invest? Possibly for the relatively low cost. Each industrial turbine costs $3 million and can generate up to $500,000 in energy revenue, so they can pay for themselves in 6-10 years and they generate power more consistently than solar. However, it has been shown the effective lifespan of a turbine is less than 15 years, which flies in the face of conventional wisdom that they will last 20 years. The annual cost of maintenance for modern turbines is 2 per cent of the cost, or $30,000 and the cost of replacement parts can be as much as $500,000 over a 10-year period, so the total cost of a typical windmill over 15 years is about $4 million. That comes out to about $2.40 per watt per year for a typical onshore windmill if absolutely nothing goes wrong.

Wind power will continue to be a source of energy for years to come, but only as long as we are willing to pay the premium financially and in human life.

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Energy Storage takes center stage at Intersolar

By Lou Covey, editorial director

The electrical energy storage industry continued to grow in credibility this week at the Intersolar 2015 conference with a co-located show in Moscone West. However, as a possible indicator that it is still a very small market, the Intersolar folks put the show name all in lowercase (ees).

The sector is set to see the installed base grow 250 percent by the end of 2015, year to year, according to GTM research , but according to other reports, that represents a total investment of $2.6 billion world wide. As a comparison, Solar energy installations represent an investment of $172 billion as of the end of last year. The industry has no where to go but up.

There is no obvious leader rising in the ranks, except by general impression. Until this year the industry has done very little to distinguish itself until Elon Musk announced in May that Tesla will be offering home and industry storage products “real soon,” which was enough for lots of wealthy people that have electric cars and solar panels to put down a big chunk of cash to get their systems… sometime next year (A fool and his money…).

The reality is that the industry has been around for some time and selling products around the world relatively profitably, without a clear leader in the market. One would think that the attention being paid to the Tesla announcement might give them cause for jealousy, but that was not the case at ees. Every single company offering a storage system (and there were many) were practically salivating over their prospects.

“We are selling proven products with higher capacities and lower cost now than what Tesla says they are going to sell,” said Stefanie Kohl, marketing director of Sonnen-Batterie. “We made a decision to enter the US market early last year, and when Tesla made their announcement it was a nice gift to our marketing budget. Now everyone knows what it is and we can provide a better product for a better price." Being first to market is not always best.

Most companies offering storage products at ees called themselves a “market leader” for one reason or another, and Sonnen-Batterie calls itself “the German market leader.” It sold close to 4,000 units of its intelligent energy storage system to home owners, farmers and businesses since entering the German market in 2011. Germany has approximately 1.5 million solar installations currently and more coming every day, so Sonnen-Batterie has a way to go before they reach market saturation, but it seems a good start.

The investment community thinks so, too. Last December, Dutch and German investors sank put up $10 million to fund expansion.

The issue to be resolved is still cost per watt. Storage systems make sense for companies and residential applications when there is money to be spent. With solar installations producing power at $0.33 per watt, they are a pretty good deal over peak power costs from utilities, which is around $0.85 per war between noon and 6 p.m. But adding a storage system can make it a wash or even end up costing more.

So like all alternative energy technology, storage technology is still the realm of the wealthy. But it is a good start in the right direction.

OpenText offers secure collaboration environment

At the 52nd Design Automation Conference in San Francisco, we talked to Rod Simon of OpenText about their collaboration platform, Exceed VA Turbo X that was introduced to the EDA industry at the conference.  With a web-based interface, Exceed VA TurboX is a hybrid solution intended to improve users productivity by enhancing collaboration from any location, securely. Exceed VA TurboX is designed for the enterprise data center so administrators to easily manage and monitor access to sensitive applications and data. Here's the interview:

Survey of IT management finds conflict in priorities

Modern communications techniques and technologies are not just changing the jobs of people in marketing and journalism, they flowing into the realm of IT.  And they are causing a significant amount of confusion in the process. The initial results of a survey being conducted at the University of North Texas is finding that many companies are changing the strategic priorities for IT managers to produce results in social media and online marketing, but are not adapting those priorities to their daily, tactical priorities.  As a result, to two sets of priorities are often at odds with each other.

We talked to the survey leader, Vess Johnson, about those initial results and found that they problem ranges outside of just IT.

Big Data: Privacy vs. Benefits

By Joe BasquesManaging Editor

A recent report by IBM said 2.5 exabytes of data were created every day through 2012. This is almost nothing compared to what we will collect in 3 to 5 years as the Internet of Things moves into reality and everything from milk jugs to the clothes we wear will contain sensors actively collecting data.

Two of the biggest challenges businesses face today are where to begin when developing their Strategic Big Data Plan, and how to lessen the “creepy factor” so customers willingly consent to contributing their data. Gartner predicts that one-third of Fortune 100 companies will experience an information management crisis by 2017, due to the fact that many U.S. companies don't have a clear data strategy.

As part of our ongoing series looking at the latest in Big Data, we sat down with Ann Buff, Business Solutions Manager and Thought Leader for SAS at Enterprise Data World in Austin Texas to discuss Big Data Strategy and how companies overcome the “creepy factor” to provide a high-value proposition to their customers.

Oculus CEO sees future at Imagination Tech briefing

Virtual reality and video were topics of discussion that got hundreds of technology CEOs, attending an executive forum at Stanford University Wednesday night, slavering over the possible growth potential. The event kicked off Imagination Technologies global summit series and featured Sree Kotay, Comcast’s Chief Software Architect, and Brendan Iribe, CEO of Oculus VR, the latest Silicon Valley uber-rich technonerd thanks to the purchase of his company by Facebook. Iribe kicked off the excitement with a 10-minute talk about the history of computing breakthroughs (see video) and why virtual reality will be a niche as big as the personal computer.  His description of the possibilities for personal communication made heads pop up around the room with a buzz of excitement at each table.  The Oculus vision will call for a massive dedication to new product development, which means investment and another boom within a few decades.

The Oculus headset, still in development, is promoted as 3D gaming platform and resembles a massively bulky set of ski goggles.  The Facebook acquisition of Oculus stirred up both anger and confusion when it was announced. Originally a crowd-source funded project, the gamers that provided the first investment felt betrayed and some demanded some sort of monetary reimbursement.  Both the acolytes of the technology and observers in the tech world did not see the connection between what Facebook does and what the platform is currently.

In a short interview with New Tech Press, Iribe explained Facebook’s reason for the purchase of a seemingly tangential technology.  He said Facebook CEO Mark Zuckerberg immediately saw the potential for creating not just a state-of-the-art gaming platform, but a next-generation communications paradigm, which is the social media giant’s next step.  Iribe described a world, several decades into the future, where people can attend events like a trade show by simply putting on a pair of sunglasses and finding themselves in a 3D world.

Kotay’s talk about the growth of Comcast into a major media company, and their plans for growing their network, opened the prospect of even more technology development and expansion.  He riffed off Iribe’s talk about the need to expand not just bandwidth but data flows as well.

Kotay would not talk on the record regarding the net neutrality debate, but in a short conversation with New Tech Press he pointed out that even with an efficient backbone and an extensive fibre network, much of the last mile is made up of multiple wireless channels, all of which have significant limits that need to be addressed with new technology.  Comcast, he said, is investigating and supporting efforts to that end as well.  That reality, along with Iribe’s vision for his technology, have got the electronics industry scrambling to find a way to cash in on the demand.

Economics and Vengeance wreak havoc with wafer market

By Lou Covey Editorial Director

As Semicon West approaches in two months, there will be a rising chorus of predictions for 450mm manufacturing and test equipment. But silicon wafer industry revenues are heading in the wrong direction, dramatic technology advances in test and reclamation, and an overall urge for revenge among their customers over gouging during the solar boom.

In February, SEMI issued its annual report on the state of silicon wafer industry that showed a small increase in the delivery of wafers to customers in spite of a well-known glut of supply, but a sharp decline in revenues that outstripped reasons based on inventory. What is more, this appears to be developing into a trend over the past three years.

When questioned about the discrepancy, SEMI replied simply, but cryptically, that it was due to "market pressures and a weak yen.” Yet placing the blame on the decline of Japanese currency seemed knee-jerkish at best. While it is true the yen has plummeted over the past 20 years, the decline has relatively flattened out over the past five years. Japan, while still the leading supplier, has seen a significant increase in competition worldwide especially in China, Malaysia and even the US, modifying the yen's influence even more. The extremely vague explanation "market pressures" is even more suspect. Let’s take a look at test, for example.

A joint study by Hewlett Packard, the University of Oregon and the University of California, San Diego showed that applying data mining to optimize IC test resulted in significantly higher yields on virgin wafers. At ITC in 2013, Craig Nishizaki, Senior Director of ATE Development at NVIDIA, extolled the benefits of test data management methodologies. Higher yield through improved test reduces demand. Although, you wouldn’t know it talking to people in the test management industry.

Jim Reedholm, an independent representative of Yieldwerx, based in Austin Texas. “I haven’t seen any data that would backup any claim that effective test management would reduce demand for wafers, but it sounds right.” Executives at other semiconductor test management technology companies were either unresponsive or, strangely enough, unlocatable.

OK, so maybe no, maybe yes. How about reclaimed wafers?

According to Semico analyst Joanne Ito, improvements in reclamation processes for silicon wafers has dramatically dropped the demand for test wafers for semiconductor manufacturing and, according to SEMI, both revenue and material shipments are up 14 percent from last year. Ito believes that will be a trend going forward, but SEMI predicts that increase will flatten out by 2015. We might be getting closer to a reason for the discrepancy between revenue and shipments.

According to Ito, during the solar boom up to 2008 there was a significant lack of raw material for wafers, which drove up prices for the high-quality virgin wafers that the semiconductor industry needs. That same solar demand ate up the capacity for 200mm and 300mm manufacturing. When the boom blew out, demand for the raw material dropped and a huge overcapacity developed in 200-300mm facilities.

OK, so oversupply tends to push down prices and revenues. Econ 101. There is only one problem. Demand has not decreased in the semi industry. It is increasing as demand for smart devices worldwide drives semi design starts. Hence, the steady increase in shipments to semi customers. Why the dramatic drop in revenue?

Ito thinks the answer might be vengeful purchasing executives in semiconductor companies.

“During the solar boom, the semi industry (which has higher requirements for the wafers than solar) saw an annual increase in prices of 10-12 percent from the wafer manufacturers because of the cost of silicon raw materials. So the semi industry said, ‘We paid you a when the cost went up, we want this cost reduction reflected in our prices.”

Now we have a better idea what “market pressures” are actually in play. The opportunity to return to the wafer manufacturers what they forced upon their customers a decade ago is too good to resist.

This quid pro quo may seem good for the industry in the short run. However, long-term it is causing significant problems. We will take a look at that next week…

Do you agree there is an element of vengeance going on, or do you see other factors at play? Leave a comment and tell us what you think.

Accellera swallows OCP-IP

By Lou Covey Editorial Director, New Tech Press

Accellera Systems Initiative, the non-profit standards organization  for electronic design automation (EDA) and intellectual property (IP) standards, has taken over the moribund Open Core Protocol International Partnership (OCP-IP).

Accellera has been taking over multiple standards organization in the industry for several years and this is only the latest.  The acquisition includes the current OCP 3.0 standard and supporting infrastructure for reuse of IP blocks used in semiconductor design. OCP-IP and Accellera have been working closely together for many years, but OCP-IP lost corporate and member financial support steadily over the past five years and membership virtually flatlined. Combining the organizations may be the best way to continue  to address interoperability of IP design reuse and jumpstart adoption.

"Our acquisition of OCP assets benefits the worldwide electronic design community by leveraging our technical strengths in developing and delivering standards," said Shishpal Rawat, Accellera Chair. "With its broad and diverse member base, OCP-IP will complement Accellera's current portfolio and uniquely position us to further develop standards for the system-level design needs of the electronics industry."

OCP-IP was originally started by Sonics, Inc. in December 2001 as a means to proliferate it's network-on-chip approach.  Sonics CTO  Drew Wingard has been a primary driver of the organization.  It has long been perceived as the primary marketing tool of the company and it will be interesting to see how the company (which has been on and off the IPO trail several times since its founding) fairs without being the "big dog" in the discussion.

A comprehensive list of FAQs about the asset acquisition is available.

Shoppinpal joins host of mobile commerce apps

At the inaugural Mobile Commerce World Conference in San Francisco, there were a plethora of m-commerce apps prowling the halls. One of them was Shoppinpal, which seemed to offer the most comprehensive approach to the shopping experience. We will be doing a deeper report on what we found at the conference next week but here is the interview we did with Shoppinpal's CEO Sriram Subramanian.  

Changing the environment instead of optimizing chip design

By Lou Covey, Editorial Director A few weeks ago we reported on a new data center environment that virtually eliminated heat in a data-processing environment.  We decided to talk to a few companies in the chip world about the potential this development has for chip design and the most comprehensive prediction came from Ian Ferguson, vice president of segment marketing for ARM Holdings.  When considering the potential, Ferguson saw almost unlimited possibilities for advancing data processing.  Here's the interview: