Today Lead Acid is the lowest upfront cost offering for Energy Storage and is set to grow significantly over the next ten years in a variety of applications most importantly, automotive & Renewable Energy or Grid tied Storage. However, the signs are clear that Lead Acid is set for significant issues in the future as supply becomes constrained, environmental pressures build and other systems besiege the incumbents. Consider,
Lead was $0.08/Kg in 2001, spiked at $0.7/Kg in 2008 and today trades at 4.5X 2001.
During the commodity crisis of 2008 Lead, and specifically spent lead acid batteries, (cores) became a global commodity. Before 2008 they were a casually collected regional waste product.
In addition, the Supply Chain power for cores switched from recyclers to the battery manufacturers who were able to secure the best spent battery collection schemes and contracts.
China is mining & refining 70% of the primary lead. Unlike many other metals there are no new mines that have been opened for many years, at least outside of China.
Environmental pressure is also taking its toll and existing manufacturing infrastructure will require regular upgrades.
The following predictions can be made.
Should there be upward pressure on commodities the price of Lead will increase more than other battery materials.
As the life of other battery systems continues to improve towards 20 years for many new applications total cost of ownership will trump lowest acquisition cost.
It is doubtful that an existing lead acid battery can compete in a 10-year life market let alone 20 years.
Based on entitlement BOM costs the gap between the acquisition costs for Lead Acid and other systems will continue to narrow.
Many other systems have their own supply challenges. This by default will help Lead Acid grow over the next ten years despite the presence of many technically better alternatives.
Invented in 1859 by Gaston Planté there could be a thought that this is a very mature technology. In many respects, it is, but developments in other areas of science and industry have been promising for the last 15-20 years to transform Lead Acid into a next generation Energy Storage System. For example advanced polymers, precise manufacturing, boutique carbons & smart electronics have all been suggested as Lead Acid Battery enhancers, but none to date, have revolutionized this battery as some hoped. There is no doubt that such opportunities could help this technology significantly but to date there has been no execution that has impressed the market with any meaningful impact or sustainability. Eliminating sulfation, efficiently managing the Oxygen cycle and maximizing lead utilization remain challenges that if solved could propel, supply issues notwithstanding, Lead Acid to new heights of performance and therefore utility.
The overall picture must be considered somewhat gloomy. Per the different forces that any business must manage the Lead Acid battery industry has more challenges than most industries. Today overall market growth and that good friend, “Volume”, are on its side, but should there be economic bumps in the road or real substantial breakthroughs in other battery chemistries that favor their supply chains and cost structure, Lead Acid will suffer for sure.
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