By Ajinkya Waradpande
Have you ever considered the intricate infrastructure behind the simple act of turning your lights or fans on and off? What seems like a simple act, in reality, relies heavily on a complex grid infrastructure that is historically centered around fossil fuels, with coal, oil, and gas dominating the energy landscape. This dependence on fossil fuels has had alarming consequences, contributing to global warming and the emission of greenhouse gases. In 2019 alone, CO2 emissions from coal power plants reached a staggering 10.5 Gigatons worldwide, with India responsible for emitting 2.5 Gigatons of CO2 due to its reliance on coal for electricity generation. While renewable sources like solar and wind energy offer emission-free solutions, their intermittent nature poses challenges to achieving a consistent and reliable energy supply, especially for a complete transition from fossil fuels. Consequently, integrating renewables with energy storage technologies, such as battery storage, becomes imperative for a 100% clean energy transition.
The transition to a cleaner energy future is intrinsically tied to the growing significance of advanced energy storage technologies, particularly batteries. But what are batteries, exactly? At their core, they are energy storage devices that convert chemical energy into electrical energy, enabling various devices to perform their intended functions. This fundamental process involves the orchestrated movement of electrons and atoms between positive (cathode) and negative (anode) electrodes within an electrolyte, shaping the entirety of their performance and characteristics.
Today, batteries are poised to become the linchpin of future energy systems, playing a pivotal role across the entire energy value chain. Their applications span from consumer electronics to powering transportation systems and even facilitating grid operations. As global conversations increasingly revolve around the imperative shift toward cleaner energy sources, batteries have emerged as the central focus of attention. With that shift, technology too has advanced, and over the years, multiple battery chemistries have emerged, including Lead Acid, Nickel-Cadmium, Sodium-Sulphur, and the reigning champion, Lithium-Ion, which currently dominates the battery landscape.
The restricted availability of lithium reserves, primarily concentrated in only a few countries worldwide, combined with the intricacies involved in its processing, has resulted in supply chain limitations and price fluctuations. This vulnerability was especially evident during the recent COVID-19 pandemic. Furthermore, lithium batteries pose certain safety concerns, particularly in challenging environments like that of India, leading to performance degradation. These challenges underscore the potential for enhanced technologies through material innovations, promising improved performance, reduced costs, and increased efficiency.
Over the last few years, significant innovations have emerged in the battery technology space, mainly in alternate battery chemistries to Li-ion and in electrode and electrolyte innovations within Li-ion. In alternate battery chemistry, prominent research and development are taking place worldwide in sodium-ion batteries since sodium is the closest metal with a similar performance learning curve to lithium. Additionally, as sodium is abundantly available as raw material globally, this new chemistry will enable local supply chains, ultimately reducing costs. Some projected targets are approximately 50$/kWh. Around the world, more than ten start-ups are innovating in sodium-ion battery chemistry, with a few already reaching closer to commercialisation. The total funding received by these start-ups is approximately $290 million. Similarly, significant research and development are happening in alternate battery chemistries such as Zinc-based, Iron-based, or liquid metal-based technologies, each catering to different applications. Particularly in zinc-based innovations, globally, at least eight start-ups that have received approximately $500 million in funding are set to bring batteries with promising optimal performance and improved safety to the market.
Additionally, significant efforts are underway within lithium-ion battery technology to enhance safety and performance. These endeavours include a shift from liquid to solid-state electrolytes, innovations to prevent dendrite formations in the anodes, and incorporating silicon into existing graphite anodes to boost energy density. Notably, globally, at least 15 start-ups are actively bringing solid-state batteries to the market. These initiatives have collectively secured a substantial amount of around USD 2.5 billion in funding.
Furthermore, the integration of silicon-based anodes into Lithium-ion batteries stands as a promising development. This innovation could increase the energy density of Li-Ion batteries by 20-40%. Remarkably, at a global level, more than 20 start-ups are engaged in advancing these silicon-based batteries. The total funding received by these forward-looking ventures amounts to approximately $3.5 billion.
The demand for batteries worldwide is poised to reach a whopping 2,000+ GWh by 2030. It is nearly impossible for the current dominant lithium-ion battery to cater to this projected demand sustainably. Therefore, there is a need for at least 5-10 new battery technologies to cater to energy storage needs sustainably in the next few years. India alone will have a demand of nearly 300 GWh of batteries by 2030, to cater to which we are seeing a nascent upward trend in innovations of storage technologies. Despite the significant funding numbers mentioned above, the scenario compared globally vs India is quite different.
Although a few start-ups are emerging in the Indian ecosystem with innovations in alternate battery chemistries, with a requirement of a similar funding curve, there is a shortage of funding available to them through mainstream capital. For these start-ups, this forms the valley of death. Battery science innovation necessitates deep research, constant tech validation, and multiple iterations on the product before plugging the innovation from lab to market to commercialisation. This long gestation period requires a considerable infusion of patient capital at an early stage, making investment propositions in the battery technology space risky. Despite this nascency in the industry and the accompanying challenges, a few strategic investors with an impact-first and deep technology approach toward solving problems have supported start-ups with emerging battery technologies.
Another challenge beyond funding is the question of waste disposal. Another valid and pressing concern is what happens to all the resultant waste accumulated with increasing energy needs over the next few decades? In India, for traditional waste streams such as organics and plastics, the ecosystem for waste management has advanced over the years; however, for streams such as battery waste, the ecosystem has just begun to develop, with parallel strengthening of regulations. For the energy storage industry to be truly sustainable, end-of-life battery waste management must also be climate-friendly. Entrepreneurs across the globe are seeing this as a potentially big market and are moving towards repurposing and recycling battery waste.
By 2030, there will be significant waste generated from batteries, and battery waste management and recycling presents opportunities for entrepreneurs to create a more sustainable energy ecosystem. The challenge is not only in powering the future but in doing so while preserving our planet. As we navigate this evolving landscape, the journey towards a cleaner, sustainable energy future is both exciting and essential.
The author is Portfolio Manager, Social Alpha.
Disclaimer: The views and opinions expressed in this article are solely those of the original author. These views and opinions do not represent those of The Indian Express Group or its employees.
