alab-12 executive summary - navigant research · constitute a multi-billion dollar global market...

Brittany E. Gibson

Research Analyst

Kerry-Ann Adamson, Ph.D.

Research Director

Executive Summary: Advanced Lead-Acid Batteries Enhanced Flooded, Valve-Regulated, Lead-Carbon, and UltraBatteries for Motive, Transportation, and Stationary Applications: Global Market Analysis and Forecasts

NOTE: This document is a free excerpt of a larger report. If you are interested in purchasing the full report, please contact Pike Research at [email protected].

Published 4Q 2012

RESEARCH REPORT

Advanced Lead-Acid Batteries

©2012 Navigant Consult ing, Inc. Notice: No material in this publication may be reproduced, stored in a retrieval system, or transmitted by any means, in whole or in part, without the express writ ten permission of Navigant Consult ing, Inc.

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Section 1 EXECUTIVE SUMMARY

1.1 Advanced Lead-Acid Batteries: A History of Practical Innovation

Of all the battery technologies that Pike Research analyzes, the lead-acid battery is the most mature and entrenched technology available in the market. Lead-based batteries already constitute a multi-billion dollar global market that provides products to a variety of motive, transportation, and stationary applications. However, the battery products that have historically captured the highest sales across the globe are technically insufficient at providing dynamic energy storage and increasingly fall short of the market’s energy storage needs.

Despite these technical limitations, the lead battery industry remains a multi-billion dollar business for two reasons: first, the industry is adept at responding to the evolving needs of its clients, and second, lead-based batteries remain the cheapest form of electrochemical energy storage available in the market. Since the 1970s, the lead-acid battery industry has been producing advanced lead-acid batteries which have introduced innovations to the battery design, the anode, the cathode, or the electrolyte to enhance the core technical features of lead-based batteries. These innovations are built upon broad lead-acid battery (LAB) industry knowledge and the use of low-cost raw materials, existing manufacturing practices, and legacy relationships with some of the world’s largest buyers of energy storage.

In this report, Pike Research presents an overview of these market dynamics in the context of the target applications for advanced lead-acid batteries. The enhanced functionality of advanced lead-acid batteries, in charge acceptance and cycle life, among other features, is presented by segmenting lead-acid batteries into advanced lead-acid batteries and fast-charging lead-acid batteries; the latter is a new segmentation introduced to capture the most cutting-edge innovations in the lead battery industry.

These innovations will drive legacy and existing lead-acid battery vendors to capture significant market share, despite persistent competition from newer advanced batteries such as lithium ion (Li-ion). Pike Research forecasts that the advanced lead-acid battery market alone will be worth roughly $18 billion in 2020 across all applications; this represents the future of the lead battery industry.

1.1.1 Report Focus

This report provides an analysis of the global market for advanced lead-acid batteries and fast-charging lead-acid batteries. Enhanced flooded batteries (EFBs) and absorbed glass mat (AGM) batteries represent the bulk of existing advanced lead-acid market share, while fast charging lead-acid batteries represent the future of the market. Fast-charging LABs include batteries with carbon additives and split electrode batteries such as the UltraBattery – a hybrid lead-acid battery and ultracapacitor discussed in greater detail in the “Technology Issues” section of this report.



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Both categories of batteries – advanced and fast charging – are analyzed in the context of their leading market applications from a technical and business perspective: motive, transportation, and stationary energy storage. The application segments covered in this report are defined as follows:

» Motive: hybrid locomotives, electric-powered forklifts

» Transportation: stop-start vehicles (SSVs)

» Stationary: utility-scale energy storage, community & residential energy storage (CRES), uninterruptible power supply (UPS)

The market dynamics of each application are presented independently to highlight the versatility of advanced lead-acid batteries and to show the broad reach of the battery vendors to meet different client demands. These are but a few of the applications that ultimately deploy lead-based batteries but represent a sizeable portion of the global market for advanced lead-acid batteries.

1.2 The Future of Battery-Based Energy Storage

Advanced lead-acid batteries represent a technology that bridges the gap between legacy forms of battery storage and the future market. The industry remains enthralled with the technical features of lithium ion batteries, and many stakeholders await the cost decreases that will enable mass market adoption; these are not likely to arrive until the latter part of this decade. As a result, advanced lead-acid batteries are well-positioned to capture early market share in motive, transportation, and stationary applications; transportation will be the most important market for advanced lead-acid batteries in the next several years.

This outlook – of near-term growth and sustained sales – represents good things for advanced lead-acid battery vendors, and these companies are well-positioned to provide these technologies. However, as the target applications for advanced lead-acid batteries evolve, as they inevitably are and will continue to, the competition from other advanced batteries will only increase. The technical features of advanced lead-acid batteries will need to be continuously revised and may ultimately prove insufficient for the most advanced energy storage applications if the technical features cannot be improved. These dynamics depend heavily on the future costs of advanced batteries of all chemistries.

Despite the future challenges that loom on the horizon, the advanced lead-acid industry is filling important demand for energy storage devices now. Pike Research forecasts the market to expand at a compound annual growth rate (CAGR) of 19.8% over the next 8 years. Of the $18 billion market in 2020, 58% of those sales will be from the transportation sector, historically one of the most of important industries for lead-acid batteries.

New applications will make up the rest of the market volume, driven by the expanding market potential of the global grid storage market. By 2020, Pike Research forecasts that advanced lead-acid batteries will capture roughly 25% of the global battery-based grid storage market, a



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small subset of the broader energy storage market. The market value for advanced lead-acid batteries in grid storage will be approximately $6.8 billion in 2020.

Chart 1.1 Advanced Lead-Acid Battery Market Value by Application, World Markets: 2012–2020

(Source: Pike Research)

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

2012 2013 2014 2015 2016 2017 2018 2019 2020

($ M

illio

ns)

Motive

Stationary

Transportation



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Section 8 TABLE OF CONTENTS

Section 1 ........................................................................................................................................................... 1

Executive Summary .......................................................................................................................................... 1

1.1 Advanced Lead-Acid Batteries: A History of Practical Innovation ........................................................... 1

1.1.1 Report Focus ................................................................................................................................ 1

1.2 The Future of Battery-Based Energy Storage ....................................................................................... 2

Section 2 ........................................................................................................................................................... 4

Market Issues .................................................................................................................................................... 4

2.1 Introduction ........................................................................................................................................ 4

2.2 Application Overview .......................................................................................................................... 4

2.2.1 Transportation and Motive Applications.......................................................................................... 4

2.2.1.1 Stop-Start Vehicles and Microhybrids ........................................................................................ 5

2.2.1.2 Hybrid Locomotives .................................................................................................................. 6

2.2.1.3 Materials Handling ................................................................................................................... 7

2.2.2 Stationary Storage ........................................................................................................................ 8

2.2.2.1 Paths to Market ........................................................................................................................ 9

2.2.2.2 Community and Residential Energy Storage .............................................................................. 9

2.2.2.3 Utility-Scale Applications ......................................................................................................... 10

2.2.2.3.1. Renewables Integration .................................................................................................. 11

2.2.2.3.2. Grid Storage .................................................................................................................. 12

2.2.2.3.3. Case Study: UltraBattery Installation ............................................................................... 13

2.2.2.4 Telecommunications Base Stations and Remote Community Power ........................................... 14

2.2.2.5 Uninterruptible Power Supply ................................................................................................... 15

2.2.3 Summary of Applications .............................................................................................................. 16



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2.3 Regional Market Issues ...................................................................................................................... 17

2.3.1 Overview ..................................................................................................................................... 17

2.3.2 North America ............................................................................................................................. 18

2.3.2.1 Transportation......................................................................................................................... 18

2.3.2.2 Grid Storage ........................................................................................................................... 18

2.3.2.3 Business Environment ............................................................................................................. 19

2.3.3 Western Europe ........................................................................................................................... 19

2.3.3.1 Transportation......................................................................................................................... 19

2.3.3.2 Grid Storage ........................................................................................................................... 20

2.3.3.2.1. Germany ........................................................................................................................ 21

2.3.4 Asia Pacific ................................................................................................................................. 21

2.3.4.1 Transportation......................................................................................................................... 21

2.3.4.2 Grid Storage ........................................................................................................................... 21

2.3.5 Latin America .............................................................................................................................. 22

2.3.5.1 Grid Storage ........................................................................................................................... 22

Section 3 .......................................................................................................................................................... 23

Technology Issues ........................................................................................................................................... 23

3.1 Introduction ....................................................................................................................................... 23

3.2 Definition of Advanced Lead-Acid Batteries ......................................................................................... 23

3.2.1 Enhanced Flooded Batteries ........................................................................................................ 25

3.2.2 Valve-Regulated Lead-Acid Batteries ............................................................................................ 25

3.2.2.1 Absorbed Glass Mat Batteries .................................................................................................. 25

3.2.2.2 Ceramic Battery ...................................................................................................................... 26

3.2.3 Sulfation ..................................................................................................................................... 26

3.3 Advanced Lead-Acid Batteries with Carbon Additives .......................................................................... 27



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3.3.1 Lead-Carbon Batteries ................................................................................................................. 27

3.3.1.1 UltraBattery ............................................................................................................................ 29

3.4 Advanced Lead-Acid Batteries in Context ........................................................................................... 29

3.5 Costs for Advanced Lead-Acid Batteries ............................................................................................. 31

Section 4 .......................................................................................................................................................... 32

Key Industry Players ........................................................................................................................................ 32

4.1 Overview ........................................................................................................................................... 32

4.2 Lead-Acid Battery Vendors ................................................................................................................. 32

4.2.1 Atraverda .................................................................................................................................... 32

4.2.2 Axion Power ................................................................................................................................ 32

4.2.3 C&D Technologies ....................................................................................................................... 33

4.2.4 East Penn Manufacturing ............................................................................................................. 33

4.2.5 Enersys ....................................................................................................................................... 33

4.2.6 Exide Technologies ..................................................................................................................... 34

4.2.7 FIAMM ........................................................................................................................................ 34

4.2.8 Furukawa Battery ........................................................................................................................ 35

4.2.9 General Electric ........................................................................................................................... 35

4.2.10 GS Battery .................................................................................................................................. 35

4.2.11 GS Yuasa .................................................................................................................................... 36

4.2.12 Johnson Controls Inc. .................................................................................................................. 36

4.2.13 Panasonic ................................................................................................................................... 37

4.2.14 Primearth EV Energy ................................................................................................................... 37

4.2.15 Trojan Battery ............................................................................................................................. 37

4.2.16 Xtreme Power Inc. ....................................................................................................................... 38

4.3 Ultracapacitor Vendors ...................................................................................................................... 38



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4.3.1 Ioxus ........................................................................................................................................... 38

4.3.2 Maxwell Technologies .................................................................................................................. 39

4.4 Systems Integrators and Project Developers ....................................................................................... 39

4.4.1 AES Energy Storage, LLC ............................................................................................................ 39

4.4.2 Ecoult ......................................................................................................................................... 40

4.4.3 S&C Electric Company ................................................................................................................. 40

4.5 Research and Industry Organizations ................................................................................................. 41

4.5.1 Advanced Lead-Acid Battery Consortium ...................................................................................... 41

4.5.2 Commonwealth Scientific and Industrial Research Organisation ..................................................... 41

Section 5 .......................................................................................................................................................... 43

Market Forecasts.............................................................................................................................................. 43

5.1 Overview of Market Forecasts ............................................................................................................ 43

5.1.1 Market Forecast Methodology ...................................................................................................... 43

5.1.2 Market Forecast Data .................................................................................................................. 44

5.1.3 Forecasts by Application .............................................................................................................. 44

5.2 Leading Market Application: Transportation ........................................................................................ 46

5.2.1 Stop-Start Vehicles Drive Growth in Advanced Lead-Acid Batteries ................................................ 46

5.2.1.1 Advanced Lead-Acid Batteries in Context ................................................................................. 47

5.3 Stationary Applications: UPS Is Leading Opportunity ........................................................................... 48

5.3.1 Grid Storage: Many Competitors ................................................................................................... 49

5.4 Motive Applications ............................................................................................................................ 50

Section 6 .......................................................................................................................................................... 52

Company Directory .......................................................................................................................................... 52

Section 7 .......................................................................................................................................................... 55

Acronym and Abbreviation List ....................................................................................................................... 55



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Section 8 .......................................................................................................................................................... 58

Table of Contents ............................................................................................................................................. 58

Section 9 .......................................................................................................................................................... 63

Table of Charts and Figures ............................................................................................................................. 63

Section 10 ........................................................................................................................................................ 64

Scope of Study ................................................................................................................................................. 64

Sources and Methodology ............................................................................................................................... 65

Notes ................................................................................................................................................................ 65



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Section 9 TABLE OF CHARTS AND FIGURES

Chart 1.1 Advanced Lead-Acid Battery Market Value by Application, World Markets: 2012–2020 ..................... 3

Chart 2.1 Capacity of Grid Storage Technologies, Excluding Pumped Hydro, World Markets: 2012 ................. 13

Chart 5.1 Advanced Lead-Acid Battery Market Value by Region, All Applications, World Markets:

2012–2020 .................................................................................................................................. 45

Chart 5.2 Technology Penetration in SSVs by Battery Chemistry, World Markets: 2012–2020 ........................ 46

Chart 5.3 Market Value of Advanced Lead-Acid Batteries for Stationary Applications by Region,

World Markets: 2012–2020 ........................................................................................................... 48

Chart 5.4 New Installations of Off-Grid Base Stations and Green Base Stations, World Markets:

2013–2020 .................................................................................................................................. 49

Chart 5.5 Market Value of Advanced Lead-Acid Batteries in Stationary Applications by Stationary

End Use, World Markets: 2012–2020 ............................................................................................ 50

Chart 5.6 Market Value of Advanced Lead-Acid Batteries in Motive Applications by Region,

World Markets: 2012–2020 ........................................................................................................... 51

Figure 3.1 Advanced Lead-Acid Battery Cycle Life Comparison to Other Advanced Batteries ........................... 28

Table 2.1 Supplier Stop-Start Systems Summary ........................................................................................... 6

Table 2.2 Summary of Market Conditions for Advanced Batteries, Utility-Scale Applications ........................... 11

Table 2.3 Summary of Applications for Advanced Lead-Acid Batteries by Category ........................................ 16

Table 3.1 Lead-Acid Battery Segmentation by Technical Design ................................................................... 24

Table 3.2 Summary of the Technical Characteristics of Leading Advanced Lead-Acid Battery Technologies .... 30

Table 5.1 Estimated Market Penetration of Advanced Batteries in SSVs by Chemistry: 2012 & 2020 ............... 47



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Section 10 SCOPE OF STUDY

Pike Research has prepared this research report to provide stakeholders in the advanced lead-acid battery industry – including manufacturers and service providers – with an overview of the global forces shaping the market opportunity for motive, transportation, and stationary energy storage applications. The major objective of this study is to assess the innovations in advanced lead-acid battery technologies that improve upon conventional, wet-cell lead-acid batteries, traditionally limited by low cycle life and other limiting characteristics. The report aggregates the technical specifications for the leading advanced lead-acid battery technologies and fast charging lead-acid batteries; the latter segmentation was introduced to address split electrode batteries such as lead-carbon or UltraBatteries independent of advanced lead-acid batteries. The market drivers for these technologies overlap in the different applications discussed herein. The business models for advanced batteries are still emerging as manufacturers, service providers, and utilities attempt to commoditize the benefits of these expensive assets, meanwhile transportation applications are already pursuing advanced battery technologies.

The report’s purpose is to provide a foundational understanding of the innovations in lead-acid battery technology and understand how these technologies represent incremental improvements. These are not the only energy devices on the market, and despite the fact that the market opportunities are potentially numerous no one technology has emerged as a frontrunner to compete against other energy storage technologies, advanced batteries or otherwise. Technology commercialization is being tracked through the Pike Research Energy Storage Tracker for grid storage applications, which keeps the most up-to-date account of global energy storage installations. For the transportation market, Pike Research closely watches the partnerships between auto OEMs and battery players, and tracks shipments by vehicle, evolving industry partnerships, and ongoing technical innovation.

This report is a first publication for Pike Research, so the scope remains narrow to provide insight into a specific technological approach to utility-scale energy storage. In future editions of this report, Pike Research intends to expand the analysis of financing mechanisms and business model discussion.



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SOURCES AND METHODOLOGY

Pike Research’s industry analysts utilize a variety of research sources in preparing Research Reports. The key component of Pike Research’s analysis is primary research gained from phone and in-person interviews with industry leaders including executives, engineers, and marketing professionals. Analysts are diligent in ensuring that they speak with representatives from every part of the value chain, including but not limited to technology companies, utilities and other service providers, industry associations, government agencies, and the investment community.

Additional analysis includes secondary research conducted by Pike Research’s analysts and its staff of research assistants. Where applicable, all secondary research sources are appropriately cited within this report.

These primary and secondary research sources, combined with the analyst’s industry expertise, are synthesized into the qualitative and quantitative analysis presented in Pike Research’s reports. Great care is taken in making sure that all analysis is well-supported by facts, but where the facts are unknown and assumptions must be made, analysts document their assumptions and are prepared to explain their methodology, both within the body of a report and in direct conversations with clients.

Pike Research, a part of the Navigant Consulting, Inc. Energy Practice, is a market research group whose goal is to present an objective, unbiased view of market opportunities within its coverage areas. Pike Research is not beholden to any special interests and is thus able to offer clear, actionable advice to help clients succeed in the industry, unfettered by technology hype, political agendas, or emotional factors that are inherent in cleantech markets.

NOTES

CAGR refers to compound average annual growth rate, using the formula:

CAGR = (End Year Value ÷ Start Year Value)(1/steps) – 1.

CAGRs presented in the tables are for the entire timeframe in the title. Where data for fewer years are given, the CAGR is for the range presented. Where relevant, CAGRs for shorter timeframes may be given as well.

Figures are based on the best estimates available at the time of calculation. Annual revenues, shipments, and sales are based on end-of-year figures unless otherwise noted. All values are expressed in year 2012 U.S. dollars unless otherwise noted. Percentages may not add up to 100 due to rounding.



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Published 4Q 2012

©2012 Navigant Consulting, Inc. 1320 Pearl Street, Suite 300 Boulder, CO 80302 USA Tel: +1.303.997.7609 http://www.navigant.com/pikeresearch

This publication is provided by Pike Research, a part of the Navigant Consulting, Inc. (“Navigant”) Energy Practice and has been provided for informational purposes only. This publication may be used only as expressly permitted by license from Navigant and may not otherwise be reproduced, recorded, photocopied, distributed, displayed, modified, extracted, accessed, or used without the express written permission of Navigant. Navigant makes no claim to any government data and other data obtained from public sources found in this publication (whether or not the owners of such data are noted in this publication), and makes no express or implied warranty, guaranty, or representation concerning the information contained in this publication, its merchantability, or its fitness for a particular purpose of function. Any reference to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise, does not necessarily constitute or imply an endorsement, recommendation, or favoring by Navigant. Navigant does not assume, and hereby disclaims, any liability that may result from any reliance on or use of any information contained in this publication, or for any loss or damage caused by errors or omissions in this publication. This publication is intended for the sole and exclusive use of the original purchaser. If you do not have a license from Navigant covering this publication, please refrain from accessing or using this publication. Please contact Navigant to obtain a license to this publication.

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