Credit: Shutterstock photoOn April 6, researchers at Stanford announced what many saw as a breakthrough in battery technology. The aluminum-ion (Al-ion) battery appears to offer several advantages over lithium-ion (Li-ion) batteries, the current standard for laptops, smartphones and other rechargeable devices:
- It’s safe. Li-ion batteries have a tendency to burst into flames, which has led to a number of recalls since their introduction in early 90s. The video Stanford released shows researchers drilling a hole through their prototype without eliciting so much as a snarl.
- It’s flexible. As Scientific American explains, the battery’s aluminum metal anode (negative side) is divided from its graphite foam cathode (positive side) by a liquid electrolyte separator, which, in consumer terms, translates into a pouch as bendable—even foldable—as an underfilled ketchup packet.
- It charges incredibly fast. Researchers managed to charge a smartphone in a minute using their prototype. Li-ion batteries, as we’re all painfully aware, require hours.
- It is more durable, completing over 7500 charge cycles without losing capacity, compared to the typical Li-ion battery’s 1000 cycles. Previous cracks at developing an Al-ion battery usually only managed about 100 cycles.
- Aluminum is cheaper than lithium.
Stop there, you might be saying, eureka, they’ve done it. Unfortunately, it may be too early to declare a breakthrough yet.
Disadvantages
Elon Musk has this to say about the eager headlines the new battery has generated:
As CEO of Tesla Motors (TSLA) and chairman of SolarCity (SCTY), Musk ought to know his batteries, and indeed he’s identified a major drawback of the Al-ion prototype.
Scientific American reports that the Al-ion battery’s energy density is a quarter of the typical Li-ion battery’s. Additionally, as Stanford chemistry professor Hongjie Dai admits, his team’s prototype “produces about half the voltage of a typical lithium battery.” He remains optimistic, however: “improving the cathode material could eventually increase the voltage and energy density.”
Until those improvements materialize, the battery will probably not be making an appearance in electric cars. The Tesla Model S Li-ion battery pack already pushes practical and economic limits, weighing an estimated 1200 lbs and costing around $45,000. An attempt to wire up twice the number of cells in order to achieve similar voltage with Al-ion batteries would probably be impractical.
The same issue would likely make the Al-ion battery a no-go for smartphones and other portable devices, despite the fact that that application has generated much of the media buzz so far.
Renewable energy storage
There is one crucial application for which the Al-ion battery’s advantages are well suited and its drawbacks are relatively unimportant. In recent years the fundamental challenge preventing the large-scale adoption of renewable energy is the intermittent nature of its sources. You can fire up a coal plant on command, but not the sun or wind. Therefore periods of peak energy consumption call for the use of fossil fuels—or a reliable, economical energy storage system, if someone would just devleop one.
Given its inexpensive materials and its ability to rapidly, repeatedly cycle through charges, the Al-ion battery could prove to be an ideal solution to the grid’s current inadequacies. Professor Dai said as much when talking up the technology’s potential, and the Wall Street Journal’s Jason Bellini didn’t raise any objections.
Of course, the road from media-darling prototype to marketable product is littered with failed battery designs. And of course, the Al-ion battery is not the only contender for the mythical grid storage breakthrough.
A team at the University of Illinois Urbana-Champaign has announced a Li-ion microbattery that charges at an incredible rate. Elon Musk has said Tesla would reveal home and grid Li-ion battery solutions at the end of April. The company’s Gigafactory, currently under construction, is slated to produce 35 GWh-worth of Li-ion battery capacity in 2020—more than the entire world did in 2013. (Perhaps Musk’s criticism of the Stanford team’s work was not entirely dispassionate: Edison killed an elephant over less.)
Assuming the Al-ion battery does make it to market, however, its widespread adoption could remove the biggest hurdle in the way of a renewable energy revolution. Given that the benefits would likely be sector-wide, the simplest way to invest in such an outcome would probably be through an ETF.
The star performer in recent months has been the Guggenheim Solar ETF (TAN), which is up 42% year-to-date. As the name implies, however, that vehicle doesn’t provide exposure to other renewable energy sources.
The PowerShares WilderHill Clean Energy ETF (PBW) offers some exposure to wind power, primarily through China Ming Yang Wind Power Group (MY), and hydrogen fuel cells, primarily through Ballard Power Systems (BLDP). Another option, which tracks the NASDAQ Clean Edge U.S. Liquid Series Index and gives Tesla Motors a portfolio weight over 7.5%, is the First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN).
For those who share Professor Dai’s optimism regarding Al-ion batteries’ wide applicability, it might be worth considering a bet against lithium.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
