Summary: For the October 30 th issue of NAATBatt s Advanced Battery Weekly, we highlight recent sector activities. The NAATBatt, U.S. and Asia Indices all increased 3.4% w/w, 2.0% w/w and 2.0% w/w, respectively. The S&P 500 was up 1.8% w/w, while the Russell 2000 was relatively flat w/w. Executive Director James Greenberger writes that the new Battery Energy Storage Caucus launched this week in the U.S. Congress challenges the energy storage industry to get its act together and decide what it wants to do with respect to a government relations initiative. Read "New Battery Energy Storage Caucus Challenges the Industry to Decide What it Wants to Do" in the Executive Director's Notes section of the newsletter below. Key Highlights: LG Chem is in the final stage of negotiations to supply lithium ion (li-ion) batteries to Tesla Motors. The company recently completed a facility in Nanjing, China the 3 rd plant after sites in South Korea and the U.S. Nissan and Ecotricity have teamed up in an effort to get the U.K. government to address the lack of a charging infrastructure. There are approximately 9,000 charging points across the country. Talga Resources subsidiary, Talga Advanced Materials GmbH, has been accepted as an Associate Member of the European Union founded Graphene Flagship program. The company was one of three new associate members along with Robert Bosch GmbH and LEGO Group. The Renault-Nissan Alliance will provide 200 electric vehicles (EVs) to the United Nation's COP21 climate conference in Paris. The COP21 car fleet will feature the Renault ZOE, Nissan LEAF and Nissan e-nv200. UQM Technologies announced the signing of a 10-year supply agreement with ITL Efficiency in China, a subsidiary of Eastlake New Energy. The company has received the first purchase order under the agreement for the initial 3,000 units, which are expected to ship in 2017. Hong Kong will rollout its first locally designed electric bus (ebus) next month. The vehicle was designed by the Hong Kong Productivity Council and Hong Kong Automotive Parts and Accessory Systems Research and Development Centre and took two years to complete. Tesla Motors is in discussions with state and national government officials about producing its EVs in China. The company views local production could shave sales prices of its EVs by a third because of reduced shipping costs and avoidance of import duties. The Electric Vehicle Charging Association (EVCA) has been created to advance innovation in the charging industry. The coalition in California consists of founding members ABM, ChargePoint, Clean Fuel Connection, Envision Solar, EV Connect, NRG EVgo, Plugless Power, SeaWave Battery and Volta. Sun Tran is working with BYD to evaluate adding electric buses (ebuses) to its fleet. The ebus can drive about 150 to 200 miles on a charge. The first fully electric articulated bus, the Citea SLFA-180 Electric, was delivered to Kölner Verkehrs-Betriebe AG (KVB). The ebus has a pantograph for a brief charge at the end of each run.
A Few More Details: LG Chem is in the final stage of negotiations to supply li-ion batteries to Tesla Motors. The company recently completed a facility in Nanjing, China the 3 rd plant after sites in South Korea and the U.S. The combined annual capacity has increased 40% to the equivalent of over 180,000 electric vehicles (EVs). Source: Nikkei Asian Review Nissan and Ecotricity have teamed up in an effort to get the UK government to address the lack of a charging infrastructure. The partners want the government to create a series of official signs that everyone will recognise that there is an electricity charging point nearby. There are approximately 9,000 charging points across the country. Source: The Independent Talga Resources subsidiary, Talga Advanced Materials GmbH, has been accepted as an Associate Member of the European Union founded Graphene Flagship program. Talga was one of three new associate members along with Robert Bosch GmbH and LEGO Group. The Graphene Flagship is a Future and Emerging Technology Flagship coordinated by the European Commission, the European Union s executive body. With a budget of 1 billion ($1.1 billion), the Graphene Flagship is the largest graphene research platform in the world. Source: Talga Resources The Renault-Nissan Alliance will provide 200 EVs to the United Nation's COP21 climate conference in Paris. The COP21 car fleet will feature the Renault ZOE, Nissan LEAF and Nissan e-nv200. The vehicles will be available to shuttle delegates 24 hours, seven days a week to and from the Le Bourget conference venue, as a complement to public transportation. Source: Renault Nissan UQM Technologies announced the signing of a 10-year supply agreement with ITL Efficiency in China, a subsidiary of Eastlake New Energy. Over the term of the Agreement, revenues could exceed $400 million based on projected volume shipments. Production is expected to begin in early 2017 following development, test and certification programs during 2016. The company has received the first purchase order under the agreement for the initial 3,000 units, which are expected to ship in 2017. Source: UQM Technologies Hong Kong will rollout its first locally designed ebus next month. The single deck ebus was designed by the Hong Kong Productivity Council and Hong Kong Automotive Parts and Accessory Systems Research and Development Centre, took two years to complete. Carrying a full load of passengers and running air conditioning, the bus consumes only 0.78 kilowatt-hour (kwh) per kilometre. Charging its battery for four hours enables up to 380 kilometers (km) of travel. Source: South China Morning Post Tesla Motors is in discussions with state and national government officials about producing its EVs in China. The company views local production could shave sales prices of its EVs by a third because of reduced shipping costs and avoidance of import duties. Chinese production could happen in three years. Source: AsiaOne The EVCA has been created to advance innovation in the charging industry. There are now more than 9,000 public and workplace charging outlets in California, and thousands more in residences more than 20,000 total. The coalition in California consists of founding members ABM, ChargePoint, Clean Fuel
Connection, Envision Solar, EV Connect, NRG EVgo, Plugless Power, SeaWave Battery and Volta all of which are headquartered or maintain a significant presence in California. Source: Electric Vehicle Charging Association Sun Tran is working with BYD to evaluate adding ebuses to its fleet. The ebus can drive about 150 to 200 miles on a charge. Sun Tran currently owns 247 buses: 42 run on compressed natural gas, 194 use biodiesel and 11 are hybrid ebuses. Source: Arizona Public Media The first fully electric articulated bus, the Citea SLFA-180 Electric, was delivered to Kölner Verkehrs- Betriebe AG (KVB). The ebus has a pantograph for a brief charge at the end of each run. Kölner Verkehrs-Betriebe AG (KVB) is the fourth largest municipal passenger transport company in Germany and has a fleet of over 300 buses. Source: VDL Bus & Coach Exhibit 1: Indices Performance (From January 7, 2013) (Indexed to 100) 300 Tesl?a Motors at 627 250 200 150 100 50 1/29/2013 2/12/2013 2/26/2013 3/12/2013 3/26/2013 4/9/2013 4/23/2013 5/7/2013 5/21/2013 6/4/2013 6/18/2013 7/2/2013 7/16/2013 7/30/2013 8/13/2013 8/27/2013 9/10/2013 9/24/2013 10/8/2013 10/22/2013 11/5/2013 11/19/2013 12/3/2013 12/17/2013 12/31/2013 1/14/2014 1/28/2014 2/11/2014 2/25/2014 3/11/2014 3/25/2014 4/8/2014 4/22/2014 5/6/2014 5/20/2014 6/3/2014 6/17/2014 7/1/2014 7/15/2014 7/29/2014 8/12/2014 8/26/2014 9/9/2014 9/23/2014 10/7/2014 10/21/2014 11/4/2014 11/18/2014 12/2/2014 12/16/2014 12/30/2014 1/13/2015 1/27/2015 2/10/2015 2/24/2015 3/10/2015 3/24/2015 4/7/2015 4/21/2015 5/5/2015 5/19/2015 6/2/2015 6/16/2015 6/30/2015 7/14/2015 7/28/2015 8/11/2015 8/25/2015 9/8/2015 9/22/2015 10/6/2015 10/20/2015 NASDAQ Composite Index Russell 2000 AMEX Cleantech Index NAATBatt Index Advanced Battery U.S. Index Advanced Battery Asia Index Tesla Motors LG Chem Johnson Controls Exhibit 2: Indices Performance Close on 52-Wk % of 52-Wk Performance Index 10/26/2015 High High LTM YTD Week Dow 17,623.1 18,351.4 96.0% 4.9% 31.4% 2.3% S&P 500 2,071.2 2,134.7 97.0% 5.5% 41.6% 1.8% NASDAQ 5,034.7 5,231.9 96.2% 12.7% 61.8% 2.6% Russell 2000 1,159.5 1,296.0 89.5% 4.1% 32.8% (0.4%) AMEX Cleantech Index Source: Bloomberg and ThomsonOne 1,253.3 1,397.4 89.7% 3.2% 22.8% 2.1%
Exhibit 3: Supplier Performance (From January 7, 2013) (Indexed to 100) 250 225 200 175 150 125 100 75 50 25 0 1/7/2013 3/7/2013 5/7/2013 7/7/2013 9/7/2013 11/7/2013 1/7/2014 3/7/2014 5/7/2014 7/7/2014 9/7/2014 11/7/2014 1/7/2015 3/7/2015 5/7/2015 7/7/2015 9/7/2015 FMC Corp (Lithium Supplier) Polypore International (Separators) ABB Toray Industries Inc. (Separator supplier) Hirano Tecseed Co. (Coater supplier) Albemarle Sociedad Quimica y Minera de Chile S.A. Inoue Kinzoku Kogyo Ltd. (Coater supplier) Source: Bloomberg Exhibit 4: Commodity Prices Price on Price on Price on 1 Week 1 Month Commodity 10/26/2015 10/19/2015 9/26/2015 Change Change LME Copper (Cash, $ per tonne) 5,233 5,240 5,098 (0.1%) 2.6% LME Lead (cash, $ per tonne) 1,742 1,786 1,680 (2.5%) 3.7% LME Nickel (cash, $ per tonne) 10,460 10,410 9,815 0.5% Source: LME 6.6%
Exhibit 5: Natural Gas and Crude Oil (From January 3, 2013) Advanced Battery Weekly (Indexed to 100) 200 150 100 50 0 1/3/2013 2/3/2013 3/3/2013 4/3/2013 5/3/2013 6/3/2013 7/3/2013 8/3/2013 9/3/2013 10/3/2013 11/3/2013 12/3/2013 1/3/2014 2/3/2014 3/3/2014 4/3/2014 5/3/2014 6/3/2014 7/3/2014 8/3/2014 9/3/2014 10/3/2014 11/3/2014 12/3/2014 1/3/2015 2/3/2015 3/3/2015 4/3/2015 5/3/2015 6/3/2015 7/3/2015 8/3/2015 9/3/2015 10/3/2015 Source: EIA
Executive Director s Notes NEW BATTERY ENERGY STORAGE CAUCUS CHALLENGES THE INDUSTRY TO DECIDE WHAT IT WANTS TO DO Last Tuesday, U.S. Representatives Chris Collins (R-NY), and Mark Takano (D-CA) announced the launch of the Battery Energy Storage Caucus in the U.S. Congress. The mission of the caucus is to advance the understanding of how energy storage systems are enabling American businesses and homeowners to better access reliable, affordable, and sustainable electric power. Reps. Collins and Takano were joined in the announcement by representatives of the Energy Storage Association (ESA), AES Energy Storage and Johnson Controls. NAATBatt International welcomes the launch of the new caucus and extends its thanks to all involved in the effort to form it. Getting information about battery energy storage technology and its benefits out to members of Congress and to the public generally is important. NAATBatt will support this effort in any way it can. But while telling the story of battery energy storage in Congress is important, even more important is getting something done to support our industry and to bring the benefits of our technology to the public. Although I am sure that many in Washington are working on good ideas for possible programs and initiatives, none were discussed in the news release announcing the launch of the caucus. At the risk being a skeptic, I would point out that over the past few years our industry has spent a lot of time and money lobbying Congress for a variety (and perhaps far too great a variety) of storage-related legislation, with little success. Our industry must decide what it wants to do. Press releases and new caucuses are great. But much more critical is getting something done. And to get something done, you must first decide what you want to do. Where the storage industry has seen some success with traditional lobbying is at the state level. This is in part because most of the potential benefits of battery storage technology adhere to electricity distribution systems and retail customers that are subject primarily to state law and regulation, not federal. Janice Lin and her team at the California Energy Storage Alliance played a critical role in pushing for AB 2514 in California, arguably the industry s greatest legislative success (excepting, perhaps, the battery manufacturing grants in the ARRA, for which NAATBatt can claim some credit). Likewise, Bill Acker, John Cerveny and their team at NY-BEST are playing an indispensable role in ensuring that storage remains a critical component of the New York State Energy Plan. The ESA s efforts in Texas and other states also represent important initiatives. The battery energy storage industry needs a coherent government relations strategy and a clear and coherent set of asks. I am not sure that we have those yet. But in developing our asks, we need to
keep in mind where the opportunities in the industry really are and what we need to drive those opportunities forward. Here are some thoughts: Rate Structure Reform. The behind-the-meter storage market is promising, but it is driven almost entirely by retail rate structures. Where rate structures encourage commercial, industrial and residential customers to levelize their use of electricity, storage will thrive. Where they don t, it won t. The challenge of lobbying for rate structure reform is that there are literally thousands of entities that set or approve electricity rate structures around the country. A traditional lobbying campaign for electricity rate reform would be expensive and challenging. Utility Rate-Basing of Energy Storage Assets. In one of the more interesting conversations I had this week, a senior executive at one of the most successful ESS developers told me that he thought that the real future for storage was that batteries would eventually become a standard and somewhat unremarkable component of most utility substations. The battery will simply be there to handle any number of tasks or functions that the operating utility might need. The problem, said the executive, is that given slow utility technology adoption and purchasing cycles, both he and I are likely to be retired by the time that happens. If that is an accurate picture of the true, primary opportunity for storage, then the appropriate focus of industry s government relations initiatives should be to support utilities efforts to rate base storage assets. Today, this probably has less to do with lobbying utilities to adopt storage technology than with lobbying regulators to allow utilities to rate base it. Most regulated utilities would be happy to deploy storage in their substations, if they could rate base it. After all, that is their business model. The challenge to our industry is convincing regulators (and, again, there are more than 50+ applicable regulatory bodies) that storage assets will in the long run reduce the cost of electricity to consumers and increase its reliability. Perhaps it s time to reconsider NAATBatt s Got Juice? public relations proposal of a few years ago (which unfortunately received little industry traction at the time). Battery Research and ESS Component Demonstration High cost remains the principal obstacle to ESS gaining market share from competing electricity technologies. Further research into battery technology at the basic science level is one of the few areas of federal discretionary spending that has the potential to garner widespread bipartisan support. This could, and perhaps should, be the focus of an industry-wide government relations effort at the federal level. The problem, of course, is that basic research will result in little short term gain for industry or market penetration by ESS technology. More immediate gains might come from funding demonstration projects implementing novel technologies that support the batteries themselves, such as new inverter technology and new communications software that could help bring down ESS system cost. These new technologies must be seen by utilities and their regulators to work in real world environments before anyone will rate base them and deploy them in the field. That process, left to its own natural evolution, takes a long time. Funding more projects demonstrating the efficacy of new ESS-supporting technologies could move this adoption cycle forward more rapidly. Rationalizing Existing Credit Support Programs for Storage. I have written in this column on many occasions about the opportunity to use existing government programs that were designed to provide credit support for large energy projects for smaller, distributed energy storage projects. Today, the Department of Energy s Loan Program Office as much as $4 billion in loan guarantees available for innovative renewable energy and energy efficiency projects located in the U.S. that avoid, reduce, or sequester greenhouse gases. In July, President Obama announced that he
wanted at least part of those funds to be made available for distributed energy projects, such as storage. But to my knowledge little has happened, largely because the programs administered by the DOE s Loan Program Office are really structured to support larger, mega energy projects. An industry effort to reform this program and unlock some of the $4 billion that is technically available to support distributed storage technology projects might be a very good use of our industry s limited government relations capital. The bottom line is that the battery energy storage industry has to decide on what it wants to do and to set its own priorities. Until we set them, Congressional caucuses will serve little practical purpose, other than for politicians showing themselves to be knowledgeable and responsive to constituent concerns and for lobbyists looking for something to do. October 30, 2015 James J. Greenberger Executive Director
NAATBatt International Membership Applications for 2015 Membership Applications and Dues Structure NAATBatt International is accepting applications for membership from companies engaged in the business or applications of advanced electrochemical energy storage technology. Annual membership dues for 2015 are $7,500 for Platinum Members, $5,000 for Gold Members $2,500 for Silver Members, $1,000 for Research Institution/Government Members, and $500 for individual scientists and researchers. Affiliates of Platinum Member companies may join as Silver Members for the special price of $1,000 per year. Applicants may choose their level of membership based on their desired participation in NAATBatt International. Membership runs for 12 months from the month in which an application is accepted. For details about our membership structure, including a list of the benefits of each class of membership, and a membership application, please click here. Why Join NAATBatt International? NAATBatt International is a not-for-profit trade association of companies, associations and research institutions commercializing advanced electrochemical energy storage technology for emerging, high tech applications worldwide. Our mission is to promote the commercial interests of our members by supporting developments in the science of and markets for advanced electrochemical energy storage technology consistent with the goals of enhancing energy efficiency, reducing petroleum dependence and enabling carbon-free electricity generation. Our members include advanced battery, ultracapacitor and electrode manufacturers, energy materials suppliers, vehicle makers, electric utilities, equipment vendors, service providers, universities and other research institutions. We are a membership-based organization focused on delivering the following benefits to our members: Strategic market intelligence Access to new and emerging electrochemical energy storage technology Networking and building name recognition within the industry NAATBatt International conducts multiple programs for its members over the course of the year. One of our most popular programs is our Members Site Visit meetings. At these meetings, one NAATBatt member hosts all other members for a tour of the hosting member s business and production facilities. These tours give participants an unprecedented opportunity to learn about the needs and capabilities of individual member firms. Past hosts of these programs include General Motors, EaglePicher, Duke Energy, EnerDel, Cabot Corporation, S&C Electric, Magna Steyr, DNV-GL, Grafoid, Hydro-Quebec and XALT Energy. These programs are open to NAATBatt members only. NAATBatt members also get exclusive information about new products and new opportunities in the market. Each year, NAATBatt runs an Energy Storage Innovation Summit in conjunction with our annual meeting and conference. At the meeting, 20 jury selected emerging companies developing market-ready energy storage-related technologies make presentations directed to companies looking for licensing and acquisition opportunities. The Summit is the culmination of an industry-wide survey and solicitation for
new technologies. NAATBatt members have the exclusive opportunity to participate in the selection process and get a first look at these new technologies. NAATBatt members have access to ABC PatentEdge, a database of patents and patent applications covering advanced batteries and ultracapacitors developed by NAATBatt in cooperation with the research firm IP Overviews. The database, and the quarterly reports summarizing developments in the database, provide NAATBatt members with deep insight into where advanced battery and capacitor technology is going and where the major players in that market are really making their R&D bets. NAATBatt, as the only international trade association focused on advanced electrochemical energy storage, is a frequent resource for companies looking for products or services involving advanced battery technology. NAATBatt routinely receives inquiries for products and services, which NAATBatt forwards, exclusively, to NAATBatt member firms. For example, NAATBatt recently received and transmitted to its members a solicitation for batteries from a California municipality looking to electrify its bus fleet. This inquiry was transmitted to NAATBatt members well before non-naatbatt members learned of the opportunity. If you think that NAATBatt membership costs money, think about what not being a member costs. NAATBatt is the pre-eminent networking organization for professionals and companies working in the advanced battery industry. NAATBatt believes that good business relationships are founded on good personal relationships. From our members-only networking dinners, to our Advanced Battery Golf and Tennis tournament, to our annual meetings held at four and five-star resorts, we are dedicated to ensuring the development of strong personal and social relationships among professionals working in the industry. NAATBatt membership is meant to be fun, but it is fun with a serious purpose: Helping our members build bigger and more profitable businesses. NAATBatt is a not-for-profit trade association qualified under Section 501(c)(6) of the Internal Revenue Code and works for the benefit of the entire advanced battery and ultracapacitor industry. Every dollar spent on NAATBatt memberships and programs goes to recouping program costs and to supporting activities intended to benefit the entire advanced battery industry. At a time when it seems that the only people making money on lithium-ion technology are professional conference organizers, the advanced battery industry needs to take control of its own market and its own future. Electrochemical energy storage is the most important technology challenge of our time. Solving the problem of how to store more electricity in a smaller mass is fundamental to progress in vehicle technology, the Smart Grid, robotics, consumer electronics, unmanned aviation, fuel efficient maritime systems, electricity-based weapons systems, medical devices, monitoring systems and many of the other technologies that will shape human society in the 21st Century. Join us in our mission. We are helping to store the energy that will power the world.
Contact Information: NAATBatt International 122 South Michigan Avenue, Suite 1700 Chicago, Illinois 60603 (312) 588-0477 www.naatbatt.org Officers Zak Kuznar Duke Energy Chairman Davion Hill DNV-GL President Bob Galyen Amperex Technology Limited President-Elect Randy Moore EaglePicher Technologies Chairman Emeritus Steve Vechy EnerSys Chairman Emeritus John Butkowski Beckett Energy Systems Vice President Brian Morin Dreamweaver International Vice President Ralph Brodd Broadarp of Nevada Chief Technology Officer Michael Lew Head of Communications Jim Greenberger Executive Director Paula Szyper Director of Meetings Sandy Kane Chief Financial Officer