Energy

The Department of Energy will give an $850 million loan to battery cell developer KORE Power for the construction of a domestic battery manufacturing plant, The Hill reports.

What’s going on: The DOE on Friday announced the conditional loan to build “KOREPlex” in Buckeye, Arizona, as part of a broader strategy to “strengthen the U.S.’s supply chain for batteries for electric vehicles as well as for energy storage,” according to The Hill.

• It’s a milestone in the Biden administration’s objective to make half of all new vehicles sold in the U.S. in 2030 zero-emissions, according to the DOE.

Why it’s important: Once operational, the facility is expected to produce enough battery-cell storage to power more than 28,000 electric vehicles annually, the DOE said.

• The project is slated to create as many as 700 temporary construction jobs and 1,250 permanent operations positions.

Two-thirds of the U.S. is at risk of energy shortfalls this summer—and that share is only going to grow “[u]nless reliability and resilience are appropriately prioritized,” the North American Electric Reliability Corporation warned the Senate at a recent hearing, according to CBS Austin.

What’s going on: In most of the country, “there is the potential of running low on resources including electricity,” CBS reports. “The causes include an overwhelmed electric grid, the slowing use of fossil fuels like coal and natural gas to balance the use of the grid and new regulations like a lengthy permitting process that makes developing new energy take too long.”

• The NERC recently released its 2023 Summer Reliability Assessment, in which it details how, in the current push toward greater use of renewables, “the pace of change is overtaking the reliability needs of the [transmission grid] system,” NERC President and CEO James Robb told the Senate Energy and Natural Resources Committee last week.

​​​​​​​ Why it’s important: “The hearing comes as more and more Americans are expected to rely on electricity, even being rewarded by switching to electric cars,” according to CBS. “‘When electricity is unreliable, the potential consequences are catastrophic, including loss of human life,’ said Sen. Joe Manchin, D-W.Va., the committee chairperson.”

What can be done: NERC suggests a multipronged plan to shore up grid reliability. This includes:

• Better management of the “pace of change” to mix in more renewables and continued use of traditional energy;
• More natural gas infrastructure to make the grid more resilient; and
• Increased investment in energy storage technologies “and/or hydrogen production and delivery systems.”

​​​​​​​The last word: “Manufacturers rely on access to reliable and affordable energy to power their operations—so if the grid is unreliable, not only will manufacturers suffer, but American families will suffer, too,” said NAM Vice President of Energy and Resources Policy Brandon Farris.

• “The NAM supports an all-of-the-above energy approach that includes renewables, natural gas, nuclear, clean hydrogen and others, as well as efforts to shore up grid reliability.”
• “We must also continue to work on permitting reform to ensure we can build new energy projects in a timely manner and get them connected to a stable grid.”

The U.S. government and automakers are on a mission to supply the nation with better, faster charging for electric vehicles, according to The Wall Street Journal (subscription).

What’s going on: The Biden administration “is trying to spur the buildout of so-called fast chargers that can charge EVs in about 15 to 40 minutes. That’s still slower than a traditional fill-up at a gas station, but faster than the hours-long experience at public chargers … ”

• Across the U.S., labs including the National Renewable Energy Lab are coming up with designs capable of fully charging an EV in under half an hour. Some trucking firms and charger makers have piloted systems capable of charging trucks in 15-20 minutes.

The challenges: There is debate over the best way to get more people into EVs, however: is it faster chargers or more slower chargers installed “where people park … in order to make charging a car a convenient and ubiquitous experience”?

• Most current EV charging takes place at owners’ homes, typically garages or driveways where the cars can “sip” energy for hours. However, “those in multifamily housing have less access to charging.”
• The more commonly used EV charger, called level 2, will charge a battery to about 80% in four to 10 hours.

Faster charger, bigger issues: “Fast chargers require costly utility infrastructure and charging equipment; ultra-rapid charging would be even more expensive. ‘Higher power costs more,’ [Dan Bowermaster, head of electric-vehicle research at the Electric Power Research Institute] says. ‘You get to a point where for these higher power levels you’d need bigger and bigger wire. At some point the wire gets so big that not only it’s heavy, but it can’t readily bend to curve around the charging port.’”

How to solve it: Mechanical assists could lessen the cables’ weight with robotic arms, according to one fast-charging company.

• Another possible fix? A “solid-state battery in which the electrolyte that conducts the electric current is a solid, rather than a liquid as used in most batteries today.”
• Some automakers are switching to 800-volt charging systems over the more common 400-volt ones, “doubling the power that the same current would provide”—but it’s a move that will require “the highest-level charging equipment.”​​​​​​​

Companies are turning to seemingly unlikely sources for the lithium needed to make electric vehicles, according to The Wall Street Journal (subscription): oil-and-gas reservoirs.

What’s going on: “These oil-and-gas sites harbor not only hydrocarbons, but also brine that contains metals including sodium, calcium and some lithium. When drillers poke holes into oil-saturated formations, the brine flows back to the surface along with the molecules that end up as fuel, and companies have been prompt to discard the earthy marinade.”

• “But now that the EV battery material has become a prized commodity, lithium companies are developing technologies to remove it from this brine—and oil-and-gas companies are also taking a second look.”
• Lithium companies in the U.S. and Canada are working with oil-and-gas firms to get the metal out of old oil fields and produce it from wastewater pumps.

Skyrocketing demand: U.S. demand for lithium is expected to increase to nearly six times its current size by 2030, to $52 billion, according to Boston Consulting Group.

Why it’s important: Most lithium today comes from China, Chile and Australia, with the three countries providing around 92% of the lithium extracted globally last year. But in the U.S., the process would be more environmentally friendly.

• “Because energy companies have drilled millions of oil-and-gas wells and collected subsurface data in the process, lithium prospectors know where to look.”

A faster process: The direct extraction method could significantly speed lithium production. In it, “brine is sent to a processing unit, where chemicals, a resin or a membrane, among other technologies, are used to capture the lithium ions. The water is then reinjected into the aquifer where it originated. The process takes at most a few days, and recoveries are up to 90%.”

• Some are hoping direct extraction will allow lithium producers to get the metal in the Permian basin of West Texas and New Mexico.

A Charlotte, North Carolina–based company that started life as a paper mill is now the world’s largest lithium producer—and “a key cog in a tight global supply chain for battery metals used in electric cars, smartphones and other applications at a time when governments are pushing to electrify their economies,” according to The Wall Street Journal (subscription).

What’s going on: Albemarle is one of the few companies that can produce lithium at a competitive cost, thanks in large part to its 2015 purchase of a lithium producer in New Jersey.

• The global lithium market has grown an enormous 2,900% since that purchase, to $48 billion from $1.6 billion.
• To keep up with demand, “Albemarle has embarked on new acquisitions and capacity building,” including an ongoing bid to purchase Australian lithium miner Liontown Resources.
• Last month, Albemarle—which also mines lithium at operations in Nevada and Chile—announced plans to double the capacity of a lithium hydroxide plant in Western Australia in which it has an 85% stake.
• Lithium is also used in “industrial-scale batteries that can store energy from solar panels and wind farms and smaller ones for residential use.”

Competing with China: The company’s “integrated approach has put it at the center of Western efforts to diversify supply lines” to counter China’s dominance in the electric-vehicle market.

• “China has emerged as a global leader in EV production and is spending billions to boost its access to lithium-mine production globally. Meanwhile, it dominates the business of refining lithium extracted elsewhere in the world. The West is trying to catch up.”

What’s next: Last fall, the Department of Energy gave Albermarle a grant of nearly $150 million to produce EV batteries.

• In March, the company said it would spend more than $1.3 billion on a lithium-processing plant in South Carolina.

As the Federal Energy Regulatory Commission prepares to issue a final rule that would change the way new energy projects connect to the U.S. electrical grid, some are concerned the regulation may be insufficient, according to E&E News’ ENERGYWIRE (subscription).

What’s going on: “Speeding up the grid connection system is critical for the success of the Biden administration’s signature climate initiatives and for many states’ clean energy goals. Today’s protracted process for linking new energy projects to the transmission system is widely considered one of the chief hurdles to deploying more carbon-free energy.”

The problem: Developers of clean energy undertakings and others say FERC’s coming changes likely won’t have the effect of getting new projects online sooner.

• Some policies—such as the direction of regional transmission lines to study interconnection requests in groups, not individually—have already been implemented to little effect, they say.
• And some potential issues slowing grid connection aren’t covered by the regulations, including grid operators’ difficulty in hiring sufficient numbers of experienced engineers to process all the requests.
• Then there are network-upgrade costs, which “are rising sharply” and may not be “meaningfully address[ed]” by FERC’s proposed rule.

Too long a wait: Before being able to deliver power to businesses and households, new energy projects need to be connected to the transmission system—and getting approval for that connection can take years.

• “As of last year, it took an average of five years for a new energy project in the United States to move through that study process and reach commercial operation, according to the Department of Energy’s Lawrence Berkeley National Laboratory. That’s up from an average of three years in 2015 and less than two years in 2008.”
• What’s more, “[i]n the current interconnection process in most of the United States, projects are sometimes restudied up to 10 times before they’re approved to connect,” one source told ENERGYWIRE.

Prioritizing projects: The proposed regulation tries to prioritize projects by commercial viability and construction readiness to cut down on the number of “possible” projects in the lineup.

• However … some in the renewables industry say “it’s unrealistic to expect project developers to have most of their permits and contracts in place before they have gone through the interconnection process,” another source told the news outlet.

A fundamental change: FERC has its work cut out for it given the foundational changes that have taken place in the U.S. energy system in the past few decades.

• “Historically, the electric grid was dominated by large, centralized power plants. But as the clean energy transition continues,” that is likely to change.

The NAM’s take: “Manufacturers depend on access to reliable and affordable energy to expand—which is why we support reforms that would foster transparent, streamlined and timely federal regulatory processes for the siting, permitting and licensing of energy delivery infrastructure of all types,” said NAM Vice President of Energy and Resources Policy Brandon Farris.

China, which already commands most of the world’s lithium refining, is undertaking “a risky strategy” in an effort to lay claim to more of the metal globally: buying stakes in mines located in developing nations, according to The Wall Street Journal (subscription).

What’s going on: “China is spending billions on stakes in nations that have histories of political instability, local resistance and resource nationalism. Projects often face protests, regulatory delays and even cancellations. If China succeeds, however, it could secure access to one-third of the world’s lithium-mine production capacity needed by 2025, according to industry estimates.”

• Canada and Australia, which hold among the world’s largest lithium reserves, recently put an end to new Chinese investments in critical minerals.

Why it’s important: Lithium is a critical component of batteries used in electric vehicles and smartphones—and demand for the mineral could outstrip supply significantly by the end of the decade.

A precarious investment: To ensure sufficient lithium stock to power its EV industry (particularly as tensions with the U.S. rise), China has acquired stakes in close to 20 mines throughout Latin America and Africa.

• Some of the countries in which the mines sit face the risk of terrorist attacks, while others have a history of revoking agreements made with foreign firms.

However … China has some advantages over Western nations when it comes to securing lithium from South American and African nations.

• “CATL, for example, is a battery behemoth, with the political backing of Beijing and a strong network of companies along the supply chain.
• Developing nations often want to partner with Chinese firms that also do processing, refining or battery making, because they believe such companies will better guarantee them steady streams of income. ​​​​​​​

Why is China winning the electric-vehicle production race? Because it controls or dominates every step of the process of making EV batteries, according to The New York Times (subscription).

What’s going on: “Despite billions in Western investment, China is so far ahead—mining rare minerals, training engineers and building huge factories—that the rest of the world may take decades to catch up.”

• Rare minerals: China owns the majority of the cobalt mines in Congo—where most of the world’s supply of the metal sits—and it controls most of the world’s lithium mining.
• Refining: “Regardless of who mines the minerals, nearly everything is shipped to China to be refined into battery-grade materials.”
• Components: China produces more EV batteries than any other country, which it managed “partly by figuring out how to make battery components efficiently and at lower cost.”
• Final products: China boasts the most EVs on the road of any nation, and almost all of them use batteries made domestically.

Why it’s important: Now, eight years after the Chinese government instituted policies to bar foreign competitors from the EV market and increase consumer demand, “the Biden administration … [is] pursuing a similar strategy to foster battery development in the United States. But in a business with huge capital costs and thin profit margins, Chinese companies have a big head start after years of state funding and experience.”

A power line and wind farm project first conceived in 2006 finally received a critical permit this month—a perfect example of why we need permitting reform, according to The Wall Street Journal (subscription).

What’s going on: “The Interior Department’s Bureau of Land Management gave the green light [last] Thursday for a high-voltage power line [in the SunZia project]. The permit allows the developer, Pattern Energy, to build the country’s largest wind energy project across three counties in rural New Mexico and deliver that electricity to large markets in Arizona and California.”

• Developers applied for federal approval in 2008, and the Obama administration “fast-tracked” the project four years later.
• Pattern Energy plans to start construction later this year.

Why it’s important: SunZia is emblematic of a flawed system, one which President Biden and legislators are now trying to fix, according to the Journal.

• “The labyrinthine state, local and federal permitting processes are often drawn out for years, require duplicative paperwork and generate thousands of pages of government analysis. The average federal environmental review, for example, takes 4½ years, according to a 2020 White House report.”
• Earlier this month, the White House recommended changes it said would help speed the approval of transmission projects.

What they’re saying: “‘The White House doesn’t have a prayer of implementing the infrastructure bill or the [Inflation Reduction Act] without permitting reform,’ said Rep. Garret Graves (R., La.), a lead Republican negotiator in the debt-ceiling talks. ‘And anyone who’s actually out there trying to build things will tell you that.’”

What we’re doing: The NAM has been one of the foremost voices urging permitting reform on Capitol Hill.

• NAM President and CEO Jay Timmons recently testified before Congress on the topic and outlined manufacturing priorities for overhauling the permitting process.
• At another recent congressional hearing, NAM Vice President of Energy and Resources Policy Brandon Farris told legislators, “Streamlining and modernizing our nation’s permitting laws and procedures will help us advance many of our nation’s shared priorities, improving the quality of life for all communities; modernizing our infrastructure; achieving energy security; ramping up critical mineral production; enhancing manufacturing competitiveness; and creating manufacturing jobs in the U.S.”

Washington, D.C. – Following the release of the Environmental Protection Agency’s new rule on power plant emissions, National Association of Manufacturers Vice President of Energy and Resources Policy Brandon Farris released the following statement:

“Manufacturing in America is cleaner and more sustainable than ever, and the power generation sector has been making historic strides in bringing zero-emissions sources online. Even as that trend continues, this proposed regulation will prove unfeasible. With nearly 60% of our nation’s energy generated from natural gas and coal, this will either require deployment of still nascent technologies at an impractical pace or force those plants to shut down entirely. With the many threats to global energy security, that is a grave risk to our economy and to our families. The U.S. cannot afford to shut down more than half of our power generation and grind our economy to a halt. The NAM looks forward to working with the administration to ensure emissions standards protect public health while allowing manufacturers to continue pioneering technologies to make our air even cleaner and our climate even healthier.”

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.90 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.