Europe is sinking billions to beat Asia on energy storage. Will it pay off?

Europe is investing billions of dollars in research to try to reverse Asia’s dominance in the battery market, but analysts believe it could be in vain.

Along with various national initiatives, the European Union has invested half a billion euros ($ 550 million) in battery projects within its Horizon 2020 global competitiveness program, with a total budget of 80 billion euros ($ 88 billion) from 2014 to 2020.

And last December, the European Commission approved 3.2 billion euros in public funding under its rules on “important projects of common European interest” (IPCEI). The investment will support battery research and innovation in Belgium, Finland, France, Germany, Italy, Poland and Sweden.

The project is expected to last until 2031 and should unlock an additional 5 billion euros in private investment. French oil company Total and German carmaker Opel will receive € 1.3 billion in public funding on IPCEI terms for a major manufacturing program. He could see as much as 48 gigawatt hours capacity added at sites in France and Germany.

“Battery production in Europe is of strategic interest to our economy and society because of its potential in terms of clean mobility and energy, job creation, sustainability and competitiveness,” said Margrethe Vestager, European Commissioner for Competition. A declaration.

Given the range of different support programs, “it is difficult to calculate the exact amount of funds currently invested” across Europe, said Doriana Forleo, communications and events manager at the European Association for the energy storage. But Bloomberg last July reported that total investments in the battery supply chain of European governments, manufacturers, development banks and commercial lenders could exceed € 100 billion.

US energy storage spending eclipses

While comparative figures for other regions are difficult to come by, Europe’s energy storage funding effort is potentially several orders of magnitude higher than in North America.

Trump administration’s budget proposal for fiscal 2020 devoted $ 158 million establish an advanced energy storage initiative within the Department of Energy (DOE). In October of last year, the United States Office of Energy Efficiency and Renewable Energy popular $ 25 million annually for a Critical Materials Institute; and $ 15 million in solid-state battery research grants from the DOE’s Vehicle Technologies Office.

Yet while Europe seems certain to be leaving North America behind in terms of research, there is a big question mark as to whether the money Europeans invest in innovation will help European Union to overcome the current dominance of Asia in the battery market. It certainly seems unlikely on the basis of manufacturing capacity alone.

Although the European manufacture of batteries is Faster and faster, much of the planned manufacturing capacity in the EU comes from Asian giants. Last October, for example, Chinese manufacturer Contemporary Amperex Technology Co. Limited (CATL) inaugurated a factory in Thuringia, Germany, which will have a production capacity of 14 gigawatt hours per year by 2022 and represents an investment of 1.8 billion euros ($ 2 billion).

These Asian forays into the European battery market are actively supported by funding bodies keen to maintain a supply of low-cost batteries for the rapidly electrifying European automotive industry.

Last month, the European Investment Bank approved a € 480 million loan to help South Korean battery giant LG Chem build a € 1.5 billion plant with a capacity of 35 gigawatt hours per year in Poland.

Invent a growth path in batteries

Overtaken on the manufacturing scale, Europe is betting on research to discover a secret homemade sauce that could allow it to reduce the prices of Asian battery manufacturers. Forleo said the EU was pumping money into concepts in all technological maturity levels (TRL) and chemistries.

“Europe is also trying to cover the entire value chain, from raw materials to advanced manufacturing, applications and recycling,” she said.

One initiative even aims to innovate the innovation process itself.

De facto (for “Battery DEdesign and manuFACTuring Optimization through multiphysic modeling”) was launched in January with nearly 6 million euros ($ 6.6 million) in Horizon 2020 funding to accelerate research processes in cell development.

His goal is to create a software tool that mimics the behavior of cells and can be used in place of physical experiments. Defacto coordinator Elixabete Ayerbe Olano said that by 2023 the project may be able to reduce the cost and time required to develop TRL6 concepts by 30%.

For more technologically ready full-scale cell designs, from TRL7 to TRL9, the savings could range from 50 to 76 percent, she said.

Despite these lofty ambitions, catching up with the Asian battery market remains “a tall order,” according to Rory McCarthy, senior analyst on the global energy storage team at Wood Mackenzie Power & Renewables.

Even without state support, Asian companies such as LG Chem and Panasonic have orders of “tens of billions” of dollars from automakers, he said.

This gives companies significant financial power to devote to research, not to mention the fact that some Asian companies have been perfecting battery technologies over the past 30 years.

Given Asia’s lead in lithium-ion batteries, looking to develop the next generation of products that could one day take over from today’s chemistries “would be strategically smart,” McCarthy said.

But European policymakers should take a long-term view, he said. “Any technology they invent in the next 10 years will take another 20 years to hit the market,” he commented.

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