The climate debate sure looked different 10 years ago.
When I founded ClearPath in 2014, we looked at global temperatures, sea levels and the so-called “100-year weather events.” We studied the data AND watched the political discourse.
And we were concerned.
At the time, many advocates said we could only solve the climate challenge with 100% renewable energy and by starving the fossil energy industry. They said the government needs to solve the challenge; free-market innovations would be too expensive, and consumers and industry wouldn’t adopt them.
Advocacy for small modular nuclear was limited, few embraced carbon capture as a solution, and other game-changing technologies like long-duration, grid-scale storage were barely a glimmer.
Thankfully, conservatives knew there was a better way.
Over the past 10 years, the ClearPath family of entities has worked with private sector innovators and leaders in Congress to shape conceptual ideas into pragmatic policy, leading to the construction of real projects. These relationships have led to significant clean energy policy wins – from developing the moonshot Advanced Reactor Demonstration Program concept in 2016 to the inception of the 45Q tax incentive in 2018 and the Energy Act of 2020, which culminated with new legislation like the Better Energy Storage Technology (BEST) Act and the Advanced Geothermal Innovation Leadership (AGILE) Act.
Over the last decade, U.S. emissions have decreased by 15%, more than any other nation.
That hasn’t happened by chance, conservative clean energy leaders have catalyzed innovation policies:
Between 2014 and 2024, roughly 20 gigawatts of batteries, geothermal, hydropower, and nuclear, were added to the grid. These facilities generated approximately 36 million megawatt-hours of electricity, enough to power nearly 3.5 million homes annually, avoiding roughly 19 million metric tons of CO2.
In 2018 – A Republican-led Congress updated the tax code, increasing the credit value for carbon capture projects, broadening eligibility thresholds, and allowing DAC eligibility for the incentive. Since, 14 carbon capture and direct air capture projects are operating in the U.S., with 123 under development. Together, those projects could capture 156 million tons of carbon every year.
In 2019 – Congress and the Department of Energy began to focus on building advanced nuclear reactors. Today, we are building two new advanced reactors and at least nine more are on the way in addition to 25 new license applications expected by 2029.
In 2020, conservatives in Congress passed the Energy Act of 2020 – one of the biggest advancements in clean energy and climate policy that has created the clean energy innovation roadmap in over a decade.
In 2021 – Congress enacted the bipartisan Infrastructure Investment and Jobs Act (IIJA), funding a wide range of clean energy demonstration programs.
Where is ClearPath today? The last decade has resulted in significant growth for the ClearPath family – both in size and impact. We’ve seen an 800% personnel increase and expanded our policy portfolio from primarily a nuclear and CCUS advocacy organization to 11 different policy areas. While we remain steadfast in our core technologies, we have added exciting new areas to our portfolio, such as tackling industrial emissions and agriculture and how we can deploy cleaner energy internationally.
In Washington, people and politics drive policy, and policy refines our heavily regulated energy system.
Recent polling conducted by Engagious and Echelon Insights shows 88% of voters believe climate change is happening, 74% want their Member of Congress to focus on clean energy, and 60% of votersbelieve innovation rather than regulation is the best way to reduce emissions.The leadership driving this seachange is remarkable, and here are just some of the federal lawmakers who are meeting the demand of their constituents and have championed clean energy policy over the last decade.
What’s next?
10 years into this dream, we have covered a lot of ground, but we still have quite the journey ahead. Many of the right policies are in place, but we need to get America building again. We need to get advanced nuclear reactors built, we need to capture carbon directly from the air, and we need to decarbonize heavy industry. Energy demand will double over the next decade, and one of the most important efforts everyone needs to get behind is updating our outdated permitting processes. Because if we continue to invest in novel technologies, and ensure that the projects currently under development are successful, then the U.S. will continue to lead the world in adopting clean energy solutions.
I mentioned that in Washington, D.C., people are policy, so when discussing ClearPath’s future, I must recognize how the organization is searching for the next generation of clean energy champions. ClearPath’s Conservative Climate Leadership Program (CCLP) actively recruits individuals passionate about climate and clean energy policy who want to work on Capitol Hill and drive innovative technologies to reduce global energy emissions.
We all hear a lot of talk about a clean energy future, and we know that success means putting cleaner, more affordable, and more reliable energy on the grid.
If there is one thing you can count on ClearPath doing for the next 10 years: supporting America’s free-market advantage. When American energy works, we all win…
Onward!
5 Climate Policies for the 118th Congress
The story of American energy is one of innovation. And today, we’re in the middle of a true revolution that the 118th Congress has an opportunity to capitalize on.
America has reduced its total carbon dioxide emissions by more than any country in the last 20 years. And it’s largely due to American innovations in the power sector — where the U.S. is producing higher performing, lower emissions technologies to regenerate the world. That doesn’t mean we should slow down.
By 2030, the industrial sector will be the largest emitting sector of our economy. This means many of the same types of technology breakthroughs we’ve seen in advanced nuclear and energy storage will be needed in the various pathways that could tackle industrial sector emissions.
But, if we don’t get our public policy right, these technologies will be built in China or Russia instead of at home.
The rest of the world’s population is growing faster than ours, which has led to more power and industrial activity, and more emissions as they buy higher emitting technology from China and Russia.
But what if we didn’t accept that? Of course, the world needs energy… but what if it were all clean? And why can’t America be the leader?
ClearPath has outlined five big areas where conservative clean energy policy can lead to more American innovation, reduce global emissions, make energy more affordable, and strengthen our economy.
1. Implementation of the big 4 energy bills
The past five years have yielded some of the most significant bipartisan innovation and climate policies in our nation’s history, dramatically impacting expected annual public and private sector investment in energy infrastructure.
Annual Capital Investment in Energy Supply Related Infrastructure
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In November 2021, Congress enacted the bipartisan Infrastructure Investment and Jobs Act (IIJA), which funded a wide-range of clean energy demonstration programs, including carbon capture, direct air capture, energy storage, geothermal, hydrogen, and industrial. The IIJA built on many of the technology moonshots authorized in the Energy Act of 2020, which Congress passed and then-President Trump signed into law.
In August 2022, Congress also passed the CHIPS and Science Act, a bill that got significant attention for its support of the U.S. semiconductor industry, but also included big bipartisan wins to bolster scientific research and bolster American manufacturing and strengthen supply chains. This included the House Science Committee’s bipartisan modernization of the Department of Energy’s Office of Science, and an ambitious steel sector decarbonization initiative.
Congress also amended existing tax credits and established additional new incentives for clean energy. While the process that led to their enactment was partisan, for years Republicans and Democrats worked together to mainstream proposals to incentivize investment in nascent technologies, bolster the 45Q carbon capture credit to accelerate U.S. deployments, and support new and existing American nuclear generation.
The Administration is already in the process of implementing these bills. With constructive Congressional oversight and productive input from the private sector, we should have a huge head start getting new clean energy projects built and keeping America in the lead.
2. Continue support for federal energy innovation
Investing in key federal programs that advance new clean energy technologies across sectors of the economy must continue, particularly in key areas that were not prioritized in recent bipartisan legislation.
Innovation and creating jobs is part of who we are as Americans. And thanks to exciting new American technology, research at the Department of Energy, and strong bipartisan policies, we are building an amazing new suite of technologies from advanced nuclear, carbon capture for fossil energy and industrial complexes, long-duration energy storage, enhanced geothermal, and so much more.
Now, we need to move full steam ahead to get these incredible American innovations to market. One urgent example, is in advanced nuclear fuels, where the U.S. and our allies could wind up reliant on Russia if we fail to scale up domestic production capacity.
3. Enact permitting reform
Given the passage of the bipartisan Energy Act of 2020, IIJA and CHIPS and Science and other financial support in the annual appropriations process from the previous Congress, the United States will have a lot of clean energy projects ready for deployment soon.
But, simply throwing money at new technologies will not necessarily make them a reality. We need regulatory reforms that maximize deployment of clean technologies.
Right now, it takes 10 years to permit an off-shore wind farm, five years to certify a nuclear reactor design, and six years to issue a permit necessary to store billions of tons of captured CO2. That’s not good enough. Our energy innovators and project developers need more certainty and a smoother path to be able to build. We’ve heard a lot of great ideas on how to modernize and reform America’s outdated permitting process — and the best part is, we can do this all while maintaining the strongest environmental standards to protect our communities.
4. Further America’s industrial competitiveness
As I mentioned, industrial emissions are set to be the top source of emissions by 2030, surpassing the electric power and transportation sectors. The good news is America is already leading by producing cleaner industrial products than other countries around the globe. While Chinese steel is the third dirtiest in the world, American steel is among the cleanest in the world, with the second lowest CO2-intensity of any country.
One of the biggest global climate policies we can all get behind is bringing more manufacturing and more energy production back to the United States because our environmental standards are superior.
There are also exciting new R&D developments happening in steel, cement, and concrete. Policies to help get those clean industrial technologies to market will maximize America’s carbon advantage.
5. Grow U.S. clean energy exports, trade, and investment abroad
All of these policies will continue to bring down America’s carbon emissions. We must also enable U.S. leadership in GLOBAL emissions reductions.
China’s Belt and Road Initiative – their commitment to global infrastructure finance and development to tie together a huge swatch of the developing world – is immensely outpacing all U.S. export credit and development finance activity. That’s led to massive amounts of new, unmitigated Chinese coal technologies being built around the world.
China and Russia are also currently building more nuclear reactors than the U.S. There is an array of new and advanced American designs, but Russia currently accounts for about two-thirds of reactor exports worldwide.
Meanwhile, our export credit agencies are lagging far behind. The Program on China and Transformational Exports at the Exim Bank only authorizes a specific additional focus on renewable technology and energy storage.
The program does not focus U.S. export credit on technologies that could offer a real like-for-like substitute to subcritical coal plants, e.g., nuclear technology or natural gas with carbon capture. So, because we have not provided realistic alternatives, these nations are naturally choosing cheap Chinese coal technology.
An absolute no-regrets policy shift would be to expand the energy programs at places like Exim and the Development Finance Corporation to include all clean energy sources — like nuclear, natural gas and coal with carbon capture, and enhanced geothermal – so we put all clean energy technologies on the same footing and enable more financing options for key technologies.
There is a path to success that makes solving the climate challenge possible, and faster. We will continue to develop and advance policies that accelerate breakthrough innovations to reduce emissions in the energy and industrial sectors.
America’s economy is the strongest on the planet. And if we allow our free-market advantage to work, we will lead on lowering emissions, lowering costs, and America will win.
Clean Energy Infrastructure Year Marches On
November 2022 marks the first anniversary of the bipartisan Infrastructure Investment and Jobs Act’s (IIJA) robust investments in energy demonstration projects. This law, and its forerunner the Energy Act of 2020, both earned broad bipartisan support to invest in American infrastructure innovation and pave the way for America to once again lead the world in breakthrough clean energy technologies.
With great investment comes great accountability. ClearPath has been actively tracking the programs authorized by the Energy Act of 2020 and funded through the bipartisan infrastructure law. These investments include more than $62 billion in energy programs at the Department of Energy (DOE). The majority of these programs are located in the new Office of Clean Energy Demonstrations (OCED), which received more than $21 billion in funding through the IIJA. ClearPath provided implementation recommendations for key demonstration programs that will be critical for innovative new technologies including advanced nuclear, carbon capture and storage, hydrogen hubs, enhanced geothermal systems, and critical mineral production to reach commercial viability. Continued engagement with the private sector will be essential to ensure these programs are structured for success in these critical public-private partnerships.
Over the course of the first year, the Department has taken the initial steps, including receiving public comments and stakeholder feedback, to stand up dozens of new programs. ClearPath has helped facilitate stakeholder discussions with utilities, oil and gas companies with carbon capture expertise, and hydrogen developers. The Department has been measuring progress through issuing Requests for Information and Notices of Intent for $32 billion worth of programs, but has yet to open competitive application periods for the majority of these programs, including the much-awaited Direct Air Capture and Carbon Capture Hubs programs. Major funding opportunities, like the Hydrogen Hubs and civil nuclear credit programs, currently have open application periods. Over the course of 2023, it is likely that the vast majority of the remaining programs will see both application periods and award selections.
The Department has announced the recipients for two major demonstration programs: The Advanced Nuclear Demonstration Program was partially funded through the bipartisan IIJA to provide more than $3 billion to projects located at two sites including the Terrapower project in Kemmerer, Wyoming and the X-Energy Reactor project in Richland, Washington. Additionally, the Department announced $2.8 billion from the Battery Manufacturing and Recycling Grant Program to support more than 20 projects located in more than a dozen states. These projects are designed to boost domestic capabilities across the battery supply chain, including commercial-scale facilities to process lithium, graphite and other battery materials, manufacture components, and demonstrate new approaches like manufacturing components from recycled materials. Done correctly, these projects will increase America’s competitiveness with China on critical minerals.
IIJA Award Selections to Date
In the new Congress, oversight related to the bipartisan infrastructure law will become an increased focus for both Chambers. While Congress will be interested in where the funds are being allocated, it will be equally important to understand structural challenges at the Department. One major challenge is hiring the necessary staff for the OCED to support these new programs and billions in federal funding. Additionally, Congress has yet to confirm nominees for the Underscretary for Infrastructure or a permanent Office director for OCED, although David Crane, the Infrastructure nominee, recently participated in his Senate confirmation hearing.
When it comes to oversight, it will be critical for policymakers to acknowledge the intent of these demonstration programs. While many will reflect past public failures that received federal funds, namely Solyndra, the reality is that demonstration projects are intended to be more like a test run than a final product. But the opportunities for success are greater, with companies and projects including Tesla and Vogtle that received early funding from programs offered by DOE having reached commercial status. By allocating these federal funds, DOE is absorbing risk the private sector would otherwise be unable or unwilling to take on. Much like the private sector investing in new technology, part of this risk will mean not every project succeeds. The critical piece will be to ensure this is part of the innovation cycle and not exacerbated by political interference.
This is where productive and robust congressional oversight can play an important role to protect taxpayer dollars and improve future research and demonstration projects for the next era of American innovation. While it is still early in the process for the major funding investments provided by the Energy Act of 2020 and the bipartisan infrastructure law, the first year past enactment has laid the groundwork for major announcements in the year ahead. ClearPath will continue to track these programs, award announcements, and the flow of federal funds through our Infrastructure Tracker Dashboards.
Let’s move beyond false climate choices (CNN)
Rich Powell was published by CNN on October 20, 2022. Click here to read the entire piece.
Climate debates in Washington are often based on false choices: renewables versus fossils, economy versus environment, 100% global emissions reduction versus inaction at home. The truth is, no government or business will achieve climate goals and see economic success unless all energy resources are on the table. So, let’s ask ourselves some key questions.
If solutions are only focused on reducing emissions to net zero here in the US while China continues emitting, what have we really accomplished? If America’s power sector transitioned entirely to clean energy at the cost of reliability or affordability, would the public support the change? Will our industry move overseas to higher emitting locations?
Economic inflation, high gas and electricity prices, global supply chain chaos, Russia’s war in Ukraine and China’s effort to dominate markets have all combined to create an ongoing energy crisis. Lawmakers in both parties can work together on the biggest question: How do we restore American energy independence while working to solve the climate challenge?
There is a path both parties can follow. First, leverage American innovation and make clean energy cheaper …
How the U.S. Can Beat China and Russia in New Energy Tech (Bloomberg Law)
This op-ed was originally published by Bloomberg Law on September 26, 2022. Click here to read the entire piece.
Paul Dabbar, former under secretary for Science and Energy, and Rich Powell, CEO of ClearPath, say the agency needs more leaders with deep industry experience and knowledge of commercial projects if the US is to stay ahead of China and Russia in new energy innovation.
America’s energy innovation engine has been a well-oiled machine for nearly 50 years. We’re on the verge of building what could be the greatest energy technologies we’ve ever seen, but you know the saying—it’s hard to find good help.
The bipartisan Infrastructure Investment and Jobs Act funded demonstration projects authorized in the Energy Act signed by President Donald Trump in 2020. It was the biggest US Department of Energy project since the Manhattan project.
The IIJA included $27 billion for grid infrastructure and $21.5 billion for a new Office of Clean Energy Demonstrations (OCED). If done right, this investment may be our key to beating China and Russia in the race for next-generation energy technologies.
Staffing Needs
Historically, DOE has been a giant nuclear defense and science R&D agency. It has focused on building and maintaining nuclear weapons, power plants for subs and carriers, not to mention the Human Genome Project, giant particle colliders, and other world-altering innovations like quantum computing. It owns and operates the 17 National Laboratories, building and running cutting-edge science infrastructure.
The Department, however, has little experience with specific ready-for-first-deployment commercial energy technology. In an August report, the Department’s Office of the Inspector General raised similar concerns outlining risk areas such as insufficient staffing, circumvention of project controls, insufficient project oversight, and inadequate internal and recipient-level controls DOE’s team has brilliant minds and policy expertise.
But even in the applied offices, they are staffed with early-stage technology R&D funding experts, not people with experience building commercial-scale energy facilities.
The agency’s Loan Programs Office, created in 2005 to bridge new technologies with available capital, has had some incredible wins—including Tesla—but also some high-profile losses. Some projects failed simply because the right people weren’t in place to assist with the selection process. The current office has brought in leaders with deep industry experience to fill gaps and get things done.
Policy Needs
Congressional oversight to ensure these programs succeed is obvious, but there are three internal policy changes DOE could implement.
First, DOE needs to immediately hire both political and career employees with experience delivering power plants and other energy facilities on time and on budget.
That means senior energy engineers, private sector technology investment leaders, former employees of large utilities or equipment manufacturers, plant developers, corporate capital allocators, and fund investors who have depth in building commercial projects.
U.S. Senate Energy and Natural Resources Committee
Below is my testimony before the U.S. Senate Energy and Natural Resources Committee, entitled “Opportunities and Challenges for Deploying Innovating Battery and Non-Battery Technologies for Energy Storage”. on September 22, 2022.
Good morning Chairman Manchin, Ranking Member Barrasso, and members of the Committee. My name is Spencer Nelson, and I am the Managing Director of Research & New Initiatives at ClearPath, a 501(c)(3) organization devoted to accelerating breakthrough innovations to reduce emissions in the energy and industrial sectors. To further that mission, ClearPath provides education and analysis to policymakers and collaborates with relevant partners to inform our independent research and policy development. An important point – ClearPath is supported by philanthropy, not industry.
Thank you for the opportunity to be here. It is a privilege to testify before you today after working as Professional Staff for Senator Murkowski last Congress developing the Energy Act of 2020. I have great respect for the work of the members of this Committee and its staff across its entire jurisdiction. While the Energy Act made great progress to advance energy storage, the Committee’s work in this area is far from over. There is great opportunity for supporting new energy storage technologies that bolster both baseload and renewable resources, and American innovation will play a key role. I will discuss four key topics today:
The valuable role of energy storage on the grid today;
The long-term limits of lithium and the importance of alternatives;
Advancing alternative energy storage technology solutions; and
Building on Federal Policy Wins in the Energy Act of 2020 and IIJA.
1. The Valuable Role of Energy Storage on the Grid Today
America’s power grid is incredibly complex. It must balance hundreds of gigawatts of power demand with supply in real time over thousands of miles, with the potential for sudden disruptions due to weather, mechanical issues, or other unexpected disruptions like cyberattacks. The system relies on an intricate network of transmission and pipelines for the transportation of energy. As the American economy grows, the grid transitions to lower carbon resources, and consumer preferences change energy supply needs, our nation’s grid operators face immense challenges. There are few places where this is more evident than the State of California, where a recent statewide grid emergency was declared to deal with record high energy demand due to blistering summer heat. The need for more firm, flexible electricity generation along with new grid-scale energy storage solutions to maximize reliable, affordable, and clean energy has never been more urgent.
Energy storage is not new to the electric grid. The energy storage technology with the greatest capacity in the United States today is pumped storage hydropower (PSH), in which water is pumped up or down a mountain when electricity demand is low and allowed to flow through a generator when demand is high. The first PSH plants were built a full century ago in the 1920s. PSH has historically been a tremendous asset by providing daily and weekly load shifting for baseload power generators like nuclear and coal power plants.
Innovative grid-scale technologies are opening up new roles for energy storage on the modern electric grid. Energy storage technologies now provide a wide variety of market services, including, but not limited to:
Load shifting/peak shaving when demand is high;
Reductions in the need for transmission capacity;
Frequency regulation and other ancillary services for the grid;
Operational flexibility for electric generators; and
Reducing the need for overbuilding electric generating capacity.
While PSH remains the largest energy storage technology by capacity in the United States today, lithium-ion batteries are dominating new capacity additions. Boosted by the global development of electric vehicles, the cost of lithium-ion battery packs has fallen 90 percent since 2010, bringing down the cost of grid-scale batteries 75 percent along the way. Lithium-ion batteries have grown tremendously; reaching nearly 7,000MW of generation capacity on the grid, a 920 percent increase since just 2017. Looking ahead, there is 421GW of energy storage in the interconnection queue waiting to be added to the grid, nearly all of which is in the form of lithium-ion battery technology. For context, this is equivalent to 40% of the total U.S. electric grid’s capacity.
The growth of grid-scale battery storage provides real benefits to the grid. During the 2022 California summer heat wave, batteries provided more than 3 GW of power during the hours of peak demand, which helped avoid blackouts. Without the deployment of battery storage technology, outages would have been widespread, at tremendous cost to both California’s economy and the state’s residents.
Elsewhere, storage is being developed as a transmission asset. In places where additional transmission capacity is only needed for a few hours a day, adding storage assets to the grid can help avoid significant costs that would otherwise be borne by ratepayers.
2. The Long-term Limits of Lithium and the Importance of Alternatives
While lithium-ion grid-scale batteries are useful and will likely have a role to play for the foreseeable future, there are several drawbacks to consider. First, the geopolitical implications of lithium-ion batteries are severe and tragic. The current most common form of lithium-ion batteries uses nickel-manganese-cobalt (NMC) cathodes, which rely heavily on a variety of critical minerals that are not readily available in the U.S. The current supply of these materials is concentrated in Australia, Chile, Democratic Republic of the Congo, and Russia, but the majority of processing and manufacturing comes from China. In 2021, China controlled two-thirds of lithium pre-processing facilities, as well as 77 percent of production capacity worldwide. Based on current trends, China will still hold 67 percent of global lithium ion cell capacity in 2030.
Critical Minerals Production and Refining by Country
Global demand for critical minerals used in battery storage is expected to skyrocket – reaching between 180,000 and 300,000 tons by 2030, compared with 25,000 tons today.
Another challenge with lithium-ion batteries tied to electric vehicles is that as the demand for EVs increases, so does the price of lithium. Prices for lithium carbonate have increased from $5,000 per ton in mid-2020 to $70,000 per ton in 2022 as demand has skyrocketed and supply has flatlined. This cost curve is unsustainable.
Nickel and cobalt prices have also been highly volatile over the last year (due in part to the war in Ukraine), leading many in the stationary energy storage market to begin a transition towards lithium-iron-phosphate (LFP) chemistries, which utilize more earth-abundant minerals in return for lower round-trip efficiency. This shift could offset some of the cost and geopolitical risks of non-lithium critical minerals, but does not solve the overall lithium challenge.
As the share of variable, non-dispatchable energy from wind and solar on the electric grid grows, the reliability of the electric grid will increasingly depend on weather patterns like the sun shining or wind blowing. The Energy Information Administration (EIA) predicts that variable renewables could represent over 36 percent of total electricity generation in the United States by 2050, with much higher shares in some regions of the country. If that is the case, sustained periods without sunlight or wind could occur in areas where solar and wind energy are a major source of energy and present a serious challenge for electric reliability. In those instances, the options include either wheeling high volumes of electricity cross-country to make up for bad weather, greatly overbuilding solar and wind (by up to 4 times as much), or having a seasonal long-duration storage option that could provide many hours or potentially days of energy capacity.
The challenge is that lithium-ion batteries are fundamentally impractical for addressing the need of long-duration energy storage. In a lithium-ion battery system, the power and energy components are combined – meaning power and energy capacity scale at the same time. If you increase energy capacity, you increase power, and vice-versa. While this is a useful property for some applications, this presents a challenge for reducing the cost of long-duration applications for storage. The most common duration of lithium-ion systems currently deployed is four hours, and it is unlikely that systems will get much longer than eight hours anytime soon. Lithium batteries will continue to work for evening demand peaks and for frequency regulation – but will not solve the seasonality problem that could occur at higher levels of variable renewable energy. So what will?
3. Advancing Alternative Energy Storage Technology Solutions
Thankfully, there are alternatives to the narrow technology solution set currently being deployed on the American grid. Technological innovation can both reduce our reliance on foreign battery manufacturers and critical minerals and bolster our electricity grid with solutions that are cheaper and more reliable.
Finding Alternatives to Critical Minerals
In the near term, with the well-established interest in lithium-ion technologies, the U.S. needs to not only increase the direct production of lithium and other crucial materials, but also rapidly scale up its recycling in order to reduce our dependence on foreign sources. Currently, recycling rates for cobalt, copper, and nickel range from 30% to 60% while less than 1% of lithium is retrieved, underscoring the need to establish collection and market infrastructure in advance of projected demand. Recycling of spent EV and storage batteries is expected to reduce the need for new, primary supplies of lithium, cobalt, nickel, and copper by approximately 10%.
China controls more than two-thirds of global lithium processing facilities, and unfortunately controls the vast majority of the battery recycling market as well. We need to find a way to onshore the entire critical minerals mining, processing, and supply chain manufacturing processes in the U.S. $6 Billion in recent funding from the bipartisan infrastructure law will go towards improving this.
While recycling can help, it is not an all-encompassing solution. Longer term, the best way to reduce America’s reliance on foreign sources of critical minerals is to innovate away from technologies that rely on critical minerals that are supply constrained in the United States. For lithium-ion batteries, that means moving away from cathode designs that use minerals like nickel, which is currently controlled by russia, and away from cobalt, which often exploits child labor in the Democratic Republic of the Congo. As mentioned above, the transition to alternative technologies is already beginning in the grid-scale storage market as prices for nickel, cobalt, and other critical minerals skyrocket. The market is naturally selecting more earth-abundant technologies, and we should find a way to source more of those materials from domestic and allied producers.
It is important to note that even if the energy storage sector moves away from reliance on NMC cathodes, there will still be a vast need for lithium itself. Thus, there also needs to be a strong focus on developing domestic sources of lithium, including co-producing lithium from geothermal brines and expanding direct mining, in addition to recycling as much lithium from existing batteries as possible.
Alternative Long Duration Storage Technologies
Even if we managed to develop a supply chain composed solely of U.S. and allied nations for lithium-based batteries in the electric sector, those technologies still would not prove effective for long-duration applications. Since a 21st century grid requires storage options that can last upwards of 100 hours, the public and private sectors should aggressively invest in the demonstration and commercialization of non-lithium technologies.There are a variety of technologies under development — including thermal, chemical, and mechanical — that could both meet long-duration timelines and be cost competitive. Each technology must be assessed against several criteria, including supply security, performance, and price.
By definition, a seasonable energy storage technology is a backstop that would rarely be required to fully discharge its rated capacity. These technologies would only be fully utilized during the worst of weather conditions or periods of intense stress on the grid. As a result, the energy cost of a long-duration technology must be incredibly low to reach significant deployment, likely below $20/kwh of energy capacity – far below today’s energy storage costs.
Thermal Energy Storage Thermal energy storage takes excess heat energy and stores it in various materials, including rocks, cement, storage tanks, hydrogen, or in liquid air. These technologies transfer energy into a material that is capable of storing the energy for a longer time frame, capable of maximizing excess energy or arbitraging lower cost energy. There are a number of companies pioneering thermal energy storage in the United States, and the venture capital community has injected millions of private sector dollars into promising start-up companies like Malta and Antora. Another clever thermal energy storage example is TerraPower’s Natrium nuclear reactor, which would couple molten salt energy storage with a nuclear power plant. The nuclear plant would be able to run continuously by storing excess power as heat in the molten salt, and then use that heat to produce electricity as needed. The first commercial demonstration of TerraPower’s novel technology is underway in Kemmerer, Wyoming as part of a public-private partnership via the signature Department of Energy’s Advanced Reactor Demonstration Program (ARDP).
There are additional exciting industry experiments focused on storing excess thermal energy in rocks; these substances store energy at very high or low temperatures, capturing the energy in both forms. Another concept is to develop flexible geothermal energy systems using geothermal reservoirs as heat storage so plants can remove heat stored from the reservoir when it is needed.
Chemical and Electrochemical Energy Storage Long-duration chemical energy storage options include the production of liquid or gaseous fuels or battery technologies in which the energy and capacity portions of the battery are physically separated to allow longer duration storage.
Hydrogen is an energy storage technology that can be used for electricity generation through a fuel cell or direct combustion. Clean hydrogen can be produced either through electrolysis powered by low-carbon energy or through steam methane reformation of natural gas using carbon capture and storage technologies. Beyond the production of chemical fuels, several varieties of batteries can be used for long-duration storage. One example is flow batteries, in which the electrodes are dissolved in electrolyte solutions stored in tanks – an anolyte tank containing an anode and a catholyte tank containing a cathode. These are pumped into cell stacks where the reversible reactions occur when the battery charges and discharges. Flow batteries can provide high efficiency, long duration, and high safety levels, but some materials, such as vanadium, can be expensive.
There are also options to develop batteries that use sodium or iron as a cathode, with air serving as the anode. These “reversible rust” batteries, like those being developed by Form Energy, can be long duration and have very low materials costs, meaning they are cheaper as the energy-to-capacity ratio gets larger. There is also growing international competition in the electrochemical long duration storage space. A recent report from the Boston Consulting Group found that U.S. companies began developing technologies earlier than most countries, but the U.S. now ranks 4th globally in patent volume for flow batteries and metal air batteries behind China, Japan, and South Korea.
Mechanical and Kinetic Energy Storage Many examples of effective mechanical and kinetic long-duration energy storage technologies exist. As previously discussed, the most classic of these is pumped storage hydropower, which currently represents 80 percent of total energy storage capacity in the U.S.
In many cases, pumped hydropower is used as a form of baseload electricity generation because it is reliable and inexpensive. However, over time it has become much more complex and can be used in various ways to help improve grid stability and act like a “peaker plant.”
In recent years, it has become much more difficult to site and permit new PSH facilities, despite their value to the grid. Some companies, such as Quidnet, are looking to develop alternative styles of pumped hydro by injecting water underground under pressure, which can later be released to generate electricity through a turbine as needed. Another underground pressured energy storage option is Compressed Air Energy Storage or CAES. CAES stores energy in the form of compressed air in an underground reservoir for use at a later time. CAES systems release the pressurized air by heating it to expand it, turning a turbine, and generating electricity. CAES systems have several benefits, but ideally, they work best in balancing energy for greater integration of renewable energy, and ancillary services for the grid such as regulation, black-start, and grid stabilization.
Each of these solutions has a slightly different niche to fill, but all deserve a chance in the marketplace.
4. Building on Federal Policy Wins in the Energy Act of 2020 and IIJA
The Senate Energy Committee has historically been a leader in energy storage technology development. Some of the most recent actions include the bipartisan Better Energy Storage Technologies (BEST) Act, which comprehensively reauthorized energy storage R&D programs at the Department of Energy (DOE) and was cosponsored by many members of this committee. It was enacted in the bipartisan Energy Act of 2020, alongside several other key energy storage provisions.
Those Energy Act of 2020 storage programs were later funded by the bipartisan infrastructure law, and are now being implemented by DOE.
DOE has been supportive of reducing the cost of grid-scale energy storage across a number of programs, most notably through the Trump Administration’s Energy Storage Grand Challenge and its successor program, the Long-Duration Storage Shot. Each of these programs aimed to greatly reduce the cost of advanced energy storage technologies. DOE’s current goal is reducing the cost of long-duration storage by 90 percent by 2035, which would make long-duration options cost-competitive.
DOE is also beginning to implement a variety of programs originally authorized by the bipartisan Energy Act that were later funded by the infrastructure law. These include demonstration programs for energy storage technologies, as well as programs for battery manufacturing and battery recycling. The battery manufacturing, recycling, and processing programs are in the process of accepting applications for funding.
Going forward, it is crucial that this Committee play an active role in the oversight of these demonstrations to ensure they are implemented according to Congressional intent, support American manufacturers, and include a wide variety of technologies and end uses. While the funding from the bipartisan infrastructure law for energy storage demonstrations authorized in the Energy Act was appropriated in November of 2021, it has been nearly a year and DOE has not yet released any funding to develop new technologies. This means that DOE now has only 4 years remaining to develop these programs.
This Committee should maintain a continued focus on identifying alternative sources of critical minerals and making it easier to develop critical minerals facilities in the United States. The Committee has already passed several bipartisan pieces of critical minerals legislation, but the funding for those programs needs to get out the door at DOE so alternative sources can be developed. Domestic lithium processing facilities are absolutely a priority, as China currently contains two-thirds of the world’s capacity.
Removing barriers to resource and energy development is a must. At ClearPath, we have identified through work with the Aspen Institute that America is currently not on track to meet its clean energy goals unless we make it easier to build cleaner, faster. Aspen’s report identified several key principles for improving decarbonization project development. Additionally, there remain significant barriers for certain varieties of energy storage, such as pumped hydro, that need to be addressed individually.
Thank you again for the opportunity to testify today. ClearPath is eager to assist the Committee in developing policies to support innovative energy storage technologies. We applaud the Committee for taking on this critical topic that will increase electric reliability, lower costs, and reduce emissions.
Recommendations for Implementing the Largest Clean Energy Investment Programs in U.S. History
In November 2021, Congress enacted the bipartisan Infrastructure Investment and Jobs Act (IIJA), which funded a wide-range of clean energy demonstration programs, including carbon capture, direct air capture, energy storage, geothermal, hydrogen, and industrial. The IIJA built on many of the authorizations in the Energy Act of 2020, which Congress passed and then-President Trump signed into law.
Now that Congress has allocated the funding, it is important for DOE to implement the IIJA demonstration programs consistent with Congressional direction and maximize the impact of taxpayer resources. DOE’s track record of funding large-scale demonstration projects is mixed, but the Department can increase the chances of success by adhering to principles of responsible program management, including rigorous merit review standards and adopting a milestone-based approach, so that projects with the most technical merit get funded.
As DOE prepares to issue funding opportunities in the coming weeks and months, ClearPath has developed a series of memos with recommendations for implementing the IIJA demonstration projects. Each of these memos includes similar principles related to rigorous milestones and responsible stewardship, but each also includes unique recommendations tailored to specific technologies. Brief summaries are included below.
Carbon Capture, Utilization, and Storage (CCUS) Demonstration Program
The IIJA included nearly $12 billion for CCUS programs, with nearly $2.54 billion for a demonstration program authorized by the Energy Act. DOE should fund projects with the lowest technical risk and highest potential to deliver on time and on budget. Projects should be large enough to demonstrate on a commercial scale, but not so large that the complexities from scaling up from pilot testing are unclear. DOE should also ensure projects have stable revenue streams and offtake agreements. Finally, the federal government should expedite permitting under the National Environmental Policy Act (NEPA) and EPA’s Underground Injection Control Class VI requirements.
Carbon Dioxide Infrastructure Finance and Innovation Act (CIFIA) Program
In the IIJA, Congress appropriated $2.1 billion for the CIFIA program to support the buildout of infrastructure to transport CO2 from where it is captured to where it can be utilized or securely sequestered underground. In addition to this funding, the IIJA allows eligible proposals to take advantage of a secured loan of up to 80% of the project cost. DOE should prioritize geographically diverse projects and be mindful of infrastructure routes already identified by project developers. The federal government should also modernize the NEPA process and couple CIFIA projects with other CCUS programs supported within the IIJA to ensure the deployment of critical CO2 infrastructure.
The IIJA provides $3.5 billion for four regional Direct Air Capture (DAC) hubs, each with the capacity to capture 1 million metric tons (MMt) of CO2 annually. In selecting hub locations, DOE should leverage existing infrastructure and consider co-locating with DOE’s hydrogen hubs and CCUS demonstration sites to leverage pipeline infrastructure. DOE should also set clear timelines and milestones, including ensuring that projects have secured or are working to secure an offtake agreement for their captured CO2 at the time of application.
The IIJA included $505 million for energy storage demonstration projects that were authorized by the Energy Act. DOE should prioritize a diverse portfolio of long-duration, grid-scale energy storage technologies capable of achieving DOE’s performance goals under the Energy Storage Grand Challenge and Storage Shot. Moreover, DOE should develop energy storage technologies that can be manufactured in the U.S. and exported globally, advance technologies that strengthen U.S. energy security and do not depend on supply chains controlled by foreign adversaries, and leverage synergies with other IIJA demonstration programs.
Enhanced Geothermal Systems (EGS) Demonstration Program
The IIJA included $84M for EGS demonstration projects from FY22 to FY25, as authorized by the Energy Act. The Energy Act directed DOE to fund four geothermal demonstration projects for power production or direct use, utilizing diverse geologic settings and development techniques. As such, DOE should prioritize technology diversity, geographic diversity, and use case diversity. DOE should also adopt a milestone-based approach and coordinate with DOE’s new Office of Clean Energy Demonstrations (OCED), as there are several other programs under OCED for which geothermal is eligible to compete for funding.
The IIJA included $500 million for industrial emissions reduction demonstration projects that were authorized by the Energy Act. In the Energy Act, Congress directed DOE to focus on a wide range of industrial processes and technologies, with an emphasis on heavy industrial sectors such as iron and steel, cement and concrete, and chemicals. As such, DOE should focus on developing a demonstration program that is both sector-specific and technology-inclusive. DOE should prioritize investments in heavy industrial sub-sectors, leverage synergies with related DOE demonstration programs, and coordinate the demonstration program with the Advanced Manufacturing Office’s (AMO) proposed Manufacturing USA Institute.
The IIJA included multiple hydrogen provisions, including $1 billion for a Clean Hydrogen Electrolysis Program, $500 million for a Clean Hydrogen Manufacturing program, and $8 billion for Regional Clean Hydrogen Hubs. Regarding the hydrogen hubs, DOE should consider awarding more than four hubs (the statutory minimum), pursue a multi-solicitation and milestone-based approach, clarify the role of the DOE National Laboratories, establish thoughtful and realistic deadlines, prioritize projects that focus on multi-sector integration and match hydrogen production with end use, and co-locate the fossil-based hydrogen hubs with the IIJA CCS projects.
Conclusion
Congress’ bipartisan IIJA demonstration programs represent an unprecedented opportunity to scale and de-risk emerging clean energy technologies. With thoughtful implementation that focuses on maximizing the impact of taxpayer resources and upholding the principles of responsible project selection and management, DOE can help position the U.S. to build cleaner faster and lead the world in the commercialization, manufacturing, and export of clean energy for decades to come.
Energy Act of 2020 Could Reduce CO2 Emissions by 2500M Metric Tons
We need more clean energy technologies that can be ramped up affordably. And while some in Congress are pushing costly climate plans, we want a cleaner environment done the right way: with more innovation, not burdensome regulation or taxation. Despite the partisanship we are seeing today, Congress thankfully passed one of the biggest advancements in clean energy and climate policy in over a decade – the monumental Energy Act of 2020.
Tucked away in the 5,000 page end of 2020 omnibus was a wholly bipartisan, clean energy innovation roadmap.
Research, development and demonstration (RD&D) programs can have a tremendous benefit in reducing early stage technical risk for new technologies. This is particularly the case in the energy sector, where projects can be capital intensive and competition is fierce. The Department of Energy (DOE) has been a leader in accelerating the development of new technologies by investing in the development of breakthroughs like hydraulic fracturing, nuclear energy, solar and much more. The Energy Act of 2020, once implemented, has the potential to spur significant economic development, emissions reductions, and cost savings in the energy sector, largely through R&D and reduced taxes. Programs included in the Energy Act are expected to cumulatively reduce between 1,400 and 2,500 million metric tons of CO2 over the next 17 years. That’s why we call the Energy Act of 2020, signed by President Trump, the biggest climate bill in more than a decade.
What is the Energy Act of 2020?
The Energy Act was spearheaded by then-Chairman Lisa Murkowski (R-AK) and Ranking Member Joe Manchin (D-WV) of the Senate Energy and Natural Resources Committee, Chairman Eddie Bernice Johnson (D-TX) and Ranking Member Frank Lucas (R-OK) of the House Science, Space, and Technology Committee, as well as Chairman Frank Pallone (D-NJ) and then-Ranking Member Greg Walden (R-OR) of the House Energy and Commerce Committee. It represents dozens of individual bills from many Members of both parties in both the House and Senate, and represents the hard work of multiple months of comprehensive negotiations between both sides of the three committees.
It modernizes and refocuses the DOE’s research and development programs on the most pressing technology challenges — scaling up clean energy technologies like advanced nuclear, long-duration energy storage, carbon capture, and enhanced geothermal. Crucially, across all of these technologies, DOE is now empowered to launch the most aggressive commercial scale technology demonstration program in U.S. history. The law ultimately establishes a moonshot of more than 20 full commercial scale demos by the mid-2020s.
Energy Act Commercial Demonstrations
In addition to these large five specific rewrites of policy, it contains significant reauthorizations for solar and wind, critical minerals, grid modernization, the DOE’s Office of Technology Transitions, and ARPA-E. Outside of DOE, the law included important tax credit extensions, for clean energy technologies like carbon capture and new offshore wind. One of the largest climate provisions authorizes regulations to phase out a greenhouse gas called hydrofluorocarbon in a cost effective and predictable manner.
Five Key Technologies Driving Costs and CO2 Emissions Down
Of course, the real impact of the Energy Act will only be realized once it is fully funded and implemented by appropriations. Once that happens, the impact is expected to be significant. Much of the funding required to implement the Energy Act is included in the bipartisan infrastructure bill pending before Congress.
The think tank Resources for the Future (RFF) recently published an analysis of the impact of the Energy Act for five advanced energy technologies if fully funded for 10 years. They interviewed 26 experts on the impacts of the Energy Act programs for advanced nuclear, energy storage, natural gas carbon capture, direct air capture, and geothermal technologies. They found that even for just these five technologies, the total benefit outweighs the cost of the federal funding, with the average societal benefit of EACH technology program to be $30 billion.
The benefits of investing in these clean energy research programs range from economic growth, reduced carbon emissions, reduced air pollution, and reduced electricity cost. RFF found that federal investment in these technologies would lead to significant follow-on R&D investment from the private sector as well as international support for these technologies.
Projected Effect of Legislation on RD&D Spending If Fully Funded for 10 Years, FY 2022– FY2031
RFF also found that the Energy Act funding would significantly reduce costs so the technologies can move from an uncompetitive cost to a competitive cost.
Estimated Average Cost Reductions in 2035 Due to 10-Year RD&D Funding
Developing cheaper clean energy technologies benefits emissions reductions as well. RFF found that 10 years of funding at the Energy Act levels for these technologies would reap significant emissions reductions over the next 17 years. They found that the total emissions reductions from these policies would represent between 142 to 1,029 million metric tons of cumulative CO2 abatement through 2038. Total deployment of these advanced energy technologies would range from 25 to 75 gigawatts of capacity.
Tax Credits and Bipartisan Regs in Energy Act Bring Big Returns
Elsewhere in the Energy Act of 2020 were other significant bipartisan emissions reduction policies. The law included a two-year extension for the 45Q carbon capture tax credit, which provides $35 per metric ton of carbon dioxide utilized in products or enhanced oil recovery, or $50 per ton of CO2 sequestered. The two-year extension in the Appropriations Act allows any project that commences construction by the end of 2025 to qualify, giving developers enough time to utilize the credit. This two-year extension of 45Q is expected to single-handedly result in an additional 53 to 113 million tons of capture capacity, which corresponds to an additional 342 million to 585 million tons of avoided carbon emissions over the next 15 years.
Another major climate policy passed in the 2021 Appropriations Act is a phaseout of hydrofluorocarbons (HFCs), common refrigerants that contribute heavily to climate change. Analysts have estimated that this policy will reduce greenhouse gas emissions in the United States by 900 million metric tons of CO2e over the next 15 years, which is more than an entire year of carbon emissions from Germany.
In total, this means just these portions of the Energy Act — the five advanced energy R&D programs, the 45Q tax credit, and the phaseout of HFCs — could collectively represent a reduction in carbon emissions of between 1,400 and 2,500 million metric tons of CO2e over the next 17 years all while reducing energy costs and creating economic growth. The full benefit of the law is likely much higher.
The Missing Market Signal to the Clean Energy Puzzle
Energy sector innovation and broader efforts to address climate change should resemble the best of the tech start-ups in the U.S.: fast, disruptive, exciting and good for consumers. But the complexity of the energy tax code and market can stymie American ingenuity.
A new bipartisan bicameral bill championed by top Finance Committee Republican Senator Mike Crapo (R-ID) and Finance Committee climate hawk Sheldon Whitehouse (D-RI), as well as House Ways and Means Committee members Reps. Tom Reed (R-NY) and Jimmy Panetta (D-CA) – especially when added to the recent suite of bipartisan proposals to right-size the U.S. innovation engine and regulatory code – could be a major missing financing piece of the clean energy innovation puzzle.
Drawbacks of existing energy tax code
Tax approaches to date have suffered from a few serious drawbacks.
Investment tax credits are good for investor certainty, especially for the first few demonstrations of a technology. By being based only on how much someone invests however, the resulting clean energy production is uncertain.
Production tax credits are better in that we taxpayers only support the clean energy that is actually produced. However, traditional production tax credits have significantly distorted some markets, leading technologies to produce at times that the market does not value the power, and causing what are known as negative pricing events.
And, this hodge-podge of different types of credits, for different technologies, at different levels, on different timelines does not create a clear consistent market signal for investors or innovators, and leads to constant legislative battles over extending credits for favored technologies.
This Energy Sector Innovation Credit, or ESIC, would update the energy portion of the tax code by allowing cutting-edge technologies to gain commercial viability and upend the status quo without distorting the free market.
How ESIC works
First, ESIC takes a technology inclusive approach. This means that eligible new sources of power can span the full gamut of tools. From a new coal or gas power plant that can capture and store its carbon emissions, to an advanced nuclear reactor, to next generation batteries that store excess power from wind, solar and other renewable generation.
Eligible Technologies Can Represent the Full Gamut of Clean Energy Tools
Importantly, new power plants couldn’t qualify if they were also receiving the hodge-podge of other incentives already on the books. But, ESIC would be a permanent feature of the tax code, continuing to exist even after these other credits expire.
Second, the credit is set up to provide the appropriate level of support for a new technology at each stage of development. Developers have the option of an investment tax credit (ITC) or a production tax credit (PTC), providing financing options on a project by project basis.
For example, if the technology is brand new, it will pay out at 60 percent of whatever a plant earns selling power or at 40 percent of the investment necessary to move the project forward.
In the case of the emerging energy technology production credit option, that means that if the market values power at $100 in 1 hour, and the plant meets that demand, the incentive pays out at $60 for that hour. On the other hand, if the market only values power at $10 during an hour, which might occur when temperatures are moderate, it would only pay out at $6 during that hour. At times when there is an oversupply of power and additional megawatt hours are valued at zero, the incentive would pay out nothing at all. In other words, ESIC differs from the credits of old by working with markets, not against them.
AND by paying more to technologies that can respond to market signals, ESIC will drive innovation to the most flexible clean power sources.
Third and finally, ESIC is designed to automatically sunset for each new technology. The legislation would set up four tiers of early market penetration — or market penetration level (MPL) — based on the technologies’ share of national power generation, evenly dividing the space from 0 to 3% of national power generation. Within each tier, a developer would have the option to choose either this emerging energy technology production credit, or the investment tax credit. Both the production tax credit and the investment tax credit start high, at 60% and 40%, respectively, and then decline as the technology gains market share.
This built in ramp down automatically weans each technology off of government support. Then, the technology will either thrive on the marketplace on its own, or developers will experiment with other new technologies
For example, if the technology is new, still making less than 0.75% of total national electricity generation, it will pay out as 60% of whatever someone earns selling the energy. That means that, if the market values electricity at $10 / MWh at a given time, and you are able to meet that demand, the incentive would pay out a maximum of $6 for that MWh. And in times where there’s an oversupply of power into the market and electricity is valued at $0 or less, the incentive would not pay out anything at all.
The Missing Clean Energy Innovation Puzzle Piece
ESIC would be a market-based solution in the truest sense because the incentive is designed to reward the most flexible clean power sources – the ones that can respond to market signals to provide power. We already have two terrific sources of low-cost intermittent clean power in wind and solar, and they’re getting cheaper every year. But we have very limited access to flexible 24/7 clean power than can ramp up and down when we need it. ESIC is designed to incentivize innovators to develop those flexible clean power sources like advanced nuclear reactors, carbon capture technology, energy storage or geothermal.
This tax code fix complements a series of bipartisan bills that could turbocharge clean power innovation. That includes refocusing federal-private sector energy research development and demonstration across major low-emission energy sources, while also recognizing that we need a soup to nuts investment – from early stages all the way through demonstration and commercialization.
There is a larger puzzle that is being pieced together to firm up development and deployment of technologies that are both cleaner and reliable and can help the U.S. take hold of the global technology market, while reducing both U.S. and global emissions. ESIC is a financing mechanism that could be a corner piece of that puzzle.
A “Reversible Rust” Battery That Could Transform Energy Storage
As power sector decarbonization accelerates, energy storage has emerged as an essential technology to maximize grid reliability and integrate renewable energy. Though pumped storage hydropower is by far the largest source of energy storage today, and lithium-ion batteries are the fastest growing storage technology, innovators are developing new, advanced battery chemistries to meet the needs of an evolving electric grid. A Massachusetts-based company called Form Energy recently unveiled the details of its much anticipated, multi-day energy storage system, a technology that’s been known for decades but never truly commercialized: iron-air batteries.
Importance of Long-Duration, Grid Scale Energy Storage
Grid reliability is essential to modern life. Maintaining a reliable electric grid requires having enough electricity available every second of every day. As the U.S. deploys more variable sources like wind and solar, grid operators face the challenge of maintaining 24/7 power. Energy storage allows the grid to save energy for when we need it most, such as when severe weather events shut down a power plant. With storage, we can also save excess solar power generated during the day and use it at night, when the sun isn’t shining.
Among energy storage technologies, lithium-ion batteries are the fastest growing. These are the same batteries used in smartphones, laptops and electric vehicles. Lithium-ion batteries have benefited from steady R&D funding for decades, culminating in a Nobel Prize in Chemistry for Department of Energy-funded researchers in 2019. As a result, lithium-ion battery costs have declined 90 percent over the last decade, which is driving deployment of electric vehicles and grid-scale battery storage, the latter increasingly paired with utility-scale wind or solar.
Despite impressive advances in energy storage technologies, more innovation is needed for cost-effective grid scale storage that can deliver energy cheaply for long periods of time. Lithium-ion batteries work best for shorter term storage, such as regulating grid frequency on the order of minutes, or providing up to a few hours of power. For perspective, powering an entire city like Minneapolis during a four-day storm would require the energy of 600,000 lithium-ion electric vehicle batteries, which would be cost prohibitive. This is why long-duration energy storage is a potentially transformative technology: to store vast amounts of electricity, like during extended storms, the U.S. will need new technologies capable of storing electricity for multiple days at low cost.
The Form Energy Story
Innovators are rapidly developing new battery chemistries that hold promise for cost-effective, long-duration storage that can be deployed at grid scale. One of those innovative companies is Form Energy. Form was founded in 2017 by energy storage veterans determined to reshape the global electric system by creating a new class of low-cost, multi-day energy storage systems. Form’s investors include Breakthrough Energy Ventures, Coatue Management, NGP Energy Technology Partners, Temasek, Energy Impact Partners, Prelude Ventures, MIT’s The Engine, Capricorn Investment Group, Eni Next, and Macquarie Capital.
In 2018, Form Energy received more than $3.7 million in funding from the U.S. Department of Energy’s (DOE) Advanced Research Projects Agency – Energy (ARPA-E). The project was awarded under ARPA-E’s long-duration energy storage program, known as DAYS. Form’s award under DAYS focused on developing an aqueous sulfur battery system. After conducting a broad review of available technologies, Form pivoted to something truly different from the vast majority of other battery storage technologies: a rechargeable iron-air battery.
Like lithium-ion, iron-air batteries have been around for decades. But while lithium-ion batteries benefited from decades of public and private funding, research on iron-air batteries was largely abandoned in the 1970s. Form believes this overlooked technology has not only the lowest fundamental cost of known battery chemistries, but will be the best long-duration grid scale solution due to its safety, durability, and global abundance.
Inside the Form Battery
Form’s technology amounts to a reinvention of the iron-air battery, optimized for multi-day energy storage. It works as a “reversible rust battery,” which means that while discharging, the battery breathes in oxygen from the air and converts metallic iron to rust. While charging, with the application of an electrical current, the battery converts “rust” back into metallic iron and breathes out oxygen.
Here’s a deeper look at the battery cycle. On discharge, the air-breathing electrode allows oxygen to pass from the air to the electrolyte, turning it into a hydroxide ion, which reacts with the iron anode. This turns the coating of the metal into rust (iron oxide). Then to recharge, the air electrode consumes hydroxide ions to form fizzy oxygen bubbles on charge, when the direction is reversed. Then the rust is converted back to iron metal.
Each iron-air battery is filled with a water-based, non-flammable electrolyte like those used in AA batteries. Inside the battery are stacks of anywhere between 10 and 20 cells, which include iron electrodes, the liquid electrolyte, and air electrodes – the parts of the battery that conduct and carry electricity on charge and discharge. The battery is a technological breakthrough: the iron electrode is the largest battery anode ever made, and one cell delivers about as much energy as a Chevy Volt battery pack at lower cost.
Each individual battery module is about the size of a washing machine. These battery modules will be grouped together in megawatt-scale power blocks, which will comprise thousands of battery modules in an enclosure for environmental protection. Depending on the system size, tens to hundreds of these power blocks will be connected to the electricity grid. Form says the battery systems can be sited anywhere, even in urban areas, to meet energy storage demand at grid scale.
Form Energy Advantages
Thanks to decades of research and innovation, lithium-ion battery costs have declined dramatically, which has driven significant deployment in the transportation and power sectors. However, lithium-ion batteries work best for shorter term storage. As the U.S. deploys more variable renewables, we will need cost-effective technologies capable of storing and discharging vast amounts of electricity over several hours to multiple days, like during extended storms and periods of low wind or solar output.
Form Energy’s batteries offer unique advantages for grid reliability, energy security, and environmental stewardship. Two of the major advantages of iron-air batteries are stable supply chains and end-of-life management. Lithium-ion batteries depend on critical minerals whose supply chains are dominated by China. Moreover, the U.S. currently recycles less than five percent of lithium-ion batteries, with the rest piling up in landfills.
By contrast, Form’s iron-air battery chemistry uses one of the most abundant minerals on Earth, iron, and is easily recyclable. While innovators are developing new ways to source critical minerals domestically and establish battery recycling supply chains, Form Energy’s batteries avoid many of those issues entirely, which is a win-win for U.S. energy security and the environment.
Pathway to Commercialization
Today, the major advantage of lithium-ion batteries is cost, in part due to established supply chains, industry expertise, and decades of R&D. Lithium-ion batteries are now so cheap that many energy developers are pairing the batteries with new solar and wind projects, which would have been untenable just a few years ago. As with any new technology, iron-air batteries will need to be demonstrated and scaled up to drive costs down. At commercial scale, Form expects its iron-air batteries to store electricity at less than 1/10 the cost of lithium-ion batteries.
Form Energy has received support from both DOE and private investors to develop and scale its technology. Since its first DOE award in 2018, Form has made significant progress toward commercialization. In 2019, Form demonstrated key iron-air cell performance proof points at lab scale. The company has also conducted large-format testing at its 50,000 ft2 R&D center in Somerville, MA. In 2020, Form announced a partnership with Great River Energy to build a 1 MW battery pilot project in Cambridge, Minnesota, which Form expects to complete in 2023. Form expects to offer larger commercial scale systems in 2024.
Form Energy’s story shows how federal funding for emerging technologies can successfully complement private sector investment. One of DOE’s moonshot technology initiatives is the Energy Storage Grand Challenge (ESGC), launched in early 2020. The ESGC is DOE’s comprehensive strategy to boost storage innovation so the U.S. can maintain global leadership, with a focus on three goals: Innovate Here, Make Here, and Deploy Everywhere.
Federal policymakers should strive to maintain the momentum. By investing in demonstration and commercialization, we can accelerate the deployment of next-generation energy storage technologies that can be made in America and exported around the world.
