Energy Dept. funnels $3.5B into battery industry, an important climate solution

The Department of Energy is working to strengthen the U.S. battery supply chain, announcing up to $3.5 billion for companies that produce batteries and the critical minerals that make them up.

Batteries are considered an important climate solution because they can power cars, which are a major cause of climate change when they burn gasoline. They are also a solution when storing clean electricity produced from solar panels or wind turbines, allowing gas or coal-fired power plants to cause climate change turn off.

Lithium-ion is currently the dominant battery type, both for electric vehicles and for clean electricity storage. The DOE wants to strengthen supply because although much work is underway to develop alternatives, it estimates that demand for lithium batteries will increase tenfold by 2030.

The Biden-Harris administration aims to reduce climate change-causing pollution to zero by 2050 and have half of all new car sales electric by 2030.

Some officials, industry experts and others concerned about climate change worry that the supply of battery materials won’t keep pace with demand. Others worry that too much of the industry is rooted in Asia.

A shortage of redux chips?

Jodie Lutkenhaus, a professor of chemical engineering at Texas A&M University, said she closely monitors battery production and manufacturing in the United States. “I’m afraid we won’t be able to catch up and end up in the same situation we’re in now with the semiconductor industry,” she said. When assembly lines came to a halt during the pandemic, production was halted in Asia, leading to a global shortage of electronic chips which affected the availability of vehicles and electronics.

“The same thing can happen with batteries if we don’t diversify where batteries are made and where the materials come from,” Lutkenhaus said. “It is essential that the United States participate in battery production and manufacturing so that we can avoid a global battery shortage, should it ever occur. »

The bipartisan infrastructure bill allocated $6 billion in total funding for battery materials processing and manufacturing. A first round focused on 15 projects, including companies that exploit critical minerals such as graphite and nickel, used in lithium batteries. This second round will fund similar companies but also those that rely on alternative chemicals, such as flow and sodium batteries.

Here’s how it works: A company may want to build a factory to make cathode materials for electric cars. It determines the cost of building the facility, agrees to cover half the cost, and the government grant would cover the other half, if the company is selected.

Ablemarle, a major lithium producer, received funding in the first round for a facility in Kings Mountain, North Carolina, which processes lithium from ores collected around the world. The company said that in addition to electric vehicles, demand for lithium also comes from electronic devices such as medical devices and smartphones. Without DOE funding, the project “likely would have progressed on a different time scale,” he said in an email.

While funding may not have been the deciding factor for them, Matthew McDowell, an associate professor of engineering at the Georgia Institute of Technology, said the bipartisan Infrastructure Act and the Inflation Reduction Act have “dramatically” transformed the US battery manufacturing sector in the past. three years. He’s excited, he said, about the next generation of batteries for clean energy storage, including solid-state batteries, which could potentially hold more energy than lithium-ion.

Tom Moerenhout, a professor at Columbia University’s Center on Global Energy Policy, said it would be very difficult to increase the global supply of critical minerals to meet projected demand for batteries in 2030. is quite huge, it’s almost scary,” he said. , noting that it takes an average of 16 years for a new mine to begin commercial production.

But with the price of lithium rising, Moerenhout said, alternative battery types are becoming more attractive. He hopes to see sodium-ion batteries developed to help strengthen the power grid. “The potential is pretty huge,” he said, because they are safe and affordable.

Businesses can apply for financing until mid-March.


Associated Press climate and environment coverage receives support from several private foundations. Learn more about AP’s climate initiative here. The AP is solely responsible for all content.

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