By Hessie Jones
The move towards electrification is a global mandate. The transition away from fossil fuels is a fundamental shift that will have significant impacts on infrastructure, society, consumer demand and how we change our behaviour.
The Paris Agreement that emerged out of the United Nations Climate Change Conference (COP21) established long term objectives across 194 parties and the EU to legally bind participating nations to significantly reduce greenhouse gas emissions to 2 degrees Celsius before the turn of the century, and additionally, limit the increase to an even lower 1.5 degrees Celsius.
Electrification refers to the process of replacing traditional mechanical or fuel-based systems with electric-powered alternatives. This means the adoption of electricity as the primary source of energy for various applications and industries. Electrification can be applied to many sectors, including transportation, heating, and cooling, as well as industrial processes. The goal? Reduce reliance on fossil fuels and promote the use of cleaner and more sustainable electric energy sources such as renewable energy.
This movement towards electrification, especially in the context of electric vehicles (EVs) and renewable energy sources, has significant implications for batteries. Batteries will play a crucial role in enabling electrification across the economy. From electric vehicles to grid energy storage across wind and solar renewables, to diversification away from fossil fuels, further R&D innovation and impacts on supply chain and infrastructure, battery technology will drive significant driving advancements in energy storage, transportation, and renewable energy integration.
For Canada, the pledged was to reduce its emissions by 30% below 2005 levels by 2030. The government of Canada aims to enhance its electricity grid, and since 2016, allocated $15 billion to support clean power and general transmission. The 2022 budget announced additional invesments towards Clean Electricity– approximately 10 % of the new proposed budget allocated towards inter-provincial transmission and small modular reactors; support of renewable electricity and grid modernization, a pan-Canadian Grid Council, and regional strategic initiatives.
What does the electrification of everything mean to infrastructure and society? As we move towards 2030, can we realistically meet these goals? What needs to happen not only to support these goals but transition away from fossil fuel across our systems, and more importantly, across our electrical grid?
I met with four individuals already innovating in battery technologies and acceleration of EV production, who weigh in on the implications of this global mandate:
- David Agbanwu, Founder of Lytup, a startup developing residential battery energy storage solutions to bring electricity to Sub-Saharan Africa and other parts of the world facing challenges in accessing reliable power.
- Jill Pestana, Battery scientist and engineer and the of Battery Consulting Lead for North America at Accenture.
- Karen Lai, Karen is the President and Founder of KPM Power Inc, a customizable lithium battery solutions provider, with a specialization in Battery Management Systems.
- Dr. Aazir Khan, founder Aliera AI UK, and Director of the Integrated Engineering Centre of Excellence (IECE) at the University of Lahore.
Exploring Battery Technology’s Sustainable Future
Jill Pestana had a fascination with material science and electrochemistry. She explains, “I started working on fuel cell research. In 2012, around the time Tesla was making strides in the electric vehicle industry, I became deeply interested in battery technology and its implications for a sustainable future.”
Pestana, previously a senior scientist developing lithium-ion battery technology and inventor of 14 patents, discussed how advancements in batteries are enabling a wide range of applications beyond powering vehicles, which has significant implications for both individual consumers and broader energy infrastructure. She highlighted the concept of “vehicle-to-grid,” where electric vehicles not only draw power from the grid but can also feed electricity back into it. This dynamic interaction between vehicles and the grid presents exciting opportunities for optimizing energy use and reducing costs. She expressed, “During off-peak hours, electric vehicles could store excess energy and discharge it during peak demand, helping stabilize the grid and making it more efficient.”
Pestana also introduced “regenerative braking”, a technology that allows vehicles to convert kinetic energy back into stored electrical energy when braking. This innovation has implications not only for improving the efficiency of transportation but also for applications in heavy industries like mining, where large vehicles can recover energy while descending steep terrain.
Pestana also alluded to the idea of a “virtual power plant,” describing it as being able to “harness the collective energy storage capacity of various electric vehicles or stationary batteries within a community or institution like a university.” These distributed energy resources can be strategically managed to balance energy supply and demand, enhancing grid stability, and potentially reducing energy costs for participants.
The possibilities of electrification across a global spectrum, continue to be, however, steeped in political controversy, investment, and supply chain challenges.
Electrification Equates to Access
David Agbanwu’s perspective on electrification is rooted from his background in Nigeria, where rural electrification projects have been essential in providing electricity to the masses. “In many parts of Africa, the source of electricity matters less than its availability. Electrification is a means to bring power to those who previously lacked access. It represents progress, improved living standards, and economic development.”
Electrification, for him, is fundamentally about expanding access.
In Africa, according to Lemonde, there is a persisting trend of Western multinational corporations actively engaging in the exploration and exploitation of fossil fuel resources across Africa. This is happening despite the global imperative to curtail activities, particularly those associated with fossil fuels. One noteworthy statistic: “About 16 billion additional barrels of oil equivalent are expected to be produced by 2030, representing two years of European Union emissions.”
This is consistent with the significant drop in investments for renewable energy in Africa, more than 30% in a single year, reaching their lowest level in over a decade.
Agbanwu is not surprised by this and has emphasized that while there is vast opportunity to transition to renewable energy to serve the needs of African populations, some African heads of state continue to exploit the fossil fuel reserves, as they have for decades. These infrastructure projects will drive African countries into deeper debt, further hindering their transition to more sustainable sources of energy. Agbanwu asserts,
“These infrastructure projects threaten to compound the challenges facing African nations, particularly as the global economic landscape shifts towards renewable energy sources. While the rest of the world progresses towards clean and sustainable economies, Africa risks remaining tethered to the old fossil fuel paradigm. Instead, African countries have the chance to chart a fresh course, unburdened by heavy fossil fuel dependence, and can proactively develop cleaner energy solutions. This presents a clean slate for Africa to establish a more competitive and environmentally conscious economy in line with global trends towards sustainability.”
Karen Lai, Founder of KPM Power, a Toronto based company, focused on lithium-ion battery solutions, remarked that in Canada the reliance on diesel or other fossil fuels for heat and power especially among rural and remote communities, is a going concern. The Pembina Institute’s latest research shows that remote communities consume almost 700 million liters of diesel and other fossil fuels per year to produce electricity and heat.
This ‘diesel dependency’ seals the fate of many, especially in Indigenous communities, into paying for the high transportation costs to traverse to these remote locations, and further exposes them to heightened health and environmental risks. While there have been initiatives to change this system, transitioning towards renewable energy sources including biomass, solar and wind, and increasing local capacity to improve economic development, the progress has been slow.
Converting to clean energy has a profound impact on local economies, especially in regions heavily reliant on fossil fuels for their economy. Jill Pestana emphasizes the importance of reskilling the workforce to ensure a smooth transition. This involves offering training and certification programs that equip individuals with the skills needed to work in the emerging clean tech industry, to help individuals secure sustainable employment in the sector. As per Pestana,
“Different states and regions are actively working on understanding what it takes to reskill their workforce. For example, Ohio Manufacturer Association conducted a deep dive into the skills needed for battery plants and EV manufacturers. The key is identifying the skills that can be transferred from one industry to another.”
Industry Adoption Challenges: Varying Compliance, Efficiency, and Integration of Renewables
Since the Paris Agreement, significant legislation has spurred changes in the US like the Inflation Reduction Act (IRA), one of the most ambitious, with a goal to reduce greenhouse gases by 50% by 2030, below 2005 levels.
Pestana noted, “The European objectives, especially in the battery and energy storage sector, are more developed, but the Inflation Reduction Act, now provides significant impetus for clean tech adoption… Policy is a driving force in holding companies accountable for changing systems ingrained for the last century. It’s not just about reducing dependence on fossil fuels for transportation; it’s also about reshaping our entire supply chains. Policy plays a critical role in incentivizing and regulating these shifts toward sustainability.”
Lai concurs with the necessary influence of policy to fuel change, and pointed to California’s key legislation banning the sale of new diesel trucks by 2036, additional mandating the transition to zero-emission vehicles (ZEVs) for industrial vehicles by 2025, which specifically target vehicles that produce absolutely no tailpipe emissions.” Heavy-duty trucks represent nearly one third of the state’s nitrogen oxide and more than one quarter of its fine particle pollution from diesel fuel, according to the California Air Resources Board. While medium and heavy-duty trucks are just 10% of the vehicles on the country’s roads, they emit 25% of the greenhouse gas emissions from transportation.”
For Lai’s company, KPM Power’s primary objective is to offer a certified and customizable battery management system. This solution allows other companies working on electric vehicles and energy storage projects to leverage a pre-certified component, streamlining their own certification process. This approach not only accelerates time to market but also promotes the adoption of cleaner technologies for the broader market.
Lai touched on some of the challenges confronting clean tech companies striving to bring their innovations to market in Canada. Government grants and incentives for research and development (R&D) can be a double-edged sword. While these grants undoubtedly encourage companies to invest in R&D, they can inadvertently foster a culture where research takes precedence over the commercialization of innovations. Moreover, government policies and funding can exhibit inconsistency, often subject to changes with shifting administrations. This unpredictability can disrupt the long-term plans of clean tech companies, casting a shadow of uncertainty across the industry. The solar industry in Ontario serves as a poignant example, Lai points out, as experiencing a decline following the cessation of government funding.
Dr. Aazir Khan has over 25 years’ experience in Automotive architecture development, AI and control systems, and green technologies spanning the UK, Italy, Germany, Ireland, and the US. He currently resides in Pakistan, where there is a push to influence adoption of EV technologies and foster the development of locally produced EVs in Pakistan. Khan contends the country…”currently lacks comprehensive regulations for EVs. There are no specific standards or guidelines regarding the types of batteries, cells, or battery management systems that should be used in EVs. This absence of regulations extends to performance standards, such as defining the expected range of an EV.”
Due to the absence of regulations, many EV manufacturers in Pakistan rely on components imported from China. The lack of regulatory oversight can lead to the importation of technology through unregulated channels, contributing to the nation’s dependence on China for EV components. Khan signals that some companies in Pakistan resort to using components sourced from dubious or unregulated channels, including secondhand cells from laptop batteries.
The disparate policies between the west and Asian and African nations are further issues that stall progress towards effective global decarbonization.
Developing a Reliable Infrastructure
One of the pressing challenges in the transition to clean energy is the efficiency of renewable sources compared to fossil fuels. Agbanwu highlights the concept of energy density, which refers to how much energy a given amount of a particular fuel can provide. Fossil fuels like gasoline and diesel have high energy density, meaning a small quantity can generate a significant amount of energy. In contrast, renewable sources like solar panels and wind turbines have lower energy density, requiring larger installations to produce the same amount of energy.
Even with the rise of EVs, Agbanwu highlighted, “the infrastructure for charging remains a critical barrier. In areas with inadequate charging infrastructure, hybrid vehicles might become more prevalent, which, while a step toward cleaner transportation, is not a complete solution.”
Agbanwu points out that the efficiency of solar panels, for example, is currently around 20%, “..this means that only a fraction of the sun’s energy that reaches a solar panel is converted into electricity. Improving the efficiency of renewable technologies is crucial to bridge the gap in energy density between clean and fossil energy sources.”
Can Electrification Meet Energy Demand?
Agbanwu indicates that this will depend on geography and climate. Regions with abundant sunlight and favorable weather conditions can harness solar power effectively. However, in areas with limited sunlight or long periods of darkness, such as during winter months, full reliance on solar energy becomes challenging. Electrification and renewables offer a path towards cleaner energy, but they may not be the sole solution for all regions. In Canada’s climate, the hybrid renewable solutions between solar and wind energy may be optimal for most Canadians.
Lai emphasized that we are in a chicken and egg state. Despite the goals set by governments, there are supply chain challenges especially in the availability of cell production. You can’t even have a battery management system if you don’t have the cells. So that’s a challenge I’m facing is if you don’t have enough cell production, you can’t build anything. So, my production slows down because cell production isn’t fast enough.”
Lai also mentions limitations related to raw materials, such as cobalt, which is a key component in lithium batteries. The availability of raw materials, like cobalt, can impact the production capacity of lithium batteries.
The World Cannot Easily Diversify Away from China, the Dominant Contributor to EV Market
Dr. Aazir Khan, who is helping to lead efforts for EV production in Pakistan, underscores the significance of China as a key supplier of materials for Pakistan’s energy and electric vehicle (EV) industries, including motorbikes. In Pakistan, the national EV policy aims to reduce the reliance on imported fuels by encouraging the adoption of EV technologies and fostering the development of locally produced EVs in Pakistan. Khan continues
“In the Pakistani market, there are approximately 28 million motorbikes. When our company, Aliera , entered Pakistan, we explored the idea of electrifying these motorbikes through retrofitting. Rather than introducing entirely new motorbikes into a system that is already densely populated, and where people may not have the means to purchase new vehicles, our approach was to retrofit these existing motorbikes. This approach takes into consideration the limitations of space and the size of batteries, particularly lithium-ion batteries, that can be integrated effectively.”
Pakistan has approximately 23 manufacturers permitted to produce EVs, but the majority of them function as assemblers rather than manufacturers of core EV components. This reliance on assembly often involves importing essential technology and components. China plays a pivotal role in supplying critical EV components to Pakistan, including Battery Management Systems (BMS), drivers, controllers, motors, and battery cells. Approximately 56% of battery cells are sourced from China, while Korea and Japan command 26% and 10%, respectively of the market. There is a significant cost difference between EV battery cells sourced from China and those from South Korea and Japan, with the Chinese cells being 30 to 40% cheaper. However, Khan noted that this cost difference isn’t solely due to the intrinsic cost but also the complexities in logistics and regulations. Despite the desire to diversify sources away from China, these complexities make it difficult for manufacturers in the EV production sector in Pakistan to shift away from Chinese suppliers.
To complicate matters, the impending shortage of lithium can come as soon as 2025.
“BMI, a Fitch Solutions research unit … largely attributed the deficit to China’s lithium demand exceeding that of its supply… We expect an average of 20.4% year-on-year annual growth for China’s lithium demand for EVs alone over 2023-2032… In contrast, China’s lithium supply will only grow 6% over the same period, BMI said, adding that rate cannot satiate even one third of forecasted demand.”
There continues to be innovation to improve battery management systems. From solid state batteries to cathode or anode, the goal is to produce higher energy density, signifying the capacity to store more energy in a smaller package while enhancing the safety profile, reducing susceptibility to thermal runways or fires.
For now, both Khan and Lai agree that lithium batteries (Li-ion and LFP) are the dominant choice for batteries. “It is the lesser of all evils”, insists Lai. KPM Power, however, is also involved in developing backup power solutions using different chemistries, specifically nickel-zinc chemistry. While this chemistry isn’t designed for vehicles, it represents an alternative to lithium batteries, potentially offering solutions to some of the challenges associated with lithium. KPM Power provides a gateway to the market for battery management systems (BMS) and can adapt its products to different battery chemistries. This adaptability allows them to transition from lithium to other chemistries if needed.
Despite global dependence on Chinese manufacturing and refining, efforts to ramp up refining and production in areas like Australia have been underway.
Even the Richer West Nations Struggle to Live up to their Commitments
A recent article cited, “The federal government failed to spend billions of dollars it pledged on a host of climate change initiatives in recent years, raising questions about one of Prime Minister Justin Trudeau’s core policy commitments and the massive funding publicly devoted to it.” Over 2016-2017 to 2021-2022, approximately $7.78 billion designated for climate-related programs was either unspent or spent more slowly than budgeted. These shortfalls affected initiatives such as building retrofits, clean fuel production, emission reduction projects, and climate adaptation measures, including protection against wildfires. The largest funding gap was in public transit and green infrastructure projects, where only a fraction of the allocated budget was spent.
According to Climate Action Tracker, an independent scientific project,
“Canada seems incapable of kicking its oil and gas addiction, deeming it “highly insufficient” comparing its NDC goals (Nationally Determined Contributions) or climate pledges to the policies it has enacted.
The United States received an “insufficient rating”, referencing the US Congress’ approval of a $1 billion for international climate finance in 2022, falling well short of President Biden’s 2021 pledge to provide $11.4 billion annually by 2024. “The low climate finance provision is not enough to make up its fair share contribution and undermines the credibility of stated US intentions to line up as a global leader on climate change.”
We Have a Long Way to Go
The global shift towards electrification is a response to the pressing need for a sustainable future and the reduction of greenhouse gas emissions. The objectives outlined in the Paris Agreement emphasize the urgency of moving away from fossil fuels and embracing cleaner, electric energy sources. Profits and politics dominate this issue and continue to stall the necessary acceleration to meet 2030 goals. This has impacted the urgency to create access for emerging nations, further hindering progress among more marginalized communities in dire need of improving health and economic conditions. While innovation and progress provide hope, the path forward involves addressing the complex interplay of technological, political, environmental, and societal factors to achieve meaningful progress in global electrification goals globally across sectors.
Altitude Accelerator has expertise in clean technology and supports early stage founders who are innovating in this space. Through our programs and partnerships with Green Centre and Sustainability Development Technology Canada, we provide opportunities to grow and scale clean tech innovation. Contact us for more information firstname.lastname@example.org