EDITORIAL

Mike Halls • editor@batteriesinternational.com

What the Ukraine invasion means for the battery business

In just a few months Europe’s energy strategy has been turned completely on its head. The main reason, of course, being the Russian invasion of the Ukraine and the attendant energy crisis. After Russia attacked on February 24, the reaction from the West was rapid: unprecedented sanctions, a blocking of interbank and international transfers and a huge host of trade embargoes. The economic punishment being meted out was complicated by the fact that Europe was dependent on Russian natural gas. Gazprom, Russia’s majority state owned energy firm, controls the flow of gas to the region. Last year Europe imported around 155 billion cubic metres of natural gas — that’s just under half of Europe’s supply. And let’s not forget that the region imports about 2-1/2 million barrels a day of Russian oil. It’s a straightforward dilemma. The problem for Europe is this: how can it inflict economic pain on Russia without hurting itself? The short-term answer is it can’t. But longer term it’s a different picture, if the right actions are taken. “Forget COP26, forget climate change, forget the circular economy and forget the old plans for the orderly energy transition the EU has been talking about,” one commentator told this magazine. “The new economic instrument of war is going to be found in renewables — and in their corollary energy storage. “Every megawatt of energy storage added to Europe’s reserves is now being priced against every cubic metre of Russian gas sold to the region. One unexpected consequence of the tragedy in the Ukraine is the massive boost to renewables and storage.” This new way of thinking has affected the whole of the European renewable and storage industry. Pressure to create change is coming from the top of the EU, governmental levels and among businesses rushing to do business. One immediate spin-off is that energy projects are being priced — and subsidized — at levels that would have not been contemplated before the Russian invasion. An orderly, if somewhat all-mouth and littleaction commitment to the energy transition is being turned into something more determined. Indeed, the European Commission, the unelected civil servants that set the rules for the EU, has now recommended that battery storage and renewables projects should be fast-tracked and planning red tape slashed, all in the name of combating a looming energy crisis. At the heart of EU policy changes will be Germany. It has already reduced its consumption of Russian gas to 35% of imports from 55% before the war in Ukraine, but says it needs to keep buying from Moscow at least until next year to avoid a deep recession. But there is, perversely, good that is to come out of the needlessness of this conflict. In its most obvious way it will be the growing independence Europe’s energy security. But there are two other benefits to come for Europe — and the world — arising from this war.

The joys of science

The first are the scientific advancements we can expect soon. The two world wars of the last century injected a technological fire into the march of scientific progress. Legacies of WW2 include radar, the jet airplane, penicillin and much more. (It also includes nuclear power, microwave cooking and …duct tape!) The interesting thing to note is that many of these legacies had been discovered well before the conflict and had largely been side-lined — Frank Whittle filed his first patent for the

The new economic instrument of war is going to be found in renewables — and in their corollary energy storage.”

jet engine in 1930, Fleming had discovered penicillin in 1928, a primitive form of radar had been installed on Britain’s coasts in the 1930s. Even a basic electronic computer was being tested well before the code breaking that went on in Bletchley Park. It is almost certain that promising areas of research — think lithium sulfur batteries for example or US Argonne investigations into lead batteries — will move further into the main stream with fast tracked and accelerated budgets.

Hydrogen too

Looking away from electrochemical energy storage, the future is also looking brighter for the development of hydrogen. The EU is now setting ambitious targets for the production of green hydrogen — created by using electricity from renewable power to split water into hydrogen and oxygen molecules.. The whole process, at present, is a wasteful one. The round trip efficiency is low to start with — some say the efficiency is as low as 20%. The electrolytic process is complicated by water impurities and the splitting of water into the two gases involves energy loss in the process as well as loss in the recombination. Then the costs spiral upwards when the gas is liquefied for distribution and transported to where their combustion is needed. Green hydrogen may be the ideal in terms of environmental impact but other types of hydrogen may be accepted in the race for energy independence. Grey hydrogen — derived from fossil fuels — is five times cheaper than green hydrogen but releases 50% more CO2 than the green material. (And to decarbonize the process you get blue hydrogen, which triples the cost.) Despite its environmentally-friendly image and potential, the global production of hydrogen emits almost three times as much CO2 as a whole country, France, for instance. It’s likely that the EU will have a difficult choice to make here. The political wing of the EU, the elected body by voters that is the European Parliament, will almost certainly vote for energy independence at a cost of meeting climate change criteria. But insiders say that the European Commission will almost certainly ignore that. They will plump for the ideologically pure, if costly, green hydrogen. And why not? The Commission itself is above the world of business and public expenditure — every month they ship the whole apparatus of EU governance from Brussels to Strasbourg for a few days as part of a treaty obligation — and will likely stay green and righteous. (Imagine the uproar over the cost if the US moved the seat of government from Washington to New York for a few days every month!) Oddly enough, in the longer term a Commission decision for green hydrogen might prove to be the correct decision and kick-start a new industry. Once again US academic Robert Merton’s Law of Unintended Consequences has shown that what can go wrong, will go wrong and — simultaneously what has gone wrong [the Ukraine conflict] can make things go right. The question now is can Europe harness the wind of change that has blown in from the East and fashion a new energy order out of the chaos caused for the greater future good?

“Every megawatt of energy storage added to Europe’s reserves is now being priced against every cubic metre of Russian gas sold to the region.”