Power Play
The politics of batteries
This article originally appears on the Urban AI blog.
As cities electrify, batteries play an increasingly important role in our daily lives. But how can we ensure that this technological shift truly benefits everyone and contributes to an equitable future? This is the question answered by Gábor Csapó in this essay for Urban AI.
Charging
The world’s appetite for Li-ion batteries is set to soar from 700 GWh in 2022 to a staggering 4.7 TWh by 2030 with mobility applications accounting for most of this demand. (source) Which leaves us wondering: Where on earth will we charge all these batteries? Likely, the answer will be closer to home than you think. Can our current grid handle this surge? What social dilemmas does a failing grid pose?
Picture this: all your neighbors already have electric vehicles (EV) and you also decided to join the green transportation revolution. You drive home your brand new EV, plug it in to charge at night — just like everyone else — and suddenly, your house and the entire street plunges into darkness. Your neighborhood’s electrical system that was designed 50 years ago couldn’t handle one more EV. This raises a contentious question: Who is responsible for the blackouts? The latest EV adopter, the utility company, local government, or everyone collectively? Compromises and negotiating a solution will be hard.
The short-term solution to this grid overload dilemma might hinge on societal attitudes towards cooperation and privacy. Some places will have to wait for a grid overhaul because they don’t manage large scale infrastructure projects efficiently (for ref transitcosts.com). Meanwhile, grid users and utility providers will need to work together to reduce peak electricity demand reliably. A commonly discussed solution is demand shift, meaning scheduling when people have access to how much electricity.
However, demand shifting comes with its own bag of challenges: First, technical issues arise as many of our current meters don’t have dynamic capabilities. Second, users will need to accept that utilities can control when they can charge their EV, which is already creating news headlines. Can Europeans, for instance, relinquish some privacy for a more efficient grid? Third, it’s a negotiation problem. We have to prioritize what people should always have power for and what we turn off first. Will utilities introduce premium tiers allowing the wealthy always to have electricity at the cost of the less affluent having less access?
Despite these challenges, progress is already being made. Short-term demand shifting solutions like smart thermostats connected to virtual power plant programs are leading the charge, and energy storage solutions like the Tesla Powerwall are filling the gap in service. Meanwhile, innovative ideas are appearing to fast-track the long-term solution: updating the grid. For instance Alphabet’s Tapestry aims to provide greater insight into potential failure points, while startups like Alphagrid are helping the buildout of public charging networks.
However, while technological advancements offer promising solutions, it’s crucial to acknowledge that the hurdles we face are not solely technical ones. The crux of the matter lies within policy reform and societal attitudes — the very blueprint of our social infrastructure. As we navigate this electric revolution, we must remember that the future of our grid depends not just on our technology, but also on our willingness to adapt and evolve our policies and societal perspectives.
Ownership
At the scale batteries penetrate our lives, the question of “who owns batteries” is becoming less trivial. It’s not just about who owns them, but how they’re owned. Ownership models shape sustainability outcomes, incentives, and costs, influencing not only economic realities but also political power dynamics. Different models cater to different needs, reflecting the diversity of users and use cases. For instance, a homeowner might invest in a Tesla Powerwall or EVs with bidirectional charging and enjoy the direct benefits of storing their roof solar power overnight. However, this model isn’t universally applicable due to factors like upfront costs and housing structures. What might work for a single-family home may not for an apartment complex. Therefore, we need to explore alternative models, such as shared ownership, utility-controlled batteries, or even battery rental services. Each model presents unique opportunities and challenges that we must navigate as we progress towards an increasingly battery-reliant future.
Communal Ownership
Have you ever considered sharing batteries with your neighbors? While still a niche idea, imagine living in a society where your solar panels and those of your neighbors work in symbiosis, feeding a shared battery that powers your entire community. This futuristic setup sparked many questions during my discussion with Max. I.e: what happens to a single member’s surplus electricity? Should it be stored in the battery for their use later? Or should they be able to sell it to other co-op members? Or perhaps it should be freely available, preventing it from going to waste if no one purchases it. We also pondered how individual perspectives on profit and moral values could shape the choice of setup in different communities globally. We also questioned how cultural attitudes towards collaboration and collective decision-making might affect the success of such initiatives. Are there societies more predisposed to the energy co-op model, like the Netherlands with its polder model? This decentralized approach grants power to local communities. The battery utilization rate could be higher given the various situations where a neighborhood, unlike a single house, could balance energy. However, the operational intricacies could prove challenging. Implementing such a communal battery is currently difficult due to the need to rework existing neighborhood electrical systems into a local microgrid. Additionally, there’s a dearth of policy support and incentives to encourage this model.
Utility ownership
Another possibility is to let utility companies handle everything and let batteries become an invisible component somewhere in the grid. However, this is easier said than done. Utility companies, often likened to slow-moving giants, must navigate a labyrinth of tight regulations. Energy markets have been intricately designed to address the challenges of natural monopolies, inelastic electricity demand, storage difficulties, and fluctuating supply and demand. Consequently, any modification in this system is a time-consuming process, with national politics having significant influence over utilities’ decisions. In a conversation with Daniel, I discovered an interesting aspect of the US framework that could greatly impact battery adoption. US utility companies, while operating under a monopoly, must provide returns to shareholders. Interestingly, they’re not permitted to make profits based on the quantity of goods sold (electricity, water, gas). Instead, their allowable profits are calculated on their investments into infrastructure that they use to deliver goods (like wires, transformers, poles)(ref). This means that substantial investments into battery storage might allow them to raise their rate base and make higher profits. Many utilities are already building out storage systems and the buildout is expected to accelerate. Other experiments with battery storage have sparked interesting comments from the public such as “they’ve given up on building a reliable grid, so they just give out batteries instead.” I’m eager to see how the utility ownership model evolves. This model offers high utilization, often integrates seamlessly into existing networks, and leverages batteries at scale.
Battery rental
The battery rental model, arguably the most forward-thinking, involves private companies owning and even charging the batteries, which are then available for a fee or subscription. Gogoro, a Taiwanese firm, is perhaps the most prominent example of a battery swapping service for motorcycles. With a population of 24 million and 14 million motorcycles, the developed East Asian nation of Taiwan is a natural hub for innovation in electric two-wheelers. Since its inception in 2015, Gogoro has rapidly expanded to over 2,400 battery stations. I strongly encourage you to watch the explainer video of Gogoro’s battery swapping below. During my time in Taiwan, I was a huge fan of the quiet Gogoro scooters, particularly when compared to their noisy, pollution-prone, gas-powered counterparts. I also admire the company’s mission to make electric scooters compelling enough for people to not buy cars. Gogoro isn’t alone in the battery swapping industry but is arguably the most established. Sun Mobility India has developed a similar, more cost-effective solution for two- and three-wheelers, while Ample and Nio brought battery swapping to cars. These companies always highlight the main advantages of battery swapping: 1) the ability to exchange an empty battery for a fully charged one within minutes, 2) users won’t have to worry about battery degradation over years, as the private company manages the health of the battery “fleet”, and 3) the private company can partner with utilities to use the battery network for rebalancing the grid at scale. However, they often omit a significant drawback: the high initial infrastructure cost and the network effects could lead to battery network monopolies. Such monopolies could potentially stifle customer service, innovation, and consumer pricing in the long term.
Marketplace framework
While private monopolies can stifle innovation, a marketplace framework could unlock the continuous evolution of shared battery systems. Monopolies are not a new problem, and governments have invented regulations to control them. I envision a future where there’s a separation between the fundamental electrical infrastructure and the ownership of charging sites, and the provision of charging and swapping services. This could be akin to the market structure of European railways, where the infrastructure is publicly owned, and private companies compete to provide services using this infrastructure. Such an open access policy for newcomers eliminates high entry barriers, encouraging competition and thereby innovation. However, the battery swapping industry is yet to reach a level of maturity that would necessitate such coordinating frameworks. Initially, it’s crucial to create a consumer demand for battery swapping, followed by aligning industry incentives towards standardization and political interests to realize this model.
As technology evolves, policy will play a crucial role in steering the direction of battery ownership models. Whether centralized or decentralized, each model presents unique opportunities and challenges. Given the various factors at play, including consumer attitudes and renewable energy’s unpredictability, it seems that a blended approach might serve us best. By combining aspects of communal, utility, and rental models, we could leverage the benefits of each, while minimizing their downsides. However, for this to be feasible, we need supportive policies and regulations that encourage innovation and competition, while ensuring sustainability and consumer protection. As we stand on the brink of a battery-powered revolution, the question remains: will we let policy guide technology, or will we let technology drive policy?
Supply chain
Technology is never neutral. Like anything in society, the political power imbalance of the actors determines the outcome. To understand this, let’s investigate the exploitation along the battery supply chain often hidden beneath the facade of a green energy revolution.
The lithium-ion battery was invented in the 1980s with the main goal of storing the maximum amount of energy in a tiny battery. Battery production was negligible at the time so the availability of the materials wasn’t a concern. Fast forward to the 2020s and the mining of the materials necessary for our EV batteries is putting huge political and social pressures on the few rare earth material abundant locations. Communities in resource-rich yet impoverished nations like the Democratic Republic of Congo, Indonesia or Philippines suffer at the hands of multinational mining corporations, with minimal improvement to their living standards. Reports paint a disturbing picture over and over and over again. Thankfully a promising shift is underway towards diversifying battery materials, utilizing more abundant and ethically sourced elements. This exciting development not only addresses resource constraints, geopolitical risks, and environmental impacts, but also opens doors to technological breakthroughs. Imagine a future where we can choose from competing battery technologies with different trade-offs between energy density, cost, and sustainability. This innovation is a beacon of hope, promising a more green and just energy landscape for generations to come.
This pattern of exploitation continues as the extracted minerals are shipped to manufacturing hubs, often located in developing nations eager for economic growth. My home country, Hungary, exemplifies this trend, where the government keen on attracting foreign investment welcomes battery manufacturers, sometimes at the cost of environmental protection and local consultation. While this influx of industry promises economic benefits, it also highlights how wealthier nations can exploit those with less stringent environmental regulations. The tension between local communities and political interests has become a central issue in elections across the globe, from Peru and Serbia to Chile, revealing a complex interplay of economic interests, environmental concerns, and the rights of local communities. If that’s not enough, the whole situation is sprinkled with a pinch of geopolitics. The question is not simply about the need for factories, but about who gets to decide how and where they are built.
Battery manufacturing is currently a seller’s market. Any battery that fits into electronics or a car is in high demand. This gives immense power to the manufacturers, reducing competition and consequently, stifling innovation. A prime example is the development of battery management software, the “brain” of a battery system that monitors vital parameters like voltage, current, and temperature for safe and efficient operation. When a company like Panasonic sells a battery cell to Volkswagen, it usually comes with an integrated circuit (IC) to manage the battery. However, the development of the algorithms within this IC requires careful analysis of the battery’s chemical processes over years — data that Panasonic lacks once the batteries are in Volkswagen’s vehicles. Consequently, the default battery management software falls short on many fronts, and companies like Volkswagen end up developing their own software — a clear case of reinventing the wheel. Ideally, manufacturers like Panasonic should supply top-tier software with the batteries to all its customers, but the current seller’s market has dampened such innovation. During my time at Google Nest, I experienced first hand unreliable fuel gauge and charger integrated circuits causing me a ton of headache and having to write our own layer of battery management. However, there’s a silver lining. Companies like Zitara are stepping up to address this issue by providing generalized, reusable, state-of-the-art battery management software. This innovation promises to unlock more power from batteries and ensure their safer use.
The story doesn’t end once the batteries are sold. Once they reach the end of their lifespan, they must be recycled. While we’re developing recycling technology at breakneck speed, a completely circular battery economy remains elusive. For now, there’s a risk that rich countries could export their pollution to poorer ones, further exacerbating the systemic issues.
The push for electric vehicles as a climate solution is fraught with complications, as their production often exploits vulnerable communities and ecosystems. While technological innovation is crucial, it must not overshadow the urgent need to question the current political and economic systems that perpetuate this exploitation. Instead of focusing solely on replacing one type of car with another, we should prioritize alternative city designs that reduce car dependency and foster sustainable transportation options. Additionally, we must challenge the existing political economy that prioritizes corporate profits over environmental and social justice. By rethinking our relationship with both transportation and resource extraction, we can create a more equitable and sustainable future.
Sensible technology
The ethos of effective technology is its seamless integration into our daily lives, often becoming so ubiquitous that it essentially becomes invisible. When a technology is well-designed, it addresses a need or solves a problem in such an effortless way that we may not even notice its presence. The downside is that many people become unaware of the technology’s impact, lose understanding of its workings, and thus can’t help evolve its applications.
Electricity and batteries are nowadays such an invisible part of our lives, but that wasn’t always the case. The electrification movement of the 19th century serves as a prime example when technology was visible. As electricity began to power devices and public lighting, it was a visible sign of progress, a testament to human ingenuity that inspired (and intimidated) the populace. It was not just a technological advancement, but a political statement of progress, fueling people’s desire to be part of this transformative period. Anecdotes from the Rural Electrification Act of 1936, and the electrification history of Chicago further elucidate this point.
Today, we are on the verge of another infrastructure upgrade — the transition to electric vehicles (EVs) and sustainable energy. Unlike its predecessor, this transformation is happening largely hidden from public view. The most noticeable elements have been the rising electricity costs and the power outages attributed to climate change, both likely to cause discontent among consumers. Given this scenario, how can we inspire people to embrace the challenges of this transition, rather than fighting against them?
To avoid the phenomenon where important technologies are forgotten because they are not directly seen (‘out of sight, out of mind’), we need to foster an emotional connection between people and the new wave of battery technology. By making them a sensible, physical part of our lives, we can promote awareness and hopefully inspire demand for change. One company that exemplifies this approach is Gogoro, the previously introduced electric motorcycle company. They make beautifully designed batteries and engage users in the battery swapping process through a gamified user experience. This made many people curious to learn more about the inner workings of the battery network and helped people build a connection to the mission of decarbonizing transportation. Similarly, Tesla cars have been a visible and unignorable part of the modern cityscape for nearly a decade. The publicity and emotions people attached to the company helped push electrification into the mainstream discourse. Another example is ‘transparent consumer tech’ like this e-notebook, whereby manufacturers design devices that aesthetically incorporate batteries into their devices, making them a notable feature of the design rather than concealing them. This would serve as a constant reminder of their vital role in powering our lives.
In the end, the key to embracing the challenges of our transition to sustainable energy lies in our perception. Just as the electricity poles of the 19th century were a visible symbol of progress, so too should batteries be in the 21st. By making this critical technology a tangible part of our lives, we can not only promote understanding and appreciation but also inspire a collective demand for a greener, more sustainable world.
By Gábor Csapó, Software Engineer at Google and Contributor & Advisor at Urban AI
Acknowledgments
Thanks for the inspiring discussions, Maxime Cunin! Thanks, Daniel Vickery, for the chat that inspired this article and Ian Morse for his super detailed analysis of some of the issues I’m presenting here.
