The Battery Series
Part 4: Critical Ingredients Needed to Fuel the Battery Boom
The Battery Series is a five-part infographic series that explores what investors need to know about modern battery technology, including raw material supply, demand, and future applications.
The Critical Ingredients Needed to Fuel the Battery Boom
We’ve already looked at the evolution of battery technology and how lithium-ion technology will dominate battery market share over the coming years. Part 4 of the Battery Series breaks down the raw materials that will be needed for this battery boom.
Batteries are more powerful and reliable than ever, and costs have come down dramatically over years. As a result, the market for electric vehicles is expected to explode to 20 million plug-in EV sales per year by 2030.
To power these vehicles, millions of new battery packs will need to be built. The lithium-ion battery market is expected to grow at a 21.7% rate annually in terms of the actual energy capacity required. It was 15.9 GWh in 2015, but will be a whopping 93.1 GWh by 2024.
Dissecting the Lithium-Ion
While there are many exciting battery technologies out there, we will focus on the innards of lithium-ion batteries as they are expected to make up the vast majority of the total rechargeable battery market for the near future.
Each lithium-ion cell contains three major parts:
1) Anode (natural or synthetic graphite)
2) Electrolyte (lithium salts
3) Cathode (differing formulations)
While the anode and electrolytes are pretty straightforward as far as lithium-ion technology goes, it is the cathode where most developments are being made.
Lithium isn’t the only metal that goes into the cathode – other metals like cobalt, manganese, aluminum, and nickel are also used in different formulations. Here’s four cathode chemistries, the metal proportions (excluding lithium), and an example of what they are used for:
|Cathode Type||Chemistry||Example Metal Portions||Example Use|
|NCA||LiNiCoAlO2||80% Nickel, 15% Cobalt, 5% Aluminum||Tesla Model S|
|LCO||LiCoO2||100% Cobalt||Apple iPhone|
|LMO||LiMn2O4||100% Manganese||Nissan Leaf|
|NMC||LiNiMnCoO2||Nickel 33.3%, Manganese 33.3%, Cobalt 33.3%||Tesla Powerwall|
|LFP||LiFePO4||100% Iron||Starter batteries|
While manganese and aluminum are important for lithium-ion cathodes, they are also cheaper metals with giant markets. This makes them fairly easy to procure for battery manufacturers.
Lithium, graphite, and cobalt, are all much smaller and less-established markets – and each has supply concerns that remain unanswered:
- South America: The countries in the “Lithium Triangle” host a whopping 75% of the world’s lithium resources: Argentina, Chile, and Bolivia.
- China: 65% of flake graphite is mined in China. With poor environmental and labor practices, China’s graphite industry has been under particular scrutiny – and some mines have even been shut down.
- Indonesia: Price swings of nickel can impact battery makers. In 2014, Indonesia banned exports of nickel, which caused the price to soar nearly 50%.
- DRC: 65% of all cobalt production comes from the DRC, a country that is extremely politically unstable with deeply-rooted corruption.
- North America: Yet, companies such as Tesla have stated that they want to source 100% of raw materials sustainably and ethically from North America. The problem? Only nickel sees significant supply come from the continent.
Cobalt hasn’t been mined in the United States for 40 years, and the country produced zero tonnes of graphite in 2015. There is one lithium operation near the Tesla Gigafactory 1 site but it only produces 1,000 tonnes of lithium hydroxide per year. That’s not nearly enough to fuel a battery boom of this size.
To meet its goal of a 100% North American raw materials supply chain, Tesla needs new resources to be discovered and extracted from the U.S., Canada, or Mexico.
Raw Material Demand
While all sorts of supply questions exist for these energy metals, the demand situation is much more straightforward.
Consumers are demanding more batteries, and each battery is made up of raw materials like cobalt, graphite, and lithium.
Today, about 40% of cobalt is used to make rechargeable batteries. By 2019, it’s expected that 55% of total cobalt demand will go to the cause.
In fact, many analysts see an upcoming bull market in cobalt.
- Battery demand is rising fast
- Production is being cut from the Congo
- A supply deficit is starting to emerge
“In many ways, the cobalt industry has the most fragile supply structure of all battery raw materials.” – Andrew Miller, Benchmark Mineral Intelligence
There is 54kg of graphite in every battery anode of a Tesla Model S (85kWh).
Benchmark Mineral Intelligence forecasts that the battery anode market for graphite (natural and synthetic) will at least triple in size from 80,000 tonnes in 2015 to at least 250,000 tonnes by the end of 2020.
Goldman Sachs estimates that a Tesla Model S with a 70kWh battery uses 63 kilograms of lithium carbonate equivalent (LCE) – more than the amount of lithium in 10,000 cell phones.
Further, for every 1% increase in battery electric vehicle (BEV) market penetration, there is an increase in lithium demand by around 70,000 tonnes LCE/year.
Lithium prices have recently spiked, but they may begin sliding in 2019 if more supply comes online.
The Future of Battery Tech
Sourcing the raw materials for lithium-ion batteries will be critical for our energy mix.
But, the future is also bright for many other battery technologies that could help in solving our most pressing energy issues.
Part 5 of The Battery Series will look at the newest technologies in the battery sector.
Which Countries Have the World’s Largest Proven Oil Reserves?
The world holds 1.73 trillion barrels of proven oil reserves. Here we rank the top 14 countries that make up 93.5% of the world.
The Countries With the Largest Proven Oil Reserves
Oil is a natural resource formed by the decay of organic matter over millions of years, and like many other natural resources, it can only be extracted from reserves where it already exists. The only difference between oil and every other natural resource is that oil is well and truly the lifeblood of the global economy.
The world derives over a third of its total energy production from oil, more than any other source by far. As a result, the countries that control the world’s oil reserves often have disproportionate geopolitical and economic power.
According to the BP Statistical Review of World Energy 2020, 14 countries make up 93.5% of the proven oil reserves globally. The countries on this list span five continents and control anywhere from 25.2 billion barrels of oil to 304 billion barrels of oil.
Proven Oil Reserves, by Country
At the end of 2019, the world had 1.73 trillion barrels of oil reserves. Here are the 14 countries with at least a 1% share of global proven oil reserves:
|Rank||Country||Oil Reserves |
|Share of Global Reserves|
|#2||🇸🇦 Saudi Arabia||298||17.2%|
|#9||🇺🇸 United States||69||4.0%|
While these countries are found all over the globe, a few countries have much larger amounts than others. Venezuela is the leading country in terms of oil reserves, with over 304 billion barrels of oil beneath its surface. Saudi Arabia is a close second with 298 billion, and Canada is third with 170 billion barrels of oil reserves.
Oil Reserves vs. Oil Production
A country with large amounts of reserves does not always translate to strong production numbers for petroleum, oil, and by-products. Oil reserves simply serve as an estimate of the amount of economically recoverable crude oil in a particular region. To qualify, these reserves must have the potential of being extracted under current technological constraints.
While countries like the U.S. and Russia are low on the list of oil reserves, they rank highly in terms of oil production. More than 95 million barrels of oil were produced globally every day in 2019, and the U.S., Saudi Arabia, and Russia are among the world’s top oil-producing countries, respectively.
Oil Sands Contributing to Growing Reserves
Venezuela has long been an oil-producing country with heavy economic reliance on oil exports. However, in 2011, Venezuela’s energy and oil ministry announced an unprecedented increase in proven oil reserves as oil sands in the Orinoco Belt territory were certified.
Between 2005 and 2015, Venezuela jumped from fifth in the world to number one as nearly 200 billion barrels of proven oil reserves were identified. As a result, South and Central America’s proven oil reserves more than doubled between 2008 and 2011.
In 2002, Canada’s proven oil reserves jumped from 5 billion to 180 billion barrels based on new oil sands estimates.
Canada accounts for almost 10% of the world’s proven oil reserves at 170 billion barrels, with an estimated 166.3 billion located in Alberta’s oil sands, and the rest found in conventional, offshore, and tight oil formations.
Large Reserves in OPEC Nations
The Organization of the Petroleum Exporting Countries (OPEC) is an intergovernmental global petroleum and oil distribution agency headquartered in Vienna, Austria.
The majority of countries with the largest oil reserves in the world are members of OPEC. Now composed of 14 member states, OPEC holds nearly 70% of crude oil reserves worldwide.
Most OPEC countries are in the Middle East, the region with the largest oil reserves, holding nearly half of the global share.
Though most of the proven oil reserves in the world were historically considered to be centered in the Middle East, in the past three decades their share of global oil reserves has dropped, from over 60% in 1992 to about 48% in 2019.
One of the main reasons for this drop was constant oil production and greater reserves discovered in the Americas. By 2012, Central and South America’s share had more than doubled and has remained just under 20% in the years since.
While oil sands ushered in a new era of global oil reserve domination, as the world shifts away from oil consumption and towards green energy and electrification, these reserves might not matter as much in the future as they once did.
Visualizing the Power Consumption of Bitcoin Mining
Bitcoin mining requires significant amounts of energy, but what does this consumption look like when compared to countries and companies?
Visualizing the Power Consumption of Bitcoin Mining
Cryptocurrencies have been some of the most talked-about assets in recent months, with bitcoin and ether prices reaching record highs. These gains were driven by a flurry of announcements, including increased adoption by businesses and institutions.
Lesser known, however, is just how much electricity is required to power the Bitcoin network. To put this into perspective, we’ve used data from the University of Cambridge’s Bitcoin Electricity Consumption Index (CBECI) to compare Bitcoin’s power consumption with a variety of countries and companies.
Why Does Bitcoin Mining Require So Much Power?
When people mine bitcoins, what they’re really doing is updating the ledger of Bitcoin transactions, also known as the blockchain. This requires them to solve numerical puzzles which have a 64-digit hexadecimal solution known as a hash.
Miners may be rewarded with bitcoins, but only if they arrive at the solution before others. It is for this reason that Bitcoin mining facilities—warehouses filled with computers—have been popping up around the world.
These facilities enable miners to scale up their hashrate, also known as the number of hashes produced each second. A higher hashrate requires greater amounts of electricity, and in some cases can even overload local infrastructure.
Putting Bitcoin’s Power Consumption Into Perspective
On March 18, 2021, the annual power consumption of the Bitcoin network was estimated to be 129 terawatt-hours (TWh). Here’s how this number compares to a selection of countries, companies, and more.
|Name||Population||Annual Electricity Consumption (TWh)|
|All of the world’s data centers||-||205|
|State of New York||19.3M||161|
|Walt Disney World Resort (Florida)||-||1|
Note: A terawatt hour (TWh) is a measure of electricity that represents 1 trillion watts sustained for one hour.
Source: Cambridge Centre for Alternative Finance, Science Mag, New York ISO, Forbes, Facebook, Reedy Creek Improvement District, Worldometer
If Bitcoin were a country, it would rank 29th out of a theoretical 196, narrowly exceeding Norway’s consumption of 124 TWh. When compared to larger countries like the U.S. (3,989 TWh) and China (6,543 TWh), the cryptocurrency’s energy consumption is relatively light.
For further comparison, the Bitcoin network consumes 1,708% more electricity than Google, but 39% less than all of the world’s data centers—together, these represent over 2 trillion gigabytes of storage.
Where Does This Energy Come From?
In a 2020 report by the University of Cambridge, researchers found that 76% of cryptominers rely on some degree of renewable energy to power their operations. There’s still room for improvement, though, as renewables account for just 39% of cryptomining’s total energy consumption.
Here’s how the share of cryptominers that use each energy type vary across four global regions.
|Energy Source||Asia-Pacific||Europe||Latin America|
and the Caribbean
Source: University of Cambridge
Editor’s note: Numbers in each column are not meant to add to 100%
Hydroelectric energy is the most common source globally, and it gets used by at least 60% of cryptominers across all four regions. Other types of clean energy such as wind and solar appear to be less popular.
Coal energy plays a significant role in the Asia-Pacific region, and was the only source to match hydroelectricity in terms of usage. This can be largely attributed to China, which is currently the world’s largest consumer of coal.
Researchers from the University of Cambridge noted that they weren’t surprised by these findings, as the Chinese government’s strategy to ensure energy self-sufficiency has led to an oversupply of both hydroelectric and coal power plants.
Towards a Greener Crypto Future
As cryptocurrencies move further into the mainstream, it’s likely that governments and other regulators will turn their attention to the industry’s carbon footprint. This isn’t necessarily a bad thing, however.
Mike Colyer, CEO of Foundry, a blockchain financing provider, believes that cryptomining can support the global transition to renewable energy. More specifically, he believes that clustering cryptomining facilities near renewable energy projects can mitigate a common issue: an oversupply of electricity.
“It allows for a faster payback on solar projects or wind projects… because they would [otherwise] produce too much energy for the grid in that area”
– Mike Colyer, CEO, Foundry
This type of thinking appears to be taking hold in China as well. In April 2020, Ya’an, a city located in China’s Sichuan province, issued a public guidance encouraging blockchain firms to take advantage of its excess hydroelectricity.
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