Part 3 – battery tech

I’ve written about this as part of other pieces, but this has a standalone entry. With Steve St. Angelo talking a lot about the energy cliff, he got me really thinking a lot. His big ideas get my mind going. I cannot disagree with his historical discussions of civilizations cutting trees down for energy. It is completely fascinating.

I agree with him in the big picture that we COULD have problems in 10-15 years IF things are not done to solve our energy issues. It’s getting harder to find oil and extract it from the ground. This oil is used for diesel which powers mining equipment. Natural gas used for heat. While most power plants burn coil, some burn oil.

I feel today’s “energy cliff” is a self-inflicted gunshot wound of policy, and NOT his broader thesis. For example, we have plenty of coal, but because it isn’t green, it’s not palatable. Japan has plenty of nuclear generation capability (and look to be starting that back up) but because of Fukishima, had to create other means of finding that energy. China now has coal problems, but have a lot of nuke plants in the hopper. Germany said they will be getting natural gas from Russia (who has low stocks) and power from France’s nuke plants.

There’s plenty of energy, at the moment, but it isn’t perfectly green – so the POLICY error may cause severe spikes in price and blackouts or freeze outs with no natural gas. The politicians running this clown car will then tell you we need trillions more for green stuff. The people running against them will tell you, “here’s a pile of coal. I can get your power and heat restored for 1/5th the cost, tomorrow”. And the opposition will win this argument.

But that has a fuse as well. And St. Angelo is correct – a problem is brewing down the road.

Where I differ from Steve is that I believe something like this will lead to a Manhattan Project type of level of importance. How do you solve the energy problem with extracting it from the earth? As Steve points out, you have an energy ROI – and the harder it is to drill deeper down, the more energy you must expend to extract that oil. Your energy ROI decreases the harder it is to get this stuff.

Big thinking – batteries

I think this is the next big thing of humanity. If we look back at what I consider the biggest technology advances of civilization, here are my highlights:

  1. Printing press – can now share knowledge with humanity around the world in books. Kicks off 100 years of people learning a lot of shit from books.
  2. Calculus with Newton – this led to a lot of other big things, but my physics text books had a ton of calculus in them. I imagine this was used in a lot of these other things
  3. Internal combustible engine
  4. Flight
  5. Nuclear fission
  6. Computer
  7. Microprocessor
  8. Internet

A lot of these discoveries have been over the last 100 years or so. Knowledge now with the internet may accelerate this even more. I feel battery tech will reach a point of energy storage density to be transformational.

Many of you do not realize we have a ton of energy being wasted as we speak. All of this solar energy during the day your house generates? What happens to the extra, if there is some? It can get fed back to the grid. I have batteries as part of my solar package. The concept is I have a built in generator with this then, and I can power my house for nearly a day on this.

I worked at a hydro dam company for about 4 years. The built turbines for hydro plants all over the world. So we had hydraulic engineers and mechanical engineers that worked for us designing all of this stuff. In discussions with one of their sales guys, Jim, he told me a lot about all of this and drew out lots of pictures on paper and discussed the energy generation, etc.

With this, many do not realize that these turbines are not generating electricity at all times. If there’s a pull on the grid of 100 units, and the hydro dam can generate 100 units, it does. But the total production capacity may be 200 units at a time. When the sun goes down, maybe they disengage some of the turbines from generating electricity. It is a DIRECT FEED into the system.

Dumb question. IF this can produce 200 units at a time, why might it only be producing 100 units? Why would it not produce its max capacity and feed the extra into a giant battery?

Part of this is that battery has not been invented yet. Imagine if we captured ALL of the energy from this hydro dams? When these batteries fill up, it then trips over to the next. I could, in theory, then ship this battery to a regional facility. This battery is then plugged in and 1,000 homes gets power from it and not the grid. Additionally, by locating this battery closer to the homes, you lose a lot less in transmission.

I haven’t worked out the numbers on this, so don’t kill me over a few bucks in shipping a battery versus the lost power over heat over that distance. My point is that when these batteries are filled up, they can easily be shipped to locations like factories that can use this power.

Now, assume this factory now has this giant battery. The hydro dam could work to fill that capacity up. Over the course of a decade, you do not have to build more power plants or dig up more coal – you can use the energy that you are not capturing now.

Trucks

One of Steve’s issues then is – how then do you get the materials for all of these batteries? How do you dig it up? Diesel with trucks. I would posit that perhaps our FIRST priority is a big ass battery for trucks. The trucks that dig up all of this stuff. Let’s go to a future in 10 years where all of these giant trucks run on these energy-dense batteries that can perform work for 8 hours, then need a recharge. I pointed out San Dimas owned by First Majestic that has a hydro dam running as part of it, and I imagine many mines could have solar or hydro generation for power, and then these trucks are powered on that.

To build solar, you also need to extract metals. Well, we now have trucks that use the power of the sun to move them, not diesel.

Check.

This then also leads to bigger discussions on nuclear. While it’s a steady 15% or so of our base generation, why could this not be higher? It’s political, I know. I live 7 miles away from Three Mile Island and I was 4 when my mom scrambled to get us the hell out of Dodge when we lived about an hour from here and a melt down seemed imminent. So I get the hesitancy, as I live just a few miles from one of the worst nuclear disasters in the history of mankind. Up there with Chernobyl and Fukishima.

But mining uranium and enriching it to create nuclear fuel could also be a way to really attack the coal issue. Where there are risks with nuclear, obviously, we hope that as years go on we get better and safer with all of this. I’m also not sure what to do with all of the spent fuel rods, as that creates another issue completely. But we can, over the next 15 years, significantly ramp up base generation from coal to nuclear.

Check

As this battery tech evolves, these will be added to power plants to capture ALL energy. Meaning, we need to up the amount of energy that we can capture with capabilities we have now.

Check

I believe most homes will choose to go solar over the next 15 years, as energy prices climb higher and higher. My heat is run by natural gas, but I’m considering a heat pump down the road to run off of my solar. I use 13,800 kWh per year, and my system was designed to generate 16,900 kWh and I have two Tesla powerwall batteries.

As more and more homes switch to solar, the cost of solar may go up, but not as fast as the cost of fossil fuels. The more homes generating all of their needs, the less burden on the grid.

Check

I also feel they have a really ambition solution with all electric cars inside X years. I can tell you that this problem solves itself with $10-$15 per gallon gas prices. And, do you not think this type of regime would not tax you to eternity until you complied? They HATE oil companies and everything they stand for. Now, just imagine this scenario:

2021 – $3.50 per gallon. The avg car might get 25 mpg. That means it costs you $.14 in energy to travel a mile using gasoline. What if you had all solar on your roof with batteries with extra generation capacity like me?

Now, imagine we are in 2026, and due to inflation and green policies, along with taxing gasoline at stupid rates, you are looking at $10 per gallon? That takes your per mile cost to about $.42 per mile. This starts to hurt.

And a guy knocks on your door with a solar solution to generate all of you power, and the power for two electric cars, for LESS than your existing power bill?

This then means with electric cars, you now drive at a cost of $.00 per mile.

You now have no real need for gasoline.

Check.

IT related stuff?

In my normal day job of IT, at the hydro company, I was a server tech who ran their data center. With this, I was responsible for this like ensure the UPS would act as a battery backup in case power went out. A UPS is an Uninterruptible Power Supply. You start understanding this giant thing can power my 60 servers for two hours. You deal in terms of “amp hours”. You learn how “foot-pounds” of air conditioning work to cool your data center.

And what happened what I took 45 of those servers and virtualized them on two physical servers. All of these servers with 400-1000 watt power supplies? All of them virtualized into 2 physical servers.

IT, over time, becomes a lot more efficient with power and resources. We are like a utility, in a sense. Every year, we are meant to get more work done with less people and less energy. My entire 25 year career has been constant consolidations and reduction in costs. It’s stressful. Maybe one of you hedgies want to send me an email on the side with a nice career opportunity someday? Lol.

The point of bringing this up is that efficiency drives technology as well. When it comes to battery tech, I can tell you that something similar to Moore’s law will be in place. Think about the first cell phones of the 1980s.

See the source image

These things had to be plugged in, and the battery would not last long. The cost per minute to talk to anyone was like $1.50. I had one in 1992 in my Camaro for emergencies only, and it was powered by my cigarette lighter.

Over time, as you can see, miniaturization happens and you get more production with less energy.

See the source image

My point is that Steve and others are CORRECT. Today, we cannot possibly think of a battery for a rock truck. The energy density just isn’t there yet. But what about 10-20 years from now IF this is treated like the Manhattan Project?

Pareto charts

I’ve been doing Pareto charts for 25 years. These essentially state that 80% of your problems are from 20% of the causes. In IT, you may have 100 different problems that pop up, but if you can focus most of your resources on the top 20 issues and document the hell out of them and have quick solutions, that will reduce 80% of your problems. You then rinse and repeat every month.

You look at the energy cliff, and what are the biggest causes that can affect most of the issues? How can we potentially buy enough time to get to that 2040 when battery tech does all of this stuff?

  1. Work on nuclear, now. Get more baseload generation at all countries.
  2. Create a commission to accelerate battery tech at a nation-state level.
  3. Use a lot of these batteries at hydro dams to capture excess energy capacity now. Musk offered a Texas town a massive battery after the issues happened with a freak snow storm in Texas last year. We have some of these now.
  4. Push more solar tax credits and advertise on a nation-state level how you can replace your energy costs with solar and a battery
  5. Get batteries for work trucks to eliminate diesel usage
  6. Increase tax credits for buying electric cars and advertise this on a nation-state level
  7. Provide $50 billion reward for company that comes up with certain battery tech – for example, work truck. You might potentially incentivize oil companies to start research divisions for battery and green tech
  8. Incentivize miners who use ESG like solar, wind, and hydro with tax credits or tax breaks. These COULD pay for themselves with hydro dams, solar farms, and battery powered rock trucks. Companies that do these things will have less of a tax burden and make them more competitive on margins that traditional miners.
  9. Announce a gradual gasoline tax over 20 years that will incentivize purchase of electric vehicles and make ICE cars cost prohibitive to buy.
  10. Work more closely on metals recycling. Old batteries and metals – how can we extract these metals and make a profit?
  11. Energy independence. If a household can demonstrate they have no power usage from the grid or gas usage from the grid, they get certain tax breaks that could encourage more homes to do this.
  12. Make solar and other types of energy like this extremely cheap to borrow using govt backed funds.
  13. Increase exploration in metals, now, with incentivizing miners who are exploring for green-related metals. For example, a silver miner is important for anything solar. These miners must get the best tax breaks possible to incentivize them to explore for more resources.

While some of this could be argued to be a pipe dream, and some of it is, it doesn’t mean we cannot identify the most energy-intense uses we have now and find means of incentivizing alternative generation.

We are now at a point with inflation and the lack of now oil discoveries that we are on a clock until when a lot of this is either exhausted or it costs us more in energy to pull out of the ground than what we get from extracting it.

I feel when we make much further advances in battery tech, that we will be able to not only harness a lot more of what we can already generate, but significantly reduce our dependence on coal and petroleum for energy.