How Software-Defined Batteries Mitigate Electrification Bottlenecks
Electrification is inevitable, but bottlenecks along the supply chain may pose significant challenges that hinder the ability to meet growing demand. Understanding how these hurdles may impact the execution of an electrification strategy is critical to achieving long-term success.
Bottlenecks along the electrification supply chain
Critical materials may fall short in supply and cause project delays, especially without an increase in mining capacity or demand-side adjustments like material substitutions. For example, manganese, nickel, cobalt, graphite, lithium (for battery production), and copper (for transmission and distribution or T&D) are/will be in short supply under the current trajectory.
Meanwhile, the geographic concentration of key components (e.g., cobalt almost exclusively comes from the Democratic Republic of the Congo) is often exacerbated by limited trade-flow opportunities and supply chain localization.
Price volatility, policy uncertainty, and unpredictable project pipelines may discourage OEMs and investors from financing new capabilities. Shortages of engineers and skilled technicians, plus long lead times required to build up capacities, may cause further delays.
Moreover, the power T&D structure must keep up and double until 2050 to meet commitments. Yet, our grid is already strained, and the shortage of technical personnel and slower pace of investments in the utility sector may affect the resiliency of our infrastructure and the reliability of green technology solutions.
Battery materials will be the key constraint
According to McKinsey's “Global Energy Perspective 2023: Industrial Electrification Outlook” article, battery material supply is likely sufficient to support the current trajectory but will fall short if we further accelerate electrification to achieve climate commitments.
For example, the total cost of ownership (TCO) of EVs (including subsidies) will be competitive with internal combustion engines (ICEs) by 2025 in most regions. However, if adoption accelerates, material shortages may delay the TCO crossover point.
The article suggests material substitution as a mitigation strategy (e.g., shifting from nickel, manganese, and cobalt-based batteries to manganese-based batteries). However, it doesn’t address the technical hurdle that will make changing battery chemistry long and arduous.
Traditional battery solutions lack the flexibility to accommodate different battery chemistries. Shifting to a new cell chemistry often requires a complete overhaul of the system and product design, which involves extensive effort, time, and resources. Addressing bottlenecks like this one requires innovative technology and outside-the-box thinking.
The role of new battery technologies in overcoming electrification bottlenecks
We’re battery nerds here, so we’ll delve into how new battery technologies can contribute to overcoming the bottlenecks to accelerate electrification.
The ability to use new battery chemistries on the fly
Balancing the supply and demand of battery materials is crucial to accelerating electrification. For example, new technologies may lower the concentration of critical materials. However, as mentioned above, new battery chemistry is only part of the story. We need the ability to use the new cell chemistry without overhauling existing products and systems.
Software-defined batteries (SDBs) built on the Tanktwo Operating System (TBOS) and Dycromax™️ Architecture allow operators to mix and match cells of different ages, chemistries, or capacities to achieve the desired energy density, output power, and other characteristics. Operators can switch cell types to respond to supply chain fluctuations without downtime.
Cost-effective second-life applications
Second-life applications, in theory, can help reduce wastage and maximize the use of raw materials. However, monolithic battery packs and the lack of standardization often increase refurbishing complexity to the point where the business case doesn’t exist. Also, reusing cells may not be possible without granular state of health (SoH) data.
Instead of implementing a costly and elaborated process to sort and select cells (and still discarding many at the end), SDBs make it possible to reuse cells of different SoH. Operators can combine (almost) any used cells to make repurposing batteries a viable business model.
Incorporation of distributed energy sources (DERs)
To relieve pressure on the grid (the expansion of which may be constrained by copper availability) and increase the reliability of their power supply, corporations may implement DERs (e.g., on-site solar or wind) and microgrids that operate independently of the main grid to lower power costs and increase resiliency.
Flexible energy storage solutions make such self-generated energy from on-site renewable sources available around the clock to reduce reliance on the grid further. TBOS supports industrial-scale battery solutions to ensure a stable power supply, enhance safety, and manage load peaks effectively.
Agility in new system and product development
Skill gaps and high costs increase the challenges in building capacity and developing innovative products. With batteries being a critical component of most electrified applications, addressing the shortage of skilled battery engineers and lowering the design and development costs of battery systems go a long way to address bottlenecks.
TBOS uses software to solve hardware challenges, making it simpler and faster to incorporate custom battery solutions into electrified products. Our API-like approach reduces the need for battery engineers, while its modularity increases flexibility to accelerate product development or retrofit current equipment.
Winning the electrification long-game
An electrification strategy must address short-term challenges while anticipating the long-term implications of various moving parts to mitigate the risks of multiple bottlenecks. Our battery strategy workshop helps you gain a 360-degree view and make informed strategic decisions to maximize impact.
