Sumitomo Electric plans long-life battery plant in North America.
Japan’s Sumitomo Electric Industries plans to build a new battery plant in North America as the U.S. accelerates its shift to sustainable energy, Nikkei has learned.
Sumitomo wants to produce large-capacity batteries called “redox flow cells,” which are used to store electricity generated by wind turbines and other forms of renewable energy. The batteries are less prone to degradation than conventional lithium-ion batteries. Their battery life of up to 30 years is expected to be twice as long as that of lithium-ion batteries.
The battery market in North America is expected to expand to 1.7 trillion yen ($12.9 billion) by 2035, according to Japanese research firm Fuji Keizai Group. Sumitomo hopes that by building a local production base, it would gain first-mover advantage.
Osamu Inoue, president of the company, told Nikkei in a recent interview that the U.S. will become the world’s largest battery market, with California state leading the way. He added that the company planned to expand its business by producing batteries in the U.S. and Japan.
The company is in the midst of planning such a move and it sees Texas and the city of Aguascalientes in Mexico as options for its base.
Sumitomo hopes to open the plant by 2024. The company plans to procure key materials from local companies and assemble them before it delivers the batteries to utility companies. The company wants to make the batteries in Osaka as well and expects to increase production capacity by three times, with the aim of generating 10 billion yen in sales from the business by 2025.
The redox flow battery works by circulating vanadium, in liquid form, in the tank. The battery uses vanadium electrolyte to store energy and enable batteries to have a longer and safer life. Given that renewable energy is subject to weather and its supply can be unstable, such batteries would be greatly useful for the transition from fossil fuels.
Fuji Keizai Group expects that the global market of stationary batteries will grow 3.8 times to 5.4 trillion yen by 2035 from 2021. North America will lead the growth with an increase of 4.1 times to 1.7 trillion yen, followed by 1.1 trillion yen in China, and 746.6 billion yen in Europe.
Renewables currently account for 21% of the energy mix in the U.S., according to the International Energy Agency, lower than that of China and some European countries.
President Joe Biden’s administration has pledged to achieve net-zero emissions in the electricity sector by 2035 and wants to introduce offshore wind power and other renewables. In California, the local government requires some utility companies to install large batteries.
While lithium-ion batteries are widely used, companies are racing to develop new types of energy storage, including solid-state batteries for electric vehicles.
Sumitomo led the way in developing redox flow batteries by putting them into commercial use in 2001 for the first time in the world. The battery is too large to be used in EVs but it is safe and durable for large-capacity storage.
The installation costs of such batteries vary but are often around 1.5 times higher than those of lithium-ion batteries. The company believes that its redox flow batteries can be more competitive in the long run as their capacity can be increased by adding electrolyte.
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