first_imgLeclanché says industrial applications driver of storage growthWhile residential battery deployment may be capturing headlines and heralding the march of prosumer, industrial applications deliver the demand required for manufacturing capacity growth. Leclanché’s VP and head of corporate development Jacques Boppe argued this was the case at Energy Storage Europe last week in Germany. March 21, 2016 pv magazine Energy Storage Installations Markets Markets & Policy Share pv magazine: What kind of battery cell production does Lelanché operate in Europe? Jacques Boppe: We can produce more than 1 million cells every year. In fact, we actually manufacturer more than that every year in Germany. What is the technology? Jacques Boppe: We have two [lithium ion] chemistries. We have lithium titanate oxide (LTO) chemistry, and lithium graphite/NMC (GNMC). So it depends on which chemistry that we use. On average in one year we can manufacture up to 90 MWh [of cells]. In 2015 how many cells did you produce? Jacques Boppe: We have not announced our 2015 results, so I cannot disclose those numbers. We already announced that we have participated in the Graciosa project, that is 3.2 MWh. All of these cells are manufactured in our factory in Germany, which gives you an example of one project that we have done. We normally read that it is impossible to compete with the large Asian producers because of the economies of scale. How does Lelanché do it? Jacques Boppe: Let me answer this another way. In January we announced that we won a 53 MWh project in Canada, and we competed against the main players – LG, Samsung and everyone else. And which battery chemistry will you deploy for that project? Jacques Boppe: We have GNMC and LTO. LTO has a very long life, more than 20,000 cycles. We have not announced which technology will be deployed in Canada, but we can provide two chemistries to the client, so we can do a custom design. If it is a solar PV application then it is very slow charging and discharging. If it is to provide grid ancillary services, then there are more cycles in a system. It also depends on how long the PPA will run for and how long the revenue stream is forecast to be – and according to that we chose the best technology. It is very important for the client to have the choice of technology. How do prove to the client that the lifetime is that long? Especially if it is the key USP of the technology… Jacques Boppe: The cost is the USP – we are very competitive on the cost. Our batteries and cells are tested by the main utilities and there are both public and private test results. We do our own tests, with very fast charge and discharge and we have the data for more than 15,000 cycles. In the solar industry there is often the discussion about cost profiles. In this discussion we have often heard how labor costs are not the defining factor for manufacturing costs – because it is only a small percent of the overall cost. But at the same time, many European manufacturers have not been able to compete. Jacques Boppe: Now I understand your question better: How do you deliver a competitive turnkey solution? We can provide a client a warranty of 20 years because we, the company, controls the chemistry, the hardware and the software of the module. This is a strategic move that Leclanché made 18 months ago, to go from being a cell manufacturer to a full battery system provider. This was a transformative process, a lot of investment was secured to achieve this. Last year we acquired the intellectual property from ADS-TEC last year, for the [battery] module. We also acquired a company in Belgium [Trineuron] to provide the battery management software. And now we provide the full battery system to the client and we are also able to do project design and EPC design. This enables us to provide the full warranty. If a company only manufactures the cells, then it is not able to provide a warranty for the module and there is not visibility into the software in how it manages the cell. If a company doesn’t control the software then it can’t provide the warranty. So this is the key strategy for us. Talking of strategy, what is Leclanché’s strategic goal in terms of growth? Looking at cell production today, the big three producers have 60% of all market share. Jacques Boppe: Leclanché won the 53 MWh project in Canada, so we have share, we won the project for the largest electric ferry in the world – a 4.2 MWh e-mobility project. It needs to be asked, what does it take to gain a slice of market share? A company needs to deliver niche, specific, industrial applications. A manufacturer can have a huge MWh or even GWh lithium ion battery production – but most of it will be for consumer goods. Lelanché only focuses on industrial applications: buses, ferries, large scale for grid services, large scale storage for remote distributed generation solar and wind, and industrial clients such as mining for remote power. But Leclanché also has a residential battery… Jacques Boppe: The home system is something that we are building on. The Leclanché brand is known to the consumer, so there is a path to market there. But keep in mind that in 2015, 80% of the battery capacity installed in the U.S. was for utility projects. The market segment for utility is bigger. So we will offer our residential product for key markets like Switzerland and Germany, but the driver of growth will be industrial applications. So would it be right to say that Leclanché doesn’t have the strategic goal to have 30% market share? Rather the strategy is to be present in these kinds of industrial projects, is that right? Jacques Boppe: Leclanché wants to be involved in landmark projects and it is in these projects that it is clear that we can add value. Between the two lithium ion technologies Leclanché deploys, what applications are they best suited for? Jacques Boppe: We have added in our production facility in Germany the second chemistry, GNMC. Now on the same manufacturing plant, the same line and equipment, we can produce both chemistries. Looking at the stationary storage market, GNMC is around 70% of the demand. LTO is also very useful for very cold or very hot applications. We did a project in Saudi Arabia and used that technology. In northern Europe and northern Canada, northern China where the temperatures are low and the technology needs to last 15 years or more. So we need a mix of solutions. In mobility this is even more the case. For example with a bus, there needs to be power to start the bus, so this is high discharge rate. A bus is operating more than 10 hours a day, so there are more cycles. And also the charging strategy for a bus is key: it starts from one point, goes all the way to the end of the line, and then comes back, changes driver and in around 20 years, it needs to charge very fast. We use our LTO chemistry for this. This also applies to ferries and forklifts – in the logistics world forklifts are lifting and carrying heavy loads for 20 hours a day. So in these applications a fast charge and discharge is required and therefore LTO is a key chemistry solution these days. Is GNMC then the cheaper technology? Jacques Boppe: It is a more common technology and a good standard. LTO is suitable for more harsh applications in terms of temperature, weight, charge and discharge rates. 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