The Economic Imperative for Better Battery Technology

A married research duo are studying ways to better predict the feasibility and potential economic benefits of adopting battery technologies for renewable energy.

What can we learn from a marriage of physical and social sciences?

Materials scientist and Blavatnik National Awards for Young Scientists Finalist (2018, 2019) Shirley Meng, PhD, shares her answer to this question. She and her husband, economist Graham Elliott, PhD, combine their expertise in battery chemistry and economic modeling.

In an intriguing collaboration, they developed ways to better predict the feasibility and potential economic benefits of adopting battery technologies to integrate renewable energy, such as solar and wind energy, into energy grids. Together with their research team members, they published “Combined Economic and Technological Evaluation of Battery Energy Storage for Grid Applications” in the journal Nature Energy.

Meng is the Zable Chair Professor in Energy Technologies and Director of the Institute for Materials Design and Discovery at the University of California San Diego (UCSD). Elliott is also at UCSD, where he is Professor and Chair of the Department of Economics. We recently interviewed both to discuss this collaboration and what they learned through the process.

Can you tell us how this collaboration was initiated?  

Meng: UCSD is a place where interdisciplinary and convergent research is not only highly valued but practiced.  I founded the Sustainable Power and Energy Center (SPEC) at UCSD in 2015. SPEC reaches out beyond engineering and physical sciences to study economic and sociological issues that need to be addressed to create truly robust ecosystems for low-carbon electric vehicles and carbon-neutral microgrids. We won a competitive grant from the US Department of Energy, which provided the resources for this work.

Why did you choose to study batteries for energy grid applications? What question about batteries did you study?

Meng: With energy grids showing their age and continuing to distribute energy generated with high environmental costs, efforts that enable grids to distribute cleaner, renewable energy more efficiently would be a technological advance with a positive societal impact. While there have been exciting moves toward renewables, many problems lie ahead if we are to move from renewables being important to renewables being dominant.

Elliott: Grid energy storage remains a major challenge both scientifically and economically. Batteries, or energy storage systems, play critical roles in the successful operation of energy grids by better matching the energy supply with demand and by providing services that help grids function. They will not just transform the market for supplying energy but also transform consumer demand by lowering the prices of energy for households and businesses.

In this work, we studied the potential revenues that different battery technologies deployed in the grid will generate through models that consider market rules, realistic market prices for services, and the energy and power constraints of the batteries under real-world applications.

Bringing these together in an interactive way—examining the engineering and economic aspects as two parts of the problem together—allows for a complete look at the problem, and ultimately a better outcome for the economy.

Graham Elliott

What was the biggest finding of this collaboration? Were you surprised by your findings?

Meng: We found that while some battery technologies hold the greatest potential from an engineering perspective, the choice based on economics is less clear. The current rules of grid operations dictate which battery technologies are used for those particular grids—some of these rules may be out-of-date, and will be updated as the grids modernize. So even though we continue to see improvement in the energy/power performance of battery technologies and reduction in cost, policymakers are the ultimate decision-makers. Policymakers setting those rules have considerable influence on how fast and how successfully those battery technologies can be deployed, and therefore industry needs to work closely with policymakers to define the best practices for faster deployment of battery technologies.

We also found that there are a wide variety of factors that should be considered in choosing a battery technology. For instance, the battery recycling method is an important technical variable that determines the sustainability of a particular battery technology.

How could your findings eventually affect individual people and society? How can it help our economy?

Elliott: All gains in human welfare arise from what economists call productivity gains—people creating more with less effort, so there is more to go around. Technological advances in energy storage enable productivity gains. But for it to work, we need not only to be able to provide effective energy storage from an engineering perspective, but also it needs to be economically feasible. Different choices at the engineering stage mean differences in the economic feasibility, and how markets are arranged impacts engineering choices. Bringing these together in an interactive way—examining the engineering and economic aspects as two parts of the problem together—allows for a complete look at the problem, and ultimately a better outcome for the economy.

Meng: We are delighted to see to see that battery grid storage is starting to gain more momentum—policymakers are becoming informed about both economic and scientific, and engineering aspects of battery technologies.

What did you learn from this collaboration? Are there any tips you would like to share with other researchers who would like to pursue similar collaborations between physical and social sciences?

Meng: Perhaps the most important thing for the collaborative team to do is to build a common vocabulary so we can truly understand each other. In our case, we started by explaining the most basic symbols and units in engineering, like the energy unit Wh (Watt-hour) and the power unit W (Watt). Without understanding the differences between these symbols, we will make mistakes in constructing important parameters in our economic modeling.

Elliott: Another thing we learned is that different fields have very different understandings of the big picture. Collaboration across fields helps focus everyone’s efforts. For example, engineers typically view markets as fixed, and the engineering problem is to find something that works for the market. Economists tend to think of products (such as batteries) as fixed and design markets that work for the available products.

There is a whole research area waiting patiently for economists to understand which parts of the engineering problem are important and for scientists and engineers to understand from their perspective which parts of the market design are important.