The case for sodium-ion

Our first episode covering sodium-ion batteries featured a cautious take on the chemistry: Back in February Adrian Yao, founder of Stanford’s STEER program, explained the challenges of reaching competitive energy density and costs, especially given the falling price of LFP. Still, sodium-ion chemistries are picking up steam, thanks largely to growing deployments in stationary storage and small-scale mobility in China. So what’s a more bullish take on sodium-ion? In this episode, Shayle talks to Landon Mossburg, founder and CEO of sodium-ion battery manufacturer Peak Energy. He outlines a pathway to competitiveness and argues that, in the right applications, the advantages of sodium-ion chemistries outweigh their challenges. Shayle and Landon cover topics like: Why almost all current deployments of sodium-ion capacity are in China — and why Korean battery giants are committed to LFP right now The thermal advantages of sodium iron pyrophosphate (NFPP) vs. the higher energy densities of layered oxides Sodium-ion's supply chain benefits and lower CapEx requirements How NFPP’s system-level savings in cooling, safety, auxiliary power, and maintenance — plus strong cycle life — could offset its current cell cost premium Resources: Catalyst: The promise and perils of sodium-ion batteries Latitude Media: Peak Energy’s quest to build US sodium-ion battery dominance Latitude Media: Is it too late for the US to rival China on sodium-ion batteries? Nature Energy: Critically assessing sodium-ion technology roadmaps and scenarios for techno-economic competitiveness against lithium-ion batteries Credits: Hosted by Shayle Kann. Produced and edited by Daniel Woldorff. Original music and engineering by Sean Marquand. Stephen Lacey is our executive editor. Catalyst is brought to you by Anza, a solar and energy storage development and procurement platform helping clients make optimal decisions, saving significant time, money, and reducing risk. Subscribers instantly access pricing, product, and supplier data. Learn more at go.anzarenewables.com/latitude. Catalyst is supported by EnergyHub. EnergyHub helps utilities build next-generation virtual power plants that unlock reliable flexibility at every level of the grid. See how EnergyHub helps unlock the power of flexibility at scale, and deliver more value through cross-DER dispatch with their leading Edge DERMS platform by visiting energyhub.com. Catalyst is brought to you by Antenna Group, the public relations and strategic marketing agency of choice for climate and energy leaders. If you're a startup, investor, or global corporation that's looking to tell your climate story, demonstrate your impact, or accelerate your growth, Antenna Group's team of industry insiders is ready to help. Learn more at antennagroup.com.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Speaker 00

  Latitude Media, covering the new frontiers of the energy transition.

• 0:07Shayle Kann?

  I'm Shayle Khan, and this is Catalyst.

• 0:11Speaker 02

  We can see pretty clearly for the next two years because we have quotes from, both from raw material suppliers and from cell suppliers that the price is falling by about $20 per kilowatt hour over the next two-ish years, two to three years.

• 0:25Shayle Kann?

  Coming up, watch your blood pressure. We're talking sodium ion.

• 0:38Speaker 00

  Demand flexibility is now an essential part of the data center's speed to power playbook. But how do data centers actually curtail load? Gridbeyond is the end-to-end solution for flexible energy management. Gridbeyond's advanced DERS and VPP platform is tailored to what data centers care about most: maximizing reliability, intelligently meeting curtailment obligations, reducing costs, and managing all your distributed resources in one place. Ready to transform your distributed energy management? Get started at gridbeyond.com. Catalyst is brought to you by Antenna Group, the communications and marketing partner behind the most influential companies in energy, climate, and infrastructure. For three decades, Antenna has helped ambitious companies stand out,

• 1:20Speaker 00

  build market leadership, and become category-defining brands. From breakthrough startups to global industry leaders, their team brings the expertise, relationships, and track record to accelerate your momentum. Learn more at antennagroup.com.

• 1:35Speaker 03

  The power plant for the modern grid isn't a building, it's a network. Energy Hub's DERS platform connects batteries, EVs, thermostats, and commercial and industrial sites into virtual power plants that over 230 utilities dispatch as reliable grid capacity day in, day out. VPPs deploy in 60 to 100 days at 40% to 60% less cost than traditional infrastructure, and they perform like conventional generation from day one. Learn about the flexibility platform for the modern grid at energyhub.com.

• 2:11Shayle Kann?

  I'm Shayle Khan. I invest in early-stage companies at Energy Impact Partners. Welcome. All right. So a while back, we had our first conversation on this pod about sodium ion batteries, in that case with Adrian Yao from Stanford. Sodium ion has garnered a fair bit of attention as a potential future chemistry that sort of continues the trend we've seen historically within lithium ion from NMC to LFP, which is to say, a chemistry with potentially lower CapEx, lower energy density, but some other characteristics that make it better for certain applications, lower range vehicles, and then particularly for stationary storage on the grid. Sodium, in addition to that, has a bunch of other potential advantages, from a very different supply chain that could be more domestic,

• 2:54Shayle Kann?

  in the US at least, to potentially drop in manufacturing capability, to different safety characteristics. There's a bunch of things that are, that are pretty interesting about it in principle that need to be proven out still in reality. I would say that that conversation that we had with Adrian about sodium ion was fairly sober, and I think reflected a fairly steep hill that the chemistry would need to climb in order to compete. So I thought it'd be worthwhile to present a more bullish view from somebody who's on the ground, starting to deploy sodium ion systems. Landon Mossberg is the CEO and co-founder of Peak Energy, which is commercializing sodium ion batteries specifically for stationary energy storage applications. As you can imagine, he's very optimistic about it. So let's see

• 3:38Shayle Kann?

  why. I will say this gets pretty wonky. So if you either aren't already in battery chemistry world, don't know about sodium ion, or just need some of these terms defined, go back to that episode with Adrian Yao. We'll link to it in the show notes, and that'll be a good primer for you. In the meantime, here's Landon. Landon, welcome.

• 3:58Speaker 02

  Thanks. I'm glad to be here.

• 4:00Shayle Kann?

  Let's talk about sodium ion. I want to start with you kind of walking me through from a global perspective, like where we are in sodium ion technology, manufacturing, deployment, et cetera. So start with the big picture. How would you characterize like today's state of affairs in sodium ion batteries?

• 4:18Speaker 02

  Yeah, it's been an interesting, an interesting past couple of years for sodium ion, for batteries in general. I think, you know, we started Peak Energy about two years ago, and Around that time, the promise and a lot of the interest going into sodium ion, frankly, one of the reasons we were interested in it was it was sort of like, okay, well, this is going to be fundamentally cheaper at the cost of atoms than LFP.

• 4:46Shayle Kann?

  It was, I've always described it as like, it's a different thing, but people, I think, generally appreciate the NMC to LFP transition that went on over time, where like LFP fundamentally lower cost, lower energy density, that was a trade that turned out to be worth making in a bunch of contexts, both stationary and mobile batteries. And so if you think about the promises, you're describing it a couple of years ago of sodium ion, it was sort of like an extension of that. It was like, okay, this is the next level, even cheaper fundamentally, potentially, even lower energy density fundamentally, potentially. Now we have to prove one of those things is true.

• 5:19Speaker 02

  That's right. That's right. Yeah. And by the way, I think that's still like the trajectory that is possible, whether it like, whether that's the ultimate landing spot is still, I think, very much dependent on how much traction it gets in different applications and things like that. But I think, you know, with enough, with similar levels of investment that LFP saw, you would see a similar, you'll see a similar sort of transition there. But, you know, I think two years ago, LFP was twice as, almost twice as expensive as it is today. And, and so at that point, it just felt like, okay, well, the, the mark to get a cheaper cell with sodium ion is easier, right? It's, it's a easier bar to clear.

• 6:01Speaker 02

  And lo and behold, sort of over, you know, starting two years ago and really over the next year, the price just kind of fell very, very quickly, which is a very interesting time to be starting a sodium ion based energy storage company. And I'd love to say we were smart enough to sort of see where we were going to end up at the application layer. But I think there was a good blend of like, being far enough along with the work that we were doing. To realize that there were some other application level benefits that still kept this very, very interesting despite the fact that like the bar had gotten harder to meet on or to like beat it on a full cost of atoms phases. But maybe I'll back up and we can go into those benefits later. To answer your original question about like where it

• 6:45Speaker 02

  is right now, you know, there's somewhere probably between it's hard to know exactly because a lot of this capacity is actually existing lithium ion capacity that's that can be repurposed or has been repurposed for sodium ion. But I think you'd be pretty safe in saying there's at least 30 gigawatt hours, probably as much as 100 gigawatt hours of sodium ion capacity worldwide for all different variants. And sodium ion is similar to lithium ion. It's not a monolithic cell. You have mostly differentiated by the cathode that's that you're using. And we're using sodium pyrophosphate in FPP, which until

• 7:27Speaker 02

  very recently, didn't get much attention at all outside of China. And even in China, it was was the second fiddle to higher energy density layered oxides.

• 7:37Shayle Kann?

  So 30 gigawatt hours to maybe 100 gigawatt hours of capacity globally. You made a good point there that like the numbers are squishy because people can, and in some cases have repurposed LFP lines to make sodium ions. So the numbers are not as easy as they are in other cases. But let's assume it's something in that range. I assume 95% of that, 99% of that is in China. How much of that is in China?

• 8:00Speaker 02

  Almost all of it's in China. There's there's some sort of token projects and stuff elsewhere, but almost all of it's in China.

• 8:07Shayle Kann?

  Interestingly, that implies that the large Korean battery companies like the LGs and SKs and Samsungs are not yet a big players in sodium ion world. Is that true?

• 8:19Speaker 02

  Yeah, I think the large Korean players are, you know, they saw the writing on the wall with LFP a few years ago and decided to go straight at that. And I think they're pretty, they got their hands full with that. That's a really tough thing to try to catch up to the Chinese on that pathway. We're starting to see some interest there from smaller players in Korea, but also for some of the bigger ones. But I think it's going to be a journey for them. They're already kind of pot committed on LFP to a large extent, and they're going to have to go through that process.

• 8:51Shayle Kann?

  Okay, so then most of this manufacturing capacity in China. One thing we've learned over the years is that manufacturing capacity does not equate to installations, particularly when it is in China. What do we know about where, if and where these batteries are getting deployed from the Chinese manufacturers?

• 9:09Speaker 02

  Really depends on the, again, sort of type of sodium ion you're talking about. But there's, there seems to be a decent, like a large portion of those markets going towards like smaller applications. So I think of like 12 volt battery replacement stuff, scooters, you know, smaller packs for other kind of scooter-like applications.

• 9:30Shayle Kann?

  Because, that's interesting, because I would think that like energy density matters a lot in a scooter-type application. Maybe I'm wrong about that.

• 9:37Speaker 02

  I mean, I think that, so you can approach LFP energy density, get really close, and even in some cases, there's some claims of matching it with layered oxides. Now, that's a higher cost than sodium, because you have some sort of transition metal in it, right? Like a nickel or something like that, copper. We're not doing that. And the layered oxides are also sort of similar to the layered oxides in lithium ion world, where like cyclability is not as good. Their safety profile is a little tougher to design for and things like that. But they are higher energy density, higher voltages. So that's where they play.

• 10:15Shayle Kann?

  Right. So but I guess it raises the question like, why? So if you're going to, you know, put a sodium ion battery in a scooter, like what is the benefit that you're seeking there? You're getting maybe the same energy density at a cost that means that you probably aren't getting a cheaper battery, or vice versa, you're getting a cheaper battery that has lower energy density. So what is the, do you know what the, I know this is not the application you're going after, but I'm just curious what the thinking is there?

• 10:39Speaker 02

  There are some performance benefits. So sodium ion in general, like again, it's very chemistry specific, but in general, you have much higher ionic conductivity, which translates to higher power. So you can get more power out of these things, especially with layered oxide architectures. They can have really nice cold weather performance. So scooters, this can be super interesting. I think some of this is just momentum too, especially in the layered oxide side that, you know, two years ago, when they were starting to sign these contracts and stuff like that, LFP was expensive and they could beat the price. Now they're probably close to the price of LFP, probably not cheaper. But, you know, you, these are, as you know, like battery projects take a

• 11:19Speaker 02

  while to get going and you design a pack and then you have to kind of make a guess about where you're going to end up on the price. I, you know, there's a, we from very early days, looked at layered oxide and then decided it's not the, not the chemistry, at least for the current product set that we're building on the energy storage side. And that's actually, I mean, I think there are really interesting applications. CATL has been very vocal about their, their hybrid pack technology where they're using, I think it's a layered oxide based sodium ion, but they, they basically have some portion of a vehicle pack that is sodium for, primarily for power and for cold weather performance, and then the rest is LFP.

• 12:05Speaker 02

  And you're also hearing BYD push out their first sort of sodium ion packs. So I think there's a, there's a broad consensus that this is trending in the direction and we see the same thing. I mean, from the quotes and what we're hearing from the suppliers, not just cells, but also materials, we see a really low risk pathway to the crossover point on price with LFP coming somewhere between 2028 and 2030 out of China. So like, I think that's like broadly why you see people investing here because you have these performance benefits on the layered oxide side, plus a trajectory to get to that level of cost. Sodium ion's a different, or energy storage's a different picture, which is what we're really excited about, but that's where we see the other ones.

• 12:48Shayle Kann?

  Right. So then that, that leads to Deployment question on the energy storage side. So for stationary energy storage, are we seeing within China deployments at 100 megawatt scale, 10 megawatt scale, megawatt scale? What do we see so far?

• 13:04Speaker 02

  You saw the first announcements kind of late last year, early this year with first sort of demonstrator projects, and those are in the like tens of megawatt hour scale. And we know there are multiple other in the pipeline. Some of this is driven by some policy in China that provided projects that do non-lithium storage with some preference in like interconnect queue speed and stuff like that, or the equivalent of whatever the interconnect queue is in China. And so you're starting to see that get deployed there. There's also some safety benefits on the NFPP side, which I can talk about, where they're like, if you're looking at deploying energy storage for fast charging at gas stations, the safety requirement's really high there.

• 13:47Speaker 02

  So they're having an easier time getting those permitted. Interestingly, I think where we see the benefit and where we're really excited about the product trajectory on our first system is really on non-capex cost. And we don't see a ton of focus on that yet in China. I expect there will be as we're getting traction and they're seeing what we're doing. But mostly what you're seeing right now is like either some sort of policy-driven measures or things that are due to like safety characteristics of the systems that they're deploying there.

• 14:21Shayle Kann?

  I should know the answer to this question, but I'll ask it to you anyway. I asked you in megawatts, you answered in megawatt hours, and it made me realize I don't actually know, does cost scale with duration with sodium ion similar to how it does with lithium ion?

• 14:36Speaker 02

  Yes. Yeah, yeah. And that's one of the benefits of the technology in general, right? There are a lot of really interesting energy storage technologies out there that have promise, but the problem is that they're really, really, like they're very different than what is the mass, like the thing that's gotten adoption, which is lithium ion based system. So if you look at like flow batteries or compressed air storage or, you know, things like that, they're just like new and there's a lot of unknown unknowns about how you deploy them at mass scale. For sodium ion though, like it's so similar, it's similar in enough ways to lithium ion that like Operators know how to use it. The risks are largely well understood.

• 15:21Speaker 02

  You can apply a huge amount of the supply chain and scale and de-risking and capital and all those structures against it. So that just means that you can get to scale much, much faster with much less risk. And so if you have a technology that actually fits better, it just means the market's, the addressable market is much immediately larger.

• 15:42Shayle Kann?

  Okay, so if I could step back and just characterize how you describe this sort of state of affairs today. There is manufacturing capacity that is at meaningful scale. I mean, not compared to LFP or whatever, but tens of gigawatt hours, basically all in China. Deployments are starting to happen. It seems more initially in the mobility world than in stationary storage, but there initially as well, but we're very early innings. Like, this is just the past year or two this is happening, is that right?

• 16:11Speaker 02

  You know, exactly. And I think, go back a year ago, you saw, when we were over in China, I mean, you heard a little bit about NFPP and energy storage for sodium, but it was usually, like, almost everybody was doing it as a side project against layered oxide and higher energy density sodium ion. Today, we're starting to see that flip. There's increasing interest in NFPP as an energy storage, like a really great technology for energy storage. And you're seeing even, I mean, even some of the other applications are getting interested into this because, you know, we didn't go into the benefits, but it's got a lot of

• 16:53Speaker 02

  system-level goodness that just make, especially in energy storage, a better product. It's easier to make and easier to de-risk, but they probably translate to other spaces as well. So I think we're, like, we're early innings on sodium ion, but we're even earlier innings on the scale up of NFPP, and I think we're going to see a lot, a lot, lot more of that soon.

• 17:16Shayle Kann?

  That sort of gets to my final question on the state of affairs before we go into a deep dive comparison between sodium ion and LFP for grid storage, which is the supply chain. I mean, people are familiar with sort of the supply chain for lithium ion generally. Where do you get the lithium? Where do you get the cathode materials? Where do you do the, where do you make cam or PCAM? How do you turn, where do you turn into cells and how and packs and all that? What does that look like in the early days of sodium ion? Is it an entire, at least in the initial construct, is it like an entirely internal China supply chain? Because I know one thing that's different is that their, the resource, the base resource is differentiated versus lithium ion.

• 17:59Speaker 02

  Yeah, yeah. So, so I think if you take the bomb for lithium ion, you take the bomb for sodium ion with a few small caveats, they are exactly, like you can use the exact same supply chain for sodium ion that you can use for lithium ion, except for active material. So cathode active material and anode active material, obviously salts for electrolyte. And then as you get to more specialized architectures, we see a lot of opportunity to customize stuff like separators and solvents and stuff like that, which we are doing. But in general, that's like one of the really nice characteristics of this is that you have a scaled supply chain that you can already draw on for most of the bomb. Now for the

• 18:39Speaker 02

  active materials, on the, let's talk about cathode first. What we're doing is NFPP and that's pretty simple. It's very similar to LFP and the lithium carbonate sort of equivalent for NFPP is sodium bicarbonate. So, and you know, you can make that synthetically. It's like relatively cheap to make synthetically. You can also mine it from trona reserves. The US has the world's largest naturally exploitable proven trona reserves. We have like 92% of proven reserves.

• 19:21Speaker 02

  But you can also make it synthetically and a lot of countries do that. So it's really not a constrained resource in the same way that like high-quality lithium carbonate sources are. That's not going to be the thing that drives the drives any bottlenecks in the process. In fact, I think mostly it's about getting like processing of that up. And I think on that, you can, if you look at the way people make NFPP cathodes now, I think layer oxides are going to be similar in some ways, but I'm not as expert on that. NFPP can can use very, very similar process steps as lithium ion cathodes. Interestingly, you can sort of do kind of, you can adopt processes that take from LFP

• 20:03Speaker 02

  type cathode manufacturing or from layered oxide type cathode manufacturing on the other. So you have some choices there and I think there's ongoing optimization around that. That's part of what's going to continue to drive like cost optimization on the cathode side. Of course, like most of the processing capability for that today is in China. But I think if you talk about the the scale of the challenge to bring up like non-Chinese supplies of of active material, it's much easier for sodium ion because you have much less incumbent scale benefit in China to compete with on that technology. So if we wait for four or five years to get into this game, we're going to be in a similar place that we are today on LFP.

• 20:48Speaker 02

  But today, at least, you're not, you're not facing such a huge economy of scale challenge. Active material is a really interesting thing, too, which we can talk about as well if you're interested in that. But yeah, hard carbons on the anode active side.

• 21:07Speaker 00

  For data centers, connecting to the grid quickly means two things: building distributed energy and having a plan for demand flexibility. Grid Beyond helps with both. Grid Beyond's Terms and VPP platform unlocks the potential of distributed assets and dispatches flexibility into the right market at the right time. And this is more than software. Grid Beyond supports developers every step of the way, from modeling your highest ROI energy mix to orchestrating the full set of assets around a data center. The track record speaks for itself. Grid Beyond manages over 1,400 sites and more than 3.7 gigawatts of load across Europe, the UK, and the US. Learn more at gridbeyond.com or click the link in the show notes. If you work in energy or climate,

• 21:51Speaker 00

  you already know the company's Antenna Group has helped build. For three decades, they've been the communications and marketing partner behind the industry's breakout companies, category creators, and market leaders. Today, their team is working across the most consequential areas of the energy economy, from data centers and grid modernization to nuclear, geothermal, storage, critical materials, and next-generation technologies. Antenna helps ambitious companies become the names everyone in the market knows, trusts, and wants to work with. They build reputation, elevate executives, drive demand, and turn momentum into market leadership. If your company is ready to lead its market, Antenna is ready to help you get there. Visit antenna group.com.

• 22:33Speaker 03

  When you harness the power of millions of DERs in a VPP and put artificial intelligence behind the dispatch, the outcomes exceed conventional generation. Energy Hub's DERMs platform has been trained on years of real dispatch data from over 2.6 million DERs, so utilities can plan with confidence. That means consistent load reduction across a four-hour event window, even during the widest, most uncertain peak periods. Utilities target, shape, and verify capacity down to the meter. Unlock flexible capacity that costs 40% to 60% less to deploy than traditional infrastructure in a fraction of the time it takes you to break ground on a peaker plant. Learn more at energyhub.com.

• 23:16Shayle Kann?

  Okay, so what you're focused on is stationary storage using an FPP, as you said. And I know that your view is that an appropriate comparison, obviously, the thing you need to do to win is to go take down LFP, or at least take down a chunk of LFP, to go penetrate that market substantially because that market is dominated by LFP. So I think your view is that an appropriate comparison between sodium ion and and LFP for grid storage purposes is a holistic view of a bunch of different characteristics. So what I kind of want to do is run through a bunch of different characteristics for you and have you walk me through how you view the comparison between kind of sodium

• 24:00Shayle Kann?

  ion, let's say, over the next couple of years, not 10 years from now and not today. But what you see is realistic in the sort of, you know, if somebody's developing a project, if they're developing a greenfield project today, what does that going to look like? And then you can tell me sort of how these how these stack up against each other.

• 24:20Speaker 02

  Yeah, happy to do it. And I think maybe to reframe kind of like a little bit about how to think about peak energy. I mean, we are building our first technology on sodium ion, but I would not necessarily think of us as a sodium ion company. We're we're a vertically integrated energy storage company. We want to work from the cell up to the system and pick the best technology there. So it's not necessarily that we want to beat LFP. We want to just pick the right technology for this application. And if that's, we think that's NFPP hard carbon sodium ion right now. There are some really interesting things that might be interesting to talk about later with LFP, high temperature LFP and stuff like that that we are working on. But we're not dogmatic about LFP versus sodium ion. We just want the right technology there.

• 25:05Shayle Kann?

  Good. That means you'll be less biased in the answers that you'll give me in a moment as we compare them. Okay, so I want to start with the sort of obvious one, which is which is CapEx. Talk me through CapEx and how they compare to each other, I think at the cell level and then at the system level, which is always important not to forget.

• 25:24Speaker 02

  Yeah, yeah. So, and that's where this gets really interesting. So at the cell level, it doesn't, it doesn't really make any sense to talk about cost per cell, right? Because what you actually care about is how much energy is in the cell. So cost per kilowatt hour is the thing to care about. And on a, right off the bat, NFPP, the primary challenge for the chemistry is that it's less energy dense than LFP, substantially less. It's getting better, but like that gap is pretty wide. And so the material inside the cell is dirt cheap, even though it's substantially less energy dense, you're less, you make up a lot of that cost because your materials are really cheap.

• 26:06Speaker 02

  But we're still, today, we are, depending on which LFP you're comparing to, the cells that we're working on are somewhere between $15 to $30 per kilowatt hour more expensive than equivalent LFP on a cost per kilowatt hour basis. And this is like, you know, looking at a LFP cell in China that's anywhere between like $50 to $60 per kilowatt hour. So that's kind of where it is today.

• 26:33Shayle Kann?

  So you've got a premium at the cell level, which I think folks appreciate, and we can debate till the cows come home whether that premium sustains into the future or not. Sort of irrelevant for the conversation right now, but like...

• 26:46Speaker 02

  Yeah, and we can see pretty clearly for the next two years, because we have quotes from, both from raw material suppliers and from cell suppliers that take the, like, the price is falling by about $20 per kilowatt hour over the next two-ish years, two to three years.

• 27:01Shayle Kann?

  Okay, so your view is that that premium erodes?

• 27:03Speaker 02

  Yeah, not entirely. I think we'll still be about a $10 per kilowatt hour more expensive if you talk like 2028.

• 27:09Shayle Kann?

  Okay, so then let's talk about the system level, because I think there's things pushing in both directions here, right? On one hand, you're lower energy density, and lower energy density effectively means more of all the other stuff. It's the same reason that people care about efficiency for solar panels, right? Like, the less efficient you are, the only reason you really care is that your balance of system scales up more because you need more

• 27:28Speaker 02

  More stuff.

• 27:29Shayle Kann?

  Wiring and more steel and more, right, all that kind of stuff. But on the other hand, there's also some things in the full system that I think you can spend less on in sodium iodine, right?

• 27:38Speaker 02

  Yeah, yeah.

• 27:39Shayle Kann?

  So walk me through that trade.

• 27:41Speaker 02

  So like, now it's probably, the way to explain this is to maybe back up and tell you a little bit about our system, because otherwise these trades don't really make sense. But, so NFPP, hard carbon...

• 27:56Speaker 02

  Has a couple of properties that make it really interesting for energy storage. The most important property here is that it is much more comfortable at higher temperatures than LFP. So we're talking like temperatures in a range between 45 degrees Celsius and 60 degrees Celsius where this cell is pretty comfortable and shows similar degradation performance at those temperatures that LFP does at 25 degrees C. This is really important in an energy storage context and it hasn't historically gotten that much attention because mostly in things like vehicles, you don't care about this because it's easy to cool the pack, you have to do that anyway.

• 28:40Speaker 02

  And what they care more about is cold weather, right? Because the car's off and then it's going to get cold, right? So everyone's focused down there. For energy storage though, it's really much more important at the high end of the range because managing heat becomes one of the hardest things you have to do with these technologies. You're just pushing so much power in and out of the pack. That's one piece. The other is partially because of lower energy density. So that's part of this, to be clear, but partially because of chemistry benefits, the cell has a much easier safety profile to design for. So it starts to self heat at a lower temperature than LFP and it gets, when it goes into thermal runaway, it burns colder than LFP.

• 29:23Speaker 02

  So much easier to prevent propagation. And then when it does start to vent, the gas that the cells vent is substantially less explosive, so there's less hydrogen in that gas than, we see about 50% today and opportunity 50% less than LFP and opportunity to get that even maybe down below a threshold where you could light it with an open flame, which is a really interesting property. So, yep, sorry, go ahead.

• 29:52Shayle Kann?

  So just to boil those down then, so what you're saying is where your savings come in here at the system level are one, thermal management and two, safety, what you need to install in a lithium ion battery for safety purposes, you should be able to Spend less at least, have less safety equipment embedded within the system.

• 30:11Speaker 02

  Yeah, exactly. Exactly. That and then there's some other ones like slightly better RTE, less swelling, things like this. They just like, they all accrue to system benefits. So that's the chemistry, right? Now let me back up to the system level. How do we use that, right? So a normal LFP system out in the wild, you basically have a bunch of batteries in a container that maybe need to sit in a desert for 20 years and operate and push like enough power to power like hundreds or thousands of homes every day out of this block. And as you're doing that, it generates a lot of heat. You also want to make sure that none of these cells go into thermal runaway and then like explode and that causes a lot of issues, right?

• 30:53Speaker 02

  So there's a huge amount of design and complexity go into the system. And if you actually look at what that nets out to is you get like thermal management systems where cooling is the most complex and expensive part of this. So just on a CapEx perspective, you've got to install like fans, coolers, pumps, like water cooling in a lot of these cases. There's a ton of material, a ton of like volumetric energy density loss because you're having to put all this stuff in there. And auxiliary power to power all of this stuff is actually becomes really, really significant. So in like a hot region, these things use like, you know, on the order of about 50 megawatt

• 31:37Speaker 02

  hour for a, for given like equivalent unit or like block container of energy, LFP energy storage per, per year of energy just to cool them, right? So that's the aux power load and that becomes actually pretty expensive, right? And then all this stuff, like if you think about pumps and fans, it's all moving, right? So the moving stuff's the stuff that's going to break. This thing has to be out in the desert for 20 years and that's what you're going to have to go maintain. You're having to change filters and do regular maintenance. If the thermal management breaks, you probably have to shut the system down. You can't use it for a while, so it hits reliability. And drives a ton of costs. So you end up spending a lot on operating and maintenance

• 32:21Speaker 02

  and on auxiliary power for these things in addition to the CapEx cost, right? So but back to the CapEx cost, all these things, plus the safety, plus some mechanical stuff you have to do, drive a lot of cost and a lot of energy density loss. And so because I'll sort of our system and what I'm really excited about our system is, yeah, it's great that it's a sodium ion system. It's the largest sodium ion system deployed to the grid. We actually are the first three and a half megawatt hour unit of capacity is going into the grid right now in Denver. It's going to be the largest outside of China.

• 33:03Speaker 02

  All that's exciting. But what I'm really excited about is that it's the first passively, completely passive thermal management system on the cooling side ever deployed anywhere in the world at grid scale. This means like no moving parts at all through the whole system. And we dramatically simplified the aux power system because of this. So we have no external aux power requirements. We've managed to like depopulate a ton of systems. So like, a lot of our team come from Tesla and SpaceX. So there's like this philosophy, engineering philosophy in there where everyone always says best part is no part, right? And so we've taken that to heart. Try to depopulate a lot of the subsystems that drive cost complexity and energy density loss here. And what that lets us do is actually get

• 33:46Speaker 02

  to a balance of system cost despite a serious energy density penalty that is already today pretty much on par with where LFP systems are. And that's that's massive because we're a three and a half.

• 34:00Shayle Kann?

  Sorry, is that the balance of systems cost?

• 34:02Speaker 02

  Yeah.

• 34:02Shayle Kann?

  Or is that the total installed cost?

• 34:04Speaker 02

  Total installed cost is still a little bit higher, primarily because we have that cell.

• 34:08Shayle Kann?

  Because you have the okay, okay. So the way to think about it is you've got right. So you've got some portion that's the cell cost. You've got a premium there. You've got the rest of it that's balanced system despite the energy penalty or sorry, the energy density penalty, which should drive higher balance of system cost. You're saying you can get to basically parity.

• 34:22Speaker 02

  Exactly. Yeah, pretty much there, right? You know, it is again, really depends on the system you're talking about and all that stuff. But we're.

• 34:29Shayle Kann?

  Well, and it's idiosyncratic based on the labor rates in the region and all that. But yeah, high level.

• 34:33Speaker 02

  Exactly.

• 34:34Shayle Kann?

  I understand. So that's.

• 34:36Speaker 02

  Yeah.

• 34:36Shayle Kann?

  Capex.

• 34:37Speaker 02

  Capex. Yeah. So we end up being, you know, Today, you know, like again, all of this is like on scale curves and stuff like that. So our but if you look at like equivalence, conditions, we're, you know, within 20 to 30 dollars per kilowatt hour of a really of like a good LFP system from China today on a cost basis, which is a massive achievement, given the energy density penalty. And then that's trending, as I said, you know, as those cell costs come down, we'll be within, you know, probably 10 dollars per kilowatt hour by 2028. And that is exciting because, you know, it's yeah, we're still more if that's where we stopped, we're like, why do we exist? There's

• 35:21Speaker 02

  no reason to buy a sodium ion system in the world. But I think the reason that it's exciting is because you go to these the O and M cost portion of this. And that's where it really, really gets interesting.

• 35:32Shayle Kann?

  Yeah, that was going to be my next step. So, you know, there's the cell level, the system total CapEx level, and then there's the lifetime cost of ownership level. You've already mentioned sort of two pieces here, which is OpEx in general, the, for example, the electricity load driven by the aux power, things like that. And then lifetime and degradation. So talk to me about the OpEx and lifetime portion.

• 35:56Speaker 02

  Yeah. So like, what's interesting about this, and it was super surprising to me when I got into this this space and we started the company, because like at the time, and still today, I think everybody's focused on the DC block cost, right? That's what like you're trying to get energy density into that. Everyone's going higher energy density, just trying to drive those those costs down on the CapEx level. And because intuitively, it seems like that would make sense. It's a battery, how much operating cost should there even be? But as you pull these numbers apart, especially today, because the cost for the hardware has come down so much over the last three, four years, today, you know,

• 36:41Speaker 02

  the cost of the hardware is probably only about a third of the total project cost. O and M, so all operating and maintenance, including like degradation, maintenance, aux power, RTE losses, that is about another third of the total cost NPV at like a 10% discount, right? If you don't take an NPV of it, it's massive. It's by far the biggest And then the other third is installation commissioning, which is still quite, quite high. But while like the hardware cost has been massively focused since the beginning of the ESS industry, those other two buckets really haven't gotten much focus, so they haven't moved too much. And what we found is that with our, with these systems that we've talked about, these

• 37:24Speaker 02

  improvements that we've been able to build into this first passive system, we've been able to reduce those by really, really material amounts. So like just on aux power, we're 50 times, a little bit more than 50 times more efficient. We use 50 times less power than an equivalent LFP system. And then on maintenance, we're like substantially less, less maintenance, something like 90 or like almost 90% of all the components that require regular maintenance or break in a system, we've just completely removed. By the way, those are also the things that drive a lot of the safety incidents. So if you look at most causes of fires in ESS, which are still fairly rare, but when

• 38:07Speaker 02

  they happen, they're usually caused by some thermal management system or some auxiliary system that's there. We don't have those, so it's a safety system for that. If you add all that stuff together, we're at about, in a hot region, like let's take like Miami or Phoenix, we're at about a $75 per kilowatt hour NPV benefit on a TCO basis versus an equivalent LFP system.

• 38:29Shayle Kann?

  NPV benefit on a TCO basis, okay, I understand. If you're doing like a levelized cost of storage type of calculation, what about lifetime? What about cycle life?

• 38:40Speaker 02

  Yeah.

• 38:41Shayle Kann?

  And also, how certain can we be about cycle life with Sody Mine, given how new it is?

• 38:46Speaker 02

  Cycle life is not, actually, cycle life is pretty good. We are getting close to, I think we're like very close to 10,000 cycles now on these cells. The one that I think, also for LFP, by the way, I think everybody should worry about this, is calendar life, right? Where you're like, you know, these things have been on test for over a year now in calendar conditions, and we're really stressing them, doing a lot of accelerated life testing. But these are, in cases, 20-year systems. And also for LFP, you know, this industry is not 20 years old. So there's a lot of work you have to do to try to estimate that. The good news is that the degradation mechanisms in this chemistry are simpler than, they're like fairly equivalent to

• 39:32Speaker 02

  LFP, there's just less of them. So there's multiple different mechanisms of degradation in all batteries. In NFP hard carbon, we have less. Like, for instance, we don't have any graphite. So there's no graphite exfoliation, which is a major issue in LFP chemistries. But we both have SEI dissolution. And the way that that happens seems to be very, very similar in both these architectures. So we feel like the risk there of some unknown unknowns popping up is substantially less than if you were going to something that was really novel and new. To answer your question about where the data is showing us that we're going to get to, we are like this chemistry is just incredibly stable. So you have very, very little mechanical stress.

• 40:16Speaker 02

  You don't have like you have almost no iron dissolution in the cathode, which is a problem in LFP chemistries. You do have SEI dissolution, but that is a very well understood problem. And it seems like most of the strategies used to stabilize SEI for LFP work also for NFPP. So we've seen massive improvements in things like first cycle efficiency loss and overall degradation on SEI like over like the last year, and it's continued to get better. The punchline of this is that the cyclability data that we show that we see is substantially better. So compared to LFP, if you take like two cells, just cycling equivalent at 45 degrees

• 41:01Speaker 02

  C, I'm just looking at the data right here that we have. After we got two cells, equivalent cells, same size on test in our lab right now. LFP is at about 2,600 cycles and it's at 80% state of health. NFPP is almost 3,000 cycles, same cell, and we're at 95, 94.5%. And like I said, we've seen almost 10,000 cycles, still trending way above 80% state of health on those things. They just don't seem to really want to move down. So cyclability is one of the principal reasons that this thing is better. And some of our OpEx savings come from reduced augmentation.

• 41:41Speaker 02

  But actually, what we've done is we've tried to design the system to push, to sort of like not drive as much benefit in terms of augmentation, because the way customers think about augmentation, everyone has like a little bit different of a strategy around that. And some customers really value less augmentation, others don't. So we see more value in trying to be better than LFP in degradation, but not like way, way better. Instead, we're sort of taking the system and designing it so that it uses less hot power, needs less cooling, has less maintenance and that sort of stuff. So we pushed the cells harder and still had better degradation performance. But it could even be better if we wanted to cool them the same way, for instance, that LFP does.

• 42:26Shayle Kann?

  All right, so stepping back, I guess, one last time here. I want to talk briefly about geography of manufacturing. You know, I think in LFP world, right, we had been very China dominant at the cell level. That's where the big CapEx investment is on the cell. And now we're starting to see LFP manufacturing stood up in the US, at least to some extent. Right, we've got LG and Panasonic, Tesla and so on coming. What do you think happens with sodium iodine and what is your plan, right? Like, right now, you're buying cells from China because that's where they're produced. Are you eventually going to have to stand up a cell line in, assuming you stick with sodium iodine in the US, and what's that going to look like?

• 43:07Speaker 02

  We're definitely going to build cell manufacturing here in the States. We're also going to continue to work with partners all over the world. Obviously, we have some good partners in China right now. We're in the process of basically getting, the plan of the company is kind of like a multi-phase plan, right, where the first phase is get the technology in the hand of customers, get them comfortable with the technology so that they'll give us off-takes to make enough, a good bankability case to build the cell factory. And we've done it, like, I think we're at the tail end of that part right now. So we'll be coming out fairly soon with some pretty big customer announcements around this. But we see tons of traction based on these OpEx benefits and better reliability,

• 43:52Speaker 02

  better safety characteristics that make this thing really great for all existing kind of IPP obligations, but also really attractive for data centers who really care about reliability, you know, stuff like that. And on the back of that, we have the bankability to set up the factories here and invest in the supply chain to get this going. But you can't do that, like it's, I mean, you've had, you've, you've, you've talked a lot on prior podcasts about like folk financing and all that stuff. It's the same, same here, right? Even though this cell technology is manufactured in a materially similar way to LFP, it still takes some, some convincing to the market to show that it's like, that it works and that it's real. And that's, that's what we're in the business of doing now.

• 44:33Speaker 02

  But I think your general challenge in setting up a competitive, long-term competitive sodium ion based supply chain is probably less, like we talked a little bit before, than LFP or any lithium ion, just because you, you're competing with a much like less scaled supply chain, at least on active material. And I think there are some properties of sodium ion that they give you more flexibility in different ways that haven't been fully explored on lithium ion. For instance, like the, the plating mechanism there maybe like shows a lot of promise for, you know, anode lists or cell forming anode, or whatever you want to call it,

• 45:15Speaker 02

  type, type cell architectures where that's been really challenging for lithium ion. It's not going to be easy for sodium ion, but it looks like it might be easier. That could unlock some really interesting products that might be great for automotive and stuff like that, and really changes your manufacturing process. Same thing for things like dry coating, larger cell formats. So I think it just like, you know, the nice thing about sodium ion is it lets you go ahead and get started at scale with a product that is really competitive out the gate in the right applications on today, right? You don't have to be in the lab for 10 years. But then it has the promise where you can take it in new directions and kind of disrupt the, the incumbents potentially because the technology allows you to do things down the road that, that might not be possible with lithium ion.

• 46:00Shayle Kann?

  All right, Len, and this was super illuminating, really interesting. I'm excited to see some Surya Mayan systems out in the wild that you guys are going to put out there. But thank you so much for the time. Of course. Great talking to you, Shayle. Lenon Mossberg is the CEO and co-founder of Peak Energy. This show is a production of Latitude Media. You can head over to latitudemedia.com for links to today's topics. Latitude is supported by Prelude Ventures. This episode was produced by Daniel Waldorf. Mixing and theme song by Sean Marquand. Stephen Lacey is our executive editor. I'm Shayle Khan, and this is Catalyst.