The big read: Equipment suppliers’ solar storage synergy

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From pv magazine Global, February 2019

Although much has been said already about the synergies between solar generation and energy storage, most companies on the battery side have focused their innovations on specialized offerings for the electric vehicle market. With many PV players eyeing opportunities in battery manufacturing though, this scope could soon become much broader.

Inverter manufacturer SolarEdge is convinced that lithium-ion batteries and next-generation storage technologies could benefit from innovation in tailoring them specifically to store energy generated by PV, and that these improvements require firms with expertise in solar to gain control of battery production.

One promising step in this direction is the recent acquisition by SolarEdge of a majority stake in Kokam, a leading manufacturer of lithium-ion batteries. Another may be found further up the PV value chain, where a contingent of enterprising suppliers of industrial machinery have been discreetly bridging the divide between solar and storage for years.

Trailblazers

Industrial equipment supplier Manz cashed in €20 million last year from its energy storage division alone. An early mover in the PV sector, Manz entered the lithium-ion battery business as far back as 2009 and has since reinforced its position by buying a technology firm with more than 30 years of experience in battery manufacturing. According to its head of marketing, Axel Bartmann, company revenues from energy storage remain modest in comparison with other business divisions, but they are growing rapidly.

“Energy storage is the market segment with the largest potential for our company,” says Bartmann. “We now sell equipment for batteries adapted to applications ranging from PV installations and electric vehicles to consumer electronics.”

Other suppliers of equipment for PV manufacturing have followed suit. In 2011, Jonas & Redmann delivered its first fully-automated assembly line for lithium-ion cells and has since commercialized equipment to produce battery modules. Mondragon Assembly and Schmid have also both entered the market for energy storage in the past five years and have been expanding their operations within it.

“Last year, we took €10 million worth of orders from the electric vehicle industry for battery manufacturing equipment,” says Josu Txintxurreta, sales manager at Mondragon Assembly.

“There is a general trend at the moment in combining photovoltaics and batteries,” says Christian Knechtel, CEO of Von Ardenne. His company provides equipment to deposit complex thin films for applications including PV, energy efficient glasses and lithium-ion batteries. “From a machine building point of view, if you have the right technology, it makes a lot of sense to combine solar and storage markets within your customer base.”

Technology transfer

On the surface, there is little overlap between the machines needed to build a battery and a solar system. One is largely a chemical process, the other relies on electronics. Look more closely, however, and similarities come into focus.

Txintxurreta points to key areas in battery manufacturing where Mondragon has added value with its core areas of expertise. “Moving products along assembly lines and communicating between machines – that is nothing new for us,” he says. “We offer world-class robotics and programmable logic controllers.” Mondragon machinery assembles battery cells manufactured by third parties and solders them into battery packs ready to be connected to the grid. Txintxurreta notes that adapting expertise from production lines of the kind used in the PV industry required a major shift in technology for his company, but these efforts are now yielding higher-value batteries for clients.

“A big difference with solar equipment is that we have to test and classify the performance of each battery cell before assembling it into a module,” says Txintxurreta. Unlike solar cells that are now traded as commodities, battery cells remain far from standardized. To operate them in harmony, robots supplied by Mondragon Assembly pick up each cell individually, test it, follow an algorithm to identify which other cells to group it with, and solder it into a better balanced battery pack. Txintxurreta says that other companies might offer similar optimization processes but only companies like Mondragon can automate them all into a seamless production line.

Manufacturers of machinery have proven resourceful in recruiting outside expertise and capitalizing on their own history to find niches in the energy storage market where they benefit from a natural edge over competitors.

Manz calls on knowhow from discontinued equipment for manufacturing crystalline silicon PV to deliver new products for building lithium-ion battery cells. The purchase of firms specialized in battery and roll-to-roll equipment, and insight from ongoing activities in wet chemical processing, laser processing, metrology and automation have all fed into production lines that can manufacture lithium-ion cells from scratch, assemble them into battery packs and assemble battery packs into full battery back-ends automatically. “All you need are the raw materials and our equipment can provide the rest,” says Bartmann.

Next-generation storage

Schmid has built on its core competence of wet chemical processing to bring to market an alternative to the lithium-ion battery cell currently dominating the market. “In 2010 we started developing vanadium flow batteries,” says Marcel Schönleber, who manages sales at Schmid’s energy systems unit.

Flow batteries store vast amounts of energy in vats of dissolved chemicals. They tend to take up more space than lithium-ion but require less maintenance and do not degrade as they discharge. At present, manufacturers struggle to produce them at low cost but Schmid’s background has prepared it for the challenge.

“For us a flow battery is nothing other than a chemical processing machine,” says Schönleber. “We transferred knowhow from our wet chemical etching activities and built battery modules with the same tanks and pumps used in equipment to process photovoltaics. With that we can build entire battery systems in-house from beginning to end.”

After four years of research and development, Schmid installed its first vanadium-flow battery system in Germany. It has since supplied customers in Poland, Taiwan and China.

Combination not consolidation

Not all equipment suppliers share an appetite for energy storage. Representatives from Singulus stated that they would only consider entering the market if it offered applications closer to their core business of PV. Applied Materials said that innovations in materials engineering will be needed to enable high energy density batteries but announced no plans of its own in the area.

To some, the manic growth rate of lithium-ion battery demand offers a grim reminder of the early days of the solar energy sector. A decade ago, subsidy schemes drew waves of European technology firms into the emerging PV industry. “Then the subsidies were stopped,” says Knechtel. “The downturn hit the industry hard in 2014.” Von Ardenne’s sales recovered soon after and have since been growing strongly, but most competitors that ventured into the PV market a decade ago did not survive the consolidation. Those that did are now overwhelmingly based in eastern Asia.

“There will surely be parallels between the history of battery and photovoltaics manufacturing,” says Manz’s Bartmann. “Now everyone is jumping into the battery market, later we will face overcapacity. That is just the way the cookie crumbles.” But these market trends in no way preclude business opportunities for European equipment suppliers in battery manufacturing. Instead, Bartmann says, to remain successful, companies everywhere have to take the right strategic decisions to adapt to the market as it matures.

According to SolarEdge, the trick for prevailing within the solar manufacturing sector is to reduce expenses wherever possible and cram products with unique added value so as to avoid competing exclusively on cost.

Knechtel adds, Von Ardenne has prospered through troubling times by relying on similar thinking. The company has cut capital expenditure for individual pieces of equipment by upscaling production. It slashes operational costs by shifting manufacturing activities close to its client base. It is also continuously sharpening its market edge through technology R&D, improving customer service and developing software at its headquarters in Germany.

“I don’t think that the energy storage market will offer relief for equipment suppliers struggling to survive in the photovoltaics sector today,” says Knechtel. “The challenges will be pretty much the same in both markets. But it does offer a vast opportunity for equipment suppliers that are doing well in their home sector to grow their business.”

Space for synergies

One way for manufacturers in all regions to reduce their fabrication costs and improve the quality of their product is to automate production.

The facility with which providers of machinery operate across technological applications is already helping to streamline storage solutions for solar. Last year, Mondragon released its first piece of kit designed to assemble standardized lithium-ion battery packs into stationary storage systems. “Unsurprisingly, it is marketed at photovoltaics manufacturers,” says Txintxurreta.

As energy storage grows in the portfolio of more equipment suppliers, synergies of this kind could help to progressively bring down the cost of storage for solar and shift its technology into a higher gear.

“For us, unifying these two markets offers a fantastic business opportunity,” concludes Von Ardenne CEO Knechtel. “But it also presents a great opportunity for us as human beings to be involved in bringing these technologies together. Combining energy storage with photovoltaics is one of the most efficient ways we know of to bring down greenhouse gas emissions.”

These solutions have just started to emerge on industrial scales in recent years and the work of visionary equipment suppliers is helping to propel it into the mainstream.

By Benedict O’Donnell