According to a US Department of Energy Argonne National Laboratory report, by 2030, US electric vehicle (EV) battery manufacturing capacity will need to support the production of 10 to 13 million all-electric vehicles annually. The report says that, over the same period, the total build-out of EV battery manufacturing capacity in North America will rise from 55 gigawatt-hours per year in 2021 to almost 1,000 gigawatt-hours per year. To meet this demand and maintain profitability, firms that supply automakers with batteries to power the EVs will require state-of-the-art energy management strategies.
Recognizing the energy-intensive nature of EV battery production
As demand for EV batteries drives exponential growth, local and overseas manufacturers are planning to support the expansion with new factories. Given the lessons learned from the COVID pandemic and the impact on supply chains, the latest business strategy mandates locating manufacturing operations as close as possible to where the batteries will be installed and consumed.
However, building and operating new battery manufacturing plants presents several challenges. To establish a competitive advantage and gain market share, manufacturing plant owners must recognize how energy-intensive EV battery production is.
To offer perspective, a typical hospital construction project, for example, could require between $1 to $5 million USD in electrical equipment with 2–4 substations for incoming power to support their power needs (based on Schneider Electric’s internal field data). A larger, more energy-intensive facility might require $10 to $20 million of equipment alone and 6–12 substations. Comparatively, electric battery plants can require between $50 to $200 million USD of electrical equipment, and some require over 100 substations for power.
Why is the process so energy-intensive? As companies manufacture millions of these batteries to support auto and truck makers, every battery must undergo rigorous testing before approving its installation into a vehicle. The testing process involves energizing and de-energizing each battery to validate proper function. These energizing and de-energizing processes constantly require vast amounts of electricity. This is above and beyond the power needed to keep plant lights and manufacturing equipment running.
Key challenges that proper energy management can address
Such energy-intensive facilities represent several business challenges to plant owners in the design, operations, and maintenance phases. Before moving forward, the three critical success factors that require consideration are:
- Resilience – Plant uptime is a critical success factor impacting profitability and competitiveness. It is, therefore, important to carefully select the site for the plant. Does the location provide sufficient always-available grid power? Soaring energy demand, grid instability, and extreme weather events weaken plant resilience.
Battery manufacturing stakeholders who build plants without factoring in the energy storage or alternate power generation sources risk operational disruptions due to power issues. New microgrids, energy generation, and storage technologies are powerful and cost-effective alternatives to relying entirely on the local grid.
- Sustainability – Control of carbon footprint also represents a critical success factor for EV battery manufacturers. Shareholders, financiers, customers, and regulators frequently demand carbon emissions reductions. Therefore, the sustainability of EV battery manufacturing operations in the US will fall under close scrutiny.
An energy management advisor can help the firm calculate the impact of Scope 1, 2, and 3 emissions. And they can develop a plan that increases plant efficiency. Solutions like using capacitor banks for short-term storage and reuse of de-energized battery power, while using microgrids – including renewable onsite power generation to offset some peak demand – can help better control energy costs.
- Cybersecurity – Cybersecurity futureproofs EV battery manufacturer operational environments. To reduce the threat of attack-inspired disruptions, EV battery firms must assess cybersecurity vulnerabilities. Then they must implement security measures to address them, and provide appropriate training and guidance to employees on current and emerging cyber-related threats.
Companies like Schneider Electric assist in these efforts by applying a Secure Development Life Cycle (SDL) approach to all core power train products (e.g., switchgear, transformers, meters, relays). Within the context of SDL, product development teams perform secure architecture reviews and threat modeling of the conceptual security design. They then follow secure coding rules, use specialized tools to analyze code, and perform security testing of the product. These actions help to “harden” products, making them more resilient against cyberattacks.
Why partnership is critical to energy management success
When building $10 to $20 billion battery manufacturing facilities, efficient energy management becomes critical to success. By partnering with companies like Schneider Electric, plant owners gain the advantage of a local presence. They also can engage with a partner with a high degree of energy generation, distribution, and storage operations expertise. Schneider Electric, a corporation with $30 Billion in annual revenue, has one of the largest industrial footprints for medium-voltage electrical distribution equipment in North America for North America, with 35 factories and six distribution centers across the U.S., Canada, and Mexico alone.
Partnering with the proper electrical infrastructure manufacturer also presents additional benefits. Through direct communication with executives, engineers, and product specialists, battery manufacturer stakeholders lower their project risk. The manufacturer can improve the management of tight facility delivery timelines by ensuring predictable delivery schedules. They can also optimize the design and configuration of power solutions to closely align with business application needs. Furthermore, by partnering with Schneider Electric, the burden of upfront capital costs is alleviated. This is thanks to our extensive knowledge of federal government subsidy and loan programs.
Modern predictive maintenance will be enabled with power solutions that offer embedded data analytics and monitoring systems. Such systems allow for the early detection of performance anomalies and maintenance scheduling. These can rectify the issues before any unanticipated interruption occurs.
To learn more about how Schneider Electric can support your battery manufacturing design and operation plans, and deliver efficient and sustainable buildings, download our reference guide.