Material substitution in battery electrodes

Material substitution in battery electrodes

Material substitution in battery electrodes The UK 1983-87 M. J. Holmes This study assesses the key influences on material use and substitution in b...

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Material substitution in battery electrodes The UK 1983-87

M. J. Holmes

This study assesses the key influences on material use and substitution in battery electrodes from a survey of UK industry. The intrinsic qualitative and technical characteristics provided by each respective material are dominant. Material prices appear to be of secondary importance. Increasing international concern over the environment may enhance the significance of leg islative considerations.

The author is with the Department of Economics, Dundee University, Dundee, DDl 4HN, UK. The following are gratefully acknowledged: Christopher Rogers (University of Dundee), Phillip Crowson and David Humphreys (FIT2 Corporation) for help and advice, those within the UK battery industty who kindly cooperated with the survey, and the RTZ Corporation for their financial support. The views expressed in this paper are those of the author and should not necessarily be attributed to these sources of assistance.

‘Central Statistical Office, Annual Abstract of Statistics, HMSO, London, 1989, p 154. “Batteries lead the way for cadmium’, Meta/ EWefin MonWy, May 1987, pp 22-27. 3M. J. Holmes, ‘Input prices and material substitution: case for a disaggregated approach’, Materials and Society, Vol 12, Nos 3 and 4, 1988, pp 207-221. 4M. J. Holmes, ‘Input prices and material substitution: choice of methodology for a disaggregated study’, Resources Policy, Vol 14, No 2,1988, pp 112-120.

22

Batteries manufactured cadmium, lead, lithium, of cadmium and lead,

in the UK comprise the following electrodes: manganese, nickel, silver and zinc. In the cases batteries represent a major end-use. In 1987,

batteries accounted for 29.9% of UK refined and scrap consumption of lead (the largest end-use),’ and 32% of total annual Western consumption of cadmium.2 The nickel+admium battery has increased its prominence in some applications, while the lead-acid battery has successfully maintained its market share in others. Typically, economic theory suggests that there exists an inverse relationship between the price of a material and its substitution or use in a given end-use. This study investigates the extent to which this is the case with battery electrodes.We account for the relative significance of material prices vis-&vis other concerns such as environmental and technical arguments in influencing material use and substitution. Data constraints limit the major focus of the study to the use and substitution of materials involving lead-acid and nickel-cadmium batteries; however, data and information which concern other types of batteries are also utilized. Aggregated studies of commodity demand and substitution employ general proxies for substitution and technological change, and fail to provide answers to a number of important questions. A disaggregated study such as this avoids the problems of aggregating across a varied set of technologies allowing for more precise modelling of, and more accurate qualitative and quantitative statements about, substitution and technological change.? The analysis employed in this study relies, in part, on data and information obtained from surveying a sample of UK based battery manufacturers. This approach is more appropriate than statistical techniques such as regression analysis since lesser demands are placed on data availability, qualitative influences can be examined in a more satisfactory manner, and strong presumptions about the relationship between input prices and substitution - as with econometric estimates of price elasticities - can be avoided.4 Examples of studies which analyse materials substitution along these suggested lines include Tilton, Eggert and Gjostein who present studies of US industry. Such

0301-4207/90/010022-13

@ 1990 Butterworth

& Co (Publishers)

Ltd

Material substitution in battery electrodes

studies point to the importance of material prices, qualitative and technical considerations and legislative factors in influencing material demand and substitution.5 This study offers an analysis based on UK rather than US industry. The format of the paper is as follows. The next section discusses lead-acid and nickel-cadmium batteries, comparing the intrinsic qualities that each type of battery has to offer, and the major trends relevant to material usage. The third section discusses the theoretical roles played by material prices and other influences on material use and substitution. The next section then discusses the nature of the survey employed, its findings, and assesses the role played by material prices in more detail; finally, the findings of the study are summarized and wider conclusions are considered.

The battery and battery markets The battery

5J. E. Tilton, ed, Material Substitution: Lessons From Tin-Using Industries, Resources for the Future, Washington, DC, 1983; R. G. Eggert, ‘Changing patterns of materials use in the US automotive industry’, Materials and Society, Vol 10, No 3, 1986, pp 405-431; and N. A. Gjostein ‘Automotive materials usage trends’, Materials and Society, Vol 10, No 3, 1986, pp 369-404.

A battery converts chemical energy directly into electrical energy. An electric current is generated through an arrangement of constituent chemicals which allows electrons released from one part of the battery to flow, through an external circuit, to another part. The part of the battery at which the electrons are released to the circuit is the anode, or negative electrode, while the cathode receives the electrons. Metals constitute key materials for battery electrodes. We can distinguish between primary batteries, which allow only one continuous or intermittent discharge of electrical energy, and secondary batteries which can be recharged by passing a direct current through the cell in the opposite direction to the current flow on discharge. This procedure regenerates the active chemicals within the cell by reversing the chemical reaction that produces an electric current. Table 1 presents a summary of the characteristics associated with lead-acid and nickel
Characteristics

March 1990

batteries.

Lead-acid

Nickel-cadmium

Electrodes

Lead peroxide

Electrolyte Rechargeable Maintenance free Sealed cost Robustness Lifetime Voltage during discharge Current

Sulphuric acid Yes Yes Yes Lower Lower Shorter Declines Larger amount of current for short periods of time Heavier Can be recharged hundreds of times without loss in efficiency Related to the use and disposal o! lead

Positive nickei and negative cadmium electrodes Potassium hydroxide Yes Yes Yes Greater Greater Longer Constant over a longer period Smaller

Environmental issues

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and nickel-cadmium

Characteristics

Weight Efficiency

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of lead-acid

Lighter Losses in efficiency during recharging Related to the use and disposal of cadmium

23

Marerial subsritution in battery electrodes

The market for batteries Data and information on the composition of battery manufacturing in the UK is virtually non-existent. The limited durability of batteries means that stock activity is restricted. International trade in batteries is extensive eg approximately 80% of nickel-cadmium cells produced in the UK are exported;’ thus worldwide demand plays a key role in determining domestic production. Because of their differing characteristics, batteries are differentiated products; competition between manufacturers is thus limited to the extent to which batteries have competing end-uses. Overall demand may be broken down into three principal groups of uses. The first is automotive. In this market, the (lead-acid) battery serves a startinglighting-ignition (SLI) function which includes starting the engine and operating lights. In the case of gasoline engines, the (lead-acid) battery provides the spark that ignites the fuel. The industrial market includes batteries for motive power (eg electric road vehicles and battery powered trucks for materials handling), and other industrial uses such as standby batteries, batteries for telecommunications, utilities, uninterrupted power supplies, railways, lights, alarms and so on. The consumer market includes batteries for portable tools, cameras, alarms and monitoring equipment, cordless applications, which includes a wide range of domestic appliances, and the increasingly significant business demand - portable computers, radio pagers and mobile telephones. In serving these markets, we can distinguish between primary and secondary batteries and between cylindrical and button batteries. Each type of cell is usually employed in particular end-uses eg secondary batteries in automobiles, primary cylindrical batteries in torches and primary button cells in hearing aids. However, each type of cell is not necessarily exclusive to each particular end-use eg we find an increasing use of secondary batteries in the consumer market, while button cells are becoming increasingly common in consumer applications. Let us consider the demand for lead-acid and nickel-cadmium batteries in more detail. Lead-acid cells Table 2. World demand for lead-acid ies, 1994.’ Market Automotive lnduslrial (of which standby 10.0 and traction 10.0) Consumer

batter-

% of total demand 76.6 20.4

3.0 100.0

aPercentages are based on number of cells.

‘Op

Cii. Ref 2. ‘D. N. Wilson, ‘Market pects’, Metal Bulletin 1989, pp 36-44.

24

trends and prosMonthly, January

The lead-acid cell serves all three principal markets. Table 2 shows that world demand for lead-acid batteries is dominated by automotive demand, and industrial demand to a much lesser extent (although). This pattern differs across continents. The USA has a higher number of cars per capita; automotive uses therefore account for an even greater share of the total. In Europe, there is a stronger presence of electrical vehicles; thus industrial uses account for about one-third of European demand for lead-acid batteries. Sales of lead-acid batteries for automotive and motive power uses have grown impressively in recent years. Automotive sales are determined by the number of new cars manufactured each year, the total number of cars in operation and the average lifetime of the lead-acid cell. Worldwide, 40 million batteries are required for new vehicles and 120 million batteries are required for replacement needs each year.’ The effects of technological developments leading to lower lead requirements and extended battery lifetimes (an average increase of six months during 1983-87) have been mitigated by an increasing vehicle population. Proportionately, Europe uses more electrically powered trucks and

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Material substitution Table 3. World demand for nickel-cadmium batteries, 1907.’ % of total demand

Market

30 70

Industrial Consumer

100 aPercentages given refer to numbers of cells. Source: personal intervlews

than the USA. The market for electrical vehicles is established in industrial forklift trucks, short-range commercial vehicles for delivering goods. and public transport. The chief advantages over internal combustion vehicles are that they are quiet, pollution free and have low fuel and maintenance costs. Disadvantages of the use of lead-acid cells concern weight - a significant amount of energy is used to transport the weight of the battery itself: a limited mileage without recharging, and a limited maximum speed. Within other categories of industrial use, demand for standby batteries has increased as data and information processing has become reliant on computing facilities.” The extent of competition from alternative cells is varied. In the automotive market, the lead-acid cell has significant cost advantages over nickel-cadmium and nickel-iron cells. Other alternatives such as sodium-sulphur and zinc-bromine cells are not yet a serious commercial threat. Thus the lead-acid battery is not threatened by other power sources. The more serious threat exists in the industrial market and, in particular, the standby power sector. In many of the uses described above we find that nickel-cadmium cells are used extensively. Although these cells are relatively more expensive, they offer longer life and more robustness. vehicles

Nickel-cadmium

*K. Peters, ‘Review of trends in lead-acid battery designs and the impact on metal usage’, Paper presented at the International Lead and Zinc Conference, London, 7 October 1988. “The cadmium conundrum’,

Metal &l/etin, 19 May 1988, p 19. “D. Bradshaw, ‘Batteries in need of a supercharge’, Financial Times, 24 January 1989, p 22.

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in battery electrodes

cells

The nickel-cadmium cell serves the industrial and consumer markets. Table 3 shows that consumer demand has played the dominant role with a much lesser role for industrial demand. These markets have exhibited differing rates of growth. For the latter part of the period of study, consumer and industrial demand has increased at an average of 12% and 3% per annum respectively.’ Overall demand has thus increased at an average of 9.3% per annum. The major stimulus for overall growth in demand has come from the consumer sector and, in particular. the demand for portable batteries for use in cordless appliances. In 1988 nickel-cadmium batteries accounted for over 90% of the total rechargeable alkaline battery market. A key stimulus for the rate of growth in industrial demand has been the USSR re-equipping its rolling stock with nickel-cadmium batteries. These stimuli have been very influential on UK production. Competition from alternative cells occurs in both these markets. In industrial uses, there is competition from lead-acid cells in standby applications and nickel-iron batteries in electrical vehicles. In the consumer market we find competition from primary cells such as zinc-carbon, zinc-chloride and alkaline cells which are commonly employed in cordless appliances. Despite an inpressive rate of growth in this market, rechargeable (nickel-cadmium) batteries account for only 3% of the UK consumer market. Compared to competing primary cells, nickel-cadmium batteries are longer life, more expensive power sources which are manufactured in smaller quantities. A key advantage associated with nickel-cadmium cells in this market has been their rechargeability. The period of study has seen some interesting developments in terms of competition between zinc-carbon and alkaline cells where, in the UK, the latter have overtaken zinc-carbon cells in terms of market share (value of sales).‘” In this instance, the main consideration has been the relatively longer life associated with the alkaline cell, despite its greater expense.

25

Material substitution in battery electrodes

Theoretical considerations Holmes presents a model of material substitution which incorporates the role of technological change. ‘i Material substitution and changes in the use of materials may be undertaken through technological change (long-run substitution which involves investing resources in acquiring new production technologies enabling the desired changes in material use to be made) or through using existing production technology (short-run substitution). The demand for materials is a derived demand where the firm is ultimately interested in the intrinsic characteristics that each material yields eg tensile strength, weight, ductility and so on. If we assume that firms manufacture their output so that the cost of producing a bundle of characteristics is minimized,12 we can identify a role for material prices where firms will economize on the use of a material whose relative price has risen. We can additionally envisage key roles for other influences on material use and substitution which include the uncertainty over material prices and supply which may result from cartels, political instability and nationalizations in producer countries or the nature of demand and speculation; the significance of materials within total production costs; the nature of consumer preferences and product differentiation; government and legislative influences; the cost of new technology; and the introduction of new materials.13

Empirical work

Table 4. dents.

Batteries produced by respon-

Battery

Number of firm6

Primary Alkalin~manganese Zinc-air Zinc-carbon Zinc-manganese dioxide Zinc-silver oxide Lithium based

1 3 2 3 2 1

Secondary Magnesiumsilver chloride 1 Lead-acid 5 NickeCcadmium 3 Silver-zinc 1

“Op cif. Ref 4. ‘%ee K. Lancaster, Consumer Demand, Columbia University Press, Columbia, 1971. 13A. Beiber (with Dubarle, P.), Problems Involved in Introducing New Materials in the Transporf industries, OECD, Directorate for Science, Technology and Industry, DSTVSPW87.3, May 1987.

The UK battery industry manufactures a wide variety of primary and secondary batteries. The industry comprises fifty to sixty firms. Of these, forty to forty-five firms are involved in the manufacture of lead-acid batteries only. UK production of non-lead-acid cells is dominated by approximately six firms (all of which cooperated with this study). Production of non-lead-acid cells in the UK might therefore be said to be oligopolistic. There is a high degree of international control over UK operations. A major source of information and data is derived from a survey of the behaviour of battery manufacturers who operate in the UK. A sample of fifty firms was checked by an independent source to ensure that a representative cross section of the battery industry received copies of the first questionnaire. Of this initial sample, the study secured the participation of ten manufacturers with varying characteristics ie large and small in size, producing a varied set of batteries. Of this sample, five firms manufactured one type of battery only. Reference to Table 4 reveals that the largest grouping of respondents produced lead-acid cells; this conforms with the structure of the battery industry as a whole. Although the overall number of respondents is limited, all the major manufacturers cooperated with the study and there was a comprehensive coverage of the differing types of cells produced in the UK. The survey

Each firm received two questionnaires and a further sample were personally interviewed. The questionnaires were sent to and completed by individuals holding senior positions within their respective companies eg managing directors, technical directors etc. The first questionnaire RESOURCES

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Material substitution in bauery elecrrodes

was short and asked a number of direct questions about the behaviour of

the firm and its use of materials in battery electrodes. The second questionnaire was longer and attempted to obtain a greater insight into the answers given in the first questionnaire. A sample of those firms who completed the second questionnaire were interviewed. The objective of the personal interview was to provide respondents with an opportunity to elaborate on the interrelationships existing in their industry which were of relevance to the study. The purpose of the first questionnaire was to identify the key determining variables on the firms’ use of materials in battery electrodes, and to identify the major technological development (if any) which had occurred. Change in material use was defined to include: 0 0 0

material substitution; output fluctuations; and intensity of use eg the amount of lead in lead electrodes

etc.

Firms were then asked the following questions: 0 0 0

0

Have changes in material prices influenced your use of materials in battery electrodes? Has uncertainty over future material prices or supply influenced your use of materials in battery electrodes? Have qualitative or technical considerations such as reducing potential, charge efficiency, ability to function in sealed units, influenced your use of materials in battery electrodes? Have governmental or legislative factors influenced your use of materials in battery electrodes?

Firms were asked to respond to each of these questions ‘Yes’ or ‘No’. All technical terms were explained and respondents were given opportunities to elaborate on the answers given and indicate other influences which they felt had been important. Most respondents took advantage of this opportunity to provide a considerable amount of additional data and information. The second questionnaire was sent to each of the initial respondents. This questionnaire tried to consider the responses given in the first questionnaire in more detail eg the role played by material prices. In addition, an attempt was made to obtain data on the production and capacity of these differing types of batteries, the proportion of costs accounted for by alternative materials, expenditure on R and D and new technologies, and the prices paid for materials. Despite a limited response to this questionnaire, the study gained considerable benefit from the first questionnaire and the personal interviews and the available literature on the manufacture and use of batteries. Findings

Table 5 presents a summary of the responses given by firms. Qualitative and technical considerations appear to have been the major forces behind changes in material use in battery electrodes. Material prices assume a lesser role, with 30% of respondents acknowledging an influence on their use of materials. Government and legislative factors was acknowledged by 40% of firms, while uncertainty over material price or supply appears to have had no effect. Table 6, which presents a break down of responses on the basis of whether firms manufactured

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27

Material

substitution

in battery

electrodes Table 5.

Use and substitution

Influence Changes in material prices Uncertainty over future material prices Uncertainty over future material supply Qualitative or technical considerations ‘Government or legislative

of materials in electrodes,

1993-97.

Number of firms responding ‘Yes’

% of sample

Rank

3

30

3

0

0

5

2

20

4

7 4

70 40

1 2

lead-acid or nickel
0

0

All firms regarded the manufacture of batteries as a major production activity. Of lead-acid battery manufacturers 80% did not manufacture any other type of battery. Over a third (40%) of firms stated that changes in the use of materials in electrodes had been achieved with existing battery production technology; 30% of all respondents used new production technologies developed (wholly or partly) by themselves, and 50% of all respondents employed new battery production technologies developed by others. There have been significant changes in intensity of use in electrodes, eg develoments that have occurred in lead-acid cells. Although substitution of cells is limited in many end-uses, this represents an important channel for changes in material use. Electrodes in lead-acid batteries have become thinner. Generally, it would appear that efforts have been made to reduce the intensity of use of heavier metals used in electrodes, although there is a physical constraint on the extent to which this can be done. Other technological developments have included additives made to control zinc case corrosion, the heat sealing of battery lids,

Table 6.

Use and substitution

influence on use of materials in electrodes Changes in material prices Uncertainty over future material prices Uncertainty over material supply Qualitative/ technical Government/ legislative

of materials by manufacturer.

Lead-acid (5 firms) % of sample answering ‘Yes’

Rank

40

2

0

5

0

3=

33.3

3=

0

3=

33.3

3=

1

66.6

1=

3=

66.6

l=

60 0

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Nickel-cadmium (3 firms) % of sample answering ‘Yes’

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Rank

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Material substitution in battery electrodes

0

granulation of raw materials to reduce scrap and decrease health and safety risks, and the squeeze holding of electrodes. All firms obtained their materials for electrodes from producers of materials; four firms obtained their materials from dealers and one firm obtained materials from fabricators.

Let us now consider the influences on the use of materials in battery electrodes in more detail. The influences on use of materials Changes in material prices. The survey points to a limited role for changes in material prices on the use and substitution of materials in battery electrodes. Of the firms which indicated that changes in material prices had played a role, two stated that it was changes in relative material prices which had been of importance, two stated that absolute changes had been of importance and one firm indicated that sudden changes in material prices had been of importance. Table 7 shows how prices of materials used in electrodes performed during 1980-87. The 1983-87 period saw the prices of cadmium and lead increase then fall, then rise sharply in 1987. The prices of nickel and zinc have risen and then fallen to levels slightly below their original 1983 levels. The price of silver has continued a sharp decline, although 1987 saw a strong increase. All metals have exhibited considerable fluctuations in price; this is particularly noticeable in the case of the price of cadmium, which has increased far more than lead. Despite the fortunes of metal prices, the price index for batteries and accumulators has shown a steady increase. This might suggest the absence of a direct positive relationship between metal prices and battery prices. However, we should bear in mind that metal inputs constitute a fraction of the total cost of manufacturing a battery and this may disguise the presence of such a relationship. Table 8 presents data on the consumption of lead in batteries by UK industry. During the 1983-87 period the overall amount of lead used by the UK battery industry increased by 10.6% and lead prices rose by 29.5%. Comparisons across other time periods give differing results: for 1983-84, a 3.5% increase in lead used was accompanied by an 18.7% increase in lead prices; for 198385, a 10.6% increase in lead used was accompanied by an 8.5% increase in lead prices; and for 1983-86, a 7.5% increase in lead used was accompanied by a 1.3% fall in lead prices. These findings do not conform to a priori expectations - we are unable to detect the presence of an unambiguous negative relationship between material prices and material use. Let us consider why this is so. The lead electrode accounts for a low proportion of the total cost of producing a lead-acid cell. The incentive to adjust material use in electrodes as a result of changes in material prices is consequently Table 7.

Material prices.

Material Source: for all metals except cadmium - Central Statistical Office Annual Abstract of Statistics. HMSO. London, 1988. p 316, and 1989, p 314. Cadmium index based on Metal Bulletin quotes for $/kg. These data are converted to f/kg using the f:$ annual average exhange rate as published in various editions of the Bank of England Quarterly Bulletin.

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Cadmium (producer price) Lead (LME) Nickel (LME) Silver (LME) Zinc (Producer price) Bafteries and accumulators

1980

1981

1902

181.6 139.5 90.7 119.6 63.4

126.4 129.3 96.0 68.4 89.4

91.7

91.2

1983

1984

1985

1986

1907

110.7 90.7 60.4 89.4

100 100 100 100 100

161.6 118.7 116.0 80.7 137.2

123.2 106.5 124.8 63.4 121.7

114.4 98.7 87.1 49.5 99.2

195.2 129.5 95.1 56.8 93.2

94.7

100

102.7

116.7

120.7

127.8

77.6

29

Material substitution

in battery electrodes Table 8. 000

UK consumption

tonnes

Lead in batteries (excluding oxides) Lead oxides and compounds in batteries Source: Central Statistical Office Annual Abstract of Statistics, HMSO, London, 1989, p 154.

Total

of lead in batteries. 1980

1981

1982

1983

1984

1985

1986

1987

49.3

41.5

43.7

43.3

46.9

47.4

47.6

48.0

49.3

37.7

45.0

44.4

43.9

49.6

46.7

49.0

98.6

79.2

88.7

97.7

90.6

97.0

94.3

97.0

limited. Elasticity of demand for lead-acid batteries with respect to lead prices is likely to be very small for the following reasons: The lack of available substitutes in automotive applications. In the UK it would be quite difficult to purchase a nickel-cadmium, nickel-iron, sodium-sulphur or zinc-bromine battery for use in a car. The relatively low price of lead-acid cells vis-d-vis substitutes. The low proportion of the value and running cost of a vehicle constituted by a lead-acid battery. Battery manufacturers have usually passed price increases in lead on to the consumer in the form of higher battery prices. We might expect material prices to have influenced the use of materials in electrodes in nickel
0

The price of cadmium rose significantly during 1983-87. Cadmium electrodes consequently constituted an increasing proportion of the cost of producing a nickel-cadmium cell. Following Demler, we might expect an increased sensitivity on the part of manufacturers towards increases in material prices. l4 Unlike the lead-acid cell, the nickel-cadmium cell faces competition in most of its end-uses. If a much larger share of the market is open to competition, then we might expect changes in material prices to exert a more significant influence on the demand and production of nickel-cadmium batteries.

Despite these reasons, changes in the prices of nickel and cadmium have exerted little or no influence on the use of materials in electrodes. Due to the qualitative differences across cells, the nickel-cadmium cell has been preferred in many applications. The significance of these advantages is now discussed in more detail.

14F. R. Demler, ‘Beverage containers’, in J. E. Tilton, ed, Material Subsfifufion: Lessons from Tin-king Industries, Resources for the Future, Washington, DC, 1983, pp 1 s35. 150p tit, Ref 8.

Qualitative or technical arguments. The demand for lead-acid batteries is on an upward trend despite a number of promising developments in new types of batteries which have included a trend towards the maintenance free battery. Considerable improvements in electrical performance have lengthened the average lifetime of the lead-acid cell. These changes have enabled the lead-acid battery to maintain its standing in its markets and have contributed to discouraging the development of substitute cells in SLI applications.15 The development of the maintenance free battery has involved a reduction in the antimony content of the lead electrode. Traditionally, battery grid plates were manufactured with antimonial lead in order to impart stability. Increases in antimony prices, and technical disadvantages, led to a reduction in the use of antimony which has reduced gassing in the battery and the need to add water. Instead, calcium has been increasingly used as a hardening agent. The difference in lead RESOURCES

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Material

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in batter_v electrodes

content between these two types of batteries is small. Compared to the USA, fewer battery manufacturers in Europe use calcium alloys in the automotive battery. In the standby market there is a progressive move toward lead-calcium-tin alloys for telecommunications and uninterrupted power supply batteries. These alloys account for 5% of the total and the market is expected to grow by up to 10% over the next five years. Many firms have achieved improvements in cell efficiency including gains of up to 50% in energy and power densities, with no decrease in cycle life and durability. In some standby applications. these gains have reached 200%. In the case of standby batteries, reliability over a long period is required. The typical lifetimes of lead-acid and nickel-cadmium cells are ten and twenty-five years respectively. Despite the quality improvements in lead-acid cells, the nickel-cadmium battery maintains an advantageous position. The following inherent advantages are associated with nickel-cadmium cells in industrial end-uses:

l l l l l l l

long life; good high rate discharge performance; minimum maintenance; tolerance to extremes of temperature; ability to accept high rates of charge; low self-discharge; and resistance to mechanical and electrical

abuse.

The key considerations responsible for the growth in industrial market share have been excellent charge efficiency, good charge retention and ability to function in sealed units. Manufacturers have reduced cost per amp or cost per amp hour. Furthermore, there have been other improvements in quality in the form of improved performance and capacity of cells as well in the manufacturing process itself. In the case of consumer demand, the rechargeability of nickelcadmium cells has been the key advantage. Some of the smaller sealed cells require only fifteen minutes to recharge. In addition, excellent charge efficiency, good charge retention, and ability to function in sealed units and resistance to shocks and vibrations have been of considerable importance in increasing market share. The initial cost of a nickel-cadmium cell (which includes the cost of a recharging unit as well as the cell itself) required to power a cordless appliance is several times the purchase price of a standard zinc based primary battery. However, this cost disadvantage is outweighed by the more favourable lifetime costs associated with the nickel-cadmium battery and the advantages discussed above. Uncertainty over future material prices and material supply. Despite the volatility of metal prices, the use of materials in battery electrodes was relatively uninfluenced by uncertainty associated with future material prices. In some cases, price uncertainty associated with cadmium and nickel led to an alteration in the contracts by which these metals were purchased where these metals were bought on the basis of a price computed via a montly rather than weekly average. These changes had no effect on the use of cadmium and nickel. In the case of uncertainty over future material supply, there was a limited role for this influence in the manufacturing of nickel-cadmium batteries:

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Marerial subslirution in battery elecrrodes 0

0

The end of the 1993-87 period saw problems encountered in the supply of nickel particularly as a result of low stocks and strong demand from the stainless steel sector. Cadmium is a by product of zinc production; its supply is therefore dependent on the fortunes of the zinc industry. A lower price of zinc may lead to a reduction in the supply of zinc and therefore a reduction in the supply of cadmium (and possibly a rise in the price of cadmium).

Although not having a direct bearing on the levels of production of nickel-cadmium cells, uncertainty over the suppiy of nickel and cadmium has compounded the incentive to search for ways of reducing the intensity of use of these materials in electrodes.

’ 6/hid. “Op cif, Ref 9.

32

Governmentllegislative. The major issues here concern the environment and, in particular, the environmental damage caused by the heavier metals such as cadmium, lead and mercury. Incineration can lead to air pollution, while leakage from dumped batteries can lead to toxic substances infiltrating the water system. Firms have been under pressure to use less of these materials in batteries and devise ways in which the used cells can be identified, collected and recycled or disposed of in a safe manner. Today, cadmium is used much less in pigments. In some countries, the use of cadmium has been banned. The survey found a limited effect on the number of cells produced. However, some influence has been exerted on intensity of use. Let us consider the background to this increasingly important issue. Firms have been aware of the importance of these issues and are concerned about the forthcoming EC directives concerning the use and disposal of certain types of heavy metals. It is believed that the EC Commission intends limiting the content of heavy metals in batteries eg by making the content a maximum of 0.025% of battery weight. In the cases of lead-acid and nickel-cadmium batteries, this would be almost impossible to achieve. Thus legislation might focus on recycling with a deposit system encouraging users to return spent batteries. However, it is thought that such legislation will not distinguish between types of cells. Here lead-acid cells are at an advantage. The lead-acid battery is 100% reclaimable (excluding the paper label, printing and acid); there is already a well developed collection and return route where SO% of used cells are currently being reprocessed and the use of secondary lead is readily accepted by the industry (although Peters” refers to an increasing preference on the part of battery manufacturers for primary lead). In the case of nickel
Maferial substirurion in battery elecrrodes

originating from alkaline manganese and mercury batteries by 55%. This has been achieved by technological change (increased production of zinc-air and lithium based batteries) and reclaiming batteries of intrinsic value (eg for mercury and silver oxide content).‘” Nickelcadmium cells are at a disadvantage in relation to existing capabilities for collection and disposal. This factor, coupled with anticipated future legislation, has made firms wary of relying too heavily on the production and use of these cells. Indeed, in the light of arguments presented here and in the discussion of uncertainty over future material price of supply, manufacturers have aimed simultaneously to reduce their use of nickel and cadmium, although there are physical barriers to the extent by which this can be done.

“L. Holt, ‘Designing for recycling’, Paper presented at the Eurom&aux conference Non-Ferrous Metals - Their Future, Luxemburg, October 1988. lgOp cit. Ref 10. %. Meczes, ‘Energy storage points to new US market for lead’, Metal Bulletin Monthly, October 1988, pp 35-37.

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POLICY

March 1990

The changing structure of the battery market. The use of a particular type of battery is determined by the decision to employ that battery for a given end-use and the performance of the output of that end-use. Although this study is primarily concerned with considerations relevant to the choice of battery and electrode material within end-uses, some interesting comments can be made on end-use output. A comparison of the output trends of the end-uses of lead-acid and nickel-cadmium cells is made difficult by the absence of relevant data eg suitable indices for industrial and consumer battery demand. Industrial indices might be proxied by indices for Western output, although the extent of aggregation will mask many important individual trends. Data for automobile production could be utilized; however, such data give no indication of the demand for lead-acid cells for replacement purposes. There are a number of interesting developments which may affect the markets for lead-acid and nickel-cadmium cells. In the case of business demand, there are currently 0.7 million portable computers in Europe; this will rise to one million over the next year. In the UK alone, there are 0.3 million mobile telephones and the number is increasing by 0.005 million per month. The business sector requires a cell which is lightweight and high powered. One possibility is the development of a new, lightweight lithium cell which lasts up to five times longer than traditional cells and can operate in subzero temperatures. However, this cell costs ten times more than traditional cells to produce, is highly reactive and can be dangerous as it generates 3 volts as opposed to the normal 1.5 volts. The battery industry is developing a lithium battery which overcomes these disadvantages. If successful, this will have implications for the demand for the production of nickelcadmium cells. ” In the USA, there is an increasing demand for battery storage facilities for electric load levelling. At Chino a giant lead-acid battery has been constructed with the objective of supplementing existing generators during hours of peak electricity usage and then recharging the battery during periods of low power demand. The battery consists of 8 256 cells (2 000 tons of lead) and has a capacity of 40 megawatt hours. The cost of constructing the battery is considerably less than that of building a new power station; the battery offers a cleaner operation and the immediate availability of power. This market may have a significant potential impact on overall lead usage in batteries.“’

Summary and conclusions The use

and

substitution

of materials

in battery

electrodes

is primarily

33

Material substitufion in battery electrodes

influenced by the nature of final demand and the qualitative or technical attributes offered by alternative cells (which in turn are influenced by electrode material). Material prices play a limited role in the choice of electrode material, and government or legislative factors will become more significant in the future. The findings of this study complement existing studies of commodity demand and substitution. As with the disaggregated studies of material substitution in US industry, the methodology employed here has allowed us to view the role of material prices and other key determining variables from an alternative viewpoint. There are obvious problems with this study. The sample size is not universal and the analytical techniques are not as rigorous as those employed in econometrics. However, we can question the use of unqualified input price variables in regressions - studies of commodity demand and substitution should pay more attention to the intrinsic qualities provided by materials and the way consumer preferences are satisfied. Indeed, there are implications for the ways in which behaviour in commodity markets is modelled as the discussion has pointed to a number of reasons why the relationship between the price of a material and its use substitution and use is not necessarily a direct and negative one.

34

RESOURCES

POLICY

March 1990