from July 2012 ABT

meeting report

BCI 124th Convention & Power Mart Trade Fair

Talking Stick Resort & Casino, Scottsdale, AZ USA

April 29- May 2, 2012

This year’s convention of the Battery Council International continued to be another great example of how the lead-acid battery industry can fiercely compete for 99% of the year and then come together for three days to interact and share information. The conference and trade show were very well supported with 568 in attendance. This annual event supports the lead-acid battery industry offering papers directed at the industry’s SLI and Industrial Battery sales projections, regulatory issues and pricing projections for lead and sulfuric acid.

The BCI staff and committee chairs selected another great venue and an even better convention program. The meeting was opened by the current BCI president, John D. Craig, who is the chairman, president, and CEO of EnerSys Inc. of Reading, Pennsylvania.

01

Bitrode/Sovema – From left David Beninato, Alena Bogomolova, Laura Schacht and Alessandro Fossemo

Craig addressed the group with his unique style and began by discussing “change”, especially as it relates to electronics and batteries. He mentioned that Thomas Edison was a proponent of nickel-iron batteries and did not think much of the lead-acid battery. Today Li-ion batteries rule the portable electronics industry with the mass-produced “18560” cylindrical cell, which sells for ~$270/Kwh in very large quantities. There are many Li-ion technologies and chemistries available, some which sell for as much as $5,000/Kwh. Ford is known to be paying $689/Kwh in some of their hybrid electric cars. Li-ion chemistry is also being considered for the energy storage market which, at the present time is mostly lead-acid. But by 2016 the industry estimates that batteries will supply ~550Gwh of energy storage of which ~83% is expect to be lead-acid and ~15% might be Li-ion.

02

Polymer Molding Inc. – From left Michael Doyle (Doyle Shamrock Industries), Jeff Hindman (PMI) and Mike Fraley (Crown Battery)

Craig then discussed hybrid electric vehicles and the need for lower cost batteries. He presented an example comparing the gasoline powered Ford Focus vs. the HEV version of this same vehicle. The current vehicle price difference is $5,800 ($23,770 vs. $$29,570) so the ‘payback’ in terms of miles driven is 148,000 miles when gasoline is $4/gallon and 119,000 miles at $5/gallon. He concluded by making other cost comparisons of HEV’s being produced around the world and reiterated that HEV prices must come down (so must the battery cost) if these vehicles are to add value to the consumer.

03

Centrifugal Casting – From the left are Lee Raymond (Greenwich Metals), Dwyn von Bereghy (CC) and Peter Appleby (Greenwich Metals).

The distinguished keynote speaker was Susan Eisenhower, president of the Eisenhower Group and grand-daughter of past U.S. President Dwight D. Eisenhower. Her topic was “The World Energy Future – Fact or Fiction”. From the start it was obvious that Eisenhower is in favor of nuclear energy. In regard to nuclear energy for power generation, she believes that 1) the U.S. has policies but no strategies, 2) our government cannot think past the current election cycle and 3) most other countries have thought this thing through much more carefully. She mentioned the recent move by Germany to take 5,800MW of nuclear power off-line and quipped that it was all purely political despite the fact that Germany will now be more dependent on Russia and France.

04

Inbatec GmbH – From left to right are Christian Papmahl, Davis Knauer (East Penn) and Armin Gaspers.

She feels that the most important factors that are on the government’s agenda today are energy security, relations with other countries and the economy. She noted that in terms of electricity generation the U.S. is energy independent. The U.S. produces 55% of its electricity from coal, 20% from both natural gas and nuclear with the remainder from wind and solar. She concluded by saying that diversification is the key! Energy for transportation is another matter that was mentioned but not discussed.

05

Entek International – From the left are Graeme Frasier Bell and Attila Turker (Mutlu Battery).

Another very interesting keynote was delivered by Alan Beaulieu, a senior analyst, economist and principal at the Institute for Trend Research. He began by presenting graphs that indicated that recessions occur on a 10-year cycle and was quite convinced that the next one will be upon us in 2019. He said that as manufacturers we should borrow as much money as we can now and invest in our businesses by improving our manufacturing efficiencies. He also discussed how birth rates will ultimately affect the prosperity of a country. He used Japan and Russia as examples, stating birth-rates there are below 1.4. He said that it all relates to a shortage of skilled labor. The U.S. is currently at 2.1, which is, according to Beaulieu, almost optimum. Again looking at more graphs and charts, he demonstrated that it is a myth that defense spending goes up during Republican tenure and down when the Democrats take control. His charts predict that the market will continue to rise for the remainder of 2012 and interest rates will soon begin to rise to levels similar to what we experienced during the Carter administration. The level of unemployment is an indicator of sorts, but we should not base decisions on it. His shtick was extremely entertaining but informative using more one-liners than Jay Leno.

06

JBI Corp. – From the left Rod Shane (East Penn), Joe Badger (JBI) and Larry Miksiewicz (East Penn)

Next on the stage was attorney David Weinberg of Wiley Rein LLP. He presented his annual industry update of the key regulatory and legislative issues that are affecting the industry. One of the most interesting facts presented by Weinberg was the five-year average of lead battery recycling. This number continues at 98% which is tracked and calculated by BCI. Another aspect of this presentation focused on the changes that are being made within the Chinese lead-acid battery industry. We all heard that many of these battery plants were closed earlier this year. Some were reopened, some were not. China is basically changing the rules and tightening up environmental controls. No new “small” lead-acid manufacturing facilities (<500KVA/year) will be permitted, while all very small facilities (<200KVA/year) will be closed. Air quality in all facilities will be improved through the use of fume hoods, negative pressure and filtering (standard technology in the West). Employee health will be raised to a new level involving better hygiene and blood lead testing.

07

TBS Engineering – From the left are Randy Hart (Superior Battery) and Laurie Gardiner (TBS).

The annual Power Mart Trade Fair was also well subscribed with 68 manufacturers and industry suppliers displaying their products and services. The annual BCI Golf Tournament was held on the North Course at the Talking Stick Golf Club, approximately 100 players enjoying the hot (but dry!) Arizona weather. The golf tournament was followed by a great reception held in the “Fire Garden” at the Talking Stick Resort. The winning team was Mike Gilchrist, Rick Godber, Randy Casstevens and Jim DeBray at 8 under par. As it is every year, the reception was generously sponsored by the BCI Suppliers Group.

08

Wirtz Manufacturing and Devitt Consulting – From left to right are John Wirtz, John Devitt and John Wirtz Sr.

The convention itself is a mixture of technical, marketing and legislation-related presentations. There are also the committee meetings that are open to all members of the BCI and deal with topics ranging from product information, materials, battery testing, product safety, chargers, data-books and other technical issues. The final morning of the convention featured the annual breakfast meeting of the “BCI Quarter Century Club”. This club boasts having more than 300 members, who have been in the industry for at least 25 years, with 12 of which are also members of the “BCI One-Half Century Club.”

09

Flow-Rite – From left to right are Rob Brock and Rick Mavrakis

The 125th BCI Convention & Power Mart Trade Fair is scheduled to be held in Baltimore, Maryland, at the Baltimore Marriott Waterfront Hotel, April 28 to May 1, 2013.

Featured Presentations

2010 Battery Shipment Review and Three-Year Forecast

Report by Mike Carr, Johnson Controls Inc.

This presentation was full of facts and figures beginning with 2011 global light vehicle production at 70 million units with estimated growth to reach 99 million units by 2016. Most of this large amount of growth will take place in the Asia/Pacific market. In North America vehicle sales were 13.1 million units in 2011. Battery sales during this same period were 123 million units with 89% of sales attributed to aftermarket sales. Battery shipments are expected to increase by 7 million units by 2016.

Carr then went on to describe some interesting market research. In 2011 there were ~240 million vehicles in operation in the US. The average age of these vehicles is 10.8 years, which continues to increase. Most consumers are keeping their vehicles longer and 51% anticipate keeping their vehicles 10+ years. He presented some new survey data that indicated that 39% of drivers proactively anticipate battery failure and replace their battery early. 56% of drivers wait for the battery to fail and then replace it and 59% of drivers use DIFM (do it for me) stores to replace their batteries.

Industrial Battery Three-Year Forecast

Report by Tim Purdy, Hollingsworth & Vose Company

This is the first year that Tim Purdy was on the stage, replacing Bob Cullen in this very key role for BCI. Purdy began by thanking Steve Vechy (EnerSys) and the BCI Industrial Battery Committee and noted that the industrial battery business (motive power and stationary) grew by $288 million dollars from 2010 to 2011. Despite the lackluster U.S. economy (GDP up 1.7%) this very strong growth (20%) took the total size of the industrial battery market to $1.74 billion. Digging down further, the motive power piece of this market was up a staggering 32%, which overshadowed the impressive 9% growth of the stationary sector. Purdy predicts this growth will continue into 2012 but not at the same rapid pace.

10

ALABC Honda Civic Hybrid with Ultra Battery from East Penn Manufacturing

Looking more closely at the motive power sales trends we see that from 1996 to 2011 the business had an annualized growth of 6.5% reaching $894 million. This all occurred despite the large recession-related hit the industry took in 2009 when annual sales dropped to $567 million (from $768 million in 2008). The market grew to $677 million in 2010 but had still not fully recovered. The impressive growth of 32% in 2011 showed the strong relationship between motive power battery sales and then material handling business that is closely related to manufacturing and distribution of tangible goods. By 2014, the motive power sector is forecast to reach annual sales of $1,071 billion.

In North America, the stationary sector is dominated by the UPS and telecommunications markets which grew themselves at just under 9% in 2011. Similar to motive power, this sector was also subject to the recession in 2009 and has yet to fully recover. The ever-increasing growth of cellular phones and mobile services continues to have a positive impact and by 2013 this sector should be above 2008 sales levels. As we look into 2014, the total stationary battery sector sales are forecast to fully recover from the recession in 2009 and will reach $1.05 billion.

Start/Stop Technology Panel Presentations

Moderator: Robert Gruenstern

AGM: The Preferred Battery Technology for Start-Stop Vehicles

by Robert Gruenstern, Vice President, Product and Advanced Engineering - Americas, Johnson Controls Inc., Milwaukee, Wisconsin

Gruenstern began by introducing the basic concept of start-stop which, by design operates the battery in a partial state of charge. This type of operation combined with abnormally high charging currents leads to premature battery failures of flooded batteries mostly due to acid stratification. VRLA (AGM) batteries do not experience these types of failures and generally cycle longer without paste degradation.

He then went on to discuss the AGM battery manufacturing process and the need for improved process technology. Book-molded grids with conventional belt-pasting do not afford good plate thickness control required of compression-sensitive AGM batteries. Fixed orifice pasting offers an improvement in thickness control but when combined with stamped grids (JCI PowerFrame) affords the best control for optimal AGM assembly and performance.

Another key to VRLA battery performance is to control the degree of acid saturation. In this regard formation control is very critical. In his conclusion, Gruenstern commented that the EU is embracing start-stop while the U.S. is lagging. He said that this is technology-related since the U.S. has a greater proportion of automatic transmissions, which make start-stop much more demanding and difficult to implement in the vehicle.

Advanced Technologies for Changing Requirements: Opportunities in Lithium-Ion Hybrid Battery Packs

by Tom Watson, Vice President of Vehicle Systems, Johnson Controls Inc., Milwaukee, Wisconsin

Watson introduced his topic by stating that mild HEV’s offer better value than full HEV’s but offer less fuel economy. He talked about a “White Space” that is filled by a 40+ volt operating system, ‘in-motion’ start-stop, which offers a 5-20% increase in fuel economy. In the early days of automobiles (pre-1950) vehicles operated at 6VDC. Now most vehicles are 12VDC but power requirements are increasing with electrical loads increasing by 5-7 amps per year. 24 VDC systems are coming but will not provide the answer. 42VDC is also being considered but does not maximize power. A “dual voltage” system may be the answer such as the Toyota Highlander, which has 3 voltage busses (12V, 42V and 330V), but care must be taken at voltage greater than 60VDC. So Watson proposed the use of a 48VDC Li-ion module that can better accept the high regenerative braking currents while enabling the size of the engine to be reduced.

Next Generation Battery Considerations: An OEM Perspective

by Mark Rychlinkski, Senior Staff Engineer Global Electric Power, General Motors Corp., Detroit, Michigan

Rychlinkski introduced us to a myriad of terms all related to how a battery is used in an OEM application. SLIP = SLI + Parasitic loads, SLIPFE = SLIP + Voltage Regulation, Voltage Control & Lower Engine Idle and we can’t forget SLIPFESS = SLIPFE + Start-Stop. All of these new uses and applications will dictate how the battery is designed and tested. Not only will the battery be rated for cold cranking amps, reserve capacity and C/20, but the battery of the future will also be rated by cycle life as measured in terms of “micro cycles”. Key-off loads are increasing, thus pushing up the need for improved quality and durability. Finally, Rychlinkski discussed the battery “package” and need for a smaller, lighter and lower Ah unit. The battery terminals are also a topic of discussion as they “migrate” from the side to the new “T” top (which is a DIN spec).

Partial State-Of-Charge Duty: A Challenge But Not a Show-Stopper for Lead-Acid Batteries

by Dr. Patrick Moseley, President, ALABC, Durham, North Carolina

High Rate Partial State of Charge (HRPSOC) operation is very demanding. Charging currents may reach the 30C rate during regenerative braking! At these high charge currents the negative plate is strongly polarized and carbon has been added to the negative active mass to improve charge acceptance. Though the mechanism is still not fully understood, carbon additions have improved HRPSOC cycling dramatically. The variation of grid potential in response to these high charging currents is significant and shorter grids are thought to make a big difference.

Mild Hybrid Performance at Micro Hybrid Cost: A New Low-Voltage Lead-Acid Approach

by Allan Cooper, ELABC, London, United Kingdom

Cooper mentioned how different countries are embracing hybrid vehicles but all are not the same. In Japan, mild and full HEV’s are being adopted while in Europe, start-stop technology is making big advances. Another ongoing effort is the LC Super Hybrid Project. In this system a gasoline engine is outfitted with an electric super charger. A belt-driven motor generator is used in conjunction with a VRLA battery that is based on advanced carbon technology. Performance testing is showing the benefits of this technology.