Batteries Charge Up the Fight Against Climate Change
This week, we talk about how the growing adoption of batteries can help tackle climate change.
Welcome to our weekly chat about the environmental and social issues that influence the way we work, spend our money and live our lives. We're your hosts, Maitane Sardon and Dieter Holger. Want to get our newsletter every Wednesday? Hit the subscribe button in the upper right corner and please share with your friends!
Hi, Dieter. Let’s talk about an invention many of us take for granted and don’t usually associate with the fight against climate change: the lithium-ion battery.
Lithium-ion batteries have been on the market since the early 1990s when Japanese electronics giant Sony used them to power its hand-held camcorders. The second commercial product that was powered with this technology was a Dell Technologies laptop.
For many years, batteries were mainly used in small electronic devices like smartphones and laptops as producing them was pricey. But big increases in manufacturing capacity and tweaks in the materials and design lowered costs. Ten years ago, a pack of lithium-ion batteries cost $1,183 for a kilowatt-hour, compared to $156 a kilowatt-hour in 2019, according to BloombergNEF, a data provider.
Today, the main source of demand for battery cells are electric vehicles but the falling costs have also made it possible for other high-polluting industries to find new ways of deploying batteries. This shift could help them reduce greenhouse-gas emissions that contribute to climate change. Although some greenhouse gases are emitted when mining materials and manufacturing batteries, the emissions linked to this technology are lower than for crude oil and natural gas.
In some parts of the U.S., lithium-ion battery installations are starting to replace so-called peakers, natural-gas burning plants that, until recently, were the only—and more polluting—option utilities had to generate extra energy when needed. Batteries store the excess power generated by wind turbines and solar panels for use at another time.
This technology doesn’t just benefit the planet. The rise in demand for batteries has been a boon to traders betting on lithium miners and battery makers. Exchange-traded funds invested in companies involved in lithium-ion batteries soared in the last year. The Global X Lithium & Battery Tech ETF, trading under the ticker LIT, is up more than 133% over the last 12 months.
What am I looking at? The chart above shows the performance year-to-date of Global X Lithium & Battery Tech, an exchange-traded fund that tracks lithium producers and battery makers.
Speaking of lithium-ion batteries, let’s talk about Tesla. On Monday, the electric-car maker bought $1.5 billion in bitcoin and said it would soon allow people to pay for its cars with the cryptocurrency. So why aren’t people using bitcoin for everyday purchases?
Fees are one big reason it isn’t easy to buy a $4 cup of coffee with bitcoin. The average transaction fee is more than $11, according to BitInfoCharts.
Another hurdle is volatility. Bitcoin can rise or fall as much as 20% in a single day because millions of people are trading it all the time. So it isn’t ideal for everyday transactions, but big purchases like cars may be more realistic.
Interesting. We’ll keep an eye on this cryptocurrency and Elon Musk’s next investments.
Share your thoughts below, email us or catch us on Twitter. Your words could appear in our next edition! Have a great week and remember to wash your hands.👋
Meet the team:
Elevate the Conversation is produced by the editorial teams of The Wall Street Journal and Dow Jones Newswires. Here's a little bit more about us, along with our contact information. We'd love to hear from you.
Dieter Holger, Reporter: I have a knack for uncovering values-based investing trends and I’m obsessed with spreadsheets and charts. I really enjoy ‘80s music and skateboarding (but I suck). dieter.holger@wsj.com @dieterholger
Maitane Sardon, Reporter: I have a passion for amplifying the voices of those at the center of stories. I love running on Barcelona’s beaches and binging on chocolate ice-cream to compensate (it’s all about balance). maitane.sardon@wsj.com @sardonmaitane
Catherine Lindsay, Editor: I like breaking down complex ideas and explaining them. On the weekend, you’ll find me wandering the city with my film camera at the ready. catherine.lindsay@wsj.com @CathsLindsay
Tammy Lian, Designer: As a visual producer, I'm always excited by the challenge of creative problem solving. In my spare time, you can usually find me taking care of my ever-growing collection of plants and drinking tea. tammy.lian@wsj.com @violian.tammy