Source: Simbol Materials
Simbol Materials and Geothermal Plant site at Salton Sea region, Ca.
Pleasanton-based Simbol Materials’technology can pull lithium, and other critical metals, out of the effluent water of some geothermal power plants, eliminating the drill-and-blast approach of traditional mining.
“Geothermal power plants provide a quality source of brine,” says Simbol CEO Luka Erceg. “It’s replete and rich with lithium and other metals” like zinc and manganese, he adds.
That’s because geothermal power plants extract hot brine or steam from underground to turn turbines and generate power.
Simbol’s focus will be on the geothermal power plants around the Salton Sea in California’s Imperial Valley.
The economics are compelling, says Erceg, noting that the Salton Sea is capable of supporting 500-600MW of geothermal power generation.
Just one “typical” 50MW plant, he says, creates enough brine to produce 16,000 tons of lithium carbonate — a key form of the element — as well as significant amounts of zinc and manganese.
Market rates for lithium carbonate are currently around $5,500/ton.
The Simbol process leverages a current business to get raw “ore” for almost nothing, something conventional miners pay a fortune to find and exploit.
“We’re at the tail end of their process,” says Simbol’s Erceg. “The last thing I want to do is build a geothermal power plant” just to access the brine, he says.
The power plant owners receive a royalty, he says, adding that geothermal power plant operator EnergySource is a Simbol partner.
“It’s great for geothermal [power plant] owners whose plants’ effluent contains sufficient lithium,” says Garvin Jabusch, chief investment officer at investment firm Green Alpha Advisors. “It means they now have two revenue streams from the same operations — a dream scenario.”
He adds that for geothermal projects with the right geology “this could be a game-changer and allow the net cost of their power to compete with fossil fuels.”
Global demand for lithium is expected to jump to nearly 300,000 tons annually by 2020, according to several clean tech research firms, driven by a need for electric vehicle batteries.
The remaining 75 percent is used by various industries, from pharmaceuticals to ceramics.
Erceg says his goal is to be “among the lowest cost producers” of lithium, which industry estimates put at between $1450-2500/ton.
But Green Alpha’s Jabusch says the booming worldwide need for lithium-ion rechargeable batteries — for consumer electronics and tools as well as electric and hybrid vehicles — actually points to a current shortage.
“Considering the global economy is experiencing about a 35,000-ton annual lithium shortfall, there will be no problem [for Simbol to] find markets and still get competitive prices,” says Jabusch.
Unlike a typical mining process that produces tailings that require remediation, Erceg says their process actually better prepares the brine for re-injection into the geothermal source, where it would normally be sent anyway.
For power plant operators, a new revenue stream is more good news, considering geothermal energy is already among the cheapest fuel sources.
US Department of Energy figures show that for plants commissioned by 2016, the levelized cost of energy for geothermal is about $102/mwh, compared to $109/mwh for advanced coal-fired plants and $113/mwh for next-generation nuclear power.
But like solar and wind power, while the fuel is effectively free, the upfront capital costs can be high.
Investor presentations at various renewable energy conferences have shown drilling of geothermal wells, each capable of producing around 5MW of power, cost around $10 million, with a 20 percent failure rate.
For Erceg, he says one issue, as with all drilling, is the government permitting process.
“There’s no way to be innovative around those delays,” he says.
That could help more power plants using Simbol’s technology, says Green Alpha’s Jabusch.But previously tabled legislation in the US Congress could be pointing to coming incentives for domestic production of critical materials, like lithium, in the near future.
Concerns over China’s hoarding of rare earth metals in past years — metals critical to the clean tech industry — led the US Department of Energy to produce a 2011 report identifying critical metals to the US cleantech industry, including lithium.
“I think given the importance of lithium [in] batteries, magnets, turbines, and their importance in the next green economy, that the most key, rarest ones should absolutely be declared ‘critical,’” says Jabusch. “Clearly they’re already critical to China, which has taken a lead to the tune something like 80 percent of Earth’s existing production.”
Whatever the demand for lithium and other critical metals, Simbol’s approach is also a sign of a growing movement towards “clean mining” techniques that also improve the miner’s bottom line, says clean tech analyst Dallas Kachan, managing director at research firm Kachan and Co.
“The world has had hundreds of years of dirty mining,” he says. “It’s taking time for new clean technologies that are quietly emerging to prove themselves economically.”
But Kachan, whose firm is spearheading the creation of a new clean mining trade group, adds that advances in energy savings, waste stream reuse and better site reclamation are changing the entire mining industry for the better.
“You’ll soon start to see them reshape the face of mining as we know it today,” he says.
“We need these elements and lots of them,” says Green Alpha’s Jabusch. “To the extent that Simbol or any other enterprise can get them from existing drilling operations, so much the better.”
“We want to make the utility industry intelligent and efficient,” said Choi Kyu Chong, director of the Smart Grid & Electricity Market Division of the Knowledge Economy Ministry. South Korea expects it will be able to save the cost of building a reactor by 2016 by helping households and utilities to manage electricity consumption through the meters, he said.
State-run utility Korea Electric Power Corp. has awarded contracts to companies to install the meters from a program that has won a 1.47 trillion won ($1.3 billion) commitment from the government. Photographer: Jean Chung/Bloomberg
The country is investing in smart meters amid opposition from citizens and political parties over plans to expand its reliance on nuclear energy after the Fukushima disaster last year in Japan. State-run utility Korea Electric Power Corp. (015760), also known as Kepco, has awarded contracts to companies including LS Industrial Systems Co., Iljin Electric Co. and Nuri Telecom Co. to install the meters from a program that has won a 1.47 trillion won ($1.3 billion) commitment from the government.
Smart meters show customers what they pay for power at each time of the day, which utilities say will smooth demand fluctuations by encouraging more people to shift consumption to off-peak hours when it’s cheapest to generate electricity. The devices cost from 20,000 won to 140,000 won a unit, depending on whether they are for small or large electricity users.
Energy consumption in South Korea, the fourth-largest user in Asia, more than doubled in the 12 years to 2010, the highest rate among developed countries, according to the Korea Energy Economics Institute, a state energy policy adviser. Electricity prices in the country only cover 87 percent of the cost of generating electricity, according to the government.
“While Korea’s overall approach to smart grid has been technologically advanced, the program can be only effective if the country raises its electricity tariffs,” Ali Izadi- Najafabadi, an energy technologies analyst at Bloomberg New Energy Finance, said in an e-mail.
South Korea plans to replace all analogue meters at households with the new devices by 2020. The government on Feb. 28 said it plans a 14-fold increase in the number of meters to 10 million units by 2016.
As many as 30 bidders have participated in a series of tenders by Kepco to supply 2.3 million smart meters. LS Industrial Systems Co. (010120), Iljin Electric Co. and Nuri Telecom Co. were among companies selected to supply the meters to Kepco, said Sung Ki Jong, an analyst at Daewoo Securities Co. in Seoul.
Western smart meter makers like Landis+Gyr (LGYZ), the world’s biggest, may start to participate as Kepco ramps up the volume of meters to be installed, said Izadi-Najafabadi.
“As the government has focused on pilot projects so far, the demand for the meters is quite small, making it difficult for suppliers to earn lots of money,” Sung said. “With larger numbers to be installed over the next few years, there is scope for suppliers to make real money.”
Kepco plans to issue a tender for 1.5 million units in June or July, and in 2013 for more than 2 million units. It plans to install the meters at 15.2 million households between 2016 and 2020.
If South Korea meets its 2016 target to install the meters at half its households, it will be second in Asia only to China, which plans to install them at 80 percent of households by 2016, according to New Energy Finance. In Europe, Italy already has these meters in all houses, while in the U.S., they are installed in about half of all households.
The meters are part of the Smart Grid project announced by the government in 2009 to help reduce energy consumption by 3 percent and cut electricity consumption by 10 percent by 2030. In 2030, when the project is completed, it will lead to the reduction of 230 million metric tons of greenhouse gas emissions and 47 trillion won of energy imports, according to government estimates.
South Korea, the world’s biggest producer of ships, televisions and computer memory chips, plans to legislate a cap- and-trade carbon trading system.