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Scott Bilby: We're talking with Mil Ovan, senior vice-president of Firefly Energy, a company that has developed a carbon graphite foam grid technology that increases the performance of lead acid batteries and reduces the amount of lead used. The technology has the potential to improve a wide range of market segments including transportation, construction, computer back up systems, just to name a few and also with significant cost savings. Welcome to the show Mil.

Mil Ovan: Thank you very much for having me. Appreciate it.

Scott: It's a joy having you on the show. We're interested in the name 'Firefly' and where it came from.

Mil:What's interesting about Firefly is that as I was thinking about the attributes of the technology, what words would capture it the best. It turns out I looked through the entire Thesaurus looking for names starting from A to Z and the short story is my daughter who was very young got up at 3 o'clock and wanted a bottle, I couldn't sleep after feeding her and I picked up the thesaurus and the first thing I saw in 'F' was Firefly and I said, that's it; but I went through all the way to Z anyway to figure out if there wasn't one that was even better. But when you think of a firefly it's very captivating, very illuminating, obviously a great power to weight ratio and also with the tip, it's very green and what we're doing with this firefly technology is replacing the heavy, corrodible, very non-conductive, lead metal grid in a lead-acid battery with this light-weight high surface foam material that now allows batteries to run longer, last longer be lighter, smaller in volume and much more environmentally responsive with the reduction in the amount of lead used in lead acid batteries.

Scott: And so the name Firefly, it is a great name, where did it come from? Can you tell us about its origins?
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Mil: Well the origin came out of my brain, I think in Australia are they known as…, what are they called in Australia? Is there a different name for a firefly or lighting bug in Australia?

Matthew Wright: I'm not sure, we have things called glow-worms. I don't know if they are similar.

Mil: Glow worms. Ok. There are about 1700 species around the world. In fact, I invite those listeners to go to www.fireflyenergy.com and we have a little firefly fun facts as part of our website where you can learn all about fireflies.

Scott: And on that topic it kind of reminds us of the origin of the work done into the batteries from caterpillar. Is that correct?

Mil: Yes, the technology was incubated there, and it's a kind of interesting story. How is it that the company that makes earth moving equipment for a living come up with the Holy Grail of battery technology? Well, it turns out that Caterpillar has long used lead-acid batteries in their earth movers and you can't imagine a more abusive environment for a battery than something that shakes violently and is used in temperature extremes and is used infrequently like a battery in a CAT bulldozer, but they decided around the 2000 timeframe that they were going to put the Caterpillar name on those lead-acid batteries that they had long sourced from their current supplier and when they did that customers started to complain. They said, 'Hey, what's with this Caterpillar ruggedness that we've come to know and expect. These lead-acid batteries are failing, how would you fix them?' And that same battery had been sourced before by Caterpillar, so the customers' expectation really got heightened when the CAT name was put on that.

So, they went back to their existing base of lead-acid battery suppliers and said, 'How would you fix these problems? The battery kernel…unintelligible 05.13... at an accelerated rate of heights…unintelligible 05.16... you let the battery sit uncharged it sulfates up and you can't get the battery to accept the charge. How would you solve those problems?'

Not surprisingly, the answers coming back to Caterpillar weren't very sufficient from the lead-acid battery company, because when you think about it the last major innovation in lead-acid batteries, and by the way this technology was created in 1859, the last major innovation was not having to add water to your battery. Well, that's a big yawn because that was twenty, thirty years ago. So, when they reached the limits about what they can do with a lead-acid battery with the lead grid in it, they got rid of their R & D teams and their sophisticated test equipment and they started to look at other chemistries like nickel metal hydride and lithium.

So, Caterpillar instead, having found those answers to be not sufficient, turned inward to their own research and development arm, and Caterpillar probably spends about $600, $700 million a year on research and development, and an enterprising materials scientist named Kurt Kelley was given the task of designing a better lead acid battery. The good news, as it turns out, was that he had never designed a battery before so therefore he wasn't constrained with conventional wisdom about what you should and should not do to a battery, and one of those things that according to battery company wisdom was you shouldn't add carbon to a battery. Well, Kurt, as a materials scientist, knew that there was a broad spectrum of carbons, and that the battery industry only tried one, and Kurt tried an entirely different kind of carbon. And that overcame, therefore, the limitations in terms of runtime life that was posed by those who used lead metal and lead-acid batteries. So, that's really the essence of the innovation and in May, 2003 the technology was spun out to my partner and I as well as the chief scientist, whose also co-founder, and Firefly was founded in May, 2003.

Matthew: Now, for our listeners, they're familiar with the battery when it comes to lead –acid batteries, the battery in their motor vehicle, in their car, and now obviously, initially you'll be selling into some other markets, we can talk about those in a second, but I'm just interested in knowing, comparing it to what's in a car, like a flooded wet cell battery of a certain density that can deliver a certain amount of power to run your car, like how much lead is in a Firefly battery versus the one in our car, and how much more power can you get out of a Firefly battery than the kind of battery that's in a car at the moment?

Mil: Sure, and that's an interconnected question. In Australia you probably don't face extreme colds, but in more northern climates, typically in the winter, your battery is double-sized to account for the big drop in capacity when the cold temperatures hit. So, depending on your geography, this could be a third to a quarter less in size than a classic lead-acid battery.

It all depends on the application. You know, today's lead-acid battery isn't asked to do much in a car application, but that's quickly changing. You look in Europe, the E.U. wants to implement very stringent CO2 reductions on automobiles, and if the car manufacturer doesn't meet those by a certain timeframe they're going to get penalised 90 euros per car as a result. So, there's a dramatic shift to what are called micro-hybrid vehicles whereby you pull up to a busy stop light in Paris, you push in the clutch, the engine goes off, you let your foot off the brake after the light changes and the engine comes on again. And that's already been seen to reduce the amount of fuel consumption and pollution significantly.

However, the problem is the normal lead-acid battery isn't used to being started that many moment your Firefly technology, nickel metal hydrides, or these new lithium ion batteries times, you know instead of starting once when you drive your car home from work, you might be starting the vehicle 20-30 times during that commute and that's a very punishing application, particularly since when you're at that stop you still want to have your accessories running, now that has to run off the battery as a result rather than off the alternator. So, the situation with cars is going to be significantly changing and your father's lead-acid battery isn't going to be suitable for these new vehicles that are soon to be coming to the world.

Matthew: Now, the vehicle manufacturers have got a choice between at the that listeners are familiar with from their mobile phone or their laptop computer. Now, how do these different technologies compare? Like, we're aware of Toyota Prius, the current model, and they're still running on the older nickel hydride technology, how does Firefly compare to these?

Mil: Nickel metal hydride batteries do an admirable job of cycling. These hybrid applications involve hundreds and thousands of short pulse cycles. Nickel metal hydride is very good for cycle life in that application. It can also accept regenerative braking very well.

Lead acid was tried by the car companies in the 1990's but they failed because lead acid batteries could never operate in the partial-state, charge operation that a hybrid application requires where you have to be able to accept regenerative braking and deal with it.

What would happen is that the negative plates of those lead acid plates would sulfate up and you'd reach the point where you can't return to your original capacity, it just keeps decaying and decaying and decaying.

That's changing with our battery because it has a very unique phenomena; it doesn't sulfate up like a normal adapter battery does. So, your users might be familiar with boats where you might put it away for six months and then when you come to dig it out of hibernation and charge the battery up at the beginning of the new boating season, you'll find that if you can recover the battery, and that's a coin flip whether you can or not, if you can recharge the battery it doesn't come back up to it's original capacity. This battery (the Firefly battery) you can leave in a dormant state and it'll come back and fully recharge. So, it's a very novel characteristic of this technology.

Now, to answer your question about lithium; lithium, as we know in cell phones and laptops, admirable for a number of peak discharges in a laptop or cell phone application. It has wonderful metrics in terms of single cell performance for watt hours per kilogram, watt hours per litre. However, when you put it in a multi-cell application that's a lot more robust, say a car, now you're adding a lot of safety and thermal controls that all add to volume, weight and cost and you're trammelling back the performance of that cell because it cannot tolerate over-discharge. So, you're not using a 100% of that available battery power, you might be operating in a window between 30 and 60% state of charge.

So, our position is with the second generation of our technology, we call 3D², that's a full-foam battery, because it's lead-acid it's much safer, and because the foam material we use it dissipates heat very effectively, you don't need all those thermal and safety controls, so as a pack we can get a lot closer to nickel metal hydride and lithium ion when all those extra safety and thermal controls are considered.

Scott: Mil, you were talking about the (Firefly) batteries and how they can sit around for long periods of time and then be started up again and they're usually ok, which is not the case with many lead-acid batteries, and you said that's linked to the problem of sulfation in current lead-acid batteries. Can you just quickly for the audience, because you mentioned sulfation before, just say what sulfation is?

Mil: Sure. Sulfation occurs where the chemistry cannot be converted upon a recharge. These are crystals that grow and grow on the negative plate and when energy is applied to try to recharge the battery the chemistry can't be busted apart and converted and it can't accept the charge, the battery becomes useless.

So, I've given you a couple of examples where one, if you leave your boat battery and you don't' charge it over six months you'll find that it's blocked from receiving a recharge. That's basically, in a layman's terms, what sulfation is.

And when one looks at a specification sheet for a battery, like a lead-acid battery, you might see a battery for example like the one we're making for the commercial trucking market. It's in this size called Group 31, that's a size that defines the size of batteries for commercial trucks. And you might find a classic lead-acid battery offering 150 minutes of run time, but that's only at the first discharge and thereafter the run time starts to degrade, and that's due to that sulfation effect.

We start not only at a much higher run time, over 200 minutes, but that run time keeps coming back discharge after discharge. That's the main difference between a regular leads-acid battery and the Firefly technology.

Matthew: That's very important. Now you did mention those Group 31 truck batteries and I understand that that's where you're going commercial. Have you sold any into that space yet, and can you tell listeners in Australia about California's anti-idling laws?

Mil: Yes. California, I mean there were two tipping points in the United States. One was the announcement of anti-idling in California where truckers who come to a truck stop at night can only idle their diesel engines five minutes per hour. Well, how are they going to run all their truck hotel loads like microwave ovens and TVs and the like? It's going to put a punishing strain on a regular lead-acid battery for the reasons I cited previously.

That, combined with the price of fuel that had a huge run up in July, means that the cost of idling your diesel engine can be anywhere from $30 to 60 per night. So, the trucking industry would love to have a battery auxiliary power unit, or we'd call it an APU, but there wasn't a battery that would tolerate that kind of abuse. So, we are in fact announcing next mid-week that we're, so your audience is the first to hear this, that we're deploying the world's first versions of this battery that we call Oasis to some of the United State's leading trucking fleets as we speak for evaluation by those truck companies.

But you can imagine that as a long run time peak discharge, a battery, there are other major applications for this, in marine, like in the boating industry, in solar and wind applications, again maybe to create a picture for the layman about sulfation, when you have a wind or solar system, that electricity generated has no shelf-life unless you have a battery to capture it and in the United States most of the wind happens at night when the demand is lowest so getting a battery to capture that energy of course in fundamental. However, when the wind goes away or when the sun goes away the battery stays in that partial state of charge where it's not fully charged and again that dormany promotes the grow of the sulfation which prohibits a return to full capacity of the battery. So, the Oasis battery would be a great fit in that emerging market as well.

And in the United States we have a new inflexion point in the market where the federal tax laws have changed such that if you buy a solar system, which would be inclusive of battery, you can basically write 30% of the cost off on your tax from now until 2016, so that's a strong vote for the solar industry to try to get that kick-started. So, we're very excited about that prospect as well.

Matthew: So, you said you sent the commercial-ready samples off to the major trucking fleets, how big a production line can you get going and how quickly can you ramp the technology?

Mil: We're walking before we run. The overall size, in North America, in the United States, of Group 32 batteries is approximately nine million a year. Our first line will produce the equivalent of 200,000 batteries.

Now, our strategy is different. Rather than investing in manufacturing that already exists, we make this technology to be something that could be inserted into a normal lead-acid battery line. So, what Firefly does is we make the foam plates in our facility in Peoria, in Illinois, and then we ship that to a battery manufacturer that we have contracts with, a company called C&D Technologies. They already have the rest of the battery making equipment, the positive plates and the lead straps and the battery box and the electrolyte. And so, they complete the battery under our design and then we sell that battery under the Firefly name, but the secret-sauce ingredients are these foam plates that we make and then ship to be assembled into a complete battery.

Matthew: So, once you hit the market, we'd wonder why anyone would buy anything less than a Firefly lead-acid battery.

Mil: Well, we think so. I mean, certainly in the trucking market our battery admittedly will be more expensive in the first cost, but in the terms of the number of times you can cycle this battery it'll represent the lowest cost per cycle of any battery that's out on the market place. And as we build volume, certainly that first cost will begin to come down and it will reach a point hopefully, as you said, 'Why would a company make a lead-acid battery any other way?', because battery companies and consumers alike have been riding the wild swings in the London Metals Exchange where the prices of lead metal rose to as much as $3700 in the last 12 months, and now it's $1200 per tonne. So, you know, if you're making now a material that isn't a precious metal, like this foam material we're making, how you can have a much more precise and predictable cost structure and the engineering is in our hands to drive down that cost further rather than having it in the subjective hands of speculative traders like on the London Metals Exchange.

Matthew: Now, in terms of the metal, the lead, if we got a standard Group 31 battery and we calculated how much lead was in there, is there less lead in the same battery that's given you more output in a Firefly battery?

Mil: It's kind of a complicated answer. Let me give you a couple of examples. One is, if you're familiar with uninterrupted power supplies (UPS), these are lead-acid batteries that will back up a data centre if it goes down, if the power goes down before the diesel generator kicks in. You would normally see a room's full worth of lead-acid batteries to support that 5 minute discharge in between when the power went out and the generator kicked in. Imagine if that were a room's full of lead-acid batteries, now you'd need a half a room's worth of the Firefly batteries just because this foam material it's so efficient, it has such high surface area that it exercises the chemistry at a much more efficient and rapid rate than a normal lead-acid battery does. So, in the simple answer, you'd have 50% less lead and less weight in that application, in the UPS application.

Now, in the truck application, they weren't as much worried about weight as they were, 'Hey, this Group 31 is a standard footprint, stuff as much power and energy into the battery.' So, we're about 5 to 8 pounds less, 3 to 4 kilograms less than the leading current traditional lead-acid battery, but with much more run-time and life as a result. So, it really depends on the application, that's why it's a little complicated to say how much weight saving.

The second generation of the technology, we call 3D², gets rid of all the lead metal plates in the battery and those, you'll see drops of 30 to 40% in weight and size.

Matthew: And when's that likely to be released to market.

Mil: We're right now are working on a contract from the U.S. military to develop prototypes of that battery. I'd say it's probably about 24 months off.

Matthew: And, in terms of the development, is there a long way to go? Can you really make even more strides or are you sort of hitting the limits of the technology already?

Mil: Oh no, we got eight generations of this technology under a roof and so, we have a progression, a road map, that takes us through where Ni-Cad (nickel-cadmium) performances say where nickel metal hydride and lithium ion are, as we get through the eighth version of our technology that are in different stages of development. So, this is not a one-trick pony. There's lots of opportunity to advance.

Because, you know lead-acid has been poorly engineered in the past, for example, what do I mean by that? Nickel metal hydride has done a great job in utilising the available chemistry you put in that box, upwards of 80 to 90%. Lithium ion has done a good job, some 70% of the chemistry there put in there is usable. With expensive investment they can boost that up further.

Lead-acid traditionally has done a poor job because they use lead metal and it's a non-conductive material and the result is, at best, you can use about 25 to 30% of the chemistry that you put in that box. Now, with better engineering, revised architecture and this new high surface area material we could boost those rates up towards 80-90% and allow a performance that has never been seen by someone using this chemistry before.

Matthew: And where are you at now, about 60% or…?

Mil: It depends on the application. I'd say we're overall about 40%. We're already well above where lead-acid is today just in our first product that we're coming to market with, and those improvements will just get better and better.

Matthew: Fantastic.

Scott: Mil, you've spoken to global automotive manufacturers about possible applications, are there possible applications for plug-in hybrids?

Mil: With our second generation technology, 3D², that's where the real drops in weight and size come into play and we think that would be an ideal application for plug-in hybrids because everyone is rushing headlong into trying lithium in these vehicles and I'm not confident that chemistry is going to work robustly in a car. I think there are too many issues that involve safety, that's going to prove problematic. And I think it's going to reach a point where it's gonna get the entire industry to say, 'What led us to make these decisions, and what alternatives are out there?', and so I think that's where Firefly will come in and I'm seeing examples of that on a constant basis about some of these lithium problems, and what's occurred, I just think we're heading for a significant problem in the further deployment of that technology. And I hate to be a fearmonger, I don't mean to be a fearmonger, and I don't mean to denigrate our competitors but I'd be very wary about the prospects of lithium beyond portable applications.

Matthew: Yes, there are some limitations and it's a difficult technology whereas lead-acid is known to be pretty stable and simple, I guess.

Mil: Yes.

Matthew: So, I guess General Motors are bringing out the Volt and Toyota the Prius plug-in, so you won't be there in the first generation, but in subsequent generations and bringing the price down, because they're actually claiming that a significant proportion of the price, $US10,000, could be the battery bank at the moment and that's where you guys can come in and really make this something that's available to everybody.

Mil: Yes, and even if we didn't have the life, and it hasn't yet been proven for lithium by the way, because they have a traditional problem with calendar life where they have their own version of sulfation if you will, where it prohibits the ability to recharge the battery and although in a lab you can do accelerated life testing and say, 'Look, I did these hundreds of thousands of cycles', that's the problem with accelerated tests, they don't let the natural calendar life effect take hold and lithium has always had a problem with limited calendar life.

So, if you're expected to buy a very expensive vehicle, you've gotta make sure that the length of time for that battery pack will hit the life of the vehicle because of that cost. And so, nickel metal hydride I think is already proving that they can do that, but I would be more wary of lithium ion's ability to meet those calendar life requirements.

Scott: Mil, thank you very much for talking to us this morning and we look forward to seeing the results of your battery technology in the trucking industry in the U.S. and in a whole range of other sectors beyond that.

Matthew: …and here in Australia too.

Mil: Thank you very much. I appreciate the opportunity to speak to your audience.

Scott: It was a joy. That was Mil Ovan, senior vice-president of Firefly Energy, a company that has developed a carbon graphite foam grid technology that increases the performance of lead acid batteries and reduces the amount of lead and reduces cost.

You're listening to Beyond Zero, a climate change awareness show aired weekly on 3CR community radio and the time is, well, it's time to go. Visit www.beyondzeroemissions.org.

Transcription by Jacqui McKenzie and Beyond Zero Emissions