The exponential growth in the use of portable electronic devices
and electric vehicles has created enormous interest in inexpensive,
compact, light-weight batteries offering high energy density.
Clearly, the lithium-ion battery is one of the most appealing technologies
to satisfy this need. It is estimated that the global market
for lithium-ion batteries could growfrom $877 million in 2010 to $8
billion by 2015 [1]. However, cost limits their penetration in the
global market. Energy is a significant cost driver for lithium
batteries as both electrical and thermal energy is required in the
raw materials processing and battery manufacturing and assembly.
As energy use is significant in the process, the sustainability of the
energy source influences the overall carbon footprint for the
battery production. Iceland offers a number of potential avenues for
cost and carbon emissions reductions in the manufacturing
process, due to readily available medium grade thermal energy
from geothermal or industrial sources, access to inexpensive
renewable electricity, and a skilled workforce. The purpose of this
paper is to quantify the economic advantages and carbon emission
reductions to be gained by locating a lithium iron phosphate
(LiFePO4) factory in Iceland close to geothermal heat sources,
versus sites in other locations where fossil sources of energy must
be used. Furthermore, we will also present the sensitivity of profitability
to energy cost.