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Chapter 3 SOCIOECONOMIC SIGNIFICANCE SUMMARY Electrochemical devices and processes represent a major market force in the United States today. They affect our society in three general ways: (a) as a major industry for materials and chemicals production, (b) as an enabling technology for other industries (for example, corrosion control and batteries for vehicles), and (c) as a means of promoting personal well-being over and above economic considerations (for example, in the field of health care). This chapter identifies major socioeconomic contributions, both current and future; these include metal winning, chemicals and semiconductor production, electroplating, corrosion cost avoidance, batteries and fuel cells, sensors (for health systems, industrial use, home applications), and membranes. The current domestic annual electrochemical markets are nearly $30 billion, excluding corrosion; new markets that seem likely to develop in the period from 1990 to 2000 are estimated at an additional $20 billion annually. INTRODUCTION This chapter identifies socioeconomic benefits in major electro- chemical market sectors, both present and future. These sectors include energy, industry, national security, and health, among others. The domestic economic contribution, excluding costs of corrosion, approaches $30 billion per year, or about three-fourths of 1 percent of the gross national product (which amounted to $3800 billion in 1984~. Within a decade, substantially greater sales are projected for batteries, fuel cells, semiconductors, sensors, corrosion control, and membranes. In addition, introduction of new technology could slow the loss of major markets in electrochemical production of metals and chemicals and in electroplating. Impacts of electrochemical technology are seen in three areas. The first involves the economic value of materials produced by electro- chemical methods. A summary of market estimates is given in Tables 3-1, 3-2, and 3-3 and in Figure 3-1; the dollar amounts represent conser- vative dollar values, since only a few selected markets were evaluated and the estimate for each one was based only on verifiable sales. In 17

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18 TABLE 3-1 Production of Major Electrochemicals in the United States in 1984 Domestic ProductionApproximate (thousands ofPrice per Annual Market Producttons per year)Ton ($) ($ billion) Aluminum4,0001~000 4.0 Caustic1 3,000250 3.3 Chlorine12,000200 2.4 Copper (electrolytic)1,5001,500 2.2 Magnesium1302,500 0.3 Soda ash8,300100 0.8 Zinc (electrolytic)2601,000 0.3 Total 1 3.3 SOURCE: Reference 3. TABLE 3-2 Electrochem Estimated Current Major Domestic cat Markets Market Sector Annual Market ($ billion) Semiconductor production and processing Metals and chemicals Batteries Electroplating Corrosion control (see text) Total 13 4 10 28 SOURCE: References 2, 3, 10, and 12.

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19 TABLE 3-3 Estimates of New or Increased Domestic Markets for Selected Electrochemical Products Application Annual Market, 1990-2000 ($ billion) Batteries and Fuel Cells Vehicles and stationary energy storage Utility power generation Semiconductor Production and Processing Microelectronic devices Sensors Health care Industrial--food and chemical processing Home and auto Electrochemical Industries Production of basic metals and chemicalsa 3 Corrosion Control Cost avoidance with new technologyb Membranes Various processes--e."., electrodialysis, retrofit for chloralkali plants Total 2-10 1 -2 2 11-2 11-2 1 -2 4 13-24 aCommittee estimate of value of retention of domestic industries through electrochemistry advances leading to improved international competitiveness. bCommittee estimate of corrosion costs that can be avoided with new electrochemical technology (unavailable today); the estimate is 1 to 2 percent of the total annual unavoidable cost (1~. SOURCE: Except for electrochemical industries and corrosion control, information was obtained from sources listed in reference 12.

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21 addition, the dollar values for metals and chemicals were assigned to the product just after electrochemical processing (e.g., for aluminum, the value of ingots was used rather than plates or tubes fabricated in subsequent steps). Electrochemical processes provide the only commercially viable means by which humanity can obtain certain essential materials. There are no alternate methods for most metals obtained by electrowinning or electro- refining. Without aluminum, a product of electrochemical technology, commercial air travel would be impossible. Efficient electrical machinery depends on copper of high purity, a product of electrowinning and electrorefining. The most powerful oxidizing agent, fluorine, is produced solely by electrolysis; its applications are essential to a wide variety of useful purposes. The only economically viable method for producing chlorine and caustic, both essential chemicals, is electrolysis. Electroplating, or the deposition of thin metallic layers, provides a unique and often low-cost means for upgrading metal performance in cosmetic as well as structural uses. Electrochemical reactions are highly efficient, since their chemical energy is converted directly into electrical energy and vice versa. Consequently, these reactions may have an energy efficiency far exceeding that of ordinary heat engines, which are subject to the Carnot-cycle limitation. The second area is the contribution to the success of other industries or products that have a socioeconomic impact far greater than the dollar value of associated electrochemical processes. Several examples will serve to illustrate this "value added": Automobiles cost more than 100 times the price of the battery, but the battery permits easy, reliable starting, allowing it to be a convenient mode of transportation for normal lifestyles. Indeed, batteries provide the only efficient small-scale devices for the storage of instantly available electrical energy. Dependent on batteries are all automobiles; all telephone circuits; most modern watches, calcu- lators, and standby power sources; most modern weapons systems for propulsion (torpedoes, for example), communication, and guidance systems; space exploration (which also uses fuel cells); and implanted heart pacers. The annual market for microelectronic devices, the backbone of many consumer and business products, is about 400 times the cost associated with electrochemical processing and production of semi- conductors, the"brains" of the devices (2~. Corrosion control technology is a mainstay of automobile coatings as well as household appliances; for example, the lifetime of water heaters is extended and often governed by the presence of a magnesium sacrificial anode that represents a small fraction of the appliance price.

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22 Finally, the third area represents socially important aspects that are impossible to quantify. Thus, for example, the "value" of electro- chemistry to medical science far exceeds its dollar market size. Several areas where electrochemical phenomena play a significant role are discussed in the following sections. ELECTROCHEMICAL INDUSTRIES Electrochemical processes provide the basis for numerous chemical industries that are important both in the dollar value of the product, as in the case of aluminum, and in the value of the derived products. For example, chlorine, a large-volume chemical, is an essential inter- mediate in the production of polyvinyl chloride plastics, a $5 billion industry. The sizes of individual industries (3,4) are indicated in Tables 3-1 and 3-2. The large contributors are the more mature industries that are on a plateau of their growth curves. Research and development in those mature industries can have significant dollar value, and the commercial basis for R&D funding already exists. Existing Industry Trends in aluminum production technology offer an excellent example of emerging opportunities and the critical role of electrochemical R&D therein. Aluminum ingot production consumes about 5 percent of the electricity generated in the United States, and this constitutes 15 to 25 percent of the ingot metal cost. Successful commercialization of developments in two areas could reduce energy consumption by 15 to 20 percent (5) and ingot costs by $150 to $200 million, based on current annual aluminum production (Table 3-2~. The first area is electrolytic cell design coupled with improved anode and cathode materials. Limiting factors appear to be finding (a) a stable (nonconsumable), low-resistance, readily fabricated anode material to replace the carbon anode and (b) a cathode chemically stable in the electrolyte; these two items would permit cell designs with smaller interelectrode spacings. The second area is development of a molten-salt fuel cell. The limiting problems are materials (electrode and separator stability, for example), and these are discussed later in this report (Chapter 6) and elsewhere (6~. A third area where there could be a significant impact on ingot costs is in waste processing specifically, converting .. ~ , _ . . . . . . ~ . ~ scrap potllnlng t~rom aluminum production Into usable products such as graphite, aluminum fluoride, and caustic that could be sold or recycled into the process (7~. The key technical problem involves ion- specific membrane technology in concentrated waste stream treatment; cost reductions comparable to those noted above appear likely.

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23 The production of aluminum is an outstanding example of a multibillion-dollar industry created by an invention that was sparked by a small research and development effort. In 1986 the aluminum industry celebrates the 100th anniversary of the invention of the Hall electrolytic cell, which provided a commercially feasible method of reducing alumina, thus allowing the growth of per capita consumption of aluminum to the point where today it is second only to steel. Indeed, aluminum production has increased exponentially since the Hall cell was developed, and this in turn has been improved significantly by research and development. Thus, the aluminum production of one cell has increased from 100 pounds per day in 1920 to 1000 pounds per day in 1980 to 3800 pounds per day for the largest cell in 1986, and continued improvements are projected. Opportunities parallel to that for aluminum exist in chlorine and caustic production and certainly exist for production in emerging materials markets. Small rapidly growing industries, or new embryo industries, are difficult to identify because of small dollar volume, and yet in 10 to 20 years they may become significant. These industries are the ones most likely to be advanced", and even be created", by the support of the research and development identified in this report. For example, the magnesium industry has a small volume at present; however, its potential for growth is large. Magnesium is the lightest structural metal (about two-thirds the weight of aluminum for comparable strength and fracture resistance) and with its excellent castability should find growing application in the automotive, aerospace, and electronics industries. Another area of great potential involves the production of high-value-added organic chemicals by electrochemical methods of synthesis. The high yield of these routes is particularly attractive for specialty chemical markets. Larger scale processes that have been commercialized include tetraalkyllead (8) and adiponitrile. The important points are that (a) new technology is needed to maintain international competitiveness of domestic industries producing basic chemicals and metals, (b) this technology will result from a strong R&D program, and (c) there is substantial economic leverage in such a program in helping to retain domestic industries, which contribute so heavily to the nation's economy. Corrosion The economic cost of corrosion in the United States has been estimated (l) to be about $120 billion (in 1982~. This staggering figure amounts to about 4 percent of the gross national product, or more than $500 per person annually in the United States. The broad

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24 categories examined are shown in Table 3-4 along with the losses that could be avoided by implementation of known corrosion control technology. It is noteworthy that new technology will be required to avoid most of the costs. Corrosion control underpins other technologies, as discussed later for the electric power industry. From examples given earlier in this chapter, corrosion control would be expected to have an economic impact from fifty- to a hundred-fold greater than its own dollar value. Therefore, in Table 3-3, its future annual "market value" was estimated at $1 to $2 billion. TABLE 3-4 Estimated 1982 Corrosion Costs for the United States Category Cost ($ billion) Avoidable Cost ($ billion) Energy industries Electric power Material production Government operations Personally owned automobiles Total 67.5 6.6 13.9 17.8 16.2 1 22.0 1.4 0.2 0.4 4.5 _0.5 17.0 It is interesting to note in Table 3-4 that the smallest avoidable cost is assigned to the electric power industry, where there has been considerable research and development to mitigate corrosion problems, especially in nuclear generation systems. Costs attributable to corrosion in nuclear power plants are highly leveraged because of the loss of generating capacity (the capacity factor loss), which is expensive to replace. During the period from 1980 to 1982, the capacity factor loss in U.S. nuclear plants due to corrosion problems was about 5 percent of total capacity (9) and cost about $1 billion annually; the costs are attributable solely to corrosion. Several million dollars per year are invested in R&D programs to develop countermeasures to these corrosion problems; these programs are funded by vendors of nuclear systems, by the Electric Power Research Institute, representing many public utilities, and by government agencies (Nuclear Regulatory Commission and Department of Energy).

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25 Batteries and Fuel Cells Electrochemical power sources are a multibillion-dollar-per-year business. Automobile starting batteries represent about $2 billion per year in the United States and over $5 billion per year worldwide. Other types of batteries and fuel cells have sales of over $1.5 billion per year in the United States and over $6 billion per year worldwide (10~. In developing countries the market is growing because in many remote areas batteries provide the only electrical power. New civilian markets for batteries appear to be substantial. In the United States, the electric utility industry is estimating a market by the year 2000 of $0.3 billion per year for battery off-peak energy storage systems, provided new battery technology is available (11~. This corresponds to a total installed battery capability of 40,000 MW by the year 2000. The U.S. market for batteries for over-the-road consumer electric vehicles is projected to be $4 billion per year if only 10 percent of new vehicles would be battery-powered. More research is needed to enter this potential market. Realization of that market requires that battery prices be reduced to about $100/kWh and lifetimes be extended to more than 3 years. Multibillion-dollar annual markets for associated equipment such as electric drive motors, microprocessor controls, and related electronics would be created by the successful penetration of the market by electric automobiles. Information is available on forklifts and commercial fleet vehicles, so that potential domestic markets can be estimated (12,13~. The current number of forklifts in the United States is approximately 1.5 million, and annual purchases are approximately 100,000 (based on 1985 and projected 1986 figures). Approximately half of the new lifts are battery-powered, with the battery costing $4000 to $5000. Thus, the current annual market for these batteries is roughly $200 to $250 million, and the potential market is about twice as large. In commercial fleets there are approximately 13 million light-duty "over-the-road" vehicles, slightly more than half of which are trucks (including light vans), the remainder being cars (including station wagons). Analysis (13) of the characteristics of the vehicles and their use patterns shows that trucks offer the greatest potential for substitution of electric battery power for the internal combustion engine. The prime candidates for electric vehicles number 1.5 to 3.5 million (20 to 25 percent of the truck fleet). If a battery cost comparable to that for forklifts and a 5-year vehicle life are assumed, the potential annual market is on the order of $1 to $2 billion. As fuel cell research and development brings down the cost of these systems, new market possibilities emerge (12,14~. Market analyses have been made for using fuel cells for increased electricity

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26 generating capacity (in contrast to replacement of current capacity). The near-term market (up to the year 2000) was found to be dominated by cogeneration using phosphoric acid fuel cells because of factors such as break-even cost and commercialization status. The predicted market is sensitive to assumptions in the analysis and thus varies two- to six-fold; therefore, a range of capacities and market values is indicated in Table 3-5. TABLE 3-5 Domestic Market Potential for Electric Utility Fuel Cells MW Year Installed Market Value ($ billion) 1985 nil nil 2000 1000-2000 1 -2 2015 5700-44,500 6-45 Comparison of the capacity in the year 2000 versus that in 2015 shows that the annual growth in fuel cell capacity is projected to be in the range of 500 to 4000 MW. At the cost of $1000 per kilowatt of capacity, the market value is $0.5 billion to $4 billion per year for domestic utilities. The international market is estimated to be two to three times larger. Market penetration will be assisted with the development of another fuel cell concept based on molten-salt electrolytes. In comparison to the phosphoric acid cell, the molten-salt fuel cell is a simpler engineering system, has a greater operating efficiency (50 to 60 percent versus 40 to 45 percent), but lags 5 to 10 years in commercialization status. In addition to the potential market for fuel-cell systems, other significant benefits would also accrue. For example, the savings due to reduced SOX and NO emissions with fuel cell systems installed would be about $1.~ billion over the next 25 years. The higher efficiency of the fuel cell compared to conventional systems would save about 90 million barrels of oil per year (for an installed capacity of 40,000 MWe). The electrochemical power source business is rather fragmented, and most of it operates at a low profit margin because of intense competition. The research performed by this industry is estimated to be

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27 about $30 million per year, less than 1 percent of sales. This is an extremely low figure, and it serves to point out the need for additional research that would allow the United States to maintain its competitive position in the world market. Foreign competition is keen. Countries such as Japan and Germany have been extremely effective in competing with the United States in the introduction of new, high-performance electrochemical power sources. The most direct and effective manner for the United States to retain a leading market share would be to develop a strong federal research program that interacts effectively with U.S. industry. Electrochemical Sensors Sensors are devices with behavior that responds to physical, mechanical, or chemical changes in the environment and with properties that can be quantitatively and reliably measured. Applications for sensors span the health, agriculture, industry, and personal-use sectors of the economy. With few exceptions (e.g., pH sensors), today's electrochemical sensors are associated with laboratory systems because their complexity and fragility require operation by trained technicians under controlled conditions. The potential markets for instrumentation systems containing electrochemical sensors that are simple, rugged, reliable, and low in cost are large and are outlined in Table 3-6. Although they represent a small percentage of the dollar value of markets for instrumentation systems that use them, sensors are the enabling technology that gives the system its needed sensitivity, selectivity, and reliability. Health Care Devices based on electrochemical phenomena represent a multimillion-dollar market annually for health care (15~. Applications are probably most important in the sphere of population well-being. For example, experience with heart pacemakers shows that the typical use is for those in the 60- to 80-year age bracket who will lead a relatively active and normal life and have a "statistically average" life expectancy with the assistance of a pacemaker. Without this device, the person would be debilitated and have a life expectancy of only 1 to 2 years. The current market for pacemakers is estimated at nearly 300,000 per year worldwide, about half that in the United States (15~. With a battery cost on the order of $100 for an implanted pacemaker, the dollar value ranges from $15 to $30 million for the batteries alone (predominantly lithium-iodine systems). The total cost associated with implanting pacemakers is a hundred times greater.

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28 TABLE 3-6 Market Potentials for Electrochemical Sensors Distributed (D) or Potential Centralised (C) Market Class of Sensors Facility ($ million) Comments Bioelectrochemical l Health--Critical care C (relatively 500 Need small self (e.g., monitoring marital small number of contained devices functions where units) information is needed on "real-time" basis) Health--Routine analyses D 500-1000 Need rugged, (e.g., blood analysis reliable, low-cost directly in physician's sensors office) Health--Specialty markets C 500 Industrial--Food processing C 100 Need sensors for (e.g., fermentation) use in continuous flow streams Industrial--Processing C 100 involving measurement of complex molecules Other Than Bioelectrochemical Industrial--Chemical processing D 100 Current market (predominantly pH sensors) Industrial--Chemical processing D 1000 Need sensors with improved reliabil ity, longevity, and stability Industrial--Environmental D 100 monitoring (e.g., pollution control) Vehicular--Monitoring operating D (-107 units 100 Need low-cost conditions per year) sensore($1-$10) Home and Office--Heat and D (>108 units in 1000 Need low-cost humidity control place in United sensors compatible States) with central microprocessor control

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29 The overall performance and reliability of both implanted and external medical devices depend strongly on the battery characteristics (including chemical composition of the electrodes as well as the battery design and electrolyte). Lithium-based batteries are the current choice for pacemakers, where continuous power requirements are on the order of 10-4 W; battery duration depends on demand factors and is about 7 years for continuous service (16~. Other devices are being developed that have higher power needs and serve specialty markets (probably smaller than that for pacemakers). Some of these are the following: Implanted drug dispensers are sought to permit timed release of medicines, such as insulin, on a steady-state basis or as needed if coupled with an appropriate sensor. (For example, a glucose sensor would operate in conjunction with an insulin dispenser for diabetics.) The "drug pump" power requirements are approximately 10-3 W. Neural stimulators are battery-powered electrodes useful for several treatments pain, some mental disorders, and accelerated healing of bone fractures, for example. These systems have power requirements up to a hundred times that of dispensers. Defibrillator systems apply electrical shocks through two electrodes attached to the heart. Current analyses specify power needs at 10-3 W (continuous) and 1 W peak power for developing a sufficient shock. The estimates show that current lithium batteries will be depleted after 100 shocks and need to be replaced every 2 to 3 years. The artificial heart has the greatest power requirements for implanted devices, exceeding 10 W; there are no acceptable implantable batteries for this application at present. Ire addition to use in implanted devices, small batteries are the power source for hand-held and portable instruments; some applications are telemetry receivers, pacer system analyzers, pacemaker programmers, and Hotter monitors. Electrochemical corrosion is important to the stability and longevity of implants. Evidence suggests that uniform attack and crevice and pitting corrosion are the most important degradation modes with multipart orthopedic devices (17~. Corrosion of devices with blood contact is more complex, due to the oxygenated flowing electrolyte. The cost of this corrosion has not been estimated, but it could be substantially greater than the battery market because the latter is a small fraction of the total cost of the device and associated medical operations.

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30 REFERENCES 1. Meredith, R. E. The Cost of Corrosion and the Need for Research. Report to Office of Energy Systems, U.S. Department of Energy, Washington, D.C., 1983. 2. VLSI Manufacturing Outlook. San Jose, California: VLSI Research Inc., 1985, pages 13-18 and 113-150. Hall, D., and E. Spore. Report of the electrolytic industries for the year 1984. J. Electrochem. Soc., 132:252C, 1985. 4. Saxman, Donald B. Electrochemistry: Commercial Developments and Trends. Stamford, Conn.: Business Communications Co., Jan. 1986. Jones, M. Testimony before U.S. Senate Research and Development Committee, Feb. 24, 1986. 6. Assessment of Research Needs for Advanced Fuel Cells. DOE Report DOE/ER/30060-T 1, Nov. 1985. Lever, G., ]. P. McGeer, and K. Mani. A membrane process to convert spent potlining into valuable products. Paper presented at Annual AIME Meeting, New Orleans, Mar. 9, 1986. 8. Danly, D. E. Industrial electroorganic chemistry. Organic Electrochemistry, 2nd Ed., M. M. Baizer and H. Lund, eds. New York: M. Dekker, 1983. 9. Koppe, R. H., E. A. J. Olson, and D. W. LeShay. Nuclear Unit Operating Experience: 1980 Through 1982 Update. EPRI NP-3480. Palo Alto, Calif.: Electric Power Research Institute, Apr. 1984. 10. World Battery Industry. Concord, Mass.: George Consulting International, Inc., Dec. 1985. 11. Fickett, A. Batteries for Electric Utilities: Will There Be a Market? EPRI EM-3631-SR. Palo Alto, Calif.: Electric Power Research Institute, Dec. 1984. Information sources for market information for sections of this chapter or for Figure 3-1 and Table 3-2 and 3-3 were as follows: Semiconductors-G. D. Hutcheson, VLSI Research, Inc.; Electroplating William Safranek, Technical Editor, Plating and Surface Finishing, American Electroplating and Surface Finishing Society; Batteries and fuel cells W. J. Walsh, Argonne National Laboratory, and John Appleby, Electric Power Research Institute; Sensors Imants Lauks, Integrated tonics, Inc.; Membranes Anna W.

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31 Crull, Chemical Technology Consultants; Health care Boone B. Owens, University of Minnesota, and Patrick J. Moran, Johns Hopkins University. 13. Berg, M. R. The Potential Market for Electric Vehicles. Institute for Social Research, University of Michigan, Ann Arbor, Aug. 9, 1984. 14. Energy Management Associates. The Application of Fuel Cells in Utility Systems. EPR! EM-3205. Palo Alto, Calif.: Electric Power Research Institute, Aug. 1983. 15. Salkind, A., et al. Electrically driven implantable prostheses. Chapter 1 in Batteries for Implantable Biomedical Devices, B. B. Owens, ed. New York: Plenum Press, 1986. 16. Kelly, Robert G. The Determination of the Rate Limiting Mechanism in Lithium/Iodine (PZZP) Batteries. M.S. thesis. Johns Hopkins University, Baltimore, Feb. 1986. 17. Park, J. B. Biomaterials: An Introduction. New York: Plenum Press, 1 979.

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