2019 was another blockbuster year for energy storage deployment. One question seems to stay at the forefront: When will we see a real competitor to lithium-ion? While there is no clear front-runner today to knock lithium-ion off its podium, there are many technologies that have the potential to be the next breakthrough.
Energy storage is referred to as the “holy grail” of renewable energy, as it gives solar and wind energy the ability to generate electricity 24/7. The need to shift energy from daytime to nighttime is critical for solar energy to compete with fossil fuels. Once these costs of shifting electricity reach grid parity, it is likely that solar and storage will replace many of today’s fossil fuel generators.
While lithium-ion had a dominant 60% market share of deployed projects in 2018, more and more utilities and independent power producers (IPPs) are experimenting with alternative technology pilot projects. There are several reasons why alternative technologies have become a key topic in the storage industry. Although we see lithium-ion costs continue to decline, the rate is currently slowing and would need much greater acceleration to reach grid parity coupled with solar. In addition, many lithium-ion technologies use cobalt (a conflict mineral), leading to a push for a more environmentally friendly and ethical reason.
Another key argument against lithium-ion is the inherent fire hazard the systems pose. Several lithium-ion battery fires throughout South Korea and other locations over the past few years brought this topic of safety to the forefront. On the technology side, lithium-ion sees annual degradation, both cycling, and time-based. This degradation can have major impacts on the system as it progresses through its life.
Several technologies hold the potential to unseat lithium-ion — some new and some with a long track record. At Sonnedix, we currently have over 27 MW of energy storage with different technology types, and we believe there are plenty of opportunities for alternative technologies to become commercially competitive given the potential of the global energy storage market. Our engineering and construction team is constantly meeting with technology and integration leaders, and we are always researching and looking on the horizon for game-changing technologies. A few of these — which have either been in the news recently or have announced projects — include hydrogen, kinetic, and flow batteries.
Hydrogen: This has long been a heavily debated energy storage technology. Typically, larger-scale hydrogen storage systems require underground storage (salt caverns), limiting locations for deployment. Outside of the physical requirement for storage, hydrogen as energy storage has two major setbacks: efficiency and carbon footprint. While lithium-ion systems typically operate with round-trip efficiencies ranging from 75-85%, hydrogen storage systems will normally have a 16-45% round-trip efficiency, essentially losing 55-84% of each unit of electricity stored. The other key issue is that 99% of today’s hydrogen is produced from fossil fuels, which does not necessarily align with the green nature of renewable energy facilities.
What gives hydrogen the potential to overtake lithium-ion is the development of high-temperature electrolyzers, which could increase efficiencies to beyond 90% along with the push for a greener production method of hydrogen.
Kinetic: This technology has been making headlines recently thanks to the Energy Vault platform, which uses kinetic/gravity-based energy storage that uses cranes and wires to move large concrete blocks up and down. The system requires larger-scale deployments and recently received $110 million in funding through SoftBank’s Vision Fund to further develop the technology.
The setbacks are apparent. The magnitude and physical size/height of the system means it cannot be deployed everywhere, and the size required to achieve economies of scale is significant. No systems have been officially deployed to date, but a pilot in Italy hopes to showcase the technology’s abilities. The promise of this technology is its ability to achieve a long system life with no degradation, which lithium ion-based systems suffer from.
Flow Batteries: This alternative technology is one with a history. Flow batteries have been around since the 1980s and use liquid electrolyte in external tanks. What makes flow batteries unique is that their power and energy are entirely decoupled. To increase energy size, the system simply requires a larger tank and more electrolyte.
The technology, like hydrogen, suffers from lower efficiencies. Flow batteries’ potential rests in their ability to have a long system life with no degradation. From a cost perspective, many flow batteries use vanadium. Vanadium can be a significant cost in the system; however, many manufacturers are offering 20-year vanadium lease/buyback programs in order to reduce costs to the owner. Several flow companies have commercialized solutions, but the scale of deployment and cost are not yet close to competitive with lithium-ion.
While lithium-ion has been a workhorse for the renewable energy industry, there are several alternative technologies that have the potential to unseat it as the market leader. Cost reductions, efficiency improvements, safety, and ability to scale will be the key drivers of which technology ends up being the leader or whether a blend of different technologies will be the “holy grail” for renewable energy.
While these three technologies represent some of the most publicized alternatives, there are many more being developed worldwide, with the potential for a new technology to jump to the forefront and challenge lithium-ion. One thing is clear: There is still a long way to go in cost reductions before the holy grail of 24/7 dispatchable renewables can reach grid parity.
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