Lithium technology still leads the pack for renewable energy storage

The biggest obstacle for renewable energy has always been taming the infrequent surges of the resource.

But energy storage options could help harness those bursts to send power in a controlled manner.

There are various types of storage components but lithium ion batteries are still the primary player. However, this technology has been around for awhile. In fact, the electronics heavyweight Sony was the first company to manufacture and sell lithium ion batteries more than 25 years ago.

The popularity of lithium ion may partly be attributed to Tesla and Panasonic, as the pair – along with other strategic partners – are working to create what the electric car maker calls its Gigafactory. The production facility is slated to ramp up production next year, pushing out 35 gigawatts her hour of lithium ion batteries – or more than the total amount of the product manufactured worldwide in 2013. And with the increase in production, there has been a decrease in prices.

Logan Goldie, the head of energy storage analysis at Bloomberg New Energy Finance (BNEF), said lithium ion battery pack prices have dropped by 72 per cent to US$273 per kilowatt hour last year from $1,000 per kWh in 2010. “At the lower end of the range, you have packs being sold for less than $200 per kWh today,” he said.

There are a number of alternative technologies that can help to store power, but lithium ion is versatile, with rapidly falling prices and improving performance. Mr Goldie said most of this is driven by the investments in electric vehicles (EVs) – such as the move from Tesla and Panasonic to hugely increase roll out of lithium ion batteries for EVs. “The growing interest in EVs is thus spurring investment in the technology, that is in turn benefiting stationary storage developers,” he said. “Other technologies don’t have this overlap and so have much smaller current addressable markets, which impacts their ability to scale, pricing and operational experience.”

Traditionally energy storage projects have been stand-alone rather than being tied to a scheme such as solar photovoltaic (PV), but there is a new movement combining both solar PV and batteries particularly where there are local grid constraints. The United States is leading the charge – last month a utility in Arizona signed a PV plus storage agreement for about 4.5 cents per kWh, although removing tax subsidies puts it at about 6 cents.

However, the longest storage time Mr Goldie has so far seen for this technology is six hours, although there are other longer-term, but more costly, solutions such as sodium sulphur batteries or flow batteries.

“Focusing on lithium ion, the limiting factor has really been cost – four years ago, most people were only talking about lithium ion as being suitable for applications up to an hour and this has gradually extended since then.”

There is still work to do in terms of extending storage time, but also there is a need to create a value chain for when the battery has fulfilled its duties. BNEF is seeing warranties for energy storage systems of about 10 years but the degradation will depend on what service the battery is providing and local conditions.

Mr Goldie said new sectors can be created such as recycling. “Commercial viability for large-format lithium ion battery recycling depends predominantly on commodity prices for cobalt, copper and nickel,” he said.

The value chain consists of the main sectors spanning battery and inverter manufacturing, software and controls and system integration. “The space is becoming increasingly interesting and a large number of companies are now investing in storage companies, or entering the space themselves,” said Mr Goldie.

lgraves@thenational.ae

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