Today, lithium is king of batteries. Plain and simple.
That is, for now…
Wood Mackenzie reports that lithium-ion batteries made up 99% of all [chemical] battery deployments in Q4 2018.
Technology dominance is an understatement.
But nobody is perfect.
Accordingly, lithium-ion batteries — with its six main chemistry variations — suffer from the following weaknesses.
- Safety — Overheating and exploding (“Uh, honey, my hoverboard is on fire.”)
- Duration — Maximum discharge duration of four hours
- Performance over time — 10-year lifetime, plus round trip efficiency losses
- Costs — High energy density comes at a price too high for mainstream use
- Material availability — Uncertainty regarding lithium and cobalt (“Slavery in the supply chain? No thank you.”)
In response to these Achilles Heels’, entrepreneurs, angel investors, billionaires, venture capitalists, chemists, physicists, and even a former theology student (“God, help us?”) have been hard at work creating non-lithium battery solutions.
Three main types of non-lithium technologies are showing the most promise:
- Thermal storage — that is, water heating (heaters) or cooling (often into ice)
- Flow batteries — usually involving vanadium, but sometimes zinc or iron chemistries
- Long duration batteries — off-the-wall ideas like molten salts or underground fluid compression
Does we really need anything beyond lithium-ion?
On one hand, the answer is no.
Lithium-ion’s energy density and safety continue to improve, while its costs continue to decline, roughly 85% since 2010. Moreover, as the electric vehicle market grows, it brings more lithium-ion manufacturing online to further lower costs and improve performance. Unfortunately, we have no idea where the EV market will land: Bloomberg sees EVs as 55% of all new car sales globally in 2040, while OPEC and oil majors think the number is around 10%.
On the other hand, lithium alone won’t cut it.
With analysts projecting that solar and wind plants are likely to receive 73% of all new power capacity investment globally between now and 2050, we need to span days, weeks, or months with stored power, not just minutes and hours.
Case in point: From 2017 to 2018, Wood Mackenzie shows that energy storage in the US grew by 44% in terms of MW but 77% in terms of MWh. The market is already demanding longer discharge durations.
As their analyst Mitalee Gupta puts it: “Four years ago, we weren’t even talking about 4-hour duration.” But now we’re talking about 4+ hours of discharge duration.
Moreover, the market for energy storage is changing quickly. If you thought you understood it six or twelve months ago, forget about it. It’s time to refresh with the latest Lazard report on the Levelized Cost of Energy Storage, now on version 4.0, with new additions released each Fall.
For instance, in 2017, they reported that lithium-ion’s 5-year cost reduction would be 36% while flow battery costs would fall 19% and 28% for vanadium and zinc bromide chemistries, respectively.
However, the latest report shows the opposite: flow battery costs are projected to fall 38% and 45%, while lithium-ion costs may just fall 28%.
To some degree that is to be expected: The rate of cost decreases cannot continue to fall at the same pace as a technology reaches maturity.
In contrast, we are still in the early days of flow battery production and deployment, and the corresponding cost decreases that will come.
With Bloomberg projecting $620B invested in energy storage between last year and 2040, there is plenty of time and room for non-lithium tech to capture market share and grow into serious businesses solving energy problems at scale.
So which companies might lead that charge? Let’s take a look…
List of non-lithium technology leaders
(as measured by capital raised, deployments, and/or caliber of the team)
Flow batteries
Advantages over lithium:
(based on manufacturer claims)
- Longer discharge duration = 4 to 12+ hours
- No safety issues
- Potentially 20+ year life vs. 10 years for lithium
- No degradation in performance over time
- Vanadium flow battery
- $193M raised
- Partnerships with Siemens, Jabil, 3M, and UTC
- Insurance innovation with New Energy Risk and XL Caitlin to back up energy, power, and round trip efficiency over time
- Zinc bromide flow battery
- $92M+ raised
- “Proprietary battery chemistry comprising metal ligand coordination compounds”
- Part of a $100B+ publicly traded aerospace and defense contractor
- Vanadium flow battery
- $40M+ raised to date
Thermal energy storage
Advantages over lithium:
(based on manufacturer claims)
- Simpler
- Decades of deployment
- Safer
- Longer lifecycle, with fewer performance degradation concerns
- Smart water heaters as energy storage
- Public company with a $6B+ market cap
- Smart water heaters as energy storage
- Private company with 7,000+ employees
- Retrofit solution to make “stupid” water heaters “smart”
- $4M+ raised
- Conversion of water to ice during off peak for air conditioning
- $130M+ raised, including $40M from private equity investor Argo Infrastructure Partners, with $2B in assets and [assumed
- Optimized cold storage for food supply chain
- $16M+ raised
- Manages onsite thermal resources to reduce peak demand charges
- $10M raised, including strategic investors Evergy Ventures (formerly GXP) and Shell Ventures
Long duration storage
Advantages over lithium:
(based on manufacturer claims)
- Longer discharge duration = days to months
- No safety issues
- Potentially 20+ year life vs. 10 years for lithium
- Storing electricity in hot molten salts or cold antifreeze liquids
- $26M raised
- Electrochemical, aqueous sulfur-based
- $9M raised
- “10-year play”
- Industry leaders from Tesla, Aquion, MIT, and A123
- Converting “used oil & gas wells into subsurface pumped hydro storage”
- $8M+ raised
Miscellaneous category
- Uses “smart cranes” to move 35-ton blocks up and down
- Fast Company “World Changing Idea” 2019
- 4 MW / 35 MWh capacity units
- Strategic investors include CEMEX Ventures
- Zinc hybrid cathode technology
- 4-hour discharge duration
- $64M+ raised, plus Holtec International (equipment supplier)
- Cryogenic liquid air energy storage
- $24M+ raised
- Deployed 5 MW / 15 MWh+ in UK
- Compressed air storage underground
- $25M+ raised
- Beginning a large deployment in Australia
- Zinc-air batteries
- $220M+ raised, plus acquired by billionaire Patrick Soon-Shiong
- 55+ MW installed on and offgrid
Thanks to Pitchbook and GTM Squared for information on the companies above.
If you’re confused by any of the technical terms in this discussion of next generation batteries, don’t worry. You’re not alone. I’m with you.
But really, who cares? Investors and project developers don’t need to be chemists or physicists.
Instead, for storage technology to be deployed, we just need to know that it does what it says it will, over a certain period of time, at the right cost.
And who knows, maybe insurance, not tech innovation, will be the solution that substitutes “credit risk for technology risk” and makes non-lithum bankable. Consider headlines about Vionx Energyand ESS Energy Storage along these lines.
Source : Renewable Energy World