Strong Currents: Lithium-Ion Dominance Is Making Life Difficult for Other Energy Storage Technologies

Stored capacity to produce electrical energy is not a new idea. For most of the history of the power industry, system planners have considered storage to be primarily the energy in coal piles outside power plants, or gas in pipelines, or water stored behind hydroelectric dams.

Today, as decarbonization efforts accelerate, existing and emerging battery technologies are becoming the answer to energy storage needs — meeting the challenge of maintaining grid stability in an era of dynamic change.

Cleaner and Greener

System planners today carefully track the amount of energy storage either recently installed or about to come online. California and an increasing number of other states with target dates for reducing or eliminating carbon sources from the grid are counting on renewables to get them there. It is becoming increasingly necessary to pair these renewable sources with many gigawatts of energy storage.

Although other forms of clean energy storage like pumped hydro are available, large-scale battery installations have accounted for most of the recent growth in storage within the U.S.

According to BloombergNEF, a total of 4.2 gigawatts (GW) of battery energy storage was connected to the U.S. grid in 2021, bringing the total grid-connected battery capacity to 6.6 GW. Looking to the future, more than 8 GW of additional battery storage is expected to be connected to the grid by 2027. This will be accompanied by an additional 35 GW of solar power over that same period.

Nearly all of the current battery storage is provided by lithium-ion batteries, the same technology being installed in electric vehicles and many consumer electronic devices.

According to Chris Ruckman, vice president for energy storage at Burns & McDonnell, the cost competitiveness of lithium-ion battery technology is making it the dominant force in the industry — a fact that is effectively stalling development of other types of battery technologies, such as flow batteries, that offer longer durations of energy output.

The cost of lithium-ion battery packs has dropped to around $150/kilowatt-hour (kWh) today, compared with around $1,600/kWh in 2010. What’s more, today’s price even reflects a recent rise in battery costs due to global supply chain issues and other factors.

“This train is not slowing down,” Ruckman says. “Even with recent cost increases, projects continue to get built. I view this as an encouraging sign that the economics of these projects are still viable. The numbers still make sense even when materials costs are rising.”

The large-scale energy storage market is benefiting tremendously from the fact that about 80% of lithium-ion batteries are made for EVs and consumer electronics. The large scale of this manufacturing — coupled with continuing research and development to improve energy density and address past safety concerns — is accruing as a major benefit for the power industry.

Lithium-ion batteries have historically experienced two primary drawbacks: fire risk from thermal runaway and relatively short durations before stored energy is depleted, usually within four hours.

Thermal runaway starts with a damaged battery cell. At some point, the damage can result in excessive heat, which can trigger an exothermic chemical reaction in the battery that generates even more heat. These reactions become uncontrollable (runaway) and lead to fire in the cells that can propagate throughout the whole battery rack. Until now, the electrolytes in lithium-ion batteries would rapidly decompose at high temperatures and emit hydrocarbons, providing fuel for the fire and increasing explosion risk.

However, new advanced solid-state batteries could address both thermal runaway and energy density. These battery types eliminate the need for flammable electrolyte — and expensive fire suppression systems — allowing battery facilities to be built in enormous warehouse configurations at a scale that should help reduce costs. These batteries also promise significant improvements in energy density, thus reducing costs even further.

“Once you remove fire risk, improve energy density and deliver more cost efficiencies in design and construction, you are addressing all the remaining barriers for lithium-ion,” Ruckman says. “We’re really in a great position to take advantage of some exciting innovations that are mostly being developed for other markets. When Elon Musk says we can reduce the costs of lithium-ion batteries by half, while increasing energy density to the point that electric vehicles will one day drive twice as far as they can today, it spills over to the utility-scale energy storage market.”

There are a number of energy storage technologies that could easily meet the power industry’s need for reliable, long-duration energy output, according to Katlyn Meggers, a specialist in energy storage applications at Burns & McDonnell. But all are finding it difficult to break through for meaningful pilot demonstrations, due to the market dominance of lithium-ion.

“Three years ago, we were certain that flow battery technologies were ready to jump into the mix and fill a need for energy storage projects over eight hours,” Meggers says.

However, a 2021 request for proposal in California for longer-term storage resulted in a surprise that has most in the power industry shaking their heads. The eventual winner of this RFP was a lithium-ion battery project that met the requirements by simply putting two battery installations together. Each one had capacity for four hours of output, with the ability to be dispatched consecutively, thus providing a total of eight hours of output. The proposal was accepted because the costs of this combined facility were still below those of any other alternative technologies.

“If raw material shortages and supply chain disruptions continue, long-duration technologies, especially those with domestic supply chains, could become competitive and capture some of the lithium-ion market,” Meggers says. “However, these technologies still have a way to go in terms of ramping up manufacturing capacity.”

Though there are a number of flow battery technologies under development, all are essentially rechargeable fuel cells that store chemical energy in external tanks filled with electrolyte instead of within the battery proper. Though there are some variations based on chemistry, all offer the ability to ramp up quickly to meet power demand, cycle multiple times a day, and provide output for eight hours or longer. Nearly all also offer up to 30 years of usable life, provided they are properly maintained.

Though there are dozens of flow battery types, only about six specific chemistries are being deployed in commercial applications. In redox flow batteries, catholyte and anolyte are stored in separate tanks, and pumps are used to circulate the fluids into a stack with electrodes separated by a thin membrane. This membrane permits ion exchange between the anolyte and catholyte to produce electricity. The power produced is dependent on the flow rate of the fluid and the surface area of the electrodes, while the storage duration is a function of the electrolyte volume. For some technologies, the power and energy can be scaled independently, allowing for an easily customizable battery.

Despite unfavorable market factors, the 2021 Infrastructure Investment and Jobs Act could help boost development of certain flow battery types. More than $500 million has been included in the act for long-duration energy storage technologies that are available to supply power to the grid over a number of scenarios. Applications for funding demonstration projects will be accepted starting in the third quarter of 2022.

“There are a lot of potential use cases for flow batteries if they could get past the cost hurdle,” Ruckman says. “It’s unfortunate that the only market driver for flow is large-scale, long-duration energy storage. Energy storage is only about 20% of the lithium-ion market, which means most of the innovation in development is coming from the transportation and consumer sectors. Bulk energy storage just rides along on those coattails, taking advantage of R&D they don’t have to pay for.”

Even with lithium-ion batteries moving up the duration scale for longer periods of output, it still seems likely that there will be a need for longer-duration storage systems that can provide power for up to 24 hours or even for multiple days.

Multiday storage is a challenge that has to be solved as renewable power sources continue to be deployed. The risk of future catastrophic weather events like Winter Storm Uri that shut down most of the Texas power grid in February 2021 also could serve as a catalyst for storage that could be available for multiple days.

“Flow batteries could fill a number of roles in weather disasters,” Meggers says. “Use cases could be everything from black start for generation units that need to come back online, to pairing with renewables to extend the time those sources are available. System planners are well aware that a lot of different strategies are needed, and it is a reality that storage for multiple days is needed. That seems to call for a very different storage solution than today’s lithium-ion batteries.”