Will Lithium Ion Work for Grid-Scale Storage?

Lithium batteries have revolutionized consumer electronics and made EVs a mainstream reality.

But will they play a similar role in energy storage? That was one of the most prominent questions at Energy Storage North America, the second annual conference taking place this week in San Jose.

“Lithium ion was not fundamentally designed for grid scale storage,” said Andrew Chung, a partner at Khosla Ventures, during a panel at the conference. “Even with the Gigafactory, the cost won’t come down enough.”

Chung’s skepticism essentially revolved around the three complaints most often associated with lithium batteries: they cost too much, they can become a safety hazard and they have a limited lifespan. Utilities and commercial building owners want something that will last twenty years flawlessly.

One of the key problems with lithium ion cells is the liquid-solid interface that exists between the electrolyte and the cathode. Ambri, one of his portfolio companies, is trying to get around this problem with an all liquid batteries. Other companies are trying to commercialize solid electrolytes.

Lithium ion will play a major role over the next two years because it is the only rechargeable battery appropriate for grid-scale and commercial-scale deployment, but after that new chemistries will have to be developed.  

Naturally, lithium ion manufacturers differed. “Lithium ion can be a 20 year asset,” said Bud Collins, CEO of NEC Energy Solutions. A lithium ion battery for cell phones might be designed for 500 charge cycles, but you can design long-lasting cells and supplement their performance and operation with advanced analytics so that they last 20,000 cycles, he said.

Other audience members also noted that “lithium ion” covers a lot of different chemistries. Lithium cobalt batteries are the ones subject to thermal runaway reactions. Lithium phosphate batteries don’t have that problem.

Then again, after the panel flow battery execs noted that lithium ion batteries are still cells. They are small. Something like a flow battery or a sodium sulfur  battery is better designed for bulk storage or grid applications.

How will it work out? Chung has a great point: lithium ion weren’t designed for utility applications and they are expensive. However, the world has waited for years for an alternative — zinc, etc. — and nothing has come close to matching lithium ion. Ten years ago, a Sony product manager warned me that lithium ion was hitting its limit: if companies kept pushing it, we’d see failures and explosions in 2006. He was right on target, but we still don’t have the great alternatives.

«No one battery is perfect,» said John Jung, CEO of Greensmith, which produces software for managing energy storage systems, among others. Expect a variety. Even a Tesla exec told me they will examine all sorts of different technologies. 

Other interesting tidbits from the conference:

PGE had some good news, and bad news about the future of storage. It has been using a 2-megawatt storage system to provide frequency regulation and then tracks the revenue and costs it incurs in selling power as well as performing frequency regulation. The system runs about six hours a day, from 11 a.m. to 5 p.m.

It basically breaks even. In September, the system generated a whopping $318.

So the good news? It is an indication that storage for smoothing renewables can be installed that effectively pays for itself. Solar critics have sometimes tried to add the cost of natural gas generators to the cost of solar systems to “prove” that solar is uneconomical. These results show you can have grid smoothing that doesn’t add to the cost of renewables.

  • Four hours. That is the number everyone is shooting for. If your storage system can provide four hours of service, you can compete for a wide range of contracts.
  • Policy is important but storage in many markets will stand on its own. 1.3 billion people are still not connected to the grid. China is choking in emissions. Storage systems that can somewhat economically bring the benefits of electrification to the still developing regions of Africa, Asia and Latin America will do well.
  • Versatility. Virtually every vendor talked about how their storage system could be used for a variety of applications and functions. It’s firming solar power one moment, and providing demand response services the next. In theory, this sounds easy, but one of the big differences between the winners and the also-rans will be an ability to actually provide this sort of versatility.

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