Contributed Commentary by Alan Greenshields, ESS
April 14, 2023 | The decarbonization of both transport and power generation by 2040 will be essential to avoid the worst impacts of climate change and meet global emissions targets. Achieving this goal will require the replacement of current vehicle stock and the transformation of energy infrastructure.
In the UK, the vehicle fleet has grown every year since the end of WWII, with nearly 40.8 million licensed vehicles on British roads as of September 2022. At that time, only 1,003,000 were plug-in vehicles. As EV adoption increases and fossil fuel vehicles are replaced, millions of EV batteries will be required to meet demand in the UK alone.
Global wind and solar manufacturing capacity grew rapidly in recent decades to meet increasing demand. Now that significant wind and solar generation has been deployed, the need for energy storage to mitigate the intermittency of these resources has become clear. Now, battery manufacturing must catch up not only for EVs, but for grid deployment to ensure that renewable resources can be utilized when needed.
However, even as battery manufacturing accelerates, supply chain challenges illustrate the risks inherent in the assumption that legacy technologies can meet all future demand for battery capacity. Lithium-ion technology, which currently underpins most EV and grid-scale battery projects, is forecast to face severe shortages of key raw materials such as lithium, cobalt and nickel, threatening the technology’s ability to meet global energy needs.
Faced with supply chain shortages, it is important to identify those use cases that benefit most from lithium-ion’s superior energy density. Certain applications, including EVs and consumer electronics, require high energy density for practical purposes. However, in the case of grid-scale battery storage, new non-lithium alternatives can avoid the same supply chain challenges and meet the needs of the grid in circumstances where energy density is less critical. And in some cases, these technologies offer operational advantages which actually make them better suited to support a renewable, resilient energy system than lithium-ion.
Serving EV Demand with Li-Ion
Building a lithium-ion supply chain that can meet demand for EV batteries will be challenging: global demand for lithium-ion batteries for EVs alone is set to reach 9,300 gigawatt-hours (GWh) by 2030—an increase of over 1,600% from 2020 levels. Further, the Boston Consulting Group forecasts that by 2035, the lithium supply will fall short of demand, leading to a supply gap of at least 1.1 million metric tons annually.
This rapid growth in demand for lithium-ion batteries and accompanying supply chain scarcity has, in part, caused the price of lithium to more than quadruple over the last year. The supply scarcity and increasing cost is already creating headwinds to electrification of transportation, and therefore decarbonization, with the price of EVs deterring consumers and affecting sales.
Li-Ion Batteries in Energy Storage
Li-ion batteries aren’t just in demand for EVs. They also make up 90% of grid-scale battery energy storage. However, lithium-ion technology’s energy density advantages are less critical to utility-scale installations which, in the case of wind and solar parks, may span thousands of hectares. This creates an opportunity for other technologies to meet grid-storage needs, leveraging diverse supply chains and leaving limited lithium supplies to those applications where they are most needed.
New Technologies Will Power the Energy Transition
To avoid an energy transition supply crunch, new battery chemistries will be necessary to reduce pressure on the lithium supply chain while still meeting demand for grid-scale storage and ensuring energy security.
New long-duration technologies are now available that offer advantages over existing battery systems. For example, iron flow batteries (IFB) offer a number of advantages over lithium-ion incumbents.
IFBs rely upon a low-cost electrolyte made of iron, salt and water, which is not only non-toxic and fully recyclable, but allows for the cost-effective addition of capacity. At long durations, IFBs are among the most cost-effective form of energy storage. Iron flow batteries are deployed at multiple utility and commercial sites and the inherent safety and stability of the technology make it a preferred choice for a variety of use cases where energy storage is needed in close proximity to populated areas. One recent example illustrates these advantages clearly: ESS Inc., will deliver an iron flow battery system to Amsterdam Airport Schiphol, the second largest airport in mainland Europe, to power ground operations. ESS technology poses no fire or explosion risks, making it safe for use in close proximity to passenger aircraft.
When the wind doesn’t blow and the sun doesn’t shine…
As the electrification of everything requires more battery capacity and society increasingly shifts to intermittent renewable energy resources, rapid deployment of battery storage will be unavoidable and supply chain challenges are likely. Fortunately, innovative new non-lithium technologies can help meet this need by leveraging diverse supply chains to rapidly scale deployment of battery storage and catalyse the clean energy future.
Alan Greenshields is the Director of Europe at ESS Inc. and brings over 15 years of experience in the rechargeable battery space. He is a serial entrepreneur, focusing on new technology, successfully founding, and running several technology ventures in the UK, Germany, and Switzerland. Greenshields has also held senior board-level roles at battery companies. He has been deeply involved in several initiatives relating to renewable energy, including the Think Tank on Energy Environment and Business initiated by Harvard Business School in 2010. He can be reached at alan.greenshields@essinc.com.
