Renewable energy may be in abundance, but it isn’t available consistently. To meet the grid demands and compensate for the variability in production, battery storage systems are required. Globally, more than 10 GW of grid scale battery had already been installed until 2020. The demand for these grid scale batteries is expected to rise to more than 400 GW in 2030, contributing to more than 2/3rd of the total storage battery demand.
Batteries help in five key areas in the grid: arbitrage, firm capacity, operating reserves, transmission and distribution, and black start. The technical requirements include a wide range of discharge rates from a few seconds to a few hours, storage system sizes from 100 KW to more than 500 MW, and cycle lives ranging from 10–10,000 per year. Thanks to chemistry, no one battery can meet all the requirements. Batteries will have specific use cases on the grid depending on four major factors- technical requirements, safety, cost, and availability.
Lithium vs other chemistries:
The drop in lithium-ion battery costs for automotive has made them lucrative for use in grid-scale stationary storage applications as well. Lithium-ion batteries currently account for more than 90% of the grid storage battery market due to their high energy densities of more than 200 Wh/kg.
This has put other sustainable battery chemistries back into the limelight. According to a recent report by IDTechEx, non-lithium batteries in stationary storage market is expected to grow at a rate of more than 60%over the next decade. By 2025, four alternate chemistries including sodium-sulphur, redox-flow, secondary zinc-based chemistries, and sodium-ion are expected to account for around 10% of the stationary storage market (excluding pumped hydro). Metal-air batteries are also under development which have higher energy densities compared to lithium-ion batteries.
More than $400 million of private venture capital has already been invested into advancing the development of sodium-ion batteries. Similarly, incumbents in the energy sector such as CATL and Reliance Energy are also investing heavily in sodium-ion batteries. Form Energy, a company based out of US is building an iron-air battery for use in grid scale energy storage. The company has already raised more than $350 million in private venture capital funding.
Ankur View:
Sodium-ion and metal-air batteries are still under development and are expected to become available in the market in the coming decade. These alternate batteries are cheaper, safe to use, and the raw materials used are easily available across the world, which makes them sustainable and eco-friendly. The availability of these batteries will depend heavily on key R&D breakthroughs which will make the batteries efficient and safe, successful pilots, and economies of scale which will reduce their cost and support from the ecosystem in terms of adequate financing and regulatory support. As renewable energy integration into grids increases, we expect these alternate sustainable batteries to see rapid adoption in the market.
