Competitors to lithium-ion batteries in the grid storage market

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Hello! Welcome back to Battery Week here at Volts … where we use
the term “week” somewhat loosely.


Up to now, we’ve been focusing on lithium-on batteries (LIBs) —
why they are so important, how they work, and the varieties of
LIBs that are battling it out for the biggest battery market,
electric vehicles (EVs).


It’s fairly clear from that discussion that LIBs, in some
incarnation, are going to dominate EVs for a long while to come.
There is no other commercial battery that can pack as much power
into as small a space and lightweight a package. Plus, LIBs have
built up a large manufacturing base, driving down prices with
scale and learning. Their lock on the EV market is likely
unbreakable, at least for the foreseeable future.


But there’s another battery market where some competitors hope to
get a foothold: grid storage. They think there’s space in that
market waiting to be claimed.


Currently, there’s a robust and growing short-duration grid
storage market, offering storage of anywhere from seconds (to
provide grid services like voltage and frequency regulation) to
four hours. LIBs have about 99 percent of that market locked up;
in some areas, projects with solar power coupled with four hours
of storage are bidding in competitively with natural gas.


Most energy wonks believe that, to fully shift the grid to
zero-carbon energy, we will eventually need long-duration storage
as well, to the tune of weeks, months, or even seasons. LIBs are
almost certainly not going to cut it for that purpose, so it will
be some combination of other technologies. (I’ll write about
long-duration storage some other time.)


In between short and long, there’s something that might be called
mid-duration storage, covering the range between four and 24
hours. What technologies will cover that range? LIBs can do it,
of course — theoretically they can cover any duration; you just
stack more and more batteries — but the economics get extremely
difficult. Mid-duration projects will require lots of capacity
but might run comparatively rarely. As duration gets to four
hours and above, the cost of LIBs, at least today’s LIBs, starts
to get prohibitive.


This is where other batteries come in, challengers to LIBs that
hope to beat them at longer durations — though they aren’t quite
there yet. “There really aren't competitive technologies in the
battery electric vehicle space aside from all these different
lithium ion batteries,” says Chloe Holzinger, an energy storage
analyst at IHS Markit, but “there's a ton of different battery
technologies for grid storage. They just tend to be significantly
more expensive than lithium ion batteries.”


These challengers believe they are better suited to the needs of
the mid-duration grid storage market, where energy density
matters less than capacity, calendar and cycle life, and safety.
They think they can bring costs down to competitive levels at
those durations. (Some of them think they can find other niches
as well, but it’s grid storage that offers the most realistic
shot.)


Flow batteries


Flow batteries operate on a fundamentally different principle
than the batteries we’ve looked at so far. Rather than storing
energy in metals on the electrodes, energy is stored as a
dissolved metal in an aqueous electrolyte.


The anolyte is stored in one tank; the catholyte is stored in
another; pumps circulate the fluids past electrodes (sometimes in
a fuel cell), where they don’t quite mix, thanks to a thin
separator, but they exchange ions and electrons, generating
electricity.


The key conceptual difference is that flow batteries separate
energy (the amount stored) from power (the rate at which it can
be released). If you want more power, you make the electrodes
bigger. If you want to store more energy, you make the tanks of
electrolytes bigger. And electrolytes are fairly cheap, so it’s
cheap to increase capacity.


This is in contrast to LIBs, which double in cost with each
doubling of energy capacity.


In theory, flow batteries can scale up to almost any size,
relatively cheaply. So as the demands for storage get bigger —
six hours, eight hours, 12 hours — the economics of flow
batteries look better and better relative to LIBs.


A variety of different metals can be used in the electrolyte. For
a long while, vanadium was expected to be the breakout candidate,
but materials costs remain stubbornly high. Companies have tried
with zinc (like the late ViZn, and also see below) and iron (like
ESS, which is still going strong). Recent history is littered
with failed flow battery companies.


“Flow batteries have been the next big thing for a really long
time,” says Purdue University assistant professor and battery
expert Rebecca Ciez, “but they've never quite gotten there.”


The problem, as ever, is the steady march of LIBs down the cost
curve. “For a three-or four-hour system, a lithium ion battery
outperforms any flow battery now,” says Dan Steingart, a
materials scientist and co-director of Columbia University’s
Electrochemical Energy Center. “Fifteen years ago, that was not
predicted.”


Flow batteries can theoretically expand their energy capacity
indefinitely, for little more than the cost of the electrolyte
goop to fill the tanks (though pumps and other accoutrement add
to the cost a bit). But “when we're below $100 per kilowatt-hour
on the cost of [LIBs],” says Steingart, “you're really close to
the cost of the goop.”


And flow batteries, like all challengers, face the fact that LIBs
are well-established and well-understood. “It's easier to finance
a lithium-ion battery,” says Steingart, “because of all the
existence proofs and their inherent reliability. I can predict
the fate and the failure.” That makes the operating and
maintenance costs of LIBs incredibly low, on the order of 1
percent of the cost of capital, whereas for flow batteries it is
2.5 percent at best.


There are still flow battery challengers in the field, like Largo
Clean Energy (which bought VionX), which is commercializing
vanadium flow batteries; Primus Power, which has a zinc bromide
battery; ESS, which is selling an iron flow battery; and the
mysterious Form Energy, which counts an aqueous-sulfur flow
battery among its offerings.


But there is a growing sense in the field that flow batteries
aren’t going to be able to catch up to LIBs, at least not any
time soon, without government help.


Zinc batteries


Several companies are working on batteries that exchange zinc
ions instead of lithium ions — it’s the second-most-popular metal
for batteries.


Zinc has the particular advantage of being light and energy dense
like lithium, so with relatively modest adjustments, it can
slipstream into the lithium-ion manufacturing process.


Zinc is plentiful, cheaper than lithium, largely benign, and
makes batteries that are easier to recycle. Like other lithium
alternatives, zinc sacrifices energy density, but makes some of
it back up in savings on safety systems at the battery-pack
level, thanks to the lack of any need for fire suppression. This
puts it in the same markets as LFP: smaller commuter/city
vehicles, robo-taxies, scooters, e-bikes — and energy storage.


Some in the zinc crew have larger designs: “We think we can
coexist with lithium-ion and replace lead acid,” says Michael
Burz, president and CEO of EnZinc, which has developed a new zinc
anode it says can come close to LIBs on energy density. Remember,
lead-acid batteries are still ubiquitous. “Forklifts use them.
Airplanes. Snowmobiles.“ says Burz. “Data centers have huge banks
of lead-acid batteries they use for switchover power.” It’s still
a $45 billion global market.


EnZinc thinks it can hit a sweet spot: close to the energy
density of LIBs, close to the low cost of lead-acid, safer than
either, and good enough to substitute for a big chunk of both.


Zinc anodes are “cathode agnostic,” so Burz envisions, rather
than becoming a battery manufacturer, becoming an anode supplier
— “Zinc Inside,” modeled on “Intel Inside” processors. Research
is underway on a number of cathodes, from manganese and nickel
to, just as with lithium, air. A zinc-air battery “has a
system-level specific energy of anywhere between 250 to 350
watt-hours per kilogram,” says Burz, well above most LIBs. The
trick is making it controllable and rechargeable. There are
zinc-air battery companies offering commercial products that
believe they’ve solved those problems, like NantEnergy (formerly
Fluidic), which is targeting its zinc-air batteries at off-grid
markets in developing countries.


There are other zinc-based technologies as well. A company called
EOS is making a “zinc-hybrid cathode” that it says is safe and
long-lasting. The much-hyped Zinc8 has developed a zinc-air
hybrid flow battery that it claims can beat LIB costs at higher
storage durations.


Most of these batteries make the same basic claims: they are less
energy dense than LIBs, but they are safer (no fires), they are
made with benign and plentiful materials (no supply problems),
and they are cheaper at high capacities/durations. It’s just that
last part that’s tricky, since the price and capabilities of LIBs
are a moving target.


Zinc backers are confident that as the 100-percent-clean-energy
pledges being made by cities and companies start to bite and the
market for grid storage expands, demand for longer duration
storage will expand with it. (California, for instance, is
putting lots of money toward zinc battery demonstration projects,
with an eye toward diversifying its storage options.)


Sodium-ion batteries


Lithium, nickel, and cobalt all have their issues. You know what
material doesn’t? Salt.


Sodium compounds can be substituted for lithium compounds to
create sodium-ion batteries (NIBs), which have been the source of
considerable hype for at least five years now. The basic idea and
manufacturing process is the same for NIBs as LIBs — “you could
use existing gigafactory structures to produce a sodium-ion
battery,” says Steingart — but unlike the latter, the former
can’t use graphite for the anode, because it can’t capture enough
of the relatively bigger sodium ions, so something called “hard
carbon” is typically used instead.


Research is underway to find more energy-dense sodium compounds
for the cathode and cheaper materials for the anode. “Sodium-ion
has a lower energy density than lithium-ion,” says Tim Gretjak,
an innovation analyst with Con Edison, “so all the materials that
go into it have to be correspondingly that much cheaper.”


There have also been some high-profile NIB failures. A promising
startup called Aquion, backed by Bill Gates and showered with
awards, declared bankruptcy in 2017.


But here, too, there are surviving challengers. A company called
Natron Energy is currently selling a NIB that uses Prussian Blue
(a dark blue synthetic pigment) as the anode and a sodium-ion
electrolyte. It has received “a total of more than $50 million in
venture funding and more than $5 million in ARPA-E and DOE
funding,” reports Eric Wesoff, and has a product currently on the
market. Like enZinc, it is going after some lead-acid
applications (data centers and forklifts) and some LIB
applications (stationary storage), hoping its long life and
safety can carve out a niche.


To my eye, NIBs appear to be stuck in the same spot as the
previous two batteries: better than LIBs on some metrics, for
some applications, but so far behind on manufacturing and
bankability that scaling them up is a Sisyphean task.


Liquid metal batteries


A company called Ambri was spun out of MIT back in 2010 and has
been threatening ever since to commercialize a battery for
low-cost, long-lifetime grid storage. It too has received money
from Bill Gates.


It ran into problems with its initial battery in 2015, laid off a
quarter of its workforce, started over, and now produces a
calcium-antimony battery with (according to Ambri’s website) “a
liquid calcium alloy anode, a molten salt electrolyte, and a
cathode comprised of solid particles of antimony.”


The liquids and suspended particles are contained in a positively
charged stainless steel box with a negatively charged electrode
plug on top.


The battery will pass no current at room temperature, but on
site, the contents of the boxes are super-heated (to 500°C),
which activates the materials; the metals alloy and de-alloy,
with the cathode being entirely consumed and then reformed, as
the batteries charge and discharge.


Because the contents are liquids, the battery has no “memory” —
it is not affected or degraded by absorbing or releasing ions.
This means it suffers virtually no loss of capacity over its
lifetime; in fact, it works better if completely charged and
discharged every few days.


From the time they are first activated, liquid metal batteries
require no outside heating or cooling for the lifetime of the
system, eliminating a ton of system costs, and they can operate
in a wide range of temperatures and conditions. Ambri claims the
batteries contain materials less than half the cost of LIB
materials, can be manufactured for less than half the cost of
LIBs, and will run for 20 years at a “fraction of the cost” of
LIBs.


After a decade of hype, promises, and false starts, Ambri is
currently building a 250 MWh project on the
3,700-acre Energos Reno project in Reno, Nevada. It will be,
finally, a field test of the technology. If it pans out, it could
establish a foothold in grid storage.


Should we worry about lithium-ion’s headlock on grid storage?


LIBs worked their way up from consumer electronics to appliances
to cars to trucks to stationary storage, building momentum and
scale. At this point, they have locked up the EV market and the
short-duration grid storage market.


At this point, there isn’t much demand for mid-duration storage.
The question is, as the grid integrates more renewables and that
mid-duration market develops, whether LIBs will simply continue
their march to dominance.


Right now, a few LIB competitors can claim lower kWh costs over
longer (20+ hour) durations, but Steingart thinks that some
variant of the basic LIB architecture is “going to get to
somewhere between $45 and $60 per kilowatt hour” eventually.
That’s just an incredibly difficult trajectory to keep pace with.


Is it going to make LIBs uncatchable, even in the grid storage
space? “I co-wrote a paper last year that basically says, up to
eight to 10 hours, the answer is probably yes,” Steingart says,
“at least for the foreseeable future.”


Even if they weren’t still sprinting ahead on costs, simply by
virtue of their ubiquity and familiarity, LIBs have gained an
enormous institutional advantage. When it comes to grid storage
projects, says Lou Schick, director of investments at Clean
Energy Ventures, “the installed cost is so high that the
chemistry of the battery doesn't really affect the cost.”


He explains: “The soft costs of applications engineering,
designing the contract, getting permission to do it, satisfying
all the building codes, and so forth — by the time I'm done with
all that crap, the battery itself is 20 to 30 percent of the
installed cost, at most.”


In that context, the differences in performance among different
chemistries are less important than simpler criteria, Schick
says: “Is it bankable? Can I get insurance for it? Is it standard
consumer product?”


This, even more than total long-term costs, is the biggest
barrier to LIB competitors: LIBs are bankable. They are familiar.
Their performance and failure modes are well-understood. Any
competitor has to solve the chicken-and-egg problem of convincing
the first several investors to take on greater risks.


This gets us back to an argument I raised in my introductory
post: if it is true that a) we will soon need more and
longer-duration storage than LIBs can provide, and b) LIBs
currently have an unbreakable hold on the market, then perhaps
the federal government should proactively take steps to encourage
competitors to LIBs.


Recently, the research outfit ITIF released an excellent paper by
Anna Goldstein making just this argument, in the context of flow
batteries: “in the absence of ‘first markets’ that can rapidly
pull flow battery innovation, the U.S. Department of Energy (DOE)
should push it forward with investments in research, development,
testing, and demonstration.”


The same argument could be made on behalf of any of the battery
chemistries discussed above. The market probably isn’t going to
mature them fast enough; the feds should help.


After all the time I’ve spent thinking about batteries, I am of
two minds about this argument. On one hand, Goldstein makes a
good case that the storage needs of the electricity system will
soon push past what LIBs can provide. If that’s true, it does
seem like it would be better to innovate alternatives now, to be
prepared.


On the other hand, analysts have been wrong about the ultimate
capabilities of LIBs again and again. LIBs weren’t going to be
able to handle cars, then they weren’t going to be able to handle
short-duration storage, then they weren’t going to be able to hit
$100/kWh, but they’re doing all those things.


If LIBs follow a steadily declining cost curve down to
$40-60/kWh, it’s difficult to imagine any competitor that could
catch up. The only markets where competitors might have a shot is
20+ hours of storage, and it’s not even clear how much of that
will ultimately be needed.


Nonetheless, I think I come down in the “better safe than sorry”
camp — there’s no harm in making multiple bets when the stakes
are so high. Researching and innovating medium- and long-duration
storage technologies will bring all sorts of learning and
networking benefits that we can’t predict now.


And if LIBs continue to defy all predictions and get so cheap
nothing can compete, well, that will be a nice problem to have.


Guest pup! My darling niece and her family got a darling new
puppy. His name is Oscar.


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