Momentum Building for Lithium-ion Batteries in Utility-scale Energy Storage

Battery Metals

While the lithium market is primarily driven by demand for lithium-ion batteries for electric vehicles and mobile electronics, lithium for use in larger energy storage systems is gaining traction.

The global shift toward renewable energy and off-grid power sources has pushed battery technology research toward high-power and high-capacity cells for utility-scale energy storage. That research now includes the use of lithium-ion batteries, though until recently the primary focus of lithium market news has been battery technology for the electric vehicle and mobile electronics industries.

“The lithium-ion battery market continues to evolve with focus on grid energy storage, off grid power, telecom/data comm backup, and aerospace/defense applications,” said Vishal Sapru, research manager at Frost & Sullivan’s Energy & Power Systems, in a press release. Sapru will be the keynote speaker at the 10th annual international Battery Power 2012 conference taking place in Denver, Colorado from September 18 to 19.

Energy storage technology drivers

According to a recent report by Pike Research, the market for advanced batteries — large storage systems designed to store excess solar or wind energy during low-demand periods for use during higher-demand periods — will nearly double each year over the next five years. “Considerable momentum is building behind newer energy storage technologies, such as advanced batteries, particularly as the renewable energy community embraces storage as a means of mitigating risks associated with variable power generation resources,” commented Pike Research Smart Energy analyst Brittany Gibson.

The market for such technology is expected to reach $7.6 billion by 2017 and $29.8 billion by 2022, driven mostly by escalating electricity demand and expanding renewable energy production. Both are forcing the utility industry to find dynamic solutions to incorporating carbon-free energy generation sources into the grid system while not compromising the quality of service.

There are several types of advanced-battery technology under development and in commercial production, but no single solution dominates the space. “While interest in advanced batteries for grid-scale energy storage remains high, battery manufacturers have not yet put forth a leading technology or business model that has achieved strong traction in the utility industry,” said Gibson.

Pike Research notes that the number of projects coming online globally is increasing “as technologies move at a variety of speeds toward commercialization.” During the second half of 2012, the number of energy storage projects deployed climbed from 482 to 514, a gain of more than 6.6 percent.

Lithium-ion batteries integral to hybrid renewable systems

An inherent problem with solar and wind energy generation is that peak consumption periods often don’t coincide with peak generation periods. Hence, a main focus of advanced-battery technology is providing a solution to variable power generation. Energy industry research and development teams and solution providers are investigating so-called hybrid solar systems that can be tied to the grid, but also integrate stationary storage technology, such as lithium-ion battery packs.

“High-performance batteries on the basis of lithium ions can already be applied reasonably in the grid today,” Dr. Andreas Gutsch, coordinator of the Competence E project, told Energy Harvesting Journal.  “When applied correctly, batteries can also balance higher load and production peaks and, hence, make sense from an economic point of view.” The $273 million, publicly-funded Competence E project is based at Germany’s Karlsruhe Institute of Technology (KIT) and involves 250 scientists from 25 institutes working toward the goal of commercializing electric vehicles.

The KIT group is also developing several solar and wind power pilot projects that use lithium-ion batteries to store energy. The first stage of the 50 kW modular systems is to be constructed on campus by the end of 2012. The long-term goal is to use the insight gained from the test projects to develop both small energy storage systems for private households and larger systems for industry, reports the Journal.

One company developing lithium-ion battery storage systems is Balqon (OTCBB:BLQN), which also designs electric vehicles. Last month, Balqon announced a new series of inexpensive, high-capacity lithium battery packs called HIQAP™. The company claims the packs are “designed to support large daily loads requiring deep depth of discharge and high energy transfer efficiency for solar, micro-grids, off-grid storage and telecom applications,” and will replace current lead-acid battery packs.

Lithium-ion batteries offer residential and commercial energy solutions

Companies with a global reach, like Walmart, are now turning to cleaner, more economical energy solutions. The mega-box brand intends to power 100 percent of its operations with renewable energy, and has already installed rooftop solar panels at 100 of its California stores. Walmart recently contracted full-service solar power provider SolarCity to install hybrid solar systems at 10 stores by early next year as part of a pilot storage project.

SolarCity is partnered with Tesla Motors (NASDAQ:TSLA), and is installing Tesla’s lithium-ion batteries to back up SolarCity’s residential rooftop solar panels. They will soon test the hybrid solar systems on a much larger scale.

Hybrid solar system projects that incorporate lithium-ion battery storage are underway all over the world including in Europe, North America and India.

In June, Panasonic (NYSE:PC) began mass producing a compact, long-life lithium-ion storage system that it developed for European homes. The system consists of the company’s 1.35 kWh battery module and a battery management system that stores excess energy generated from the photovoltaic power system and controls the release of the energy as needed.

In California, the Sacramento Municipal Utility District is running a $5.9 million demonstration project called SolarSmart, which incorporates battery storage systems with solar power in the construction of new homes. The goal is to determine if utility-scale lithium-ion batteries can help reduce the load on the city’s electrical grid during peak times of demand. The technology is being installed in the garages of 15 homes in Rancho Cordova while another 27 homes will share three batteries located in neighborhood common areas. The single batteries can produce 10 kW and store 8.8 kWh and the larger shared batteries can produce 30 kW and store 30 kWh.

Researchers from the University of Huddersfield, UK are partnering with the researchers from the Indian Institute of Science, other prominent Indian institutes and government agencies to study improving the size and capacity of lithium-ion batteries for use in rural electrification. Power generation in rural areas poses major problems, especially in Northern India, and researchers believe utility-scale lithium-ion batteries would aid in storing power generated from wind and solar energy for use during peak hours.


Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

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