There are lithium batteries in your smartphones… your laptops… and hybrid vehicles. Lithium represents 70%-to-90% of the battery market — and that market is about to soar. The lithium battery market is worth $112 billion annually now. It’s projected to reach $546 billion in 15 years. And lithium is expected to dominate the sector as demand surges.
But other battery technologies are emerging. The battery market is evolving away from its one-winner-take-all status quo. Other battery technologies will make a dent in lithium’s usage — especially one use case in particular. Long-duration (10 hours or greater) energy storage demand is surging. And lithium’s battery technology is simply not built to meet the demands of long-duration storage.
Lithium batteries work great for storing 2-4 hours of energy. But they don’t perform as well when you need longer hits of energy on a daily (or nightly) basis… or during peak power usage periods… or during power outages. That’s where vanadium-flow batteries — a very different kind of technology — have clear advantages.
Vanadium can exist as an ion with different charges. When it’s missing three electrons, it has a charge of V3+. When adding an electron to it, it converts to a V2+ ion. As the vanadium ions in the battery swing back and forth (from V2+ to V5+), it causes the battery to charge and discharge.
That’s very different from lithium-ion batteries. Lithium charges and discharges as the metal moves from the cathode to the anode and back to the cathode. That process leads to degradation after a few thousand cycles. And as degradation happens, performance decreases.
Vanadium ions are simply moving between oxidation states. It can be done tens of thousands of times over decades with no degradation.
The two different battery types cost roughly the same. The cost advantage goes to the vanadium battery because it can last for tens of thousands of cycles — as opposed to lithium’s thousands of cycles. That — together with its ability to provide long-duration energy storage — is primed to give vanadium a growing piece of the battery market.
Early Stage Testing
California is always good for a peek into the future. It expects to install 2,400 megawatts of energy storage in the next two years. And that’s a mere fraction of the 20,000 to 30,000 megawatts the state is expected to need by 2045. It recently issued a $20 million solicitation to fund research projects for the deployment of long-duration energy storage. Lithium-ion batteries were excluded from the request.
The battery tech proposed by the solicitation winner? Vanadium. They’ll be tested at commercial and industrial facilities that want to self-generate power (like solar) and in some cases have the ability to operate off-grid, for extended periods if need be.
The purpose of California’s project is to see how well vanadium batteries perform in various scenarios requiring long-duration energy storage. Other battery technologies — such as those using zinc — are still competing with vanadium. They all have different pros and cons. But — at least for long-duration energy storage — lithium is not a player.
Battery War Frontline: Startups
This fluid situation opens the door to startups with technologies supporting or improving the performance of various battery types. Some have aligned with lithium. Others favor flow batteries like vanadium. There is not any obvious trend favoring one technology over another yet.
Choosing lithium is often the safest course. It holds the number one spot in the pecking order of battery technologies. It’s a trusted technology that many people are familiar with.
In fact, with electric vehicles expected to take a big jump in popularity, lithium’s dominance should only grow stronger over the next couple of decades. Electric vehicles are projected to number 56 million by 2040 — a 2,800% increase from today. And the next generation of lithium battery technology is already in development. It’s hoped that someday lithium batteries will be able to charge a phone for a week or allow a car to drive 1000 miles without recharging.
One startup, EnergyX, is helping make lithium batteries cheaper and more sustainable. It’s replacing the massive evaporation ponds used to extract lithium with a new system that reduces production time from months to days.
Meanwhile StorEn Technologies is betting on the potential growth of vanadium. The company says that its vanadium battery technology has a battery life of 25 years and delivers the lowest cost per cycle in the world — up to eight times lower than lithium batteries.
A carbon-free economy is still a ways off. But fast-improving battery technologies and increasingly sustainable supportive technologies get us closer to that elusive but worthwhile goal. And startups are playing a big role. Mark my words. Some will grow into major companies earning their early investors huge financial rewards.
This is just the beginning of the battery wars. And that’s great news for you.
Source: Early Investing