An investigative route into the roadmap of Lithium-Ion batteries and their existence…

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Over the last 10-years, there’s been a surge in the production of lithium-ion batteries and this has caused the prices to fluctuate. EVs have undoubtedly become a viable option from the cost and performance viewpoint, but the next stage of utility-scale storage will be the defining factor going forward. 

Batteries hold the key to transitioning to a renewable-enabled future. But without effective energy storage methods in place, there will still be a high dependence on natural gas and coal. Large-scale storage is significant if we are to shift away from a fossil-fuel world. 

Batteries: A new era

Battery technology dates back over two centuries. Batteries come in all shapes, sizes and chemistries: lead-acid, nickel-iron, nickel-cadmium, nickel-metal hydride, etc. Lithium-ion batteries were first developed in the 1970s and then got  commercialised later.

Tesla, the world’s largest manufacturer of EVs has been successful at getting the price of its battery pack down. And this is largely due to its Giga factory in Nevada, and the company’s residential and utility storage options that help spread the fixed costs of battery production. In addition, government subsidies and streamlined factory operations have helped. The battery is the key differentiator between electric vehicles since a car’s range is determined by the amount of stored energy and how long it takes for the vehicle to charge. Tesla has an edge over other automakers, due to the energy density of its battery. 

Another point to consider going forward is long-range on a single charge and faster charging times. With battery costs coming down, S&P Global Platts said electric vehicles could become competitive in places with high oil prices.

Investment opportunities in the battery supply chain 

The foremost reason that battery-powered electric vehicles are still expensive, is the cost of raw materials required for their production. In addition to lithium, other minerals like cobalt, graphite, nickel, aluminium, and manganese are needed in lithium-ion batteries. Electric vehicles now outpace consumer electronics like phones and computers, in the demand for lithium.  Demand from the transportation and power sectors is expected to triple over the next 5 years.  

Utility-Scale Storage

The biggest market for energy storage is massive utility companies. While renewable sources like solar and wind are providing more power for the grid, these intermittent sources will rely on fossil fuels till effective energy storage is developed. Currently, power used is that which was generated just moments before. There’s not much inventory, so supply and demand must be in balance at all times. 

More and more utility companies are integrating lithium-ion batteries into their systems. For now, they’re mainly being used to replace peak plants – plants typically powered by natural gas and used only at times of peak demand. They’re also beginning to replace diesel generators in areas that need continuous power, such as hospitals.

If storage makes wind/solar power more feasible, then other renewable energy equipment makers and chemical companies could benefit. New technology will be required to help utility companies understand power needs as renewables and electric vehicles draw from the grid. There’s a lot of speculation that the implementation of intelligence across the electric grid, is one of the next big thing of IT expenditure, and an emergent investment theme playing out over the next 10-20 years. The Smart Grid is a large-scale software integration exercise leveraging communication sensors. 

Going forward and what’s next

High costs are currently preventing a surge in lithium-ion grid integration. Another reason is that this battery may not be best suited for storing energy for long periods of time. They’ve been known to catch fire, not to mention the procurement of cobalt (almost half of which comes from Congo). The environmental impact of metal extraction & recycling is another thing to consider.

For this reason, billions of dollars are being spent to find alternatives. While solid-state batteries that use sodium or flow batteries that use tanks of electrolytes to store energy, could be a possible option, for now, none of these are viable.

While we’re still not sure which battery will make it to the top of the list, the one thing we can be certain about is that batteries will play an even larger role in powering our lives.

India is set to emerge as a huge battery storage market with the increasing penetration of renewable energy in the grid and the expected surge in the transition towards electric mobility. The nation aims for a renewable energy capacity of 450 GW by 2030. In addition, it has set the national target of achieving 30% of new vehicle sales to be electric by 2030. This has set the country on a renewed trajectory of change and promise.