Non-lithium-ion batteries on course to exceed 10% of energy storage market by 2025

Alternative chemistries to lithium-ion batteries could account for more than 10% of the nascent stationary energy storage market by 2025, according to research group IDTechEx

While current battery technology is dominated by lithium-ion chemistries in applications that include consumer electronics, electric vehicles (EVs) and stationary storage, IDTechEx expects the non-lithium-ion battery sector to grow at a fast pace over the next 10 years.

“The importance of non-lithium battery chemistries is expected to grow considerably, especially in the stationary energy storage sector,” the United Kingdom-based company said.

IDTechEx estimates that the market share of non-lithium battery chemistries in stationary energy storage will reach more than 10% by 2025 compared with less than 5% in 2021.

As major global economies transition their energy generation toward low-carbon and sustainable output, such as renewable energy systems, the need for stationary energy storage will increase. Expectations are for the energy storage market to expand rapidly in the coming years, supported by the drive to decarbonize energy generation for large applications, including household and industry.

The decarbonization of energy will require more than 120 GW of battery storage capacity added in 2030, up from 5 GW in 2020, according to the International Energy Agency’s (IEA) Net Zero by 2050 emissions scenario.

Stationary storage will allow batteries with different characteristics to gain traction and market share versus the lithium-ion technologies used in EVs.

“Once energy density can be deprioritized, as it can be for stationary storage systems, the choice of battery chemistries and systems becomes less restrictive. In particular, more long-duration storage is expected to be needed to enable higher penetration levels of variable renewable power sources,” IDTechEx said.

Energy storage batteries require lower-cost systems and longer-lasting technologies than lithium-ion batteries for EVs.

The research group also points to supply bottlenecks and shortages developing in key raw materials for lithium-ion batteries, such as lithium, cobalt and nickel.

Prices for all three metals have been rising fast due to supply disruptions and a shortage of available material against rising demand.

Fastmarkets assessed the price of lithium hydroxide monohydrate LiOH.H2O, 56.5% LiOH min, battery grade, spot price, cif China, Japan & Korea, at $70-75 per kg on Friday March 25, more than six times the $11-12-per-kg range recorded one year earlier.

Fastmarkets assessed the price of cobalt standard grade, in-whs Rotterdam, at $38.70-39.30 per lb on March 25, up by 64.56% from $23.25-24.15 per kg on the same date last year.

“This opens up an opportunity for battery chemistries, and energy storage technologies, that utilize lower-cost [and] more widely available materials,” IDTechEx said, citing vanadium-based reduction-oxidation (redox) flow batteries and chemistries based on zinc, iron and other low-cost materials.

While high-strength steel accounts for around 90% of vanadium consumption, the energy storage sector is expected to see additional vanadium demand in the coming years.

Vanadium redox flow batteries employ a vanadium electrolyte liquid solution to store and release energy. They are seen as the main alternative to lithium-ion batteries because they have a longer duration, do not degrade with cycling and are non-flammable and non-explosive.

Fastmarkets’ assessment for vanadium pentoxide, 98% V2O5 min, in-whs Rotterdam was at $12.00-12.50 per lb on March 25, stable over the past two weeks after a sharp rise that started at the end February.

The market reacted swiftly to Russia’s invasion of Ukraine, with market participants initially reporting stronger buying interest, although consumers are said to be covered for the time being.

Cristina Belda in London contributed to this report.

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