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The shifting sands of the battery market and future innovation

By Posted on August 5, 2015
Blog

Dave Hurst
Director, Market Analysis
NextEnergy

While the talk of the lithium ion battery market had been focused on consumer electronics and hybrid and plug-in vehicles, the focus has taken a decided turn in the last couple of years towards stationary storage. For anyone in the battery market this won’t come as a big surprise. In 2013, California set a 1.3 GW energy storage target to support the grid, starting the race for battery manufacturers on the stationary side.

The stationary market is tempting: Bloomberg New Energy Finance is forecasting that the global installed base of stationary energy storage capacity will be approximately 31.9 GWh in 2020, up from 5.8 GWh this year. With that kind of predicted growth, it’s no surprise that the recent conferences on energy storage have seen greater interest in stationary. To be sure, the automotive market for batteries hasn’t disappeared. Tesla Motors is proving that the automotive market can generate significant volume in the battery market, but even Tesla admits that to justify its Gigafactory, it needs to support the stationary storage market as well. But what does this market shift mean for the next generation of batteries?

Tesla Gigafactory, Potential EV Sales and Stationary Storage Forecast (GWh)

Source: Claire Curry, Bloomberg New Energy Finance at the Advanced Automotive Battery Conference 2015

The target market for solid state lithium ion batteries has to date largely focused on the small format consumer electronics batteries. Other “beyond lithium” technologies have been fueled by the large format automotive applications. The energy density and cost are the key drivers for both of these technologies – more energy in a smaller volume package and at a lower cost per watt hour. The stationary market is a bit different. The package volume is less of a concern and operating environment may not change dramatically as it may in a car or cell phone.

In May 2015, Travis Thompson, a post-doctoral research fellow at University of Michigan, provided a review of various solid state battery technologies in a webinar with PlugVolt. This was focused on next generation of batteries to achieve the USABC EV 2020 goals, which are automotive targets. But what becomes clear in the presentation is that the stationary market is going to benefit from multiple technologies that may be well suited to the built environment. Particularly environments that have to pass muster from local enforcement such as building inspectors and fire marshals. A national standard may be established but states and municipalities have the last word at the local level.

The safety issues around lithium ion batteries in buildings is something that many in the industry believe has been addressed. Yet, Ron Butler of Energy Storage Safety Products International tells me that many local fire marshals remain skeptical of the technology and how to put out lithium fires. The way to address this could be improved pack design to provide better containment and suppression, or it could be a leapfrog to another technology. Again referring to the multiple technologies of the beyond lithium presentation, Butler points out that a flow battery could potentially be easier for fire marshals (and insurers) to approve since this becomes a question of storing known chemicals in well-established vessel technology, but these have their own issues, as well. All of this is not meant to discount the safety issues faced within automobiles, but that market is more likely to be regulated by national standards (the building inspector or fire marshal isn’t inspecting your car before you can start using it).

The development of the next generation of batteries will continue to be pushed by the larger pots of money, such as automotive, stationary, and consumer electronics buyers. A number of upcoming events in energy storage including The Battery Show and PlugVolt Battery Seminar, will certainly showcase how diverse the battery market is becoming. Technology developers are likely to find a nice piece of the pie by capitalizing on unique aspects within the marketplace and the approval process to get equipment into buildings, where the safety and electricity codes are very local issues.

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