In 2012, there was only 0.34 gigawatt (GW) of installed industrial battery storage for electric power. Today, in 2017, this has increased to 6 gigawatts, with projects planned for over 40 GW by 2022. This is already a multi-billion market, with plenty of additional growth projected as mega battery factories are built in the US, Europe, China, and elsewhere.
The Tesla lithium battery factory in Nevada is operational. It has a projected capacity for 2018 of 50 (GW h)/a for battery packs, and its final capacity upon completion of entire factory is 150 GWh/yr. Tesla recently installed a 100 megawatt battery in Australia, in a highly publicized bet that it could be installed in just a few months (or Tesla would provide it for free). When completed, the Tesla factory in Nevada will be the largest building footprint in the world, with several additional factories planned for the future.
More Demand is Driving Industrial Battery Storage Market
Other large-scale factories are planned in Sweden, Hungary, and Poland, as well as Daimler’s battery assembly plant in Germany. China lacks a massive battery factory like Tesla's, but makes up for it with a collection of smaller players. These include Amperex Technology Ltd., Tianjin Lishen Battery Joint-Stock Co., and dozens of others. Roughly 55 percent of global lithium-ion battery production is already based in China, compared to just 10 percent in the U.S. By 2021, China’s share is forecast to grow to 65 percent, according to Bloomberg New Energy Finance. China is building a Vanadium flow battery plant for scalable grid storage. Panasonic Corp. of Japan, BYD Co. of China and South Korea’s LG Chem Ltd. are the top manufacturers of lithium-ion batteries for EVs, according to BNEF. Lithium-salt maker, Stella Chemifa Corp., and Sociedad Quimica y Minera de Chile SA, which mines chemicals including lithium, have been ramping up to meet demand.
Where lithium battery technology has emerged as the leading candidate for electric vehicles, there are many competing battery technologies for vehicles and grid storage. Toyota is working to commercialize solid state battery technology with possible advantages for safety and power density. There are several competing chemistries and no shortage of research to make batteries that are lower in cost, have higher power densities, and can be scaled up for grid energy storage.
As can be seen in figure 1, there are many competing battery technologies. While lithium batteries are well suited to EV’s, other technologies are more scalable for grid energy storage. In some applications, high power (kilowatts) is needed. High power can achieve fast acceleration. Capacitors and flywheels are good for that and lithium batteries are much better than lead-acid. In other applications, energy storage capacity (kilowatt*hours) is the key factor as that determines vehicle range or grid power duration. Batteries for EVs must compete with the very high power-density of gasoline or diesel fuels that have the advantage that most of the fuel by weight is in the air and not carried in the vehicle. Batteries partly make up for this with much higher energy conversion efficiency, where combustion engines waste more than half of the fuel energy as heat that is dissipated in radiators or goes out the exhaust pipe. It is clear the electric grid is changing rapidly and batteries will play an increasingly important role.
Flywheel and battery energy storage systems operating today in the ancillary services power market provide a 10X time faster and more accurate response to a power dispatcher’s signals compared to power turbine generators. Lithium batteries are used for both vehicles and grid storage, with many solar installations including batteries to form micro-grids.
China is making a big investment in Vanadium redox flow batteries, motivated by Mongolian wind energy curtailment needed to maintain grid stability. According to China’s National Energy Administration (NEA), the renewable energy abandonment rate in the third quarter of this year was 33 percent in Gansu and 29.3 percent in Xinjiang, both in the northwest of the country. China is planning a vanadium redox-flow battery destined for the world’s largest battery site: a 200-megawatt, 800-megawatt-hour storage station in China’s Liaoning province specifically targeted to reduce renewable energy curtailment. Vanadium batteries scale well to large sizes and don’t have near the limits on the number of charge cycles compared to lithium batteries
Currently 95% of all grid energy storage is using pumped hydro systems or compressed air energy storage. Such large and environmentally intrusive facilities are very hard to site.