SECTION I: THE CLIMATE CRISIS IN A NUTSHELL
The global shift from fossil fuels to clean sources of energy, otherwise known as the clean energy transition, is one of the defining features of the 21st century. Since the Industrial Revolution, humanity has relied upon an increasing amount of coal, oil, and natural gas to supply its ever-expanding energy needs, including transportation, lighting, heating and cooling, and more. Global total energy consumption has risen from around 8,000 TWh in 1850 to more than 176,000 TWh in 2021 — a 22x increase!
https://ourworldindata.org/energy-production-consumption
And while the abundance of energy in the modern world has helped to produce many things to be grateful for, such as the increase of global life expectancy from 35 in 1850 to 73 in 2022, it has also directly led to a global climate crisis.
When fossil fuels (oil, gas, coal) are burned to produce energy, they emit harmful carbon dioxide (CO2) gas into the atmosphere. Due to the greenhouse gas (GHG) effect, CO2 gas traps sunlight inside the atmosphere, ultimately resulting in the warming of the planet. As a result of the GHG effect, the average temperature of the Earth has risen by roughly 1.0ºC since 1850 — and according to the United Nations Framework Convention on Climate Change (UNFCCC), current global energy usage rates set us on pace for a further 1.7ºC increase by 2100.
A 2.7ºC (or more!) total increase in global average temperature would be quite literally catastrophic; climate disasters such as heat waves, droughts, and extreme precipitation would become significantly more common, likely resulting in large-scale food insecurity, water scarcity, rising sea level, loss of biodiversity, and more.
As such, it is clear that the world must undertake rapid, fundamental changes to our energy infrastructure in order to prevent the worst outcomes of the coming climate disaster.
SECTION II: THE IMPORTANCE OF ENERGY STORAGE
In 2015, leaders from 186 countries signed the Paris Climate Agreement, committing to a collective effort to prevent global average temperatures from rising much more than 1.5ºC above pre-industrial levels. Two of the most important variables in turning this pledge into a reality are: a) increasing electricity's share of total final energy consumption from around 20% today to over 50% by 2050, and b) increasing the share of electricity produced by renewable sources (solar, wind, hydro, etc) from around 11% today to over 60% by 2050.
Therefore, the most realistic path to avoid a climate catastrophe is to increase the share of total final energy consumption produced by renewable electricity from around 2.2% today to around 40.0% by 2050. While it is abundantly clear to policymakers, business leaders, and consumers that drastically increasing the share of renewable energy worldwide is an imperative, transforming our energy infrastructure is not so straightforward. In this post, I will investigate one major barrier to the clean energy transition: the intermittency of renewable energy sources.
The intermittency of renewable energy can be summarized in simple terms: the sun does not always shine, and the wind does not always blow. As a result, solar panels and wind turbines alone are not able to meet the monstrous energy demands of the US, or any other large industrialized nation, during the nighttime and on still days. In order to deploy wind, solar, and hydro power as more than 40% of the energy grid, we need to solve their intermittency problem.
So, how can this issue be resolved? How can renewables achieve the around-the-clock consistency required to capture a 40% share of global energy? What is the key missing link in the equation? The answer is battery storage.
Long-duration batteries "time-shift" energy — they store excess energy at times of surplus (extended periods of sunlight or heavy wind) and release that excess energy at times of deficit (nighttime, low wind). Any solar or wind farm with sufficient battery storage capacity can transmit power all day, every day. BloombergNEF predicts that global energy storage capacity will reach 411 gigawatts (GW) by 2030, a whopping 15x increase from todays' levels. And I believe even this is a massive underestimate given the relative lack of interest and investment in battery storage until just recently.
It is worth mentioning alternative types of energy storage and why they don't work for grid applications. Currently, the most common form of energy storage is pumped hydro, a system of raising and lowering vast amounts of water which accounts for 90% of the world's energy storage. However, "hydro projects are big and expensive with prohibitive capital costs, and they have exacting geographical requirements — vertiginous terrain and an abundance of water." Given these constraints, pumped hydro storage would be too difficult to deploy at the scale necessary for grid applications.
Additionally, some startups like EnergyVault and Gravitricity have invested in gravity storage systems, which raise and lower heavy blocks in order to store and release energy. Similarly to pumped hydro, these projects require vast amounts of space, capital investment, and initial costs. There are also concerns about the stability of such contraptions, especially in poor weather conditions.
Although pumped hydro and gravity storage systems might eventually gain some of the energy storage market share, their current geographical, technological, and economic deficiencies render them more of a work-in-progress than a market-ready implementable solution. In contrast, many battery storage solutions are geographically flexible, technologically advanced, and cost effective.
SECTION III: THE MOST PROMISING BATTERY CHEMISTRY FOR THE GRID
There are five main battery storage chemistries: lithium ion, lithium sulfide, solid state, sodium ion, and flow. We'll look at their respective costs per kWh of capacity, cycle life, safety risk, and supply chain risk to understand their pros and cons for grid-scale energy storage applications. Spoiler alert: based on my research, flow batteries are by far the most promising chemistry to solve renewables' intermittency problem.
PART 1: THE FIVE BATTERY TYPES
Currently, lithium ion batteries are the most common battery storage technology on the market (around a 98% market share). This is largely attributable to the recent proliferation of electric vehicle production in the US — crucial elements like lithium, cobalt, nickel, and manganese have been mined enough for lithium ion batteries to become extremely competitive in the relatively underdeveloped energy storage market. There are six main types of lithium ion batteries, each with a distinct chemical composition: NMC (nickel manganese cobalt), NCA (nickel cobalt aluminum), LFP (lithium iron phosphate), LCO (lithium cobalt oxide), LMO (lithium manganese oxide), and LTO (lithium titanate oxide).
Sodium ion batteries are similar to lithium ion in that they simply replace the lithium anode with a sodium anode. Similarly, lithium sulfide batteries replace the manganese/cobalt/nickel cathode with a sulfur cathode. But these small chemical changes have drastic effects on performance.
Solid state batteries are completely different chemically in that they use a solid electrolyte instead of the liquid or gel found in most lithium ion and lead acid batteries. And finally, flow batteries separate the electrolyte solution into two different containers.
Although scientists are constantly researching new battery chemistries, these five types — lithium ion, sodium ion, lithium sulfide, solid state, and flow — are the options currently available on the battery storage market.
PART 2: THE FOUR-FACTOR COMPARISON SYSTEM
There are an immeasurable number of factors to consider when determining the relative value of these five battery types for grid applications, but I believe that the most important are cost efficiency, longevity, safety, and supply chain independence.
First, low cost is vital because the scale of this problem is massive and will have to be funded in part by government entities and government-regulated utilities with limited budgets.
Second, the number of cycles a battery can sustain without significant degradation is a key aspect of its fit for grid-scale applications. Cycle life contributes to maintenance costs and lifetime before replacement. We're all familiar with battery life on old phones that have been through thousands of cycles, and we wouldn't want our grid infrastructure to deteriorate in the same way.
Third, safety is always a factor. The fire hazards of electric vehicle batteries have been well documented, and the same issues arise with battery storage.
And fourth, supply chain risks affect the cost and reliable supply of these technologies. Rare earth metals used in batteries have always been hard to find, and this has only become more relevant since the start of the Russia-Ukraine war. Even though a certain battery technology may be cheaper today, it is clear that any reliance on raw materials from other countries (especially potentially adversary countries like China and Russia, or underdeveloped countries like the DRC) is risky.
Finally, it is worth noting that energy density, a key factor in electric vehicle batteries, is not particularly important for grid-scale storage applications; while car batteries must fit in concise spaces, storage batteries are primarily located in areas with a plethora of open space (next to wind and solar farms).
PART 3: BATTERY COMPARISON
A. Most Common Lithium Ion Battery Chemistries
As previously mentioned, NMC and NCA batteries have been the most popular chemistries due to the abundance of lithium, nickel, manganese, and cobalt. The main asset of NMC and NCA batteries is their relatively high energy density (500 and 550 Wh/I, respectively); they can easily fit in the small space inside a vehicle. However, NMC and NCA batteries perform poorly in all four key metrics for grid scale applications.
To start, they cost $150 and $146 (respectively), which is significantly higher than most of the other battery types we will investigate. They also can only complete about 2,500 cycles before significant degradation (the fewest of any of the five battery types) and have been known to ignite in extreme temperatures and after considerable usage.
Crucially, lithium ion batteries are alarmingly dependent on foreign supply chains — 55% of all nickel comes from Indonesia, the Philippines, and Russia, 70% of all cobalt comes from the DRC, and 85% of all lithium comes from Australia, Chile, and China. Although the US has invested significant capital in reducing its foreign dependence for these materials, it will likely be a long time before lithium ion batteries are free from immense supply chain risks.
B. Alternative Lithium Ion Batteries
Four alternative lithium ion chemistries have arisen in response to the drawbacks of NMC and NCA, with varying success. While LCO and LMO batteries offer somewhat lower prices than NMC and NCA (about $132 per kWh each), their useful life is significantly shorter (750 and 500 cycles, respectively) and they are similarly at risk of supply chain problems due to their extensive use of lithium, cobalt, and manganese. As a result, LCO and LMO technologies are even worse than NMC and NCA for grid scale applications, but due to their lower costs and high voltage levels (3.6 and 3.7V, respectively) they may have some utility in power tools, electric bicycles, and other small devices.
Meanwhile, LFP and LTO lithium ion batteries have attempted to solve the supply chain and safety risks of NMC and NCA. They greatly reduce the percentage of the battery made up by lithium and replace cobalt, manganese, and nickel with more abundant and accessible materials like iron and titanate. And although this is certainly an improvement from NMC and NCA, any reliance on lithium is still troublesome for safety and supply chain issues. Additionally, LFP batteries can only run 4,000 cycles without degradation, rendering them unfit for grid scale applications, and LTO batteries currently cost around $1,000 per kWh (the highest of any chemistry I will discuss) due to the scarcity of LTO producers.
In sum, neither LFP nor LTO batteries are ideal for grid scale applications. However, LFP is emerging as a viable alternative to NMC and NCA batteries in EVs due to their lower cost ($131 per kWh), better safety and supply chain independence, and longer life cycles (4,000 vs 2,500). And if the cost of LTO could drop significantly as production increases, its long useful life (17,000 cycles) could allow for considerable applications in the shipping, aircraft, and heavy trucking industries.
C. Lithium Sulfide and Solid State Batteries
Lithium sulfide batteries improve significantly on some of the drawbacks of lithium ion. They cost $75 per kWh (about one half the price of lithium ion) and diminish much of the supply chain risk by eliminating cobalt, nickel, and manganese (this also explains why they are cheaper). However, lithium sulfide batteries do not pass all four tests; they have a very short useful life (around 1,500 cycles) and still suffer from safety concerns, making them unfit for grid scale applications.
Solid state batteries are a very promising technology for certain applications. They feature an extremely high voltage (3.8V), high energy density (500 Wh/I), long useful life (10,000 cycles before degradation), and significantly improved safety due to the solid chemistry. However, solid state batteries still rely heavily on lithium (and therefore have considerable supply chain risks), and currently cost around $600 per kWh. So, solid state batteries are far from competitive in the battery storage market in the near future.
However, if their cost is reduced over time due to increased production and technical breakthroughs, they could become a significant player in the EV battery market. Auto companies like Mercedes, Ford, and BMW have already recognized this possibility, and have invested significant capital in solid state R&D.
D. Sodium Ion and Flow Batteries
The final two types of batteries are those that I believe are the most promising for grid scale applications: sodium ion and flow. Sodium ion is the first technology I've discussed that excels in all four categories: low cost ($40 per kWh), long useful life (5,000 cycles before degradation), excellent safety (largely due to the replacement of lithium with sodium), and limited supply chain risks (for the same reason). The main drawback with sodium ion batteries is simply that they are not outstanding in terms of longevity (other batteries have much longer useful lives) and supply chain risk (they still use cobalt, manganese, and nickel). So while sodium ion batteries are more fit for grid applications than other types, they fall short of being ideal.
Flow batteries feature incredibly low costs ($25 per kWh) due to their inexpensive materials and simple chemistry. They have an extremely long useful life (15,000 cycles before degradation) due to the reversible 'redox' chemical reactions they utilize to conduct electricity (hence, redox flow). The separation of electrolyte solutions into two separate containers also mitigates any risk of fire or other safety issues. And finally, when using materials like iron, the most abundant element in the earth, as the main raw material (as I will discuss more shortly), the supply chain risks are almost negligible. Overall, flow batteries feature the best combination of cost, longevity, safety, and supply independence, making them the ideal fit for grid scale energy storage applications moving forward.
E. Types of Flow Batteries
Even within the relatively small flow battery industry, several different chemistries exist. So far, the most commonly discussed chemistry is vanadium-vanadium due to its favorable chemical properties for conducting electricity. However, I believe vanadium-vanadium flow batteries are unfit for grid scale applications; the use of vanadium essentially cancels out any cost or supply chain advantages that flow batteries have. Vanadium is not only an incredibly expensive material, but it also can only be mined in certain regions of the world (China, Russia, and South Africa account for 85% of global vanadium). So while vanadium-vanadium flow batteries might be somewhat inexpensive to produce right now, if the chemistry ever becomes more popular the supply chain issues would become rampant and the price of vanadium would skyrocket. Because they utilize vanadium-vanadium chemistries, I believe many relatively well-known flow batteries producers such as VRB Energy, Invinity Energy Storage, CellCube, Sumitomo, and UniEnergy are risky long-term investments.
On the other hand, chemistries such as iron-iron, zinc-bromide, hydrogen-bromide, carbon-oxygen simply build on the advantages of a flow battery (low cost and low supply chain risk). For example, iron is the most abundant mineral in the world, and can be mined in a wide variety of climates. Even if iron-iron flow batteries were the only type of battery used for global energy storage for the next 50 years, the world would not run out of iron. Materials like hydrogen, oxygen, and carbon are similarly abundant. And although zinc and bromide are somewhat more rare and challenging to acquire, they are still significantly less vulnerable to supply chain issues compared to lithium or cobalt. By maintaining the low cost and minimal supply chain risk promised by flow batteries, the iron-iron, zinc-bromide, hydrogen-bromide, and carbon-oxygen chemistries are the clear best-fit technologies for grid scale applications.
SECTION IV: BATTERY INNOVATION IN THE PRIVATE SECTOR
PART 1: PRIVATE COMPANIES DEVELOPING FLOW BATTERIES
Below are a number of flow battery companies that I came across in my research. Information is limited because they are private and mostly early stage, but based on my research into this space, I believe RFC Power (due to its strong IP portfolio) and Primus Power (due to its well-established partnerships) are the most promising.
- RFC Power https://www.rfcpower.com/
RFC Power, founded by researchers from the Imperial College in London in 2017, is developing a novel flow battery chemistry based on abundant materials like manganese and hydrogen. The company received a seed investment in January 2020 and a non-equity assistance round in February 2023 (both of undisclosed amounts). RFC Power also recently joined Shell's GameChanger program, which "works with start-ups and businesses on unproven early-stage ideas that have the potential to impact the future of energy."
2. Skip Technology https://www.skiptek.com/
Skip Technology is an Oregon-based startup that produces hydrogen-bromide flow batteries. The company claims to possess a piece of intellectual property containing the solution to a fundamental flaw of outstanding hydrogen-bromide batteries. Skip Technology was founded in 2018 and has received three rounds of funding totaling $950,000, most recently an angel investment of $622,000 in October 2021.
3. Noon Energy https://www.noon.energy/
Noon Energy is a flow battery producer that utilizes oxygen and carbon as its redox pair. The company was founded in California in 2018 and has raised $28 million in Series A funding, mostly from a large venture investment in November 2022. Clean Energy Ventures and Aramco Ventures' Sustainability Fund were among the funds involved in this investment round.
4. Elestor https://www.elestor.nl/
Elestor is a Dutch startup founded in 2014 that has raised $30 million in Series A funding. The company utilizes hydrogen and bromide, two highly abundant materials, to construct a flow battery that is highly efficient, low-cost, and safe. Elestor recently won the Offshore Wind Innovators Award 2022, which rewards "innovative contributions to the offshore energy transition."
5. ViZn Energy http://www.viznenergy.com/
ViZn Energy, founded in 2009, is a startup based in Montana. The firm produces zinc-iron flow batteries, and has raised $64 million in funding. Most recently, ViZn Energy received $15 million in private equity funding, allowing the company to remain afloat in difficult market conditions.
6. Primus Power https://primuspower.com/en/
Primus Power is a major producer of zinc-bromide flow batteries. Founded in 2009 and based in Silicon Valley, the company has raised over $110 million through a combination of grants and venture funding (up to Series E, most recently in December 2018). Primus Power has partnered with firms such as Microsoft and Raytheon, as well as the US government, to test and implement its zinc-bromide battery storage systems.
7. ZincFive https://zincfive.com/
ZincFive is a startup based in Oregon that produces nickel-zinc flow batteries. The firm has raised $133 million in funding through Series D, with its latest deal amounting to $21.5 million. However, ZincFive's extensive use of nickel makes the company vulnerable to similar supply chain risks as lithium ion and other types of batteries.
PART 2: NOTABLE BATTERY STORAGE COMPANIES OUTSIDE THE FLOW BATTERY SPACE
- Form Energy https://formenergy.com/
Form Energy is an American startup that has raised over $800 million in Series B funding. The company is developing an iron-air battery that may be able to store energy for up to 100 hours, potentially making it the first reliable multi-day storage technology. Form Energy recently invested $760 million to construct its first manufacturing plant in West Virginia, and has secured partnerships with US-based utilities like Great River Energy and Xcel to test its iron-air battery in practice.
2. Natron https://natron.energy/
Natron is a California-based sodium-ion battery producer which has raised $115 million. The company plans to utilize its patented Prussian Blue sodium-ion technology mainly for large data center applications, but it could also be applied to large-scale energy storage. Chevron and ABB are among investors in Natron.
3. Sakuu https://www.sakuu.com/
Sakuu, based in Santa Clara California, produces solid-state batteries for grid-scale applications. While most solid-state batteries have been developed for EV applications, Sakuu 3-D prints its solid-state batteries, and therefore may be able to lower costs enough for large-scale storage applications. The firm has raised $16.3 million since it was founded in 2016.
4. Enzinc https://enzinc.com/
Enzinc is a zinc-air battery producer based in Richmond, California. The company claims potential applications for not only large-scale energy storage, but also for electric vehicles and smaller electric devices. The company has raised $7.6 million in grants and seed funding (most recently a $4.5 million seed round in July 2022).
PART 3: TOP PUBLIC COMPANIES WORKING ON GRID-SCALE BATTERY STORAGE TECH
- ESS Inc. https://essinc.com/
ESS Inc. is an Oregon-based iron flow battery producer founded in 2011. It is the largest current manufacturer and seller of iron flow batteries on the international market. The company went public in 2020, and currently has a market cap of $300 million.
2. Lockheed Martin https://www.lockheedmartin.com/en-us/capabilities/energy/energy-storage.html
Surprisingly, Lockheed Martin is a leading provider of flow batteries. They created a battery called Gridstar Flow, which uses "abundant earth metals as well as commodity chemical ligands to produce the battery." Gridstar Flow is evidently a very small piece of Lockheed Martin's overall revenue stream, but it's a company to keep an eye on in the flow battery industry; Fort Carson, a US Military base in Colorado, recently agreed to install 1 MW of Gridstar Flow for storage and efficiency purposes.
3. Faradion https://faradion.co.uk/
Faradion is a UK-based sodium ion battery company which was recently acquired by public Indian conglomerate Reliance Industries for over $133 million. On December 5, 2022, the firm successfully installed its first sodium ion battery, at a trial site in New South Wales, Australia. Especially given recent increases in global lithium prices, Faradion's sodium-based technology is well-positioned to capture an increasing market share in the battery storage industry.
4. Redflow Limited https://redflow.com/
Founded in Brisbane, Australia in 2005, Redflow Limited produces zinc-bromide flow batteries. The company has already deployed more than 280 projects around the world, including a 2MWh storage system in California in 2021. Redflow is led by CEO Tim Harris and features a market cap of about $22 million.