Instyle Solar Lithium Market Is Hot Right Now And Here's Why

The Lithium-ion battery appeared on the scene a few years ago as a viable energy storage system solution. It is far more advanced than the conventional lead-acid or nickel-cadmium batteries and also softer on the environment than other heavy metal-based batteries.

In this article, we will take a close look at Lithium-ion battery technology.

Lithium-ion batteries have a specific energy density of 150 Wh/kg compared to 40 Wh/kg for VRLA AGM or 30 Wh/kg for Flooded Lead-Acid batteries.

The technology also boasts a much faster charging time of 2 to 4 hours and can be discharged to 80% compared to 50% for conventional rechargeable batteries.

Up to now the cost of this technology has been prohibitive, with the technology initially being used in mobile phones and smaller rechargeable batteries that are used in smaller electrical devices such as toys and remotes.

However, that is all changing as companies ramp up production and more players come onto the market, meaning increased competition and more innovation.

Technology in this space is advancing rapidly with massive amounts of capital being invested into Lithium-ion R&D. These advances will drive down the weight and cost of batteries, as well as increasing their power output.

The State Of The Market

The Lithium-ion battery market is growing at an exceptionally fast pace as demand picks up for for the technology. Most notably, electric vehicles (EVs) and energy storage solutions for renewable energy are driving this demand.

A recent study has forecast that the Lithium-ion battery market will be worth US$93.1 billion by 2025, with an annual compounded growth of 17%!

The demand for energy storage is one of the main driving factors behind that exponential growth.

Forecasts show an annual compounded growth of 21% from 2017 till 2025. Renewables such as solar and wind in the US, Germany and China are behind the demand for energy storage systems.

The Asia Pacific region was the dominant market in 2016, accounting for 48.3% of the market share. This figure is expected to rise substantially as government support for EVs in China and India gain traction.

North America comes in second with a 25.9% share of the overall Lithium-ion battery storage revenue in 2016.

Lithium-ion batteries still have some limitations but researchers are hard at work in the lab, focusing on improving the technology. Development of solid state batteries will allow Lithium-ion batteries to charge and discharge in a matter of minutes. This will be a major breakthrough for EVs.

Other recent exciting breakthroughs in the lab include increasing the energy capacity of Lithium-ion batteries by a factor of 30 to 50%. Breakthroughs like these will only make EVs a whole lot more viable as it will increase the range of electric vehicles.

Tesla’s commercial and utility sized Powerpack 2 Lithium-ion energy storage system has recently made waves in the media and social media. Elon Musk’s company Tesla seems to be gaining a reputation at the first of developing new technology and bringing it to commercialisation. The Tesla Powerpack 2 is no exception here.

In what initially seemed like a PR stunt, Elon Musk founder and CEO of Tesla made a commitment to install the world's largest Lithium-ion energy storage system in South Australia within 100 days. In what was a competitive bid process, out of the 91 proposals received, Tesla was selected to install a 100 MW energy storage backup system.

True to his word Elon’s company Tesla had the system up and running in well under 100 days. In actual fact, they had the system commissioned 45 days ahead of schedule!

The system is able to supply enough backup power for 30 000 South Australian homes and is charged via a 315 MW wind farm. The energy storage system was commissioned to provide backup power to the SA community for when the wind doesn’t blow.

Other utility sized Lithium-ion energy storage systems are in the pipeline and this current world record is probably set to be smashed soon.

Who Are the Main Lithium-ion Battery Players?

Most of the larger Lithium-ion battery manufacturers supply Lithium-ion batteries to EV manufacturing companies. Some of the larger suppliers of these batteries are relatively unknown. Even though Tesla is a household name by now, it actually falls quite far down the list of suppliers according to production capacity.

For instance, ever heard of A123 systems?

They are a US-based company with a specific focus on supplying battery solutions to the automotive industry. Their Lithium-ion batteries are designed for use in hybrid vehicles and are specifically designed for regenerative braking to optimise power usage. The company has a total production capacity of 1.5 GWh!

Next in line is AESC or Automotive Energy Supply Corporation. Back in 2007 Nissan already saw the potential for EVs. They formed a new company with other heavyweight Japanese titans NEC and NEC Tokin. Their main goal was to develop Lithium-ion battery technology for EVs. Currently, AESC Lithium-ion batteries are used in the Nissan Leaf EV.

Altairnano develops Lithium-ion batteries for energy management solutions in the utility and industrial sector. They have since branched out to supply energy storage solutions to the EV market. Altairnano has also developed unique Lithium-ion batteries with fast charge capability, being able to fully charge in a matter of minutes. The other advantage of their proprietary technology is the increased lifespan of their batteries.

Johnson Matthey Battery Systems is a UK company that designs and manufactures Lithium-ion batteries for the EV market. They produce Lithium-ion batteries for EVs, including urban delivery vehicles and high-performance sports cars. Of great interest is the Lithium-ion battery they developed for a limited production McLaren P1 hybrid supercar. The company manufactures 70 million Lithium-ion cells per annum. Other British car manufacturers that use the Johnson Matthey battery technology are Jaguar, Land Rover and Rolls-Royce.

The list of Lithium-ion manufacturing companies is growing and is expected to continue growing as the demand for Lithium-ion batteries increases for such applications as EVs and renewable energy storage solutions whether it be residential, commercial or utility.

Top Lithium Producers

Lithium is a metal and as the EV and ESS markets take off, the demand for this metal is expected to soar. For the moment approximately 46% of the lithium produced goes to producing Lithium-ion batteries.

Between 2016 and 2017 the worldwide production of Lithium rose 13% to 43 000 MT’s per annum!

Who are the main producers of Lithium?

  1. Australia
  2. Chilie
  3. Argentina
  4. China
  5. Zimbabwe

Australia comes in first at being the No 1 producer of Lithium. The country produced 18,700 MT of Lithium in 2017 up 3,300 MT from the year before, thanks to new mining operations coming online and strong sales. According to the US Geological Survey, Australia holds over 2,7 million MT of identified Lithium reserves.

Chile comes in 2nd on the list of top Lithium producers in 2017, with production figures of 14, 300 MT in 2017, - down due to poor weather conditions. Unlike Australia which mines Lithium out of hard rock, Chile mines Lithium from brine deposits.

Argentina is another large player when it comes to Lithium production. Its output was 5,500 MT in 2017, also slightly down from 2016, due to poor weather conditions, as it also mines Lithium out of brine deposits. Interesting to note is that Chile, Argentina and Bolivia are known as the “Lithium Triangle”.

Argentina has enough Lithium reserves for the next 75 years and production is expected to triple by 2019.

China comes in 4th, producing 3,000 MT in 2017. Whilst Lithium production in China is relatively small, it’s appetite for Lithium certainly isn’t. As the world's largest manufacturer of EVs, it sources most of its Lithium from Australia.

Zimbabwe comes in at No 5. The country produced 1,000 MT in 2017. The private mining company Bikita Minerals owns the world's largest known deposit of Lithium at over 11 million tonnes. According to the US Geological Survey, the country’s total reserves stand at 23,000 MT.

Australian Lithium-ion Battery Manufacturing Market

The local Lithium-ion battery manufacturing market is turning out some quite exciting developments.

Energy Renaissance is one such company. Their target markets are providing Lithium-ion battery technology for the EV, commercial and utility sector following the implementation of the largest Lithium-ion battery solution in the world. Demand for energy storage systems is expected to grow in Australia and Energy Renaissance want to be a part of that journey.

With the support of the Northern Territory government, the company is building a 1 GW capacity manufacturing plant in Darwin.

Their Lithium-ion batteries are designed for hot and humid and climates, making them an ideal solution for Australia.

Tesla Gigafactory

Tesla has the main goal of fast-tracking the earth's transition to clean energy through EV’s and renewable energy. Tesla is aiming to manufacture 500,000 EVs in 2018. With these numbers, they would require the world's total production of Lithium-ion batteries. Hence the necessity to build a massive manufacturing plant that will satisfy its hunger for Lithium-ion batteries.

Although Tesla is running into production challenges that are impacting its ability to produce that amount of EVs, the company stated they have a plan to reach their desired manufacturing capacity.

The Tesla Gigafactory will manufacture Lithium-ion batteries for its EVs and also for its line of stationary energy storage systems such as the Powerwall and Powerpack. The plant is to be built in phases, construction having started in 2014 just outside Nevada in the US.

The plant started manufacturing Lithium-ion cells in early 2017 and is expected to be pumping out 35 GWh a year of Lithium-ion battery cells. That’s about as much as the world's present total annual Lithium-ion battery production.

Tesla has stated that manufacturing Lithium-ion batteries on this scale will help to bring down their cost due to economies of scale.

Tesla already has a 2nd and 3rd Gigafactory in the pipeline too!

Conclusion

The demand for energy storage is booming and at the forefront are Lithium-ion batteries.

Lithium-ion batteries are far superior to conventional energy storage solutions. They are able to store a lot more energy, yet are lighter and smaller than other kinds of batteries. They can also be discharged to 80% and have a much faster charge cycle.

As demand for the technology increases, technology costs will decrease, making production more economically viable. The renewable energy and EV market are driving the demand for energy storage.

There are few countries around the world that supply most of the world’s Lithium, these include Australia, Chile, Argentina, China and Zimbabwe. China has the largest appetite for Lithium for its massive EV production capacity.

A few major players exist that supply the demand for EVs and the number of manufacturing plants are expected to increase exponentially. Tesla is already building a mega-factory that will be able to provide Lithium-ion batteries for all of its manufactured EVs. Other mega-factories are also in the pipeline for locations around the world.

Next Step

If you want to see how much solar or battery storage could save you over the next 5 years, then take our solar saving calculator quiz below!

Or talk to an Instyle Solar expert about the best solutions for home energy storage or PV-panels.

Otherwise, head back to the solar blog to find even more great educational content.

Photo credit: Depositphotos

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