Why lithium-ion batteries are so important
People of Volts! At long last, Battery Week is here. It is time to get into batteries. Waaay into batteries.
Over the next few posts, I’m going to cover how lithium-ion batteries (LIBs) work and the different chemistries that are competing for market share, but I thought I would start off with a post about why I’m doing this — why batteries are important and why it’s worth understanding the variety and competition within the space.
Lithium-ion batteries are crucial to decarbonization in two important sectors
We know that the fastest, cheapest way to decarbonize, especially over the next 10 years, is clean electrification: shifting the grid to carbon-free sources and shifting other sectors and energy services onto the grid.
LIBs are accelerating clean electrification in the two biggest-emitting sectors of the US economy, transportation and electricity. (Each is between a quarter and a third of emissions.)
First, they are colonizing the EV market and enabling ever-higher performance and range. The global EV market is on the front end of explosive growth:
Researchers at Deloitte expect growth to accelerate through 2030:
As BloombergNEF analysts show in their “Electric Vehicle Outlook 2030,” it’s not just passenger EVs, either. The fastest growing EV segment will be buses, followed by scooters.
The global market for EV batteries alone is expected to hit almost a trillion dollars by 2030. Sustaining that growth is going to require lots and lots of new batteries. The more energy-dense, cheap, and safe LIBs can get, the faster the electrification of transportation will happen.
Second, LIBs are being used both for distributed, building-level energy storage and for large, grid-scale storage installations. As the grid shifts from firm, dispatchable sources of energy like coal and gas to variable, weather-dependent sources like sun and wind, it will need more storage to balance things out and stay stable. Batteries can help at the grid level (they can even serve as transmission assets) and they can serve local resilience at the building and community level.
Overall, the research firm Wood Mackenzie expects the global storage market to grow at an average of 31 percent a year over the coming decade, reaching 741 gigawatt-hours of cumulative capacity by 2030.
The more energy-dense, cheap, and safe LIBs can get, the faster storage will be infused throughout the grid and the more renewable energy the grid will be able to integrate.
All together, here’s what the Department of Energy projects for the global energy storage market through 2030:
As this graph shows, the vast bulk of the demand for batteries is going to come from transportation, meaning EVs of various kinds. Whatever is used for EVs is probably going to end up getting so cheap, just from scale, that it dominates energy storage as well.
There’s one other cool aspect of batteries that gets too little attention. Storing substantial amounts of electricity for cheap is a relatively new thing in human affairs. We are only just now beginning to explore what can be done with it. What’s happened in the relatively short history of lithium-ion batteries is that, as they get cheaper and more powerful, we find new uses for them.
Way back in 2015, energy analyst Ramez Naam called this the “[energy storage vi
