The battle for lithium iron phosphate and ternary battery technology has never stopped. According to foreign media reports, due to the tight production and sales of ternary batteries, more and more energy storage suppliers are beginning to look at China's lithium iron phosphate battery. Moreover, some energy storage suppliers said that the performance and application market benefits of integrated lithium iron phosphate, the current lithium iron phosphate route is the right choice.
Recently, nickel-manganese-cobalt ternary batteries are in short supply. The market economy of energy storage has led to a shift in the lithium-ion battery technology route. Energy storage developers are turning to more durable lithium iron phosphate batteries, which may highlight China's global energy storage market. Status. The surge in demand has led to a shortage of nickel manganese cobalt (NMC) ternary batteries, which gives lithium iron phosphate batteries (LFPs) an opportunity to increase market share.
"The current supply of ternary batteries is tight, which opens the door for lithium iron phosphate battery market applications. Energy storage suppliers are increasingly interested in the application of lithium iron phosphate energy and power performance."
--Mitalee Gupta, energy analyst for Wood Mackenzie Power & Renewable Energy
In the short term, this shortage of ternary batteries may cause the battery price to slow down. According to Wood Mackenzie, the market price of lithium-ion batteries has dropped by 20% per year between 2015 and 2016, and has dropped by nearly 15% in 2017. The research firm also predicted that prices in 2018 will continue to fall by 14%. However, according to the latest energy storage monitoring data, the price decline in the most recent quarter has “substantially slowed down”.
“There are not enough battery manufacturing plants at the moment, and all capacity has been booked.”
--Mitalee Gupta, energy analyst for Wood Mackenzie Power & Renewable Energy
Energy storage battery route selection
Lithium-ion batteries dominate the energy storage market, but the variety of batteries varies and their status is different. Generally, according to the battery cathode material, there are about six lithium ion materials, each of which has its own sub-category and its own advantages and disadvantages.
In 2017, the proportion of lithium cobalt oxide (LCO) and lithium iron phosphate LFP batteries accounted for about 80% of the global lithium ion market. Lithium cobaltate is mainly used in smart phones and computers. Since 2015, NMC ternary materials have been widely used in electric vehicle (EV) applications, as well as in the fixed energy storage market, where the combined demand for these uses has exceeded supply. Gupta said: "There are not enough battery manufacturing plants, and all the production capacity has been scheduled." Therefore, the supply period of ternary batteries for energy storage applications has increased.
However, it is different for lithium iron phosphate batteries, which are commonly used in power tools and industrial fields. Since 2015, they have also been used more widely in electric vehicles. "The current supply of lithium iron phosphate batteries is mainly from suppliers in China, which are used in electric buses and electric trucks," Gupta said.
As battery manufacturers accelerate production and new battery manufacturing plants are rolled out in the coming quarters, the ternary battery shortage will be resolved. And battery prices will continue to decline as suppliers scale. At the same time, the manufacturing capacity of lithium iron phosphate will continue to grow, and the supply period of ternary batteries will be extended to six or even September, further contributing to price declines. This will stimulate the use of lithium iron phosphate in user-side energy storage projects.
The rise of China's battery manufacturing industry
Gupta believes that the direct impact of this shift in battery materials is that Chinese companies have successfully attracted the attention of US energy storage suppliers.
Most of the lithium-ion batteries used to be made by Japanese or Korean giants, such as Panasonic or LG Chemical. Today, Chinese suppliers can compete with their products and advanced manufacturing facilities. China's battery manufacturing capacity is increasing substantially. According to Bloomberg’s report, China has set a target to achieve a battery capacity of 121 GWh by 2020. The Tesla Super Factory has a target of only 35 GWh even if it is fully operational next year.
Chinese battery manufacturer BYD is currently the largest manufacturer of lithium iron phosphate to supply grid-side energy storage projects and electric buses, but now system integrators are also seeking lithium iron phosphate batteries from several other Chinese suppliers. The Ningde Era (CATL) program will expand its production capacity by five times, and it is expected to catch up with Tesla and BYD as new battery manufacturing leaders in the future.
Powin Energy is one of the suppliers to find batteries in China. According to reports that the company successfully completed the transformation from project developer to energy storage system service provider at the end of last year, the company's president Geoff Brown said that the company has signed a series of energy storage projects using lithium iron phosphate, which will enable Powin to With a strong momentum to enter 2019, competitors still face a serious shortage of energy storage materials. “We benefited from the shift from the ternary battery to the lithium iron phosphate battery route and achieved high returns.”
Some large ternary battery manufacturers are looking to be willing to pay higher prices for higher performance (such as energy density and battery life) in order to achieve higher profits. NMC batteries typically have higher energy densities than lithium iron phosphate batteries, but energy density is less important in energy storage applications. Brown said he saw more and more developers starting to look at lithium iron phosphate batteries and entering Chinese companies directly. But some manufacturers do not have this flexibility.
Safe and robust technical route
Lithium iron phosphate can operate at deeper discharge cycles and withstand higher levels of sustained voltage, and Brown said he is willing to compromise on energy density for this more stable property of lithium iron phosphate batteries. Ternary batteries are particularly sensitive to conventional full charge and discharge, which often affects battery life. Lithium iron phosphate is relatively more resistant to full discharge cycle depth and therefore generally has a longer cycle life.
Energy storage facilities serving the peaking power market are cycled 50 or 60 times a year, which is quite different from the FM market or the PV cell market, as PV cells may go through a complete cycle every day. The most important thing about fixed energy storage applications is not the high cycle, but the ability to peak. In short, Brown insists that “there is no best energy storage battery.”
“The perfect energy storage system has not yet been built.”
-- Geoff Brown, President, Powin Energy
Brown said that the main reason why Powin chose lithium iron phosphate batteries is to consider its safety. Lithium iron phosphate batteries are generally more resistant to heat than ternary batteries. The use of lithium iron phosphate can reduce other costs, such as thermal control and safety measures.
“As the scale of the business grows, we decide to adopt a conservative and robust approach. The choice of technology route is the result of a combination of market prices and application cases, and the same battery is different for electric vehicles and energy storage,” Brown said. Different batteries are also different for fixed energy storage applications."
Brown firmly believes that "the current lithium iron phosphate route is the right choice," but if we have a product that supplies ternary batteries in 18 months, don't be surprised.
“The perfect energy storage system has not yet been built,” Brown said. “If we continue to reduce costs, then developers may find the best option to market in the future.”