The Australian government’s Department of Industry, Science and Resources has indicated that lithium-ion batteries are poised to “dominate” stationary storage for durations under 4-hours, but alternative technologies could surpass them for long-duration energy storage (LDES).
According to the Department’s Resources and Energy quarterly: September 2024 report, energy storage is set to play a vital role in securing Australia’s energy security and supporting the uptake of renewable energy generation across the country.
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The report states that Australia is in a good position to meet the growing demand for battery energy storage systems (BESS) by providing raw materials such as lithium and vanadium and manufacturing capabilities. Indeed, vanadium has seen a surge in appeal in Western Australia following the completion of an electrolyte factory for vanadium redox flow batteries (VRFB).
To sustain continued growth in Australia’s energy storage sector, the report urges that renewable energy generation deployment continues its upward trend, and the government continues to provide investment incentives.
There are also prospects for stationary energy storage systems to capitalise on daily power gaps, which grant arbitrage opportunities for technologies that shift energy across time.
Energy storage durations are increasing
Stationary storage demand appears to be shifting more towards longer durations. Battery energy storage is recognised as a better suitor for shorter durations and is well-suited to daily and sub-daily balancing due to quicker response times.
The challenge with using batteries for extended periods is the uncertainty about effectively increasing capacity, which often requires stacking cells and components. For larger BESS to be cost-competitive with other storage options, the technical complexity and additional production costs cannot rise significantly with battery size. The BESS must also guarantee a longer lifespan to offset the longer and more capital-intensive construction process.
Traditionally, short-term energy balancing has been achieved with BESS durations up to 4-hours. However, changing conditions and increased electrification are extending energy demand peaks beyond 4-hours, requiring 4-8-hour and 8-24-hour duration storage to balance the grid.
One of the most intriguing outcomes from the report details that alternative technologies could outcompete lithium-ion in durations above 4-hour. However, it was noted that the outlook for emerging BESS technologies depends on the outcomes of research and development, effective scale-up of manufacturing, and the cost of raw materials.
The report states that lithium-ion batteries can be used effectively for stationary storage lasting up to 4-hours, buttheir properties make them less suitable for longer durations.
Firstly, lithium-ion batteries’ limited life cycle makes them less cost-effective at larger scales. Additionally, lithium-ion batteries do not allow power and energy to be scaled separately, leading to higher marginal costs for larger batteries. The stacking of lithium-ion batteries needed to achieve longer durations can also pose safety risks, including the risk of fire.
The report name-drops several technologies that could be well-suited to longer durations, including sodium-ion and flow batteries. Energy-Storage.news reported last week that the Queensland government had invested in Australia’s first ‘14-hour’ duration iron flow battery factory, being developed by Energy Storage Industries – Asia-Pacific.
Sodium-ion and flow batteries have the potential to become cost-competitive
Sodium-ion batteries could be one of the emerging technologies that could compete with lithium-ion for durations under 8-hours. These batteries use similar technologies and processes to lithium-ion, but crucially they do not require any critical minerals, and instead use sodium, which is naturally abundant.
For sodium-ion batteries to be cost-competitive in short-duration (less than 4 hours) stationary storage, they will need to outcompete the current lithium-ion batteries. Longer life cycles and safer scalability could make sodium-ion batteries a strong candidate for medium-duration stationary storage.
The report notes that although this technology has high potential, its development and manufacturing are still nascent. As a result, there are few commercial examples of utility-scale sodium-ion batteries, though costs are set to come down nearer to the end of the decade.
The cost of lithium-ion batteries could also significantly influence the shift toward sodium-ion battery technology. As the price of lithium climbs, there could be a stronger push toward investing in and developing sodium-ion batteries, especially for use in stationary storage. This is especially true for BESS, which lasts less than 4-hours, where lithium-ion currently leads the market.
Flow batteries are expected to become more popular for medium (4-8 hours) and long-term (8-24 hours) energy storage, the report reads. Unlike lithium-ion batteries, the cost of producing flow batteries does not significantly increase at larger scales. Additionally, flow batteries have longer life cycles compared to lithium-ion batteries, making them a more attractive investment choice.
