We get the reaction from other BESS suppliers, consultancies, research firms, optimisers, investors and independent power producers (IPPs) to BYD launching a BESS using sodium-ion battery cells, a technology many see as a potential competitor to lithium-ion.
The news of the MC Cube-SIB ESS product came from a UK executive via a now-deleted post on business networking site LinkedIn two weeks ago, and shouldn’t have taken the industry by too much surprise.
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BYD announced construction on a 30GWh sodium-ion (Na-ion) battery gigafactory in Xuzhou City in January, and the firm is also one of the largest battery energy storage system (BESS) DC block suppliers globally. Sodium-ion battery powered electric vehicles (EVs) have been available in China for some time, and the technology’s imminent adoption in BESS has been a huge topic in the past few years.
Industry sources told Energy-Storage.news that it is big news for the energy storage industry, but that the technology still has a long way to go to compete with the dominant technology in the BESS industry today, lithium-ion (Li-ion), lithium iron phosphate (LFP) batteries. Energy-Storage.news has reached out to BYD for additional comment or an interview.
Sodium-ion costs still need to come down, investors will ‘wait and see’
Numerous sources said that sodium-ion batteries should eventually cost less than lithium-ion ones thanks to cheaper and more abundant raw material costs, but that the current manufacturing costs still need to come down. And, the equation is not as simple as comparing the cost of sodium versus lithium.
For example, Drew Baglino, who until earlier this year spent 18 years at Tesla including SVP of Powertrain and Energy for the past five years, said in a comment, also on LinkedIn: “Really curious to see cycle life and total installed cost per kWh. Non-cathode cost per kWh will be higher with the lower energy density sodium cathode.”
Sing Yan Wong, an import-export executive who has partnered with Dutch company KonkaEnergy to commercialise sodium-ion home and commercial & industrial-sized (C&I) batteries, told Energy-Storage.news:
“Only thing right now is that the actual cost for manufacturing the sodium-ion batteries currently is higher than LFP, no matter what the manufacturers say. BYD has the capabilities to scale this up very fast but also needs competitors to follow suit in order to decrease the production cost significantly.”
Paritosh Moghe, associate director of KPMG India, similarly told us: “It remains to be seen at what cost BYD is able to achieve this performance enhancement.”
An investment banking source, speaking anonymously, said: “Investors will want to see the application at grid-scale levels. Small scale applications struggle to provide adequate returns. Developers will take a ‘wait and see’ stance until the tech proves itself.”
Comparison to LFP
Several commentators reacted to the news by comparing the product to LFP batteries. The issue of cost is particularly acute in light of LFP’s plummeting prices over the past two years. Presumably alluding to this, Indian IPP Juniper Green Energy assistant VP Chandan Rastogi said, tersely, in a comment: “Interesting product but commercially bad timing”.
Vikash Venkataramana, president US sales and marketing for lithium-ion OEM and DC block supplier REPT Battero, told Energy-Storage.news: “Sodium-ion technology is where LFP was 5-7 years ago. For energy storage applications, improving its usable life, cycle life, round-trip efficiency (RTE) is critical. LFP battery technology today is 97% efficient, with over 10,000+ cycles and 20-25yrs of useable life. Sodium-ion needs to catch up while LFP continues to improve.”
“In the end customers will buy technology that makes the most economic sense and we need to wait to see if sodium truly provides a cost advantage, while not compromising on performance.”
In response to Baglino’s earlier comment, optimiser Proximal Energy’s CEO Rob van Haaren said lower RTE should not be too much of an issue. “At least for stationary applications, if sodium-ion takes a tiny hit on RTE compared to LFP it shouldn’t necessarily be counted as a penalty given zero to negative average charging costs on solar-heavy grids.”
S&P: gap between LFP and sodium-ion could grow
In a statement given to Energy-Storage.news, S&P analysts said the much lower energy density of sodium-ion BESS, with BYD’s product well under half of the increasingly standard 5MWh-plus of lithium-ion DC blocks, meaning many more enclosures needed to get to the same capacity.
The fact that the BESS uses BYD’s Blade battery form factor means that “products from other manufacturers using standard cell formats will likely have even lower energy than those 2.3MWh”, they added.
That extra land cost will partially offset the potentially lower cost of sodium-ion BESS. However, even the potentially lower cost “should be questioned at this stage since Na-ion’s scale of production is still substantially smaller than Li-ion”, they said.
The gap between sodium-ion and lithium-ion on energy density and cost could even get bigger, not smaller, the note said.
“Technology improvements have been rapidly increasing the volumetric energy density of Li-ion cells and systems, an area of fierce competition lately; as a consequence, the energy density gap between Li-ion and Na-ion widened.”
“It is important to note that much of the research and development on Na-ion softened from mid-2023 onwards as Li-ion costs plunged (which reduced Na-ion’s attractiveness), meaning that improvements in energy density and other key factors are likely to be obtained faster in Li-ion than in Na-ion going forward.”
Use cases for sodium-ion BESS
The potential benefits of the battery technology go far beyond cost however, with potentially wider temperature operating conditions claimed by its proponents. REPT’s Venkataramana said this has huge potential but needs to be proven.
“Sodium-ion technology also claims a wider temperature operating conditions. This certainly can improve total cost of ownership (TCO) if auxillary power requirements are lower without the need for active thermal management,” he said.
“However all of this needs to be proven with field data. Sodium-ion needs to prove via operational systems that the systems are capable of stable operation for a period of time. Without a deployment record the technology is not yet bankable for grid-scale project investors.”
KPMG’s Moghe pointed to what kinds of use cases sodium-ion BESS may be more suitable for:
“We have seen that sodium-ion is typically suitable for bulk power services and less so for rapid response services. With high nominal voltage this product would certainly open up new use cases for sodium-ion batteries.”
“Together both the Hubei project (the world’s largest sodium-ion BESS, in China) and BYD’s product once deployed on ground would provide valuable learnings on the suitability of sodium-ion batteries in stationary storage applications.”
Consultancy Apricum’s partner Florian Mayr had a somewhat more bullish view on the tech’s potential, posting on LinkedIn: Sodium-ion is set to become everything between a ‘pressure valve’ for lithium-ion battery prices and a serious contender for technology dominance, so watch the space.”
