Lithium-Ion Batteries: The Incumbent TechnologyPlatform for Coal Regions in Transition

James Frith

April 08, 2019

1 @JamesTFrith

Prices

2 @JamesTFrith

Source: BloombergNEF

Lithium-ion battery prices have fallen 85% since 2010

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

0

200

400

600

800

1,000

1,200

1,400

2010 2015 2020 2025 2030

Lithium-ion battery pack price (real 2018 $/kWh)

E-bus

Stationarystorage

PassengerEV

Observedprices

18%learningrate

2024 implied price $94/kWh 2030

implied price $62/kWh

Cummulative demand for lithium-ion batteries (GWh)

3 @JamesTFrith

Source: BloombergNEF, Avicenne

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2014 2016 2018 2020 2022 2024 2026 2028 2030

Annual GWh demand

Stationarystorage

Consumerelectronics

E-buses

PassengerEVs

This is largely thanks to the EV industry

4 @JamesTFrith

Source: OERhub.net

5 @JamesTFrith

Battery rack costs

Other costs

Source: OERhub.net

6 @JamesTFrith

Source: Bloomberg New Energy Finance. Note * Includes a 10% EPC margin. Developer overheads set at 5% of total system costs, and developer margin set at 10%.

System level prices continue to fall

286 204 189 173 158 142 127 111 96 90 84 79 74 70

20

18 17 17 16 15 14 13 13 12 11 11 10 10

68

37 36 36 35 34 32 30 30 28 27 26 26 25

58

15 15 14 14 13 12 11 11 10 10 9 9 8

81

40 39 38 37 36 34 33 32 30 29 28 28 27

28

18 18 17 17 17

16 16 16 16 15 15 15 15

32

20 19 18 17

15 14

13 12 11 11 10 10 9

581

357 338 319 299

278 255

234 214 203 193 184 176 170

0

100

200

300

400

500

600

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Real 2018 $/kWh

Transformer

Developer margin

Grid connection

Developeroverheads

EPC*

EnergyManagementSystemBalance of system

20MW/80MWh system

7 @JamesTFrith

Source: Bloomberg NEF. Note: Excludes pumped hydro. If multiple technologies are selected, the capacity is divided equally amongst them.

This has led to Lithium-ion dominating the storage market (on a power basis)

49%61%

69% 68%

87%94%

85%

22%9%

25%

3%

3%

8%6%

18%

7%

6%

5%19% 18%

3% 6% 3% 5%12%

2012 2013 2014 2015 2016 2017 2018

Other /unknownFlywheels

Flow batteries

SodiumsulphurLead-based

Lithium-ion

8 @JamesTFrith

Source: Bloomberg NEF. Note: Excludes pumped hydro. If multiple technologies are selected, the capacity is divided equally amongst them.

But other technologies can be better on an energy basis

33% 37% 40% 34%

57%

74%

46%

15% 5%

14%

2%

1%

6%4%

9%

4%

4% 3%

0%0%

46% 51%45%

52%

37%26%

52%

2012 2013 2014 2015 2016 2017 2018

Other /unknownFlywheels

Flow batteries

SodiumsulphurLead-based

Lithium-ion

9 @JamesTFrith

The Good & Bad

10 @JamesTFrith

Fossil Fuel generator providing frequency response

Why use storage? (and particularly lithium-ion)

Source: Pixelartmaker.com

11 @JamesTFrith

Fossil Fuel generator providing frequency response

Battery storage providing frequency response

Generating assets aren’t good for quick response

Source: Pixelartmaker.com Source: Groundreport.com

12 @JamesTFrith

Source: Bloomberg New Energy Finance, Benchmark Minerals, Antaike Note: prices correct as of January 28, 2018

Lithium hydroxide price - Asia Cobalt spot price - Shanghai

Lithium-ion batteries biggest weakness is commodity prices

Source: Bloomberg New Energy Finance, Benchmark Minerals, Antaike Note: prices correct as of January 28, 2018

0

5,000

10,000

15,000

20,000

25,000

2014 2015 2016 2018

$ / metric ton

0

20,000

40,000

60,000

80,000

100,000

120,000

2014 2015 2016 2018

$ / metric ton

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Source: Bloomberg NEF Note: Excludes pumped hydro. If multiple applications are selected, the capacity is divided equally amongst them.

Cobalt can be avoided

23%30% 30% 36% 36% 33% 34%

73%

35%

4%

19%

15%

14%12% 17% 17%

40%40% 34% 29%

16% 19%

2018 2020 2022 2024 2026 2028 2030

NMC (811)

NMC (622)

NMC (442)

NMC (111)

LFP

NCA

LMO

14 @JamesTFrith

What does the future look like?

15 @JamesTFrith

Source: Bloomberg NEF Note: Excludes pumped hydro. If multiple applications are selected, the capacity is divided equally amongst them.

Energy shifting dominates the market

22% 22%15%

26%35% 34%

20%

9%2%

1%

0%

5% 9%

6%

36%

29%33%

22%

23% 19%

26%

6%

4%6%

16%8% 15% 27%

16%

25%28%

21%21% 19%

13%9% 13% 15%

7% 3% 2% 3%

2012 2013 2014 2015 2016 2017 2018

Other

Residential

Commercial

Distribution

Transmission

Energy Shifting

PeakingcapacityAncillaryservices

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Source: Bloomberg New Energy FinanceSource: Bloomberg New Energy Finance

Cumulative storage deployments by application, based on power output

Cumulative storage deployments by application, based on energy capacity

Energy shifting will create new opportunities for storage

Other

EV charging

Behind-the-meter:C&I demand chargesBehind-the-meter:commercialBehind-the-meter:residentialDistribution

Transmission

Energy shifting

Peaking capacity

Ancillary services0

100

200

300

400

500

600

700

800

900

1,000

2016 2020 2024 2028 2032 2036 2040

GW

0

500

1,000

1,500

2,000

2,500

3,000

2016 2020 2024 2028 2032 2036 2040

GWh

17 @JamesTFrith

Source: Bloomberg NEF

There are somethings lithium-ion probably wont be able to do

0

20

40

60

80

100

120

140

160

180

200

Generation (GW)

Curtailment

Charging

Discharging

Solar

Wind

Dispatchable

Nuclear

Demand

Germany low renewable generation week, 2040

18 @JamesTFrith

Source: Bloomberg NEF

Particularly long duration energy shifting

0

50

100

150

200

250

300

Generation (GW)

Curtailment

Charging

Discharging

Solar

Wind

Dispatchable

Nuclear

Demand

Germany high renewable generation week, 2040

New storage technologies, with a long storage duration, are needed for shifting loads by weeks or months

12hrs

19 @JamesTFrith

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