STORAGE 101: State of Play & Technology Overview

Peter Mockel

Not for distribution without prior consent by IFC

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State of Play

LITHIUM-ION BATTERIES

Direction of travel of electrons

lithium ions

Cathode

Separator

Electrolyte

electrons

Anode

Charging device

Direction of travel of electrons

lithium ions

Cathode

Separator

Electrolyte

electrons

Anode

Load

CHARGING (BATTERY IS PLUGGED INTO

ELECTRICITY MAINS)

DISCHARGING (BATTERY IS GENERATING

ELECTRICITY)

Battery performance criteria

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• Specific power: Short term power surge e.g. for starter engines

• Cycle life: Most important where swapping cells incurs high cost, e.g. remote installations, vehicles

• Gravimetric energy density: EVs require low weight

• Volumetric energy density: Passenger cars require compact batteries

• Ambient temperature: High temp. tolerance required in hot climates, reduces need for active cooling

• Charge speed: Grid backup, when power is only temporarily on

• Charge retention: Infrequent discharge, e.g. UPS

• Safety: Risk of thermal runaway unacceptable in transportation applications

• Round trip efficiency: Counterintuitively, sometimes not so important, e.g. when energy is stored which would otherwise be curtailed

• Cell cost: Cost of individual cells, not as important as …

• system cost: Including packaging, remote monitoring and climate control.

Overview of major battery chemistry families

5

Energy Storage

Mechanical storage

Flywheels

Compressed air

Pumped hydro

Fuel cells

PEMFC

DMFC

SOFC

MCFC

…

Capacitors Batteries

Power batteries

Energy batteries

Mobile batteries

Stationary batteries

Established types

Lead-acid Lithium-ion

NMC

LMO

LTO

Li-Air

Novel types

Zinc-air

Fluidic

EOS

Sodium-ion Molten Salt

GE DurathonFlow-

batteries

Liquid metal Solid state

Innovation

hotspot around

novel battery

chemistries

Mobile is not the

focus here

Renewed interest

in fuel cells

Pumped hydro is a

mature technology, other

mech. storage is on the

fringe

The

incumbent

Strongest

momentum

IFC

investment

IFC

investment

IFC

investment

• No dominant

technology yet

• Maybe different

technologies

will specialize

for different use

cases

There is no single winning technology yet.Lithium-ion has best all-round performance at this time.

Lead Acid Li-ion Flow Zinc-air …

Chemistries Flooded, VLR/AGM/Gel,

carbon matt

LCO, LMO, NMC, NCA,

LFP, Li-S, Li Metal,

LTO, Li-Si

Vanadium redox,

Iron-Chromium,

Zinc-Bromine

Zinc-air

O&M Requires regular

maintenance

Requires cooling/air

conditioning

Requires electrical

pump to function

continuously

Low maintenance (e.g.

air filter washing)

Discharge

time

Can be optimized for

short or long (20h)

discharge

Short (up to 4h) Medium to long (4h-

10h)

Long (7h)

Cycle life (# of

deep cycles)

200 – 800 2,000 – 8,000 10,000 – 15,000 10,000+

Round Trip

Efficiency

60%-70% 85%-98% 60%-85% 50-70% 1)

Density Large and heavy High Medium Medium

Cell Price <$100/kWh <$250/kWh, and falling $200-$600 per kWh $160-250/kWh, lower at

scale 2)

Safety Medium, risk of gassing Low, about 1-in-a-million

chance of fire

No flammability but

chemical spills

possible

Risk-free

Toxicity Very critical Medium Varies, e.g. Bromine is

criticalNone

Misc. Hazardous

manufacturing

Reliability issues in

harsh environment

No cooling required

Nant Energy: Robust,

long-duration

… plus long

tail of other

battery

types for

specialized

applications

Incumbent – good all-around battery. Made

by Samsung, LG, Tesla/Panasonic, BYD,

Sony & 20+ smaller vendors

1) Nant Energy

is working

toward 80%

2) On path to

$100,

roadmap to

$35

Mostly small vendors

(Primus, ESS,

Gildemeister …)

Made by countless

local manufacturers

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Glossary: “Lithium-ion” is no single technology but a family of different combinations of anode and cathode materials

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Lithium Cobalt Oxide Cathode LCO

Lithium Manganese Oxide Spinel Cathode LMO

Lithium Nickel Manganese Cobalt Oxide Cathode NMC (alt. NCM)

Lithium Nickel Cobalt Aluminium Cathode NCA

Lithium Iron Phosphate Cathode LFP

Lithium Sulphur Cathode Li-S

Lithium Metal Anode Li Metal

Lithium Titanate Anode LTO

Lithium with Nano-Structure Silicon Anode Li-Si

ENERGY STORAGE: COMPARISON POWER AND ENERGY

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Source: Capricorn

SOME APPLICATION REQUIRE LONG DURATION STORAGE

BATTERIES ARE CHANGING HOW PEOPLE AND BUSINESSES

GENERATE, PURCHASE, AND CONSUME ENERGY

• Affordable battery-powered energy storage is the missing link between

intermittent renewable energy and 24/7/365 reliability

• Energy storage will be required to exceed 50% of renewable energy share.

• The combination of cheap solar & storage will change the sector forever.

• Batteries can:

• Simultaneously perform transmission and distribution functions

• Act as generators (by charging and releasing stored energy)

• Act as grid assets (energy shifting and peaking capacity)

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THE U.S. LEADS GLOBALLY IN DEPLOYMENTS.

THERE IS NOW TRACTION IN EMERGING MARKETS.

• Map shows battery systems >10MW, deployed or under development

• U.S. leads because of head start from ARRA projects, ahead of South Korea,

Japan, the E.U. and Australia

• Chile was the first emerging market to deploy (2012)

• China has recently announced a batch of very large new projects

• Island grids are early adopters

• Weak interconnection in MENA driving interest in storage

11 Source: DoE

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Technology & Economics

COMPONENTS OF A BATTERY ENERGY STORAGE SYSTEM

Figure 1 Stationary battery energy storage system (BESS)

Inverters

Containerized batteries,

contain fire suppression

HVAC

transformers

Apart from the actual battery, a stationary battery energy storage system, or BESS, requires additional components to become operational at the grid level:

• An energy management system (EMS) that optimizes either the battery use, or the integrated use of the battery with attached solar or wind.

• A grid connection• A transformer for connecting to the grid and stepping up voltage.• Balance of plant (BoP) (including buildings, HVAC, fire suppression, cabling, and

metering)

13 Source: Wartsila

GRID-SCALE BATTERY SYSTEMS HAVE BEEN RUNNING FOR THE

PAST DECADE. THE TECHNOLOGY IS DE-RISKED AND BANKABLE.

Source: BNEF Storage Assets database, retrieved 10/28/2019

Includes commissioned, financed/under construction, and announced projects using lithium ion, nickel-based, sodium sulphur, and flow

batteries

0.07 0.10 0.060.13

0.20

0.56

0.81

1.00

2.50

3.29

0

0.5

1

1.5

2

2.5

3

3.5

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Pow

er

(GW

)

Year Commissioned

Australia

Canada

Chile

China

Germany

Italy

Japan

Korea (Republic)

United Kingdom

United States

Other countries

Grand Total

First large grid

projects in

Japan

U.S. deploys

180m$ ARRA

funds via DoE

Fully

commercially

priced projects

in the U.S. w/o

subsidies

Fluence (formerly

AES) and Tesla

reduce deployment

time from 2 years

to 6 months)

Storage beginning to

displace new gas

peaker projects

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MOVING BEYOND LITHIUM-ION:

BRINGING OTHER BATTERY TECHNOLOGIES TO MARKET

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• Lithium-ion’s dominance has been thanks to the auto industry driving down prices,

with energy sector reaping the benefits

• “No battery fits all”: Other technologies are superior for specific applications (e.g. IFC

client Nant Energy for off-grid / bad grid applications)

• Optimizing technologies to applications will deliver market growth (rather than

cannibalizing)

COMMISSIONED UTILITY-SCALE STORAGE PROJECTS

4%

58%48%

59%

77%71%

85% 88% 86%

74%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019(partial)

Share

of

GW

Year Commissioned

Sodium sulphur

Power-to-gas

Other technologies

Nickel-based

Multiple technologies

Lead acid

Flywheels

Flow batteries

Compressed air energy storage (CAES)

Lithium-ion

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Source: BNEF

MARKET MISMATCH: EMERGING MARKETS NEED LONGER

DURATION STORAGE

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OECD Emerging markets

Needs • Short duration – there’s

always a grid for backup

• Priority on power: Ability

to quickly ramp up and

down (similar to peakers)

• Benign ambient temp

• Multiple applications

serving complex market

structures (i.e. real time

bidding into ancillary

services markets)

• End-of-life recycling no

issue

• Long duration - Power

remote systems through the

night and thorugh outages

• Energy over power

• More extreme ambient

• Low maintenance

• End-of-life recycling not

always perfect

Appropriate

technologies

Li-ion Long-duration, robust, un-

cooled, non-toxic technology

16

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WHAT’S NEXT?

FOUR MAJOR PREDICTIONS:

INPUT COSTS FALL VALUE CHAIN MATURES & EVOLVES

LCOE BECOMES MORE COMPETITIVE MARKET CONFIDENCE SOARS

208175 161 148 135 122 109 95 89 83 77 72 68

38

3532

3029

2726

25 25 25 24 24 24

18

1311

109

88

8 7 7 7 7 7

21

1918

1715

1412 12 11 11 10 10

39

39

3634

3230

2928 28 28 27 27 26

18

11

11

1010

1010

1010 9 9 9 9

21

19

17

16 15

14 13

12 11 11 10 10 9

364

331

304

282

261

240 221

203 194

186 179 172 165

0

50

100

150

200

250

300

350

400

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

Real 2019 $/kWh Developer margin

Developer overheads

EPC*

System integratormargin

Transformer

Energy managementsystem

PCS

Balance of System

Battery rack

0

20

40

60

80

100

120

140

160

180

0

20

40

60

80

100

120

140

160

180

2019 2025 2030 2035 2040 2045 2050

$/MWh (real 2018), India

Non-tracking PV +storage

CCGT

Coal

Onshore wind +storage18

Source: BNEF

THANK YOU

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