Lithium-ion batteries have been touted as the energy storage system of the future for years now. But while everyone has been standing on tiptoes, looking out over the horizon for the arrival of the future lithium-ion battery revolution, the future snuck up on us.
Allied Market Research estimates that the global market for lithium-ion batteries will top $46.2 billion dollars by 2022, representing an annual compound growth rate of 10.8% from current levels. To put this figure in context, the global demand for all batteries is only projected to grow at 7.7% and reach $120 billion dollars in a similar timeframe.
According to Denis Phares, CEO of Dragonfly Energy, a startup that "researches and develops the world's most efficient lithium-ion batteries and energy storage products," there are five factors driving the growth of lithium-ion technology today.
1. Lithium-ion batteries are the only proven option for electric-vehicle manufacturers.
Researched by university teams around the world since the early 1970s and brought to life at the University of Texas about 35 years ago, lithium-ion battery technology is well-understood and well-tested. "You undoubtedly have heard that Tesla is moving quickly to build a $5 billion plant near Reno, Nevada, to produce lithium-ion cells. The plant is expected to come on line in 2017; at full capacity in 2020, it will produce more lithium-ion cells annually than the entire world produced in 2013. Other electric vehicle makers -- Nissan and General Motors among them -- will be creating their own increasing demand. Tesla's partner on the so-called Nevada gigafactory is Panasonic, which is rapidly expanding its use of lithium-ion storage in consumer and small-business applications," Phares explains.
2. Most renewable energy generation requires storage.
The world is moving quickly toward solar and wind generation as replacements for fossil fuels. However, the sun isn't shining at night when consumers turn on their television sets. The wind isn't guaranteed to blow when a factory turns on its electrical equipment. "Efficient storage systems are the critically important limiting factor to maximize the utility of available supplies for the minute-by-minute changes in demand. Lithium-ion technology allows the use of smaller, lighter, longer-lived storage systems than those required by traditional lead-acid technologies," Phares explains.
3. Lithium-ion cells are becoming more cost-effective in the short term, and the costs are expected to drop rapidly as production increases.
Phares says the current cost comparisons between lithium-ion and lead-acid batteries are misleading. "Although Dragonfly Energy's 12-volt energy pack sells for $899 in comparison with $360 for a competitive lead-acid battery, the lithium-ion product can deliver about 10 times more cycles -- charging, then drawing power down through use -- than a lead-acid battery. Swedish researchers Björn Nykvist and Måns Nilsson that the costs of lithium-ion cells will drop by 8 to 9 percent each year as production scales up to meet growing demand, and factory technology is fine-tuned. Lead-acid batteries, which haven't seen a significant technological advance in 50 years, are unlikely to see any similar improvement in the cost of production." estimate
4. The uses of lithium-ion batteries continue to expand.
"Dragonfly Energy, for instance, developed its flagship 12-volt lithium-ion energy pack for use in RVs and boats. The market for wearable technologies, which rely heavily on lithium-energy batteries, is projected to grow by nearly 18% a year through the rest of this decade," Phares notes. "A majority of power hand tools on construction job sites these days are portable and powered by lithium-ion batteries rather than corded -- and that trend is expected to continue," he continues. More markets mean more demand, which translates into longer production runs, and lower costs, which in turn will open up even more new applications and markets.
5. Lithium-ion batteries are environmentally sound.
There's no shortage of the necessary raw materials to meet the lithium battery demand. The U.S. Geological Survey reports that known supplies of lithium could meet the world's growing demand for at least 100 years. New deposits are still being discovered and can be brought on line as more uses are found for this nascent technology. The major American source of lithium, a brine operation in Nevada, doubled its capacity in 2013. "Recycling of lithium-ion batteries, while somewhat complicated, is beginning to come of age, as recyclers seek to reclaim the nickel, cobalt and other valuable materials used to make the batteries. Some batteries that are no longer useful in vehicles may find a second life providing standby power capabilities for homes and businesses. Unlike lead-acid batteries, lithium-ion batteries are non-toxic and environmentally neutral," Phares says.
The key to widespread adoption of lithium-ion technology has always been the need for large-scale production that will allow expertise to grow and costs to fall rapidly. Green technology startups are focusing on lithium-ion usage in a wide variety of future applications. It appears that the age of the lead-acid battery is fast coming to an end.