Advances in new technology often feed off of one another. This dynamic has been on full display in the energy sector, where renewable power and battery technology have contributed to each other's growth.
According to a report, energy storage systems (ESS) are changing while the market is growing.
The "2020 Battery Performance Scorecard” was published by the Dutch market research firm DNV GL in December 2020. The methodology included testing batteries manufactured by 22 companies.
The report observes that battery technology is rapidly evolving with the robust growth in renewable energy, while electric vehicles drive innovation in the storage market.
DNV GL identify a trend toward different materials used in batteries. It notes that lithium nickel manganese cobalt oxide (NMC) and lithium nickel cobalt aluminum oxide (NCA) remain popular, but the report foresees a shift in 2020 toward batteries made from lithium iron phosphate (LFP). This is a reversal of a trend that started in the early years of the industry, when LFP was first thought to be the most prominent chemistry. Then from 2015 to 2018, NMC and NCA batteries were the dominant form.
The study also notes that lithium-ion battery costs have continued to fall. The technology has met, and now surpassed, the cost advantages of competing chemistries. It projects that battery cells costing less than $100 per kilowatt-hour are achievable in the near term.
The study projects gigawatts of new grid-tied ESS to be deployed in 2021 and 2022. That’s more than double the 500 megawatts deployed in 2020.
Growth in the storage industry is also contributing to a younger deployed fleet. According to DNV GL, the average age of battery systems in the United States is more than three years. With many more batteries being manufactured, the company expects the average age to drop down to one or two years.