The development of advanced energy storage technologies is a critical factor in the success of the decarbonisation of modern economies. Over the last few years, they have played a major role in the growth and evolution of the energy, automotive and electronic appliances sectors. While multiple technologies exist encompassing pump-hydro, compressed air, flywheels and batteries; Li-ion technologies have provided the energy and power requirements to meet the technical demands of these three sectors.

In 2016, the global lithium-ion battery market was valued at $26.4 billion [1] and it is expected to reach an estimated $93.1 billion in 2025 with a “Compound Annual Growth Rate” (CAGR) of 17% between the period of 2018 to 2025 [2]. In Europe only, the market of lithium-ion batteries is expected to grow with a CAGR of 15.9% between 2018 and 2024 [3][4][5].

Below, we give a simplified overview of the role of Li-ion batteries and their characteristics in two sectors: electric vehicles (EV) and energy grid storage; and ultimately explore the prospects and challenges of the European market development in this field.

Electric Vehicles have been boosting the R&D of Li-ion batteries for years

Decarbonizing the transport sector, which accounts for 23% (light & heavy duty) of the total GHG emissions, is one of the urgent actions settled by international agreements. Furthermore, more environmentally friendly vehicles will also have a positive impact and improve air quality in urban agglomerations [10][12][13][14].

In this context, EV’s have attracted considerable interest for the development of more efficient vehicles with lower well-to-wheel energy consumption. Just in the period between 2017 and 2018, the EV market has grown globally from 1.2 million sales to 1.6 million and it is expected to reach 2 million sales in 2019 [6] with over 165 available models for the consumer to choose from [7]. This increase is mainly due to the technical advancements that Li-ion batteries have provided in the last 10 years, providing higher energy and power density performance, increasing the vehicle driving range and electric driveline efficiency, while keeping safe operational characteristics in terms of electrical, thermal and chemical processes [8][9][10].

Different categories of EV’s have entered the automotive market encompassing the hybrid (HEV), plug-in (PEV & PHEV) and battery (BEV) electric vehicles [15][16]. Although multiple components are required to construct these vehicles, Li-ion batteries are a fundamental part of determining their performance. The most prominent Li-ion technologies in the automotive industry are lithium-nickel-cobalt-aluminium (NCA), lithium-nickel-manganese-cobalt (NMC), lithium-manganese spinel (LMO) and lithium-iron phosphate (LFP); each with its own operational characteristics [17].

The most important aspect that determines the type of Li-ion battery that can be used in an EV application is related to different characteristics: the energy and power density, performance, and the lifespan and safety of the battery. The energy density of lithium-ion batteries determines the vehicle range. Currently, EV’s can perform within the ranges of 170 km to 498 km depending on the cell technology and battery pack configuration. The performance of Li-ion batteries is directly related to the capability to provide power with appropriate efficiencies throughout its life inside the EV. It has been demonstrated that constant operation of Li-ion batteries decreases the energy and power levels that can be reached over time, especially in extreme temperatures and high current loads. This degradation directly affects their performance, vehicle range and life span. Developing batteries that can provide energy and power for an extended period with reduced degradation effects provides the consumer with a safety net for the total period during which it can operate the vehicle, but it also helps in reducing the material needed for the development of new battery packs. Due to safety concerns and performance considerations, a Li-ion battery pack cannot be used after its initial capacity has been decreased by 20%. While this restriction protects the vehicle in terms of safety and efficiency, the battery pack still has the capability to be operational in second-life applications like Uninterruptable Power Supply and energy storage for grid applications. Thus, it further reduces the materials required for new Li-ion cells and packs. For this reason, the EU has forced battery manufacturers to implement recycling pathways to re-acquire the materials present inside Li-ion batteries [18]. UMICORE, for example, has invested €25 million into an industrial pilot plant in Antwerp (Hoboken), Belgium for the recycling of precious metals found in Li-ion batteries that have been used in the EV sector [19].

Li-ion batteries providing new solutions to grid-electricity storage

In November 2017, Bloomberg New Energy Finance predicted the global energy storage market would double six times between 2016 and 2030, rising to a total power of 125 GW and energy of 305 GWh  per year [20]. The reason for this high interest lies in multiple causes: the penetration of variable renewable energy sources in the electricity grid; the increased need for support in transmission; voltage and load stability on the grid and the variable peak power demand (created from the electrification of appliances and transport).

Furthermore, energy storage has been identified as a financial potential, as virtual power plant components, to trade energy when the financial return is maximum. This concept has been developing mainly in United States, Europe and Australia with different companies providing and trading energy by combining different renewable energy sources without any interruptions [21]. Another important application that has emerged is the notion of Black Start. When a power plant has been shut down, it can be restarted by using energy stored in external systems like Li-ion batteries rather than drawing energy from the grid. A commercial example of this application is the WEMAG German company, that constructed a park of 53.444 Li-ion batteries providing an energy of 15MWh to restart a disconnected power grid [22].

What makes Li-ion batteries a paramount player in the development of these applications compared to other battery technologies? Their capability to provide power almost instantly at high current rates, store high amounts of energy with relative long-life cycles and slow self-discharge capabilities when not in use. Additionally, Li-ion batteries have the perk of being quite modular. They can be combined in battery packs to increase the level of power delivery and can be easily transported to the different potential locations where energy storage is required [11].

Figure 1 – Energy storage applications  [23]

 

Figure 2 – Future technologies of Li-ion batteries [8][24][25]

Elevating the European market

It is undeniable that the Li-ion battery market is expanding and supplying the capabilities required by the energy and automotive sector. Thus, with the inevitable boom worldwide, it becomes a geo-economic challenge. By taking a closer look, it can be seen that European manufactures are lacking the materials and production sites to develop Li-ion batteries. In fact, while Europe has multiple industries (for example, 20% of world vehicles are manufactured in Europe) dependent on the use of Li-ion batteries, battery production sites are mainly located in Asia. In 2015, the world’s total Li-ion manufacturing capacity was estimated at 60 GWh, 88% of which was carried out in China, Japan and Korea [8]. The dominance of the Asian cell manufacturers is also defined by a strong dynamic export scheme, creating imbalances in the economic revenues that can be secured in other parts of the world.

The current lack of European cell manufacturing plants threatens the competitiveness of European industrial companies that are operating in the EV and energy storage markets. Due to this, European players suffer from increased cost for transportation, time delays due to geographic location and a loss in quality and design options. For these reasons, the EU is trying to incentivise the Li-ion supply chain by implementing new Directives to develop a European network for companies to collaborate and administer financial investments for both academic and industrial developments. The table below presents an overview of potential European lithium-ion manufacturing facilities to be constructed between 2018 – 2028 [8], 26].

Figure 3 – Initiative for European Li-ion manufacturing facilities [8]

In 2017, the EU commission announced the creation of the EU Battery Alliance. The top leading industrial companies of Europe with over 100 stakeholders across all the value and supply chain of Li-ion batteries have combined their forces to establish Europe as a global leader in sustainable battery technologies [27][28][29]. Moreover, to be able to promote the production and facilities of Li-ion batteries, the EU has identified various, concrete requirements that must be met [8]. These can be mainly summarized by condensing the production of advanced Li-ion chemistries (e.g. 2bnd generation), securing material supply, pushing manufacturing facilities to produce more than 5 GWh/year and ensuring a skilled workforce. Furthermore, different policy recommendations have been established by the EU to promote the proper development of the industries that are directly dependent on Li-ion technologies [30]. It is principally focused on the establishment of common infrastructure for EV’s that charge quickly, support the transition towards renewable sources (see Greenfish White Paper on the CEfAE), stimulate recycling of automotive and industrial batteries and facilitate the reuse of batteries in 2nd life applications.

Although multiple efforts have been implemented by European institutions and industrial players for the increase of competitiveness of Li-ion battery production, the Asian market’s experience still meets most of the current demand. Additionally, as the production of Li-ion batteries requires multiple mineral materials (i.e. lithium, carbon, manganese, nickel, cobalt), it is very important to establish a sustainable route for the extraction and management of resources (i.e. a design favouring recyclability) since their availability is not infinite and is subject to geopolitical tension. This is a global issue and all players in the use and production of Li-ion batteries are concerned, given the fundamental role that this technology has in the decarbonisation and electrification of the worldwide energy sector.

 

Alexandros Nikolian – Consultant, Energy Transition at Greenfish
Quentin Lancrenon – Project Analyst, Green Solutions at Greenfish

 

[1] https://www.businesswire.com/news/home/20180323005367/en/2017-2025-Global-Lithium-Ion-Battery-Market-Grow 

[2] Lithium-Ion Battery Market Analysis By Product (Lithium Cobalt Oxide, Lithium Iron Phosphate, NCA, LMO, LTO, Lithium Nickel Manganese Cobalt (NMC)), By Application, And Segment Forecasts, 2018 – 2025 https://www.grandviewresearch.com/press-release/global-lithium-ion-battery-market

[3] https://www.metering.com/industry-sectors/business-finance-regulation/europe-lithium-ion-battery-market/

[4] https://www.businesswire.com/news/home/20180227005746/en/Europe-Lithium-Ion-Battery-Market-2018-2024-Market

[5] http://www.6wresearch.com/market-reports/europe-lithium-ion-battery-market-2018-2024-forecast-by-power-capacities-components-materials-united-kingdom-italy-netherlands-france-germany-spain-nordic.html

[6] https://www.forbes.com/sites/sarwantsingh/2018/04/03/global-electric-vehicle-market-looks-to-fire-on-all-motors-in-2018/#4369b1d22927

[7] http://www.frost.com/sublib/display-report.do?id=MDAB-01-00-00-00&bdata=bnVsbEB%2BQEJhY2tAfkAxNTI0NTU1ODk1MzA1

[8] ] M. Steen, N. Lebedeva, F. Di Persio, L. Boon-Brett: EU Competitiveness in Advanced Li-ion Batteries for E-Mobility and Stationary Storage Applications –Opportunities and Actions, available at http://publications.jrc.ec.europa.eu/repository/bitstream/JRC108043/kjna28837enn.pdf

[9] N. Lebedeva, F. Di Persio, L. Boon-Brett: Lithium-ion battery value chain and related opportunities for Europe, available at https://ec.europa.eu/jrc/sites/jrcsh/files/jrc105010_161214_li-ion_battery_value_chain_jrc105010.pdf

[10] International Energy Agency: Global EV Outlook 2017 Two million and counting, available at https://www.iea.org/publications/freepublications/publication/GlobalEVOutlook2017.pdf

[11] Ralon, M. Taylor, A. Ilas, H. Diaz-Bone, K. KairiesL IRENA 2017 – Electricity storage and renewables: Cost and Markets to 2030, available at http://www.irena.org/-/media/Files/IRENA/Agency/Publication/2017/Oct/IRENA_Electricity_Storage_Costs_2017.pdf

[12] A. Soltani-sobh, K. Heaslip, A. Stevanovic, R. Bosworth, and D. Radivojevic, “Analysis of the Electric Vehicles Adoption over the United States,” Transp. Res. Procedia, vol. 22, no. 2016, pp. 203–212, 2017.

[13] Enerdata, “Enerdata Energy Statistical Yearbook 2017,” 2017. [Online]. Available: https://yearbook.enerdata.net/. [Accessed: 11-Jul-2017].

[14] IEA, “Key World Energy Statistics 2016,” Statistics (Ber)., p. 80, 2016.

[15] J. Du, F. Yang, Y. Cai, L. Du, and M. Ouyang, “Testing and Analysis of the Control Strategy of Honda Accord Plug-in HEV,” IFAC-PapersOnLine, vol. 49, no. 11, pp. 153–159, 2016.

[16] G. Pistoia and M. Broussely, “CHAPTER THIRTEEN – Battery Requirements for HEVs, PHEVs, and EVs: An Overview,” in Electric and Hybrid Vehicles, 2010, pp. 305–345.

[17] Boston Consulting Group, “Batteries for Electric Cars – Challenges, Opportunities, and the Outlook to 2020”, 2017

[18] Directive 2006/66/EC of the European Parliament and of the Council on Batteries and Accumulators and waste batteries and accumulators and repealing Directive 91/157/EEC, 2006, OJ L266/1 26 September 2006.

[19] https://www.theguardian.com/sustainable-business/2017/aug/10/electric-cars-big-battery-waste-problem-lithium-recycling

[20] https://about.bnef.com/blog/global-storage-market-double-six-times-2030/

[21] https://www.solarserver.de/solarmagazin/download/The_Combined_Power_Plant_anlage_0108_e.pdf

[22] https://www.energy-storage.news/news/expanded-15mwh-german-battery-park-demonstrates-successful-black-start

[23] https://www.logicenergy.com/what-is-enhanced-frequency-response-and-which-are-its-benefits/

[24] https://www.technologyreview.com/s/610792/this-battery-advance-could-make-electric-vehicles-far-cheaper/?utm_source=facebook.com&utm_medium=social&utm_content=2018-04-25&utm_campaign=Technology%20Review

[25] https://www.scientific-computing.com/news/researchers-develop-new-lithium-air-battery-design

[26] https://www.euractiv.com/section/electric-cars/news/eu-bank-approves-financing-for-europes-largest-battery-factory/

[27] https://www.prnewswire.com/news-releases/eu-battery-alliance-delivers-strategic-plan-to-develop-large-scale-lithium-ion-battery-industry-in-europe-675146903.html

[28] InnoEnergy, European Battery Alliance (EBA), available at http://europa.eu/rapid/attachment/SPEECH-18-1168/en/EBA%20presentation%2023%20Feb%202018.pdf 

[29] https://www.pv-magazine.com/2018/02/23/eu-battery-alliance-wants-20-eu-giga-factories-saft-announces-partnership-with-siemens-manz-and-solvay/

[30] Directorate-General of Research and Innovation: BATTERIES – A major opportunity for a sustainable future, available at https://ec.europa.eu/info/sites/info/files/batteries_p4p-report_2017.pdf