What's next for batteries in 2023

Solid-state batteries can use a wide range of chemistries, but a leading candidate for commercialization uses lithium metal. Quantumscape, for one, is focused on that technology and raised hundreds of millions in funding before going public in . The company has a deal with Volkswagen that could put its batteries in cars by .  

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But completely reinventing batteries has proved difficult, and lithium-metal batteries have seen concerns about degradation over time, as well as manufacturing challenges. Quantumscape announced in late December it had delivered samples to automotive partners for testing, a significant milestone on the road to getting solid-state batteries into cars. Other solid-state-battery players, like Solid Power, are also working to build and test their batteries. But while they could reach major milestones this year as well, their batteries won&#;t make it into vehicles on the road in . 

Solid-state batteries aren&#;t the only new technology to watch out for. Sodium-ion batteries also swerve sharply from lithium-ion chemistries common today. These batteries have a design similar to that of lithium-ion batteries, including a liquid electrolyte, but instead of relying on lithium, they use sodium as the main chemical ingredient. Chinese battery giant CATL reportedly plans to begin mass-producing them in . 

Sodium-ion batteries may not improve performance, but they could cut costs because they rely on cheaper, more widely available materials than lithium-ion chemistries do. But it&#;s not clear whether these batteries will be able to meet needs for EV range and charging time, which is why several companies going after the technology, like US-based Natron, are targeting less demanding applications to start, like stationary storage or micromobility devices such as e-bikes and scooters. 

Today, the market for batteries aimed at stationary grid storage is small&#;about one-tenth the size of the market for EV batteries, according to Yayoi Sekine, head of energy storage at energy research firm BloombergNEF. But demand for electricity storage is growing as more renewable power is installed, since major renewable power sources like wind and solar are variable, and batteries can help store energy for when it&#;s needed. 

Lithium-ion batteries aren&#;t ideal for stationary storage, even though they&#;re commonly used for it today. While batteries for EVs are getting smaller, lighter, and faster, the primary goal for stationary storage is to cut costs. Size and weight don&#;t matter as much for grid storage, which means different chemistries will likely win out. 

One rising star in stationary storage is iron, and two players could see progress in the coming year. Form Energy is developing an iron-air battery that uses a water-based electrolyte and basically stores energy using reversible rusting. The company recently announced a $760 million manufacturing facility in Weirton, West Virginia, scheduled to begin construction in . Another company, ESS, is building a different type of iron battery that employs similar chemistry; it has begun manufacturing at its headquarters in Wilsonville, Oregon.

Shifts within the standard

Lithium-ion batteries keep getting better and cheaper, but researchers are tweaking the technology further to eke out greater performance and lower costs.

Climate scientists, for years, have urged governments around the world to switch from fossil fuels to renewable energy sources. Wind and solar plants have increased in popularity in recent years but they both have a fundamental problem. Lapses in sunlight and wind caused by weather events can make it difficult to reliably capture and store all that energy, especially when attempting to supply power to large cities. The solution to the reliability issue are batteries, and lots of them. 

A new report from the International Energy Agency (IEA) recently argued these hordes of batteries will play a critical role in determining whether or not ambitious climate goals established by international experts are ever met. Recent innovations in lithium-ion battery tech have significantly lowered their costs which in turn is helping make switches to renewable energy power sources more viable for communities around the world. Battery prices by , the report notes, could fall by 40%. 

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At the same time, increased demand for battery powered electric vehicles and energy produced from renewable sources means battery tech will need to get even cheaper in only a few short years in order to meet rising demands. All of this, according to IEA estimates, will require a six-fold increase in energy storage capacity by . Cheap batteries will need to get even cheaper. 

&#;Reducing emissions and getting on track to meet international energy and climate targets will hinge on whether the world can scale up batteries fast enough,&#; IEA Executive Director Fatih Birol wrote. &#;Batteries are changing the game before our eyes.&#;

Lithium-ion battery costs have fallen more than any other energy technology 

Though lithium-ion batteries are typically associated with gadgets and other consumer electronic gizmos, that&#;s increasingly no longer their main use case. In , according to the IEA, the energy sector accounted for 90% of all battery demand. The total lithium-ion battery market has increased nearly ten times the size it was just eight years ago. Costs associated with those batteries have plummeted by 90% in just the past 15 years, according to the report. Overall, the report notes, batteries have seen the sharpest price drops of any energy technology to date. Those falling battery prices have led to more affordable electricity vehicles and solar energy offered at price points comparable to fossil fuels. 

&#;The combination of solar PV (photovoltaic) and batteries is today competitive with new coal plants in India,&#; Birol said in a statement. &#;And just in the next few years, it will be cheaper than new coal in China and gas-fired power in the United States.&#;

As impressive as all those figures may sound, the IEA notes it still might not be nearly enough to support rising energy demands. In order to meet the United Nations&#; goals of tripling renewable energy capacity by , the IEA estimates global battery storage will need to increase by six times its current size. To do that, battery storage deployment will need to increase by an average of at least 25% every year. Batteries will need to have steep price drops while simultaneously maintaining or improving performance. The IEA estimates new innovations in battery chemistry and manufacturing could reduce lithium-ion costs globally by 40% between now and . Battery manufacturing capacity is also currently limited to a select few countries, something the IEA says will need to change moving forward. 

&#;A shortfall in deploying enough batteries would risk stalling clean energy transitions in the power sector,&#; the report reads.

What cheaper batteries mean for consumers 

Increased adoption of electric vehicles and renewables power sources are playing a meaningful role in efforts to cut back on emissions. While EV adoption in the US has slightly slowed compared to previous years, the trend globally is up. EV deployment increased by 40% in , a figure which translated to 14 million EVs hitting roads. The IEA estimates the continually growing fleet of electric vehicles could displace the need for 8 million barrels of oil every day by the end of the decade. In practical terms, lower costs associated with batteries will translate to cheaper electric vehicles in the near future. US drivers repeatedly cite pricing as one of the primary factors preventing them from switching to an EV. More affordable models driven partly by falling battery prices could encourage more drivers to make a switch and could even help make a dent in the Biden Administration&#;s goal of having 50 percent of all new vehicle sales be electric by .

On the infrastructure side of the equation, cheaper energy storage prices means developing countries looking to create new power plants can choose more renewable options at prices comparable to non-renewable alternatives. Falling battery prices are also making it possible to deploy renewable microgrids in areas that are currently underserved by traditional energy grids. 

In places like the US, a more reliable energy sector buttressed by batteries would further improve the country&#;s energy independence and cut down on the need to purchase fossil fuels from other countries. Renewable energy sources accounted for just 19% of the US energy grid in but affordable, more reliable storage could alter that dynamic. Researchers from Stanford provided some evidence of that scenario by recently running a simulation showing the possibility of the US maintaining a 100% renewable energy grid by .

Batteries have a critical mineral problem 

Cheaper batteries, at least how they are currently manufactured, aren&#;t a silver bullet. Today, the global battery market is largely dependent on critical minerals sourced from a concentrated handful of countries. China alone accounts for more than half of material processing for lithium and cobalt. Extracting these minerals from the Earth is dangerous work and can create its own source of damaging pollution. Massive mines can also radically alter the environment of entire communities. 

New types of batteries could offer some solutions to the mineral problem. Lithium ion phosphate (LFP) batteries, which are increasingly being used in new electric vehicles, rely on a different chemistry method which does not contain nickel or cobalt. Though more mineral intensive lithium-ion batteries still make up the vast majority of battery storage, (LFP) batteries accounted for 80% of new batteries made last year. Efforts to more effectively recycle aluminum, copper, and other resources found in mounding e-waste could also potentially help build out future batteries with less intensive mining. Less than 1% of rare earth metals found in e-waste are currently recycled. 

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