Lithium alternatives capture interest of large battery installers amidst supply chain challenges

Although still very much in its infancy, the U.S. utility-scale battery storage market has existed in earnest since 2011 led by one dominant battery chemistry choice: lithium. According to data through 2021 from the U.S. EIA, 97.95% of utility-scale batteries installed in the United States were lithium-based. While there are significant battery projects in the works (the country currently has 9 GW of utility-scale batteries under operation and a 26.4-GW construction pipeline), the lion’s share will still be lithium-ion, due to its early acceptance and established installation codes.

But lithium is by no means the only available option. Other battery technologies — whether metal-, sodium- or flow-based — are elbowing their way into the conversation. For large-scale developers concerned about both the climate-threatened world and increasingly stretched supply chains, domestically produced lithium alternatives are becoming more attractive.

“There were many years where folks wouldn’t give us the time of day. They had lead-acid and it was working or were investing in lithium,” said Ann Marie Augustus, COO and co-founder of zinc-alkaline battery maker Urban Electric Power (UEP), which began its manufacturing path in 2014. “The one thing that came out of this whole post-COVID supply chain chaos is that folks took a different look at what was available, specifically a second look at alternatives to lithium-based technology.”

Interrupted supply chains and labor concerns have caused the U.S. solar and storage industries to look inward for product options. Installation and manufacturing tax credits included in the Inflation Reduction Act have also encouraged more battery factories to set up shop stateside. Most new factory announcements have been lithium-based, with much of that lithium capacity going toward electric vehicle batteries, something solar and storage developer Pine Gate Renewables is aware of — and therefore seeking lithium-alternatives.

“We’re not transitioning away from lithium. We’re more thinking about it as having a toolbox of different options, different technologies to understand what’s out there and what’s the best fit for our projects,” said Emily Leonard, Pine Gate market strategy associate. “Lithium has been deployed [already] at the utility scale, so it’s well understood. But there are competing industries for those pouch cells. Alternative chemistries could have advantages there and less competition overall.”

Non-lithium battery makers are taking advantage of this new acceptance. Increased interest in EnerVenue’s nickel-hydrogen battery is allowing the company to expand out of its 100-MWh pilot line in Fremont, California, to a 1-GWh new-build facility outside Louisville, Kentucky.

“We’re sold out for a long time. We got firm orders and are now approaching nearly 1 GWh total [in sales], which is the first phase of our gigafactory,” said Jorg Heinemann, EnerVenue CEO. “All of this makes it very clear that customers value the differentiation. There’s very little operating expense on our battery. That’s worth a huge amount to a customer, more than we thought. And that’s reflected in the demand we have.”

The benefits of lithium-alternatives — lack of thermal runaway, longer cycle-life and durability — are major selling points for these battery makers, even though the companies and batteries themselves are largely unproven. While not demonstrated on a large-scale, EnerVenue’s battery technology has history — nickel-hydrogen batteries have been used for years in satellite and space applications.

“While technically our battery is new, we’re drafting off a 40-year-old technology at 30 years of track record in aerospace applications. Our burden of proof is lower, and we have an enormous amount of test data to back it up,” Heinemann said. “The discussions we tend to have are more about how quickly we can supply the product.”

UEP is in the same situation. While not as widely adopted as lithium, Augustus said UEP’s zinc-alkaline battery is already well understood due to its similarity to consumer alkaline batteries. Because of that familiarity, more large-scale developers are willing to trust the technology.

“We have a lot more customer interest than we can fulfill,” she said. “We use the same raw materials [as consumer alkaline batteries] of zinc and electrolytic manganese dioxide (EMD). The supply chain already exists and we’re leaning into it.”

Augustus said UEP is slowly scaling-up production, currently operating a 200-MWh factory in Pearl River, New York, even though more developers are signing on for product. In 2022, Pine Gate publicized two memorandums of understanding for non-lithium battery supply — a 4.5-GWh deal with UEP and a 2.4-GWh deal with EnerVenue. Leonard said the two partnerships were established early to give the company time to learn about these new technologies and apply them successfully — and support an increasing domestic manufacturing chain.

“We are aware that there isn’t a one-size-fits-all for storage,” she said. “There are a lot of exciting technologies that are emerging, and Pine Gate is a developer that’s excited to look into those and see if we can apply them to help evolve the grid. [With UEP and EnerVenue], we also saw the benefit of working with folks that are domestically manufacturing their products or have a path to domestic manufacturing for the American manufacturing supply chain efficiencies that come along with that.”

Project developer Ameresco is also looking into emerging non-lithium manufacturers, publicizing one strategic relationship with zinc-bromine flow battery maker Redflow Limited. Ameresco will first incorporate Redflow’s 40-kWh four-battery enclosure on an existing customer site before using more flow batteries in long-duration storage setups. Doran Hole, CFO and EVP at Ameresco, said this type of pilot system is something the developer has been doing for years as it gets more comfortable with newer technologies.

“We have been deploying early-stage clean technologies for 23 years at Ameresco,” he said. “Once we are satisfied with a technology’s readiness for commercial deployment, we will typically look to pilot the product in a smaller installation prior to moving into large-scale deployment. This is usually well-suited for the vendor, as we’ll look to synchronize the expansion of our deployments with the expansion of manufacturing capacity.”

Solar and storage developers are open to exploring all battery options instead of defaulting to tried-and-true lithium, an effort that is a win for supply chains and clean energy deployment overall.

“I’m thrilled to have gone through the last decade and COVID and still be standing and getting this attention back from these larger utilities and large integrators,” UEP’s Augustus said. “We can make something domestically using a largely domestic supply chain that’s nontoxic, low cost. There will be more than one chemistry in the market that takes the space.”