As territories around the globe move away from fossil fuel energy to green energy sources over the next few years, the need for stationary energy storage will increase exponentially. Unlike fossil fuels such as coal, which can provide energy 24/7, renewable sources such as solar peak during certain times of the day.
Stationary power storage facilities can be used to store solar and wind energy generated during the day when demand is low and then release it back into the grid when energy use peaks. According to a new report from research firm Wood Mackenzie Power & Renewables, lithium iron phosphate is set to be the leading battery chemistry in this growing segment by 2028.
After analyzing the manufacturing of lithium-ion batteries, Wood Mackenzie Power Renewables projected that LFP will surpass nickel manganese cobalt to become the number-one battery chemistry. Furthermore, the research firm estimates that by 2030, the global market for energy storage will eclipse 3,000 GWh.
South Korea’s LG and China’s Contemporary Amperex Technology Co. Limited (CATL), currently the largest energy storage manufacturers on the globe, are poised to increase their manufacturing capacity by the widest margin. As it stands, the Asia-Pacific area accounts for a whopping 90% of all the battery manufacturing in the world, Wood Mackenzie says.
This share is likely to reduce to 69% by 2030, with Europe securing a 20% claim of global battery manufacturing. On the other hand, Clean Energy Associates estimates that the Asia-Pacific’s region share of the battery manufacturing market is closer to 75% and will fall to 66% by 2030.
Battery manufacturers in China have pledged to build more than 3,000 GWh of battery storage capacity, which will ensure the region’s lead in the energy storage market. By 2030, up to 300 facilities in the region could be producing 5,500 GWh of energy storage but will face competition from the United States and Europe.
Benchmark Mineral Intelligence estimates that Europe will host 27 gigafactories run by 18 manufacturers and will produce 789.2 GWh of storage capacity by 2030. This will be a 14% portion of the global market.
Either way, Clean Energy Associates projects that the competition between lithium iron phosphate and nickel manganese cobalt chemistries will continue to heat up. Electric vehicle makers may choose to go with LFP chemistries because they are safer, cost less, and have a longer lifecycle even though they have lower energy density.
Wood Mackenzie concurs, stating that the benefits of LFP battery chemistries will make it a more alluring option in energy and power applications. That said, some other alternatives, including the vanadium flow batteries being developed by entities such as Invinity Energy Systems (OTC: IVVGF), could also spring a surprise and grab a section of the market in a way that analysts never expected.
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