Energy storage is rapidly becoming more common in combination with large-scale renewable energy projects in order to deliver dispatchable power. According to industry analysis from Wood Mackenzie, the energy storage market is expected to grow 27 times from 2020 to 2030. The team at Crossover has led the development, modeling, valuation, procurement, and offtake efforts for over 1400MW of storage projects, and Crossover is a developer on the leading edge of renewable energy projects nationwide.
As energy storage continues to become more widely available, energy offtakers will often hear about the different battery options available and the trade-offs involved with battery chemistries. As displayed in the “spider chart” in Figure 1, these trade-offs need to be weighed against one another in order to choose the optimal battery technology for a given application.
Over the last few years, of different chemistries of lithium-ion batteries, Lithium-Iron Phosphate (LFP) batteries have increasingly become the go-to option over Nickel-Manganese-Cobalt (NMC), due to both LFP’s decreasing costs and the needs of the projects.
When renewable energy plants are developed, energy storage plants are often collocated alongside solar power plants. Although NMC batteries have some advantages over LFP batteries such as higher specific energy and specific power, which measure how much energy and power a battery contains in comparison to its size, the advantages held by LFP typically create more value.
Even though the higher energy and power density of NMC can often result in more efficient land use, LFP costs have dropped due to a number of factors including enormous increases in manufacturing capacity to meet consumer electronics and electric vehicle demand, which can more than compensate.
LFP also has the benefit of avoiding the use of nickel and cobalt, which fluctuate in cost and have potential for problematic sourcing. Cobalt in particular—due to its increasing uses in industries such as medicine and energy—raises not only environmental concerns about its sourcing, but ethical concerns, as much of the mineral is mined in impoverished countries like the Democratic Republic of the Congo, where hazardous working conditions and human rights violations often occur, requiring strict oversight of the source of materials in any batteries that use it.
Another consideration is that, for grid reliability and economic reasons, many applications require capacity to be maintained over the life of the system. Since the energy capacity of all batteries degrades with time and usage, such projects need to incorporate space for additional capacity to be added as needed over the life of the plant. LFP batteries typically have a lower degradation rate, requiring less space for augmentation - and giving more certainty about long term capacity.
LFP degradation and safety are less affected by how the battery is operated, which makes it easier to design, contract, warrant, and operate. As installations are increasingly developed closer to areas with higher population, the industry is putting more focus on incorporating battery safety precautions in all aspects of a project’s design and operation. LFP has a greater thermal runaway tolerance to high temperatures, contributing to a safer, more reliable system. Liquid cooling systems are increasingly available to also improve the battery’s size, as well as its safety and resistance to overheating, by more effectively and evenly moving heat through liquid surrounding the batteries. And as battery products have become more standardized, enclosures no longer allow space for people to enter them making them safer and more space-efficient, and reliable safety systems have been built-in for monitoring and prevention of any issues.
With the decreasing cost, safety, degradation, and other strategies for efficient use of land, LFP’s advantages typically outweigh the initial higher density associated with NMC batteries. As new storage technologies come to market, similar considerations will need to be evaluated for each application.
Crossover’s extensive interactions and relationships with the independent engineering, lending, and insurance communities ensures that our battery storage projects are completed safely and efficiently to meet customers’ unique energy needs not only in the short-term, but over the entire life of a given project.
Through our partnership with leading investment firm KKR, we are helping customers address their load shape or power needs by designing cost-effective and innovative solutions tailored to their specific needs. Our experience enables execution certainty for our customers because of our deep industry relationships and development expertise.
If you would like to connect with one of our experts for support on your energy storage project, please send us a message by clicking on the "Contact Us" button at the bottom of this page.
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