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March 30, 2020

Proliferation of Lithium-ion Battery Mega Projects Globally and the Future of Clean Energy Grids

March 30, 2020, Stefan Hogg

Renewable Energy: The Carbon-free Future

The past decade has seen rapid improvements in the field of renewable energy generation from carbon-free sources. Solar energy has become an increasingly attractive option for consumers looking to invest in a long-term alternative to conventional energy grids. Solar energy is driven by impressive improvements in efficiency combined with a substantial reduction in the cost of installation of over 65% since 2012, and it is expected to grow to a total installed capacity of 1 GW by 2021 in the United States.

In addition to increasing consumer demand for solar power generation for household energy usage, the past decade has also seen the rise of both solar and wind energy generation on a grid-scale level for the purpose of power generation to supply towns and city’s electricity needs. As the world has become increasingly sensitive to the detrimental impacts of climate change, the need to cut back on the enormous usage of CO2 generating fossil fuels in grid-scale energy production grows. Renewable energy sources hold immense promise as a sustainable means of powering our electrical needs into the future. In recognition of this, both Canada and the USA have boosted the percentage of total grid scale energy generation that comes from renewable energy sources including solar and wind to 12% and 14% of total energy generated respectively (figures exclude hydroelectric power generation), and renewable energy is projected to continue being the fastest growing source of energy generation in North America into the 2020s.

Need for Lithium-ion Batteries

The generation of wind and solar power presents a carbon-free and environmentally friendly alternative to the use of fossil fuels in grid-scale energy generation, but they also present their own unique set of challenges in order for a successful adoption and eventual replacement of fossil fuels as the primary source of energy. Specifically, both wind and solar powerplants must have massive energy storage capabilities to account for the ebbs and flows in the electrical demand generated by the grid to which they are connected. In times of low demand, these facilities must be able to store the energy they generate, a challenge not encountered when dealing with physical commodities such as oil, coal, and natural gas. Hence, since the inception of wind and solar generation as a concept in a lab, they have been accompanied by the need for a corresponding energy storage system.

Li-Cycle’s previous blog discussed global investment in the li-ion industry, the continued decline in battery prices combined with the global trend toward energy grids powered by renewable energy sources. The growth of the li-ion industry is predicted to increase the world’s cumulative energy storage capacity to 2,857 GWh by 2040, a substantial increase from the current capacity of ~545 MWh, according to recent estimates by Bloomberg New Energy Finance in the chart below. As the number and size of renewable energy projects continue to grow in North America and around the world, we are seeing a corresponding spike in demand for li-ion batteries to serve the critical role of energy storage to support these projects, particularly projects connected to major energy grids.

Timeline of Mega-scale Lithium-ion Battery Storage Projects

The growing prevalence of renewable energy generation around the world has resulted in a demand for grid-scale energy storage systems to bridge the gap in variability between energy production from fluctuating sources such as wind and solar to changing energy demand from the grid. In recognition of this challenge, Terry Boston, the president and CEO of regional energy transmission company PJM from the United States acknowledged that “Energy storage technology is the silver bullet that helps resolve the variability in power demand… Combining wind and solar with storage provides the greatest benefit to grid operations and has the potential to achieve the greatest economic value.”

The construction of mega-scale lithium-ion (li-ion) energy storage projects has largely taken place over the past 5 years, most famously with Tesla’s installation of a 100MW li-ion battery in Hornsdale Power Reserve in Southern Australia, completed in December 2017. This project was designed to store energy generated from a local wind farm during times of low demand and provide low-cost energy to supplement the existing grid during peak demand times, with the purpose of driving down electricity costs for Australians. The project currently provides power to approximately 30,000 homes and is preparing for a 50MW expansion to be completed in 2020.

But Tesla is not alone in the mega battery business – in September 2019, GreenTech Media reported a list of planned projects scheduled for completion in 2020 – 2023 that would rival or exceed the Hornsdale project for the crown of biggest li-ion storage project on earth. These include two new 100MW projects by AES Alimitos and AES Arizona as part of both California and Arizona’s commitment to boost their energy storage capacities, the latter of which committed to reaching a total capacity of 3,000MW by 2030. Florida Power and Light has also set a timeline to complete a 409MW storage project to come online in late 2021, which would (currently) stand as the record for largest single li-ion battery and provide the capacity to store energy being generated by the growing number of solar panel installations being added in the sunshine state. This trend of continuously large storage projects can be expected to advance well into the coming decades as global energy grids phase into a progressively more renewable-based electrical generation model to combat the growing threat of global warming posed by fossil fuels.

Need for Recycling

The immense scale of current and future li-ion energy storage projects illustrates the pressing need for sustainable lithium-ion battery (LIB) resource recovery options. Li-ion energy storage projects ultimately serve as the backbone to facilitate a shift towards carbon-free electricity generation. However, without a viable end-of-life pathway where critical battery materials can be recovered in an environmentally friendly manner, renewable energy generation will always carry an unnecessary and avoidable environmental impact. Mega-scale li-ion storage installations require mega-scale recycling solutions when the projects reach end of life, and it is important to develop the required infrastructure before the growing number of energy storage projects coming online today reach end of life in 10-15 years.

Li-Cycle Corp® provides a solution to this challenge with an innovative technique that can safely and sustainably recover from 80-100% of all LIB constituent materials without the production of any landfilled waste. Li-Cycle’s commitment to the creation of a closed-loop resource recovery system of all types of li-ion batteries reflects our desire to ensure that li-ion batteries can continue to maintain a critical role in the fight against climate change through their integral role in environmentally friendly technological developments such as electric vehicles and storage of renewable energy.