Grid-side energy storage drives the application of lithium iron phosphate batteries

Polaris Energy Storage Network News, GTMResearch recently released the latest US energy storage report, the report shows that the decline in lithium-ion battery prices in 2018 has slowed. The supply of ternary batteries exceeds demand, but the use of lithium iron phosphate batteries in grid-side energy storage projects mainly concentrated in China continues to increase.

The latest GTMResearch report shows that the price of lithium-ion battery components has dropped by more than 20% in 2015 and 2016, and the price in 2017 has dropped by nearly 15%. The growing demand in the electric vehicle industry and the stationary energy storage market, as well as the increase in energy density, are the main reasons for the decline in prices. GTMResearch predicts that battery prices will fall by another 14% during 2018, but the price decline will slow down significantly. The slowdown in price decline is not only driven by rising raw material prices; on the contrary, it comes from the shortage of battery packs in the market, especially nickel-cobalt-manganese ternary batteries used in electric vehicles and stationary energy storage. Because there are not enough battery manufacturers to meet the growing demand, NMC ternary batteries are in short supply. However, with the increase in production capacity in the next two years, prices are expected to fall further. The situation with lithium iron phosphate batteries (LFP) is different. The installed capacity of lithium iron phosphate batteries is mainly concentrated in China. Since the energy density of lithium iron phosphate batteries is not as high as that of NMC ternary batteries, lithium iron phosphate batteries are mainly used for electric buses, electric trucks, some user-side applications and grid-side frequency modulation applications. However, with the increase in the production of lithium iron phosphate, the price of these batteries will continue to fall, and the delivery time of NMC ternary batteries may be extended to 6 to 9 months or more. Based on the above reasons, the possibility of applying lithium iron phosphate batteries to grid-side energy storage projects will continue to increase.