Recent changes in the economics of the energy storage are causing a shift in the market for lithium-ion batteries, which could accentuate China’s position in the global energy storage market.
Surging demand has led to a shortage of nickel manganese cobalt (NMC) batteries, giving lithium iron phosphate (LFP) batteries a chance to gain market share.
Our PowerBanx systems use LFP chemistry (Image: Fuel Included)
“The current supply tightness for NMC batteries is opening up doors for LFP batteries as they are seeing a growing interest from storage vendors for not just power but also energy applications,” Mitalee Gupta, energy storage analyst at Wood Mackenzie Power & Renewables, told Utility Dive via email.
In the short term, that shortage could lead to a slowdown in expected price declines for batteries. Li-ion battery rack prices declined by more than 20% year-over-year in 2015 and 2016, and came down by almost 15% in 2017, according to Wood Mackenzie.
The research firm forecasts another 14% decline in prices in 2018, but noted that price declines have “slowed significantly over the last quarter,” in the most recent Energy Storage Monitor.
Read more: Utility Dive