Lithium-ion batteries have dominated energy storage for decades, with costs dropping by about 97% over the past thirty years. Predictions indicate that grid-scale battery storage in the U.S. will grow faster than wind or solar energy in the next decade, and the global lithium-ion supply chain is currently outpacing demand. However, this supply chain is heavily reliant on Chinese manufacturing, which controls over half of the world’s lithium processing and nearly 85% of global battery cell production capacity. Consequently, countries producing lithium-ion battery products, including the U.S., depend on Chinese imports.
This dependency has prompted U.S. manufacturers to seek alternatives, leading to increased interest in sodium-ion batteries. Domestic manufacturers hope to establish their sodium-ion supply chains before China monopolises the market. Benchmark Mineral Intelligence anticipates a 350% increase in announced sodium-ion battery manufacturing capacity this year. Currently, the supply is in the tens of gigawatts, but it is expected to reach hundreds of gigawatts by 2030.
Sodium-ion technology, while not revolutionary, performs similarly to lithium-ion in energy storage systems, providing around four hours of power for both grid-scale and residential uses. A key advantage of sodium-ion batteries is the abundance and lower cost of sodium in the U.S. compared to lithium. Despite China’s early lead, domestic manufacturers believe there is still time to catch up.
Sodium-ion storage systems are expected to be about 40% cheaper than lithium-ion systems once manufacturing scales up. This affordability could extend the economic viability of sodium-ion batteries for storage applications to eight, ten, or even twelve hours. Additionally, sodium-ion batteries offer improved safety features, being less prone to catching fire due to their lower energy density and higher electrolyte flashpoints. They can also be completely discharged to zero volts, eliminating the risk of fires during transit, and they perform better in cold temperatures than lithium-ion batteries.
Catherine Peake from Benchmark Mineral Intelligence notes that lithium iron phosphate batteries, a type of lithium-ion battery, generally have a longer cycle life than sodium-ion batteries, which is crucial for energy storage systems. However, Natron claims a longer cycle life for its sodium-ion batteries than standard lithium-ion batteries.
The lithium market remains volatile. Although prices have recently decreased, they surged to an all-time high in China less than two years ago, increasing interest in sodium-ion alternatives. While there is potential for the U.S. to develop a domestic sodium-ion supply chain, scaling production to match China, South Korea, or Japan remains challenging due to their extensive experience and established manufacturing capabilities. Despite these hurdles, startups like Natron and Peak Energy are determined to innovate and expand within the industry.
The quest for energy storage alternatives highlights the shifting dynamics in global manufacturing and geopolitical landscapes. As sodium-ion technology gains traction, it presents a promising, cost-effective, and safer alternative to lithium-ion batteries, potentially reshaping the future of energy storage.
DG Innovate plc (LON:DGI) is an advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and storage, using abundant materials and the best engineering and scientific practices. Deregallera is a subsidiary of DG Innovate.
