Despite limits, Li-ion Batteries Win Market Competition

The limitations of lithium-ion batteries, particularly for electric utility use, are well known: They have a short lifetime, they don’t like rapid cycling, they run out of power quickly, and they can catch on fire, particularly when linked together (as Elon Musk is planning for his South Australia project).

So why have well-financed, well-thought-out high-tech startups aimed at supplanting the lithium batteries uniformly failed? An article in MIT Technology Review takes up that question. The article points to four recent advanced battery stumbles, all of them well-funded and technically promising.

* Aquion Energy, a startup by a former NASA battery developer and Carnegie Mellon professor, with $190 million in venture capital from Bill Gates, Kleiner Perkins, and others. Its sodium-ion technology was aimed at utility-scale installations, avoiding reliance on rare-earth minerals. Last year, MIT Technology Review ranked Aquion on number five on its 50 smartest companies list. Failing to find additional capital, the company filed for bankruptcy in March 2017.

* EnerVault, seeking to develop utility-scale flow batteries, which raised $24.5 billion in venture capital funding, failed to find additional investors in 2015 and put itself up for sale. It has vanished.

* Ambri, seeking to development a liquid-metal battery, in 2015 laid off a quarter of its staff and pushed back its plans for commercialization from 2016 into an unspecified future date. Ambri, with Bill Gates as an investor and an MIT professor as a founder, it still alive but not ready for commercial, utility-scale sales.

* LightSale Energy, another Gates investment, planned to store energy as compressed air in tanks. Instead, the company is now promoting natural gas stored in the carbon-fiber tanks as a new form of gas transportation.

The stumbles of advanced electricity storage technology prompted Greentechmedia to call Gates “the kiss of death of energy storage.” MIT Technology Review commented, “Taken together, these struggles have deflated hopes for the emergence of affordable and practical grid storage anytime soon.”

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The failure of the advanced technologies seems to have little to do with the technologies, more with economics. Despite its limitations, lithium-ion remains the king of the storage hill. That’s because its price has been falling precipitously, dropping by nearly half in two years, to $273/KWh in 2016. Bloomberg sees the price falling to $109 by 2025, and $73 by 2030, although some analysts say Bloomberg’s projections are wrong.

MIT scientist and Ambri founder Donald Sadoway says the Bloomberg estimates are unrealistic. But the lithium-ion price decline estimates clobber the market for alternatives “When lithium-ion comes out with these audacious claims, it makes investors pause,” he said. “They look and say, ‘Wow, you guys are toast.’”

So lithium-ion batteries remain on top. But they still are not cost-effective for grid operations, according to MIT energy studies professor Jessika Trancik. The MIT article concludes that “ultimately, nascent storage technologies are fighting forces embedded deep in the core of capitalism. Markets consolidate around dominant technologies and companies. It often takes a radical advance to shake up the old order, and in the energy sector those don’t come along often.”