Lithium is Only Becoming Harder to Beat – and Soft Factors Matter
Rules for alternative grid-scale energy players to play by, with Ilja Pawel.
The latest #ShortStorage recap of our Beyond Lithium podcast – featuring trailblazers at the forefront of alternative energy storage. Catch the full session here.
Ilja Pawel is an independent consultant on energy storage technologies who has worked with companies such as UL on building out their energy storage leadership. He's a powerful, positive voice online sharing incisive insights on the renewable energy and storage industry – predominantly on LinkedIn and at conferences.
On the Beyond Lithium Podcast, he shared a number of important points that alternative energy storage makers must consider to make competitive, bankable technologies. A few of those points below:
Lithium’s dominance is only growing: Pawel argues that with each new lithium-ion installation raises the performance bar for alternatives like flow batteries dramatically. “With each kilowatt hour installed on lithium ion, it adds to the track record,” Pawel argues. Alternative technologies don’t just need to be equal players – “they need to offer a better solution to just outweigh this track record.”
...and Lithium-ion's duration is getting longer: While conventional wisdom suggested lithium-ion was best for shorter durations (minutes to 4 hours), recent tenders show it's competitive up to 8 hours and beyond, largely driven by cost reductions from electric mobility advancements.
Don’t ignore economic sustainability: To achieve widespread adoption, sustainable battery technologies must do more than just tout their environmental impact. They need to create viable business cases for suppliers, integrators, operators, financiers, and end-users.
... but don’t overlook soft factors either: Evaluating storage technology bankability requires looking beyond capital expenditure – to include "soft factors" like supply continuity, safety considerations, financing accessibility, and technological flexibility for changing applications.
Safe enough isn’t good enough. Along similar lines, Pawel suggests that battery developers embrace safety parameters – especially fire safety standards – beyond mere compliance. He argues that meeting minimum safety standards like UL 9540A for fire safety/propagation is insufficient, that safety is an "underrated factor" and "meeting the bare minimum is probably not good enough," particularly when considering technologies beyond lithium-ion.
NPV beats IRR: For financial analysis of battery projects, Pawel suggests Net Present Value (NPV) calculations are more reliable than Internal Rate of Return (IRR), particularly with non-conforming cash flows. He views Levelized Cost of Storage as primarily an academic comparison tool derived from NPV calculations.
Hear the full episode on Beyond Lithium.
