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For businesses operating on large energy loads, renewables like solar have become a popular option for lowering demand charges and utility bills. However, energy storage is now taking the spotlight as the true asset in controlling energy costs. The clear financial savings, an initial draw for many in the commercial and industrial (C&I) sector, is now coupled with new sustainability mandates such as environmental, social, and governance (ESG) reporting. As such, research firm Wood Mackenzie anticipates the global storage market to grow an average of 31 percent a year until 2030.
Not all energy storage systems are created equal, however. The chemical makeup of the battery cells within these systems largely contributes to long-term viability, reliability, and safety. All of which play a critical role in the amount of usable energy and its consequent return on investment.
The Tale of Two Lithium-Ion Batteries
Lithium-ion batteries account for more than 90% of todays global battery storage market, favored by both battery and product manufacturers for its high energy density, long life cycles, and lightweight enclosures.But within the lithium-ion family are a range of chemistries, the most prominent being lithium nickel manganese cobalt oxide (NMC) and lithium iron phosphate (LFP). Each type presents its own advantages and drawbacks.
NMC batteries are popular for boasting a high energy density, enabling them to store large amounts of energy in relation to their size. Because of this, NMC batteries are widely used in most rechargeable devices – from cell phones and power tools to electric vehicles (EVs).Though NMC chemistry is less common among commercial-scale stationary batteries, household brands like Tesla and LG Chem are two market leaders offering large-scale storage solutions.There is a tradeoff for NMCs high energy density and lower upfront costs. NMC batteries lend to exhibit shorter lifespans, play a part in the harmful footprint of cobalt mining, and are prone to thermal runaway and subsequent fires.
LFP batteries are highly successful within the grid storage market, where life cycle length is more important than energy density. The efficiency and slower degradation of LFP batteries allows energy storage systems to remain at peak performance for a longer period of time.Manufacturers like Blue Planet Energy, SimpliPhi Power, and Sonnen offer storage solutions that have been deployed across the spectrum of commercial industries. Operating at lower temperature than NMC batteries and capable of withstanding higher voltage use, LFP batteries are less prone to thermal runaway or fires. This is an important note, as neither energy capacity nor lifespan will be relevant should the battery catch fire or expose hazards to a building and its occupants.