Lithium-iron-phosphate (LFP) will become increasingly popular for stationary energy storage applications, overtaking lithium-manganese-cobalt-oxide (NMC) within a decade, Wood Mackenzie forecast in a new report.
As demand from electric vehicles and the stationary storage market both skyrocket in this decade, evolving performance priorities will create a divergence between the types of batteries used for storage and those used for EV applications.
It started with a supply crunch
Historically, the energy storage market has mostly deployed NMC batteries. In late 2018 and early 2019, demand for NMC batteries to be used for energy storage applications grew swiftly, outstripping the available supply.
The rapid rise in demand for EVs since 2010 had driven down the cost of lithium-ion batteries by more than 85 percent. As lead times for NMC availability grew and prices remained flat, LFP vendors began tapping into NMC-constrained markets at competitive prices, thus making LFP an attractive option for both power and energy applications.
Now, it looks like LFP has attained sufficient momentum to overtake NMC as the leading stationary storage chemistry by 2030.
LFP will grow its market share from 10 percent of the stationary storage market in 2015 to more than 30 percent by the end of the decade.
Two markets, two sets of priorities
Even as the stationary energy storage market takes off, EVs will continue to account for the lion’s share of global lithium-ion battery demand over the next 10 years.
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