Energy

Batteries for grids, boom driven by innovative alternatives

The growth of renewables and Ai and the plummeting prices of lithium-ion batteries make storage the fastest growing energy technology

by Elena Comelli

24 April 2025

4' min read

Key points

Increase in solar and wind power
Soft drop in lithium-ion battery prices
Spring in consumption due to Ai
Innovative prototypes
Lithium production from geothermal brine

4' min read

Energy storage for the electricity grid is the fastest growing energy technology in the world. By 2025, some 80 gigawatts of new grid storage will be added globally, an eightfold increase over 2021, according to calculations by the International Energy Agency.

Increase in solar and wind power

Grid batteries are growing due to four powerful factors. The first is the global increase in the use of solar and wind power, which are intermittent by nature and now account for more than half of the generation capacity in some markets, creating problems for operators on cloudy and windless days. Large grid-connected batteries, which store energy when it is plentiful and release it when it is scarce, solve this problem effectively. The Iea estimates that from this year onwards, solar generation combined with grid-connected batteries will become cheaper than coal-fired power generation in China and gas-fired power generation in the US, although these estimates do not take into account the Trump administration's tariffs on Chinese goods, which, according to an article in the Mit Technology Review, are set to cause huge price increases for batteries and slow their growth in the US.

Strong drop in lithium-ion battery prices

The second factor is China's overcapacity in battery production, which has led to a sharp drop in the price of lithium-ion batteries. Since 1991, the price has plummeted by 97% and this year grid batteries have caught up with the historically lower prices of batteries for electric vehicles. Already today, China has installed half of the global capacity of grid batteries and this share is set to rise.

Rise in consumption due to Ai

A third impetus for batteries is the surge in energy consumption due to artificial intelligence. Tech giants need large amounts of renewable energy, with storage systems that guarantee a 24-hour supply.

Innovative prototypes

The fourth and most interesting of the forces at play, however, is the rapid emergence of innovative alternatives that go beyond traditional lithium batteries. These are discussed in the new 'State of Energy Innovation' report, in which the Iea experts point to a number of early-stage innovations that they believe will be industrialised by 2030. Of the 28 most advanced research areas indicated by the Iea in the report, no fewer than seven relate to storage, with a focus on long-life storage, which is more suitable for grids.

The first two reported projects are a prototype solid-state battery with high energy density and nine-minute recharging capacity, presented by Samsung, and a pre-commercial prototype potassium-ion battery produced for the first time by the American start-up Group1. The new technology presented by the Korean giant has an energy density of 500 watt-hours per kilogram, significantly higher than the average energy density of current battery cells, which do not exceed 250-300 watt-hours per kilogram, and would therefore allow a range of more than 950 kilometres with less than 10 minutes of recharging (20% to 80%), paving the way for the development of long-range electric trucks. Goup1's potassium ion cell, on the other hand, could become an alternative to lithium ion batteries for grid applications in the medium term. Together with sodium ions, potassium ions would become a further source of diversification, strengthening the resilience of the battery market. Sodium-ion batteries are already industrially produced and represent a promising alternative, being cheaper and less flammable than lithium-ion batteries. Bloomberg Nef predicts that sodium-ion battery manufacturers, led by China's HiNa, will start large-scale production for grid storage as early as this year.

Lithium production from geothermal brine

On the lithium ion battery front, on the other hand, the Iea points to another project of great strategic value, centred on the extraction of the raw material, namely the successful start-up of the production of lithium from geothermal brine by Vulcan Energy, an Australian company with European headquarters in Germany, which we have already reported on in these pages. According to estimates by the European Geothermal Energy Council, dissolved in the water of European geothermal brines is at least 25 per cent of our lithium requirements by 2030. Vulcan has successfully produced lithium hydroxide for batteries with a proprietary technology of direct extraction of lithium from geothermal brine and already has supply agreements for four customers in the automotive and chemical industries (Stellantis, Renault, LG and Umicore). It is estimated that the company can produce 8,000 tonnes of lithium per year by 2030, practically on a zero kilometre basis.

For long-term storage, compressed gas is another promising approach. The Iea points to the Italian Energy Dome, which stores carbon dioxide under pressure in characteristic white domes. When energy is needed, the gas is expanded and passed through a turbine. The company has already signed a pioneering supply contract with Engie from its Ottana plant, but plans to build another in the US. The system developed by Canada's Hydrostor, on the other hand, uses air as the working fluid. The company will begin construction of a large plant in Australia this year and an even larger one is planned in California.

In short, a revolution in energy storage is underway. Lithium batteries remain dominant for the time being, but many alternatives are preparing in the wings, promising cleaner and more reliable energy in the future.

@elencomelli