The long read: A burning issue

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From pv magazine, April edition

Chinese, South Korean, and Japanese manufacturers currently dominate global battery production. Chinese companies accounted for half of the world’s top 10 suppliers in the first nine months of 2018, according to Seoul-based SNE Research. “China is increasingly dominating battery manufacturing in terms of volumes,” concurs Sam Wilkinson, Associate Director of Energy for IHS Markit, estimating that global demand for batteries hit 154 GWh in 2018, including rechargeable batteries used in transport, storage, and consumer electronics. Grid-connected energy storage accounted for roughly 5% of the total, he says.

The biggest Chinese manufacturers from January-September 2018 were Contemporary Amperex Technology (CATL) and BYD. CATL, which shipped over
11 GWh over the period – up 141.6% year-on-year – makes nickel manganese cobalt oxide (NMC) and lithium iron phosphate (LFP) batteries for the electric vehicle market. BYD also produces both chemistries, but particularly favors LFP batteries in terms of cost and perceived safety for use in stationary storage. The two companies were surpassed only by Panasonic, whose shipments spiked 85% on the year in the first nine months of 2018, according to SNE Research.

In a recent report, the China Energy Storage Alliance (CNESA) estimated that global electrochemical storage capacity had cumulatively reached close to
4.9 GW/10.1 GWh by the end of 2018, up 65% year-on-year. Growth has been particularly rapid in China, with roughly 600 MW of new electrochemical capacity added in 2018, bringing the nation’s cumulative tally to 10.2 GW/29 GWh by the end of December, according to CNESA. Li-ion batteries accounted for about 68% of the total.

Blaming batteries

CNESA argues that recent accidents should not necessarily be attributed to batteries. For one, uniform safety and quality criteria cannot be applied to all Li-ion battery chemistries as a whole, as one must evaluate products according to their cathode materials. While LFP and NMC technologies are commonly used in stationary storage, some developers are also turning to batteries with nickel cobalt aluminum (NCA) cathodes and graphite anodes.

Some claim certain cathode chemistries, like LFP cathodes with lithium titanate (LTO) anodes, are safer. While those technologies can mitigate failure modes that lead to thermal runaway – a self-perpetuating cycle in which excessive heat in a cell creates more heat until the system fails or explodes – that does not make such chemistries “inherently safe,” according to the Electric Power Research Institute (EPRI). That said, it is not clear that South Korean and Japanese manufacturers such as LG Chem and Panasonic enjoy a significant edge over their Chinese rivals on safety.

“Generally, Korean and Japanese manufacturers are considered leaders in terms of quality,” says Wilkinson, noting that only a handful of tier-1 Chinese manufacturers currently compete on quality.” IHS Markit also believes that quality integration and choice of battery management system (BMS) are also critical to ensuring the safety of installed systems.

“We see an increasing focus on ensuring the safe operation of battery energy storage systems,” Wilkinson explains. “There are no major concerns limiting their use, although reports of recent fires could create a risk for future expansion.”

Rushed installation

In December, a system designed by LG Chem in South Korea’s Chungcheongbuk province caught fire, causing millions in damages – the country’s 15th such incident in 2018 alone. Bloomberg New Energy Finance (BNEF) has recorded more than 20 accidents in the country since August 2017. In response, the government has started inspecting the 1,000+ storage systems that have been installed across the peninsula.

“Incidents have largely been confined to the Korean market and a lack of occurrences elsewhere suggests this is a market-specific issue,” says Logan Goldie-Scot, head of energy storage for BNEF, echoing comments by CNESA suggesting that the government’s efforts to facilitate rapid deployment of utility-scale systems may be the reason for many of the fires. “The main incidents in the industry appear to have been a result of rushed installation and integration rather than the quality of the battery.”

Worldwide, BNEF expects annual installations to almost double this year, after doubling from 2017 to 2018 to
4 GW/8.6 GWh. It says yearly demand for stationary storage accounted for roughly 6% of total battery demand in 2018, including demand for EVs, e-buses, consumer electronics, and stationary storage, but excluding UPS/telco demand.

Goldie-Scot believes the impact of the fires on the South Korean market will hinge on the speed with which the government identifies the cause of the incidents. But globally, he says “early indications regarding specific incidents for batteries appear to be due to involved parties failing to follow best practice.”

Best practice

DNV GL recommends that developers conduct thorough analyses of new systems, focusing on cascading protections between cells and modules. It also advises installers to consider siting, fire ratings, and assessments of most likely failure modes, as well as the choice of anode-cathode chemistry, given that different chemistries exhibit varying reactivity and thermal stability. Collaboration between integrators, developers, and local emergency services is also critical to system safety.

However, DNV GL acknowledges that there are still no comprehensive, universally recognized standards in place for grid-scale storage. And Goldie-Scot argues that “it’s not clear that standardization around the technology would necessarily benefit the market at the moment.”

EPRI agrees, although it acknowledges that the dearth of standards drives up soft costs, while contributing to confusion about system design. “Codes and standards…have typically not kept pace with these rapid developments and this misalignment has led to certain constraints in the adoption of storage,” says Ben Kaun, Program Manager for EPRI. “However, uninformed standards can potentially have a long-lasting effect on the market for years, resulting in added project costs that do not fundamentally improve the risk profile.”

This lack of mature standards is a drag on global adoption. And in some circumstances, where local standards are being developed ahead of broader development, it can be tough to install any stationary systems within buildings. That said, standards are evolving in terms of how batteries are installed and maintained in many markets throughout the world.

Regional rules

In China, where most projects have thus far been installed at large PV plants to mitigate curtailment, CNESA has been helping to develop standards on quality assessments and fire prevention methods. Its efforts follow the country’s first national policy on energy storage, released in 2017. The document includes plans for a 100 MW Li-ion storage pilot and will give rise to a range of policies over the next decade, such as the establishment of technological standards. CNESA also recently claimed that heat management and fire safety standards became bigger priorities throughout 2018.

The Japanese authorities have overseen numerous storage and microgrid pilots since the Ministry of Economy, Trade and Industry started prioritizing the establishment of stationary storage standards in early 2012, including an ongoing focus on smart cities, virtual power plants, and residential applications. It provided roughly JPY 31 billion ($280 million) in subsidies throughout the first half of this decade alone to develop the ecosystem for storage applications, according to a recent Asian Development Bank report.

In 2017, Australia – home to a surging residential storage market – adopted the IEC 62619:2017 standard, which includes safety requirements for Li-ion batteries in stationary applications. Standards Australia has described the standard as an initial step toward setting additional guidelines.

And in the United States, standard UL9540 was released in 2016, followed by the UL9540A test method in June 2018. Another standard from the U.S. National Fire Protection Association (NFPA), NFPA 855, is now under final review.

Systemic approach

Ultimately, the location and objective of a project determines which Li-ion chemistry is most suitable, says Kuan. Lithium-ion batteries can store large amounts of energy in the chemical bonds of the cathode material and the electrolyte, so fires are a possibility.

Operators therefore need to understand and mitigate failure modes at the cell, module, and system levels to avoid thermal runaway of cells and prevent fire from propagating to other cells and modules. “A careful, systemic approach to safety is more important than the chemistry choice,” Kuan explains.

“Customization from project-to-project is a challenge, when compared to mass production of EV batteries. Control systems are designed for specific applications and sites, and still need to avoid and mitigate the various potential failure modes of cells, which can include overcharging, physical damage, and high temperature, among others.