As the world shifts to more sustainable sources of energy, lithium has become a very important commodity and rocketed to the forefront as the metal of choice in high capacity rechargeable batteries. Automobile manufacturing companies have joined Tesla in offering luxury electric car options, largely driven by the increased driving range lithium-ion batteries provide. In the not so distant future, house batteries and large-scale battery backups have the potential to revolutionize local power grids by enabling power companies to offset consumption during peak hours, generally from 4-10pm.
The Growth and Demand of Lithium
Strong demand side growth
Limited supply response
Government incentives and initiatives to purchase solar and battery storage systems
Major cities building lithium back-up power supply
Lithium Price Drivers
#1 Rapidly increasing electric vehicles usage
#2 Small to medium-scale battery storage
By 2040, 25% of the global car fleet will be electric*
Battery storage will be a US$250 billion market by 2040*
US$7.8 trillion is estimated to be invested in renewable energy production (2016-2040)*
A Rapidly Growing Market
The main driver behind the increase in demand, and the excitement for lithium as a commodity, has been driven by the high efficiency lithium-ion battery. Although Tesla may be at the forefront of the story in the recent years, and certainly making the most headlines, the lithium-ion battery has solidified itself as the battery of choice for automakers, mobile technology such as laptops and mobile phones, and pretty much any company looking for a better battery from their product. The real growth for lithium as a bulk commodity will likely be in the expanding large-scale battery market, such as the Los Angeles battery backup facility Tesla has recently completed, with Adelaide to soon follow suit. Goldman Sachs estimate that about 63kg of Lithium go into a Tesla 70 kWh battery, about 0.9kg/kWh. However, some reports suggest that the number can be as high as 3.0kg/kWh of unrefined, but pure Lithium Carbonate (LiCO3).
Lithium - The Most Reactive Metal
There is a very good reason why lithium as part of the battery has become the metal of choice. Lithium is the most reactive metal known, also the lightest, with an atomic number of 3. Used in batteries, lithium provides much better energy per volume ratio —or energy density— than an ordinary alkaline battery or other common rechargeable battery such as a nickel-metal hydride. This is in part because lithium is the third-smallest element after hydrogen and helium, and thus a lithium ion can carry a positive charge in a very small amount of space. Lithium-ion batteries can be recharged by running the anode and cathode reactions in reverse and the ability to be recharged many times over without much loss of capacity is another major advantage of the lithium-ion battery.