US and UK discover lithium as IHS Markit projects battery price to fall below $100/kWh

The cost of storage has already fallen steeply and lithium-ion battery prices are set to continue on that trajectory, according to market analysis outfit IHS Markit. As early as 2023, says IHS, the average cost of lithium-ion battery cells could fall below $100/kWh.

Meanwhile, new lithium mining operations are set to commence in the U.S. and U.K., potentially reducing raw material dependency on Chile, Australia and China.

The analysts have forecast average lithium-ion costs of as little as $73/kWh by the end of the decade, with the price already having fallen 82% since 2012. In three years' time, predicts IHS, that figure could be 86%, for a reduction of $580/kWh over that 11-year period.

“Progress in growing the share of low-carbon generation such as solar and wind in the global power mix also brings a particular set of challenges – namely intermittency,” said Sam Wilkinson, associate director for clean technology and renewables at IHS Markit. “Improving [the] cost-effectiveness of energy storage, particularly batteries, will be key to providing needed flexibility to balance this supply of electricity with demand.”

As markets worldwide are poised for large scale electric vehicle (EV) adoption and grid scale energy storage deployment, global demand for lithium-ion batteries is set for considerable growth. That will, in turn, increase factory sizes, driving optimization of manufacturing processes, and improve economies of scale, leading to further price reduction. With falling prices, the adoption rate of storage and EVs increases even further, in a positive feedback loop.

Improvements in battery energy density can be expected to contribute to managing materials costs with the battery industry also adopting lower-cost cathode chemistries, such as high-nickel and low-cobalt approaches, to keep prices at a minimum.

IHS Markit identified three cathode chemistries that account for the biggest market share: nickel-manganese-cobalt (NMC), nickel-cobalt-aluminium (NCA) and iron phosphate (LFP). As iron phosphate does not contain cobalt, the costs for such devices have already dipped below the $100/kWh benchmark. By 2024, NCA and NMC batteries will also cost less than that, according to IHS Markit. Though LFP batteries are expected to remain the lowest cost option over the next decade, NMC and NCA chemistries will continue to account for the lion's share of the automotive and grid storage applications due to their higher energy density.

“Cost is name of the game,” said Youmin Rong, senior analyst for clean energy technology at IHS Markit. “Technology advances and competition between the different types of lithium-ion batteries is driving prices down. Ultimately, the two major growth markets – transportation and electric grid storage – depend upon lower costs to make batteries more competitive with the internal combustion engine and fossil fuel power generation.”

Claystone mining

That upbeat sentiment was shared by Andrew Bowering, founder, director and financial officer of American Lithium, the U.S. miner currently developing a claystone lithium mining project in Tonopah, Nevada. Bowering shared his optimism after Tesla CEO Elon Musk endorsed claystone lithium projects in Nevada during his company's ‘battery day', on Tuesday.

“Lithium is going to be the primary component of the electric global fleet,” Bowering told pv magazine. “That's because it's light, small and sheds its outer electron easily. Nothing replaces lithium in our lifetime, where mobility is required. New battery configurations by Tesla and others are all going to be based on lithium-ion for years to come. Advancements in battery configurations will affect capacity, lifespan, reliability and ultimately cost. These improvements will drive investment in EVs and electrification further.”

Bowering said the U.S. must establish a lithium supply and domestic battery production or end up dependent on foreign suppliers in the same way it is on oil. Just 2% of U.S. lithium demand is met from domestic sources at present.

Salty geothermal waters

Across ‘The Pond' in the U.K. there was also news of a renewed focus on domestic production. Cornish Lithium announced a discovery of the battery raw material in Redruth, Cornwall, in the South West of England. The company discovered 220mg/l concentrations of the metal in deep geothermal waters, with peak concentrations reaching 260mg/l. Boron, rubidium, cesium and potassium were discovered in the same waters, said the miner. Cornish Lithium claims it would be possible to combine power and heat generation from geothermal waters with lithium mining. With magnesium often complicating the process of extracting lithium from such waters, Cornish Lithium said low concentrations of just 5mg/l of magnesium in the find added to the attractiveness of the project.

“The pilot lithium extraction plant, part-funded by the U.K. government, that we will develop with Geothermal Engineering Ltd at the United Downs Deep Geothermal Power Project, will allow us to evaluate green direct lithium extraction technologies which will bring us another step closer to commercial production of lithium in Cornwall,” said Jeremy Wrathall, founder and chief executive of Cornish Lithium. “We now have increased confidence that these lithium-enriched geothermal waters can be found at depth across Cornwall and believe that there is significant potential to replicate combined lithium and geothermal extraction plants in different locations across the county where Cornish Lithium has mineral rights agreements in place.”

Cornish Lithium's proposed direct lithium extraction method means that the company can use heat and power from the hot geothermal waters to run its mining activity, or even feed into the respective nearby grids. The method is considered “green” insofar as the lithium is separated from the water by chemical means, using ionic adsorbents and/ or ion exchange membranes. Once the water has cycled through the process it is cold and depleted of lithium and then pumped back to the depth where it came from, as no evaporation process is necessary no water is depleted. The chemicals that had been used to bind the lithium are not supposed to be pumped back but kept above ground as they carry the lithium.