The growing dominance of lithium iron phosphate (LFP) chemistry in stationary energy storage systems (ESS) has been the most important development in the storage sector in the last two years, experts who speak at the Netzero conference in Italy this week PV -Magazine.
LFP batteries have gained ground because of their improved safety, longer lifespan, lower costs and stable performance, said Daniel Fuchs, Chief Customer Officer at EUPD Research.
“Bovendien stimuleert de opkomst van meer opslagprojecten op het gebied van nutsschaal snelle innovatie in opslagtechnologie, het verbeteren van de energiedichtheid, schaalbaarheid en integratie met hernieuwbare energiebronnen,” zei Fuchs ter voorbereiding op zijn keynote-openingstoespraak bij NetZero Milan Expo-Summit 2025, georganiseerd door Fieramilano en gepland in mei 14 tot May in Milan, Ital.
In recent years, LFP -chemistry has increased to dominance in the battery sector, with standardized cell layouts and housing designs that make large scale benefits possible, performance difference, frequency improvements and cost reductions, said Giuseppe Artizzu, CEO at NHOA Energy.
Incremental innovation
“This wave of incremental innovation has now been leveled and we are now seeing the introduction of larger cells, which in turn can activate new concepts in the design of the housing,” said Artizzu. “The incredible competitiveness of LFP batteries increases the bar for promising alternative chemistry such as Sodiumion.”
Rosa Milano, sales director for energy storage at Fluence, said that Lithium-ion remains the most mature and commercially viable energy storage technology. Current innovations focus on three important areas.
“First, in the field of optimized grid integration: progress such as scheduling possibilities, synthetic slowness and dynamic frequency response improve stability, which increases energy security, while a deeper integration of renewable energy sources becomes possible,” Milano said.
The other two factors are adaptive implementation – such as technologies for noise reduction and accelerated construction age lines – and improved financial performance, driven by “operational reliability of more than 20 years.”
Orazio Sallemi, director of Baywa Re Energy Trading, warned that further technological innovations outside of electrochemical systems should not be overlooked.
“We are talking in particular about physical storage systems, such as compressible liquid storage and gravity storage,” Sallemi said. “Moreover, the development of optimization software, based on AI logic, can significantly contribute to the efficient use of the storage system.”
Geopolitical risks
Various experts who have to speak in the second vertical PV magazine organizes as part of Net Zero that geopolitical factors – in particular the availability of critical raw materials such as lithium, nickel and cobalt – can influence growth in the Bess market, as in the production sector wider.
“The current geopolitical landscape, in particular the trade tensions of the US-China, could significantly influence the global battery supply chain. For example, in 2024, about 25% of Chinese exports of Lithium-Ion battery became aimed at the United States,” Fuchs said. “Any disruption of trade relationships or the imposition of rates can create offer bottlenecks, increase costs and a slow implementation at the American storage markets. Different segments of the storage industry can be influenced in different degrees, with lithium-ion battery technologies that are probably the most affected by their heavy relevance of Chinese production.”
Lithium ion batteries, in particular with the Chinese supply chain, will probably be the victim of geopolitical effects because of their crucial role in both EVs and stationary storage applications, Fuchs said.
Naomi di Meo, communication officer at the Global Solar Council, said that the storage situation is not as terrible as for PV modules, thanks to “more diversification”.
Fuchs also noted that other geopolitical risks exert the pressure on the battery market. Developments in the conflict in Ukraine can influence the storage market, depending on how the situation unfolds in the coming months.
“An example is the recent Blackout in Spain and Portugal,” added Fuchs. “The reason is still unclear, but as soon as the market is influenced by the rumors (sabotage, hack), this can influence the other European markets in their approach to storage, similar, but on a smaller scale, what we saw in PV installation Boom after the Russian invasion of Ukraine in February 2022.”
Milano said that cyber security has become a fundamental aspect of the technology for battery storage, especially because digital infrastructure integrates more into energy systems.
“With the growing geopolitical tensions, we see various important risks that can significantly influence the sector. First, operational. Since cyber attacks on energy storage systems can lead to malfunctions, so that companies do not have access to their systems,” said Milano. “This, in turn, results in sales losses for providers and consumers who trust these technologies. Secondly, regulatory challenges become more prominent. Governments worldwide are starting to tighten the cyber security laws for critical energy infrastructure, such energy storage is a heavy financial income. Their systems are robust and safe.”
Risk reduction
Geopolitical complexity can also have consequences in the long term, said Orazio Sallemi, director of Baywa Re Energy Trading.
“We traders really like price volatility because it translates into arbitration options with possible profit optimization. But if you try to look a little further than the short horizon in the short term, what seems to be a boisterous upswing than a general delay of initiatives and consequently of buying and selling opportunities,” said Sallemi. “For this reason, the figure of the trader must always be ready to seize the opportunities that the conditional moment can offer, but we must always keep in mind that upstream and downstream in the value chain there are our partners, producers and end customers who in turn need certainty and reasonableness, both in sale and buy.”
The trader said it is necessary to consider industrial and commercial resilience, anticipating potential shocks to deliver both availability and demand and supply of energy companies.
“Topics such as geographical and technological diversification, the increasing use of AI applications, and finally the role of recycling and restoring critical materials are food to thinking and further investments in the near future,” Sallemi added.
The Artizzu of NHOA Energy said that the lack of a competing battery industry in Europe should be a highest care and an absolute priority for the industrial policy of the continent.
“SWIFT promotion must be undertaken to prevent dependence on battery technology from being raster in grid, electric mobility, industrial automation. These are all established industries in Europe, with advanced technology and industrial possibilities,” Artizzu added. “Access rules to the European market must be actively managed to prevent aggressive price penetration strategies from moving the existing strategic value chains of the continent. The Net Zero Industry Act and the Clean Industrial Deal are fundamental steps in this direction, and a broad consensus in their fundamental goals is required”
Production costs
Sallemi said that the learning curve of the production costs of the battery pack has fallen from more than $ 1,000/kWh in the first instance to less than $ 140/kWh in 2023, with some large -scale solutions that reach even lower values.
‘Analysts predict an oversupply condition for the coming period from 2025-27 with a further price reduction that will soon have to reach and cross the psychological threshold of $ 100/kWh, which can also be achieved thanks to the development of new chemistry such as lithium-mehzer (LFP), the battery of the battery of the vater batteries. ‘Topics such as geographical and technological diversification, the increasing use of AI applications, and finally the role of recycling and restoring critical materials are food to thinking and further investments in the near future. “
The experts above are among the speakers at the Second vertical session organized by PV -Magazine. Tickets for the Milan conference are available with a discount of 20% using code 7600199855.
This content is protected by copyright and may not be reused. If you want to work with us and reuse part of our content, please contact: editors@pv-magazine.com.
