How and where nickel-hydrogen batteries beat lithium-ion in total cost of ownership

Lithium-ion is the dominant energy storage chemistry in many renewable energy applications, but in larger-scale applications, it may no longer be the wisest choice in terms of total project costs.

I’ve been intrigued by the prospects of nickel-hydrogen for larger C&I and utility-scale energy storage projects ever since interviewing Jorg Heinemann, CEO of EnerVenue, back in 2020 (hence the pandemic-lockdown-style video production quality). The main headline is its cycling capability (about three full cycles per day for 30 years) without showing much degradation or posing a thermal runaway risk.

The remaining question (for any cool sounding technology in this space, really) was cost / commercial viability. Well, a few 2023 studies make a compelling a case — based on total cost of ownership over a 20-year period — that, depending on the application, the time for nickel-hydrogen is now.

The first two studies, conducted by Storlytics, a U.S.-based consulting and software firm specializing in grid-tied energy storage systems, compared project ownership costs of standard lithium-ion (LiFePO4) ESS vs. EnerVenue’s new Energy Storage Vessels (ESV) in two use cases.

Both simulations leverage fully validated battery models developed within Storlytics software, which was built to estimate expected degradation of battery energy storage systems and therefore select the best battery technology for the user’s specific case.

Scenario 1: Medium Cycle Count, Deep Discharge

• Power Req. at POI: 25 MW
• Duration Req. 4 hours
• EoL Dsch Energy Req. at POI: 100 MWh
• Project Life: 20 years
• Cycle Count per Day: 1.75 Cycles
• Cycle Count per Asset Life: 12,775 Cycles

Scenario 2: High Cycle Count, Deep Discharge

• Power Req. at POI:  25 MW
• Duration Req. 4 hours
• EoL Dsch Energy Req. at POI 100 MWh
• Project Life 20 years
• Cycle Count per Day 2.1 Cycles
• Cycle Count per Asset Life 15,330 Cycles

In both of the scenarios, ESV’s lack of degradation over the lifespan of the project is a critical factor in its favor. Even after performing several cycles for 20 years, the EnerVenue system’s state of health degrades only to 93.2%.

• In Scenario 1, the lithium-ion battery bank was modeled to be augmented (at years 5, 12 and 15) over the 20 years to meet the requirements. “The EnerVenue system required an initial Beginning of Life (BoL) capacity of 112 MWh compared to Li-Ion’s 127.48 MWh BoL and three augmentation phases of 30, 115 and 30 MWh. Accordingly, the DC Block capital cost of the EnerVenue system of $39 million was deduced to be less than that of the Li-Ion system with augmentation at $67 million.”

• In Scenario 2, the lithium-ion battery bank was overbuilt — 219.17 MWh of lithium-ion capacity was needed to start vs. 112.36 MWh for EnerVenue. “This is to perform the same use-case, for the same number of years. For the LiFePO4 system, if the BoL is reduced, the EoL capacity goes below the OEM minimum guaranteed SoH of 65%. To keep SoH greater than this value and meet throughput requirements of the use-case profile, the LiFePO4 system needed to be oversized.” Total system costs come to $41,726,000 vs. $65,823,450.

Downside? That’s the good news for EnerVenue. The downside to consider is the lower DC round-trip efficiency of 90.02% compared to the LiFePO4 system’s 96.11%, for the same use case. This is essentially a measure of the energy lost during a given charge-discharge cycle. Accordingly, the annual energy loss cost was more for the EnerVenue system than for the Li-Ion system:

• Scenario 1: $790,513 vs. $301,647 over 20 years
• Scenario 2: $992,910 vs. $230,742 over 20 years

Add it all up | After totaling up both the battery costs and round trip efficiencies over the 20-year time period: “cost of lifetime energy losses was found to be much less than the capital cost premium that was required for the Li-Ion benchmark.”

• Scenario 1 Effective Cost per Required EoL Energy ($/kWh) $562 vs. $769
• Scenario 2: Effective Cost per Required EoL Energy( $/kWh): $592 vs. $741

Nickel-hydrogen vs. Lithium-ion and all other chemistries

A third study zooms out much more, to consider a wide range of battery chemistries in a variety of larger-scale, long-duration energy storage use cases.

“Stationary Battery Energy Storage Systems Analysis: A focus on intraday shifting” was published in March 2023 by Ara Ake, a government-funded entity set up to develop clean energy technologies for New Zealand. The analysis presented in this document was conducted internally by Ara Ake in Q4 2022, and as such, only shows a snapshot of the BESS market in time. The report examines:

• Several Lithium-ion battery suppliers
• Redox flow batteries (RFB), including vanadium, zinc-bromide, zinc-air, iron flow and organic
• Molten salt batteries
• Other metal batteries — including nickel-hydrogen, zinc-bromide and lead
• Non-metal batteries

“Of the more than 10 containerized BESS studied, nickel-hydrogen (NiH2) is a standout chemistry for storage of 12 hours or less when considering all aspects due to a useable lifetime of 30 years and 30,000 charge/discharge cycles,” the report states right at the beginning.

The virtues of nickel-hydrogen that we’ve already discussed really show up in long-duration applications that require two cycles per day. Nickel-hydrogen is designed for up to three charge/discharge cycles per day, yet is also capable of discharge rates varying between 2 and 12 hours. According to the report:

• Lithium-ion batteries, operating at two cycles per day, start at approximately $300(±25)/MWh for one hour of storage, reducing to $230(±15)/MWh for 4-12 hours of storage.

• Vanadium and iron flow batteries quickly become more cost effective than lithium ion, after two hours for vanadium and three hours for iron flow.

• Similarly to one cycle per day, calcium-antimony and nickel-hydrogen are the two most cost effective energy storage technologies, however this is only the case for six hours of storage or less. Above six hours, iron flow overtakes calcium-antimony as the second most cost-effective battery.

• Of the technologies compared, nickel-hydrogen is the most cost effective across the 1-12 hour range when operating at two cycles per day with an LCOS between $115-150/MWh due to its long cycle life.

Ara Ake concludes in the levelized cost of storage (LCOS) section: “From a cost perspective, nickel-hydrogen is the best value for 12 hours or less of storage when comparing the levelized cost of storage (LCOS) of the technologies, a measure of the total cost of an energy storage system against the energy discharged over the battery’s lifetime.”

Lithium-ion has been (and continues to be) a great energy storage chemistry to usher in the renewable energy era. But no one battery chemistry is perfectly optimized to solve the challenges of every project size, location, climate and use case requirements. Nickel-hydrogen is no different. But these reports do show where and how nickel-hydrogen is more than ready to be deployed — cost effectively — right now.

— Solar Builder magazine

[source: https://solarbuildermag.com/news/how-and-where-nickel-hydrogen-batteries-beat-lithium-ion-in-total-cost-of-ownership/]