LG Energy recently unveiled a new energy storage device at a German exhibition equipped with lithium iron phosphate batteries. The company plans to expand lithium iron phosphate battery shipments at its Michigan battery plant starting in October 2023, and will first consider the use of lithium iron phosphate batteries. For Energy Storage Systems (ESS) rather than electric vehicles.
With the gradual increase in the proportion of clean energy, energy storage plays an increasingly important role in the power system. The U.S. ESS market will be worth $5.5 billion (about 6.95 trillion won) in 2021, more than tripling year-on-year, according to global consulting firm Wood McKinsey. Jiang Li, deputy general manager and secretary of the board of directors of CATL, also said at the performance briefing recently that the market size of the energy storage field can reach 1TWh-2TWh in the long run.
The purpose of LG Energy is to enhance its competitiveness in the energy storage market through lithium iron phosphate batteries that are cheaper than ternary batteries. In addition to supplying batteries for related manufacturers, the company has been keen to expand its influence in the North American energy storage market in recent years. Last year, it acquired the energy storage system integration and solutions subsidiary of Japan's NEC Corporation in Massachusetts, USA - "NEC Energy" "NEC Energy Solution", becoming a one-stop energy storage system solution provider.
As a South Korean lithium battery giant known for ternary batteries, why did LG Energy choose lithium iron phosphate batteries when it hit the energy storage market?
Among the various paths of energy storage batteries, lithium iron phosphate batteries have significant advantages, such as high operating voltage, high energy density, long cycle life, low self-discharge rate, no memory effect, green environmental protection, etc., and support stepless expansion, suitable for for large-scale electrical energy storage. Therefore, the energy storage system supporting the lithium iron phosphate battery has gradually become the mainstream choice in the market, and has a good application prospect in the fields of safe grid connection of renewable energy power stations, power grid peak regulation, distributed power stations, UPS power supplies, and emergency power supply systems. .
On the other hand, the electric vehicle market will still drive the shipments of lithium iron phosphate batteries. The lithium iron phosphate battery that LG Energy plans to expand is of standard size and can also be used in electric vehicles, which does not rule out the possibility of expanding its application range. According to Gaogong lithium battery data, the installed capacity of lithium iron phosphate power batteries in April 2022 will increase by 169% year-on-year, accounting for 57% of the total installed capacity.
In the future, benefiting from the rapid growth of the energy storage industry and the increase in the penetration rate of iron-lithium batteries in the overseas power field, it is expected that by 2025, lithium iron phosphate batteries will occupy 85% and 43% of the shares in the energy storage field and power battery field respectively. .
Further, the agency believes that, considering the future global demand for power batteries and energy storage batteries, the global demand for lithium iron phosphate cathode materials is expected to be about 2.67 million tons in 2025, corresponding to a CAGR of 84% from 2020 to 2025, with rapid growth. In this field, with the entry of new players and the accelerated expansion of production capacity, the industry competition is becoming more and more fierce. It is expected that the industry will realize industrial iteration in terms of cost and performance in the future, industrial chain extension, innovative lithium salt and application of lithium iron manganese phosphate It will be the most important development trend of the industry in the future.
