Fluence: all flavours of lithium accepted

In Europe Fluence has projects and installations in 14 different markets, with the largest being the UK, Ireland and Germany.

The company’s most recent and also largest project in Europe is for transmission system operator TenneT for a combined capacity of 200MW, located at a substation in Audorf Süd in Schleswig-Holstein and Ottenhofen in Bavaria. TenneT’s Grid Booster concept will use Fluence’s Ultrastack, an energy storage system designed for transmission grids, which has been developed and tested in Fluence’s technology centre in Erlangen, Germany. LFP cells will be used.

Marek Kubik, Fluence’s managing director, for western Europe sales, says the company is cell agnostic and when establishing partnerships with cell suppliers Fluence looks for counterparty bankability, scale and track record.

“Cells are just one part of a whole system, which comprises modules, racks, the BMS, connections and other components, all of which have to be integrated to work seamlessly in each deployment. Therefore, the choice of cells can be influenced by several different factors.”

From 2008, Fluence mainly used LFP cells in its first installations, expanding to NMC in around 20152016. In Europe almost all grid batteries installed by Fluence use LFP cells, while in the US some installations have NMC.

The company works with several cell suppliers, including CATL for LFP and Northvolt for NMC. An additional supplier is undergoing qualification.

In the US where demand for longer duration batteries of up to eight hours is increasing, there can be a preference for NMC cells, according to Kubik.

NMC cells have a higher energy density, compared with LFP and so can be used to build more compact BESS installations with a smaller footprint which can mean less land will need to be acquired or leased for projects. NMC cells can also be sourced outside of China, such as South Korea or Europe, which avoids tariffs in the US market being applied to LFP cells from China. In the balance these factors can lead to a reduced LCoS for certain projects in the US, he says.

Kubik says: “While NMC has a better performance profile, LFP cells are cheaper. However, market, location and project specifics will have a bearing on which technology to go with for each installation.”

Kubik says Fluence will not rule outsourcing actual LFP cells from Europe-based producers, though price is an important factor.

“There is increasing value and demand for more regionalized supply chains — from batteries to other core components. Energy storage doesn’t need subsidies but a political choice to onshore supply chains may need incentives.

“We see incentive schemes, such as the Inflation Reduction Act in the US, being the strongest driver for such localization of supply chains, but ultimately costs are decisive, requiring either higher customer willingness to pay or cost improvements elsewhere.”

Key Factors In Lithium Ion Cell Technology

Price. LFP cells tend to be cheaper than NMC due to combination of raw materials and production in China. They were heading towards parity with lead before the pandemic and later invasion of Ukraine by Russia, but have spiked some 30% higher than before on supply chain shortages.

Safety. While thermal runaway can be more aggressive and occur more quickly with NMC cells, LFPs off-gas more, which can lead to explosions. BESS projects are designed in such a way that minimizes the risks concerning either. “The ‘LFP is safer than NMC debate’ is nuanced,” says one commentator. “LFP batteries can go through thermal runaway but it is about 10 times as unlikely as some other lithium combinations.”

Density. NMC cells have higher density over LFP, which can result in a BESS with a smaller footprint. Depending on the project specifics, the higher cost of NMC cells can be offset where space is at a premium, or connections and cabling is reduced due to the more compact design possible with NMC.

Recyclability. There are more recycling facilities in place for NMC and higher potential for recycling as nickel and cobalt are more valuable.

Raw materials availability. As BESS demand continues to expand this could become an increasingly important factor since metals such as iron are more abundant than critical metals found in NMC.

Supply chain localization. This is an emerging factor but one which is becoming increasingly important. If the materials used to make LFP cells can be sourced nearer to where cell manufacturing takes place, such as the same country, continent or region, dependency on other countries, not just for cells but actual raw materials is minimized.