The Urgent Need For Lithium

Mike Leslie
June 28, 2024

Lithium, a critical renewable energy component, is the lightest and least dense solid element on the periodic table, with a standard atomic weight of 6.94.

Inputs that matter: Highly reactive, lithium metal ignites on contact with water, a familiar demonstration in chemistry labs.

  • Lithium is only found in mineral or salt forms in nature.
  • In its metallic form, lithium is a soft, silvery-gray metal with excellent heat and electric conductivity, making it ideal for storing and transmitting energy.
  • China currently leads the lithium battery production market, but the United States and latecomer South Korea aim to challenge its dominance.

The opportunity: Today, most commercial lithium production comes from extracting lithium from underground brine reservoirs, primarily located in the Lithium Triangle of the Andes (Bolivia, Argentina, and Chile) and China.

  • Hard rock mining, more complex and energy-intensive than brine extraction, involves extracting lithium from spodumene, lepidolite, petalite, amblygonite, and eucryptite.
  • In 2023, three countries – Australia, Chile, and China – dominated global lithium production, collectively accounting for 88% of the total output.

Zoom in: New mines are expected in North America and Finland by 2025.

  • These include direct lithium extraction from geothermal brines (e.g., Salton Sea, CA) produced water from shale gas fracking (Texas) and extraction from lithium-bearing clays in Nevada.

Between the lines: To cope with natural and weather-dependent solar power, the grid needs much more battery storage than is currently available to smooth out the difference in peak output and demand, resulting in significant power price variations.

  • Power systems and grid operators must often manage negative prices when solar output peaks during the day.
  • Developers and power plant owners plan to add 62.8 GW of new utility-scale electric-generating capacity this year, up 55% from the 40.4 GW added last year.
  • According to EIA forecasts, solar will account for the largest share of new capacity in 2024, at 58%, followed by battery storage, at 23%.

Follow the money: Tesla and Ford Motor, along with other major automakers, have embraced lithium iron phosphate (LFP) batteries as a cost-effective alternative for some of their EVs, moving away from cobalt-based and nickel-based lithium-ion batteries prevalent in Europe and the US.

  • LFP batteries, identified as the most economical lithium-ion battery type in 2022, now constitute around 40% of global EV production.
  • In addition, California and Texas are leading the way in battery storage additions due to the rapid growth of variable solar and wind capacity in these two states.

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Read More

  1. https://carboncredits.com/ultimate-guide-to-lithium-and-lithium-market-prices/
  2. https://banananomics.co/the_eye_opening_need_for_energy_storage