Overcoming the great disconnect in the battery storage supply chain

Excerpt from energy-storage.news

The rising demand for lithium-ion batteries far outstrips the available supply, even as
investments into materials extraction and manufacturing ramp up like never before. But what does
the situation really look like and when will it ease up? Andy Colthorpe investigates.

This is an extract of an article which appeared in Vol.31 of PV Tech Power, Solar Media’s quarterly technical journal for the downstream solar industry. Every edition includes ‘Storage & Smart Power,’ a dedicated section contributed by the team at Energy-Storage.news.

It’s no secret there’s a tightness constricting the energy storage supply chain. A few weeks ago, on EnergyStorage.news, we heard from a specialist on procurement, lawyer Adam Walters at Stoel Rives, that lithium carbonate price rises in particular are at “crisis point”.

Rising demand for batteries, largely coming from the electric vehicle (EV) sector, means raw materials prices continue to be volatile. Cell supplier contracts are moving to shorter and shorter term pricing. With terms changing over periods as short as a week, it becomes more difficult to get them signed off.

Fluence noted in its Q1 2022 financial results that while the company’s US$1.6 billion backlog of energy storage orders has been hedged with fixed price contracts, future contracting will be based on raw material indexed pricing to minimise exposure to fluctuations. The system integrator is not alone in this.