By Steve Minnihan
On paper, lithium-ion batteries look like a strong fit for the telecom and datacenter backup power market, but these customers remain cautious and resist deploying the technology until it has a healthy track record of in-field performance. Li-ion developer Electrovaya's recent fire gives credence to the sector's reluctance.
Arizona Public Service (APS) Company was deploying a 1.5 MW lithium polymer system from Electrovaya for photovoltaic energy storage. The battery experienced an unexplained fire in November, damaging the battery but leaving the surrounding hardware and substation unscathed.
Lux Research has examined the backup power market and determined that lithium-ion batteries offer a better value proposition than the incumbent lead acid batteries due to Li-ion's superior life cycle and footprint. However, high value customers, specifically telecom network and datacenter operators, value a battery's reliability above all other metrics, due to the high cost and lost revenue from short periods of service interruption. Therefore, these customers require that a new technology demonstrate comparable or superior reliability in two years to four years of successful in-field operation before they will put their faith in the technology.
While this news does not directly implicate Electrovaya or its technology, the event alone is sufficient to deter customers and incriminate a broad range of lithium-ion technologies, making them "guilty by association" in the eyes of the customer. Electrovaya and APS have not determined the cause of the fire, so it is premature to blame the fire on the battery itself. Furthermore, the configuration and usage profile of this battery is different from a battery that would be deployed in the telecom sector.
However, the fire does create an uphill battle for Electrovaya and other lithium-ion developers to demonstrate the safety and reliability of their technology, significantly delaying market adoption in the backup power sector.
Steven Minnihan is a Senior Analyst for the Grid Storage Intelligence Service at Lux Research, which provides strategic advice and on-going intelligence for emerging technologies. For more information, visit the Lux Research site.
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