# Storing energy: from fuel stocks to batteries: Batteries: chemistry, cost and wear

Source page: https://www.materialinsights.org/learn/energy/storing-energy/p2/

[Understanding Energy](https://www.materialinsights.org/learn/energy/) / [Module 10: Storing energy: from fuel stocks to batteries](https://www.materialinsights.org/learn/energy/storing-energy/) Part 2 of 4

## Batteries: chemistry, cost and wear

Batteries are now the fastest-growing store of electricity and the heart of the electric car. They are efficient, modular and quick to build, but they hold little energy per kilogram compared with fuels, they wear out with use, and they depend on a handful of minerals. Understanding the main chemistries explains most of the trade-offs.

### 2.1 A lithium-ion cell moves ions between two electrodes

A battery stores energy in chemical form and releases it as electric current. A lithium-ion cell has a negative electrode, usually graphite coated on copper foil, and a positive electrode made of a lithium metal oxide or phosphate coated on aluminium foil. Between them sit a porous separator and a liquid electrolyte. When the cell charges, lithium ions leave the positive electrode, cross the electrolyte and slip between the layers of graphite, while electrons are pushed round the external circuit. On discharge the ions return and the electrons do useful work on their way.

Because nothing burns and no heat engine is involved, the process is efficient. A grid battery typically returns about 85% of the electricity put into it, after losses in the cells, in the inverters that convert between the grid's alternating current and the battery's direct current, and in cooling. PNNL's cost and performance assessment assumes 86% for today's lithium-ion systems and 88% by 2030. Few other stores do as well.

The weakness is energy density. The best lithium-ion cells hold about 1 MJ per kilogram at most, roughly 0.25 to 0.3 kWh. Kerosene holds about 43 MJ per kilogram, some forty to fifty times more. Smil returns to this gap often. It is why battery cars work well, why electric trucks are arriving more slowly, and why long-haul aircraft and large ocean ships cannot simply switch to batteries. His calculation for a large container ship shows that batteries for one Asia to Europe voyage would take up a large share of its cargo capacity.

Cells are grouped into modules and packs, controlled by a battery management system that tracks the voltage and temperature of every cell and stops any from being overcharged or drained too far. For grid use, packs are housed in container-sized enclosures with inverters, transformers and fire protection. The pack, not the cell, is the unit whose price is usually quoted.

Process flowchart A grid battery round trip Inputs **Electricity from the grid**100 units, AC Process steps 1 **Inverter (AC to DC)**

about 98% efficient
 2 **Cells charge and discharge**

lithium ions move into graphite and back; a few per cent lost as heat
 3 **Inverter (DC to AC)**

about 98% efficient
 4 **Cooling and controls**

auxiliary loads use a little more
 Outputs **Electricity back to the grid**about 85 to 88 units

Indicative values for a modern LFP system; efficiency falls if the battery sits idle in heat or cold, because cooling and heating continue.
 Source: Pacific Northwest National Laboratory, Lithium-ion Battery Methodology, Energy Storage Grand Challenge Cost and Performance Assessment, https://www.pnnl.gov/sites/default/files/media/file/Lithium-ion_Methodology.pdf (system round-trip efficiency 86%, 88% by 2030)  In the data

#### Energy per kilogram

Approximate energy held per kilogram: hydrogen about 120 MJ; natural gas 50 to 55 MJ; kerosene and diesel about 43 MJ; crude oil about 42 MJ; bituminous coal 22 to 30 MJ; dry wood 15 to 17 MJ; the best lithium-ion cells about 1 MJ. Battery packs hold less than their cells because of casings, wiring and cooling. Fuels, however, lose most of their energy as heat when burned, which narrows the gap in useful work.

- Smil, Energy: A Beginner's Guide (2006) · via Smil Mastery Course, M1 'Energy in matter: fuels and energy density'
- Smil, How the World Really Works (2022) · via Smil Mastery Course, M7 'Diesel engines: the movers of global trade'
- [Pacific Northwest National Laboratory, Energy Storage Cost and Performance Database (2022-2024)](https://www.pnnl.gov/projects/esgc-cost-performance) · web
- IEA, Batteries and Secure Energy Transitions (2024) · Executive summary, https://origin.iea.org/reports/batteries-and-secure-energy-transitions/executive-summary; summary via ees Europe, https://www.ees-europe.com/market-trends/battery-storage-capacity
- [Pacific Northwest National Laboratory, Lithium-ion Battery Methodology, Energy Storage Grand Challenge Cost and Performance Assessment](https://www.pnnl.gov/sites/default/files/media/file/Lithium-ion_Methodology.pdf (system round-trip efficiency 86%, 88% by 2030)) · web

### 2.2 LFP, NMC and sodium-ion trade energy for cost and safety

Lithium-ion is a family of chemistries, named mainly after the positive electrode, or cathode. Two dominate.

Nickel-rich cells, known as NMC (nickel, manganese, cobalt) or NCA (nickel, cobalt, aluminium), pack the most energy into a given weight, roughly 30 to 50% more per kilogram than LFP. That suits long-range cars and anything where weight and space are tight. But nickel and cobalt are costly, most cobalt is mined in the Democratic Republic of the Congo, and these cathodes release oxygen when badly overheated, which makes fires harder to stop. The "Nickel-rich lithium-ion batteries" tile covers them.

Lithium iron phosphate (LFP) uses iron and phosphate instead. It stores less energy per kilogram but is cheaper, more stable when hot and lasts many more charge cycles, often several thousand before capacity falls to 80%. Chinese makers improved pack designs so much that LFP now dominates Chinese electric cars, and almost all new grid batteries use it. LFP made up about 60% of the world's cells in 2024 and around 70% of cathode material shipped in 2025. BloombergNEF's 2025 survey found LFP packs averaged USD 81 per kWh against USD 128 for NMC.

Sodium-ion cells replace lithium with sodium, which is abundant and cheap, and usually use hard carbon in place of graphite. They hold less energy than LFP but perform better in the cold and avoid lithium price swings. They are entering production, mainly in China, for small cars, two-wheelers and storage, and serve partly as a hedge: if lithium becomes expensive again, sodium can take more of the market.

Other chemistries fill niches. Lead-acid batteries remain cheap for starting cars and for backup. Flow batteries keep their energy in tanks of liquid electrolyte, so energy and power can be sized separately, which suits longer durations. Solid-state lithium cells promise higher density and safety but are still mostly in development; the "Next-generation lithium batteries" tile follows them.

Data Main battery chemistries compared

| Chemistry | Cell energy (indicative) | Strengths | Weaknesses | Typical uses |
|---|---|---|---|---|
| LFP | about 160 to 200 Wh/kg | Cheap, stable, long cycle life, no nickel or cobalt | Heavier, weaker in cold | Grid storage, most Chinese electric cars |
| NMC and NCA | about 220 to 300 Wh/kg | Highest energy density | Costly metals, more prone to fire | Long-range cars, electronics |
| Sodium-ion | about 100 to 175 Wh/kg | No lithium, cheap materials, good in cold | Lower density, young supply chain | Small cars, two-wheelers, storage |
| Lead-acid | about 30 to 40 Wh/kg | Cheap, widely recycled | Heavy, short life when deeply cycled | Car starting, backup power |
| Vanadium flow | about 15 to 25 Wh/kg | Very long life, power and energy sized separately | Bulky, higher cost | Longer-duration grid storage |

Ranges are indicative cell-level values from industry literature; complete packs and systems hold less.
 Source: Indicative cell-level ranges from manufacturer and industry data, including CATL's Naxtra sodium-ion cell (175 Wh/kg, 2025) and PNNL's lithium-ion methodology (cycle life), https://www.batterytechonline.com/materials/5-key-takeaways-from-catl-s-naxtra-sodium-ion-battery-launch; https://www.pnnl.gov/sites/default/files/media/file/Lithium-ion_Methodology.pdf  Common misreading

#### Every lithium battery needs cobalt

Cobalt is used in nickel-rich cathodes and in the lithium cobalt oxide cells of phones and laptops, but LFP contains none, and neither does sodium-ion. As LFP took most of the electric car market in China and nearly all grid storage, the battery industry's need for cobalt per kWh fell sharply, even as total battery output soared. Cobalt demand now depends mostly on long-range cars and electronics.

- [BloombergNEF, Lithium-ion battery pack prices fall to $108 per kilowatt-hour despite rising metal prices (December 2025)](https://about.bnef.com/insights/clean-energy/lithium-ion-battery-pack-prices-fall-to-108-per-kilowatt-hour-despite-rising-metal-prices-bloombergnef/) · web
- SMM, GGII and SNE Research cathode shipment data for 2024-2025 (2025-2026), as compiled in the site's Cathode materials chemical tile · Cathode materials tile, Table of chemicals
- IEA, Batteries and Secure Energy Transitions (2024) · Executive summary, https://origin.iea.org/reports/batteries-and-secure-energy-transitions/executive-summary; summary via ees Europe, https://www.ees-europe.com/market-trends/battery-storage-capacity
- [Cobalt Institute, Cobalt Market Report 2025 (2026)](https://www.cobaltinstitute.org/resource/cobalt-market-report-2025/) · web
- [Battery Technology, 5 key takeaways from CATL's Naxtra sodium-ion battery launch (April 2025)](https://www.batterytechonline.com/materials/5-key-takeaways-from-catl-s-naxtra-sodium-ion-battery-launch) · web

### 2.3 Battery prices fell by about 90% in little more than a decade

The striking fact about batteries is how fast they have become cheap. The IEA notes that lithium-ion battery costs fell by about 90% between 2010 and 2023. BloombergNEF's annual survey put the average lithium-ion pack price at USD 108 per kWh in 2025, down 8% in a year, even though some metal prices rose. Packs for stationary storage were the cheapest segment for the first time, at USD 70 per kWh, 45% lower than in 2024. Prices in China averaged USD 84 per kWh; packs in North America and Europe cost 44% and 56% more.

Three forces drove the fall: manufacturing scale, as factories built for electric cars grew to hundreds of GWh a year; steady gains in cell design and energy density; and, since 2023, overcapacity in China and the collapse of lithium prices from their 2022 peak. The cycle can turn. Lithium carbonate prices rose again in late 2025 and early 2026, and Chinese controls on exports of battery and cathode technology hang over supply chains.

A pack is not a working power plant. A grid project also needs inverters, transformers, enclosures, fire systems, land, a grid connection and finance. Investors therefore look at the levelised cost of storage (LCOS): the total lifetime cost divided by the MWh discharged. Lazard's 2025 analysis for the United States put unsubsidised LCOS for a 100 MW, four-hour standalone battery at USD 115 to 254 per MWh, down from USD 170 to 296 a year earlier. Two-hour systems came to USD 129 to 277 per MWh, and 1 MW commercial systems to USD 319 to 506. The fall did not last: Lazard's 2026 edition put the four-hour case at USD 210 to 292 per MWh, as US tariffs and restrictions on Chinese cells raised equipment costs.

For India the falling prices matter directly. The IEA observed in 2024 that solar paired with batteries was already competitive with new coal plants in India. It lets cheap midday sunshine be shifted into the evening peak, which is exactly the gap Indian grid operators find hardest to fill.
 Worked example

#### A rough storage cost sum

Suppose a four-hour battery costs USD 250 per kWh fully installed (an illustrative figure), lasts 6,000 full cycles and returns 85% of what it takes in. Each kWh of capacity then delivers about 5,100 kWh over its life, so the capital adds about USD 0.05 per kWh, or USD 49 per MWh, before interest, maintenance and the cost of charging. Interest over 15 to 20 years and fewer cycles in practice explain why published LCOS figures are two to five times higher.

- IEA, Batteries and Secure Energy Transitions (2024) · Executive summary, https://origin.iea.org/reports/batteries-and-secure-energy-transitions/executive-summary; summary via ees Europe, https://www.ees-europe.com/market-trends/battery-storage-capacity
- [BloombergNEF, Lithium-ion battery pack prices fall to $108 per kilowatt-hour despite rising metal prices (December 2025)](https://about.bnef.com/insights/clean-energy/lithium-ion-battery-pack-prices-fall-to-108-per-kilowatt-hour-despite-rising-metal-prices-bloombergnef/) · web
- [Lazard, Levelized Cost of Energy+ (June 2025), as reported by Energy-Storage.News](https://www.energy-storage.news/?p=81297; https://www.lazard.com/news-announcements/lazard-releases-2025-levelized-cost-of-energyplus-report-pr/) · web
- US Geological Survey, Mineral Commodity Summaries 2026: Lithium (2026) [web ↗](https://pubs.usgs.gov/publication/mcs2026) · web
- SMM, GGII and SNE Research cathode shipment data for 2024-2025 (2025-2026), as compiled in the site's Cathode materials chemical tile · Cathode materials tile, Table of chemicals
- [ESS News, Battery storage costs up 27% since 2020, says Lazard (July 2026); Energy-Storage.News, Lazard: US utility-scale energy storage LCOS has increased since restrictions on Chinese cells came into force (2026)](https://www.ess-news.com/2026/07/13/battery-storage-costs-up-27-since-2020-says-lazard/; https://www.energy-storage.news/lazard-us-utility-scale-energy-storage-lcos-has-increased-since-restrictions-on-chinese-cells-came-into-force/) · web

### 2.4 Batteries wear out and, rarely, catch fire

Every charge and discharge slightly damages a battery. Side reactions consume lithium and electrolyte, films build up on the electrodes, and particles crack as they swell and shrink. Capacity therefore fades, usually measured as the number of full cycles before a cell keeps only 80% of its original capacity. Heat, very fast charging and leaving cells full or empty for long periods all speed this up. Batteries also age with time even when idle, which is called calendar ageing.

Owners plan for this. Grid batteries are often oversized at the start or topped up with extra modules during their life, a practice called augmentation, and warranties typically guarantee a minimum capacity after ten to twenty years. LFP's long cycle life is a major reason it dominates stationary storage, where a battery may cycle once or twice every day.

The main safety risk is thermal runaway. If a cell is damaged, badly made or overcharged, it can heat up internally, which triggers reactions that release more heat and flammable gases, and the fire can spread from cell to cell. Lithium-ion fires are hard to put out and can reignite. On 16 January 2025 a fire broke out in Vistra's 300 MW, 1,200 MWh Phase I battery plant at Moss Landing in California, part of one of the largest storage sites in the world. Its nickel-based modules sat inside a building rather than in spaced outdoor containers; about half of them burned, evacuation orders were issued and local schools closed, and the fire hardened opposition to battery sites.

Yet failures have become much rarer as the fleet has grown. EPRI's analysis of its incident database found that failures per GWh deployed fell by about 98% between 2018 and 2025, to about 0.04 a year per GWh, thanks to better cells, spacing, detection and standards. LFP chemistry, outdoor containers with gaps between them, gas detection and careful commissioning reduce the risk further. At the end of their life, cells can be recycled to recover lithium, nickel, cobalt, copper and aluminium, though recycling at large volume is still a young industry, because most batteries in service are only a few years old.
 Common misreading

#### Battery storage is unusually dangerous

Battery fires are dramatic and attract attention, and they do release toxic gases. But serious incidents are rare relative to the thousands of GWh now in service, and the rate has fallen steeply. Fuel depots, gas networks and coal plants also have fire and explosion risks. The sensible response is good siting, spacing, monitoring and emergency planning, not avoiding the technology.

- [EPRI, Risk Factors and Failure Statistics of Lithium-Ion BESS (2026), as reported by ESS News, Global battery storage failure rate down 98% since 2018 (October 2026)](https://www.ess-news.com/2026/10/15/global-battery-storage-failure-rate-down-98-since-2018/; EPRI BESS Failure Incident Database, https://storagewiki.epri.com/index.php/BESS_Failure_Event_Database) · web
- [EPRI Storage Wiki, Failure Event - US, CA, Moss Landing - 16 Jan 2025](https://storagewiki.epri.com/index.php/Failure_Event_-_US,_CA,_Moss_Landing_-_16_Jan_2025) · web
- [Pacific Northwest National Laboratory, Energy Storage Cost and Performance Database (2022-2024)](https://www.pnnl.gov/projects/esgc-cost-performance) · web
- IEA, Batteries and Secure Energy Transitions (2024) · Executive summary, https://origin.iea.org/reports/batteries-and-secure-energy-transitions/executive-summary; summary via ees Europe, https://www.ees-europe.com/market-trends/battery-storage-capacity
- [Power Engineering, Fire engulfs Moss Landing, one of the world's largest battery energy storage systems (January 2025)](https://www.power-eng.com/energy-storage/batteries/fire-engulfs-moss-landing-one-of-the-worlds-largest-battery-energy-storage-systems/) · web

### See it in the table
[Oil Crude oil](https://www.materialinsights.org/energy/crude_oil/)[Gas Natural gas](https://www.materialinsights.org/energy/natural_gas/)[Cu Copper](https://www.materialinsights.org/commodities/copper/)[Al Aluminium](https://www.materialinsights.org/commodities/aluminum/)[Ni Nickel](https://www.materialinsights.org/commodities/nickel/)[Mn Manganese](https://www.materialinsights.org/commodities/manganese/)[Li Lithium](https://www.materialinsights.org/commodities/lithium/)[Co Cobalt](https://www.materialinsights.org/commodities/cobalt/)[Gr Graphite](https://www.materialinsights.org/commodities/graphite/)[H2 Hydrogen](https://www.materialinsights.org/chemicals/hydrogen/)[O2 Oxygen](https://www.materialinsights.org/chemicals/oxygen/)[NMC Nickel-rich lithium-ion batteries](https://www.materialinsights.org/energy/e_li_nmc/)[SSB Next-generation lithium batteries](https://www.materialinsights.org/energy/e_li_next/)[PbA Lead-acid batteries](https://www.materialinsights.org/energy/e_lead_acid/)

### Check your understanding

Why does LFP dominate grid battery storage?
 Weight matters little for a grid battery, while cost, safety and cycle life matter a lot.

What average price did BloombergNEF's 2025 survey find for stationary storage battery packs?
 Stationary packs averaged USD 70 per kWh, the cheapest segment, against USD 108 across all uses.

What is augmentation in a grid battery project?
 Capacity fades with use, so owners add modules to keep delivering the contracted energy.

[← Part 1: Why storage matters and how much the world holds](https://www.materialinsights.org/learn/energy/storing-energy/p1/)[Mark read · Part 3: Mechanical, thermal and chemical stores →](https://www.materialinsights.org/learn/energy/storing-energy/p3/)

## Other sections

- [Module overview](https://www.materialinsights.org/learn/energy/storing-energy/index.md)
- [Why storage matters and how much the world holds](https://www.materialinsights.org/learn/energy/storing-energy/p1/index.md)
- [Mechanical, thermal and chemical stores](https://www.materialinsights.org/learn/energy/storing-energy/p3/index.md)
- [Choosing a store: efficiency, duration, cost and minerals](https://www.materialinsights.org/learn/energy/storing-energy/p4/index.md)
- [Key terms, quiz and sources](https://www.materialinsights.org/learn/energy/storing-energy/review/index.md)