Reshoring, technology diversification are reshaping the future of energy storage – Utility Dive

Report on the U.S. Energy Storage Sector: Strategic Sourcing and Technology Diversification for Sustainable Development

Executive Summary

The United States energy storage sector is confronting significant challenges related to supply chain volatility and grid reliability. This report outlines a strategic framework for building a resilient and sustainable energy storage ecosystem by focusing on two core pillars: the reshoring of manufacturing and the diversification of battery technologies. These strategies are critical for achieving national energy security and directly support several United Nations Sustainable Development Goals (SDGs), including SDG 7 (Affordable and Clean Energy), SDG 9 (Industry, Innovation, and Infrastructure), and SDG 12 (Responsible Consumption and Production).

Advancing Sustainable Infrastructure through Domestic Supply Chains

Addressing Global Trade Uncertainties (SDG 9)

Current geopolitical and trade dynamics present considerable risks to the U.S. energy storage supply chain. A strategic shift toward domestic production is imperative for mitigating these risks and fostering sustainable industrialization.

• Impact of Tariffs: Increased costs for imported battery materials and components, affecting both lead and lithium-based systems, undermine energy affordability.
• Export Restrictions: Reliance on foreign nations for key minerals creates vulnerabilities that can disrupt the availability of energy storage solutions.
• Onshoring as a Solution: Localizing the battery supply chain strengthens national energy independence and builds resilient infrastructure, a key target of SDG 9. While initial investment costs for facilities are high, strategic partnerships, joint ventures, and mergers are viable pathways for overcoming these financial hurdles.

Enhancing Grid Resilience and Reliability (SDG 7 & SDG 11)

Modernizing the U.S. electrical grid is essential for ensuring the delivery of reliable and clean energy to all communities. Energy storage is a foundational component of this modernization effort.

• Grid Stressors: The grid faces increasing strain from aging infrastructure, extreme weather events, and the integration of intermittent renewable energy sources.
• Role of Energy Storage: Advanced energy storage systems provide critical backup power, stabilize grid fluctuations, and enable the widespread deployment of clean energy, thus contributing to SDG 7 and making cities more sustainable and resilient (SDG 11).

Technology Diversification for a Sustainable Energy Portfolio

Moving Beyond Lithium Dependency

While lithium-ion technology is a central part of the energy storage landscape, over-reliance on a single chemistry creates supply chain bottlenecks and may not be optimal for all grid applications. A diversified portfolio of battery technologies is necessary to build a flexible and robust energy infrastructure capable of meeting diverse needs.

Alternative Technologies Supporting Sustainability Goals

To enhance grid resilience and promote responsible production, the industry must integrate alternative and complementary battery technologies.

1. Advanced Lead Battery Energy Storage Systems (BESS)

   • Contribution to SDG 12: Lead BESS technology operates within a mature and highly effective circular economy, where nearly 100% of battery materials are recycled. This model exemplifies the principles of SDG 12 (Responsible Consumption and Production).
   • Domestic Supply Chain: The well-established U.S. supply chain for lead batteries supports domestic industry and reduces reliance on foreign imports, aligning with SDG 9.
   • Application: It is a proven, cost-effective solution for medium-duration and decentralized applications, providing stable backup power and integrating renewables into the grid.

2. Vanadium Redox Flow Batteries (VRFBs)

   • Contribution to SDG 7: VRFBs are exceptionally well-suited for long-duration energy storage, a critical requirement for maximizing the use of renewable energy sources like solar and wind and ensuring a consistent supply of clean energy.
   • Developing Infrastructure: The domestic supply chain for VRFBs is expanding, presenting an opportunity to build new, sustainable industrial capacity in line with SDG 9.

Conclusion and Recommendations

A resilient and sustainable energy future for the United States depends on the parallel advancement of strategic domestic sourcing and technology diversification. The persistent challenges of tariffs, supply chain constraints, and geopolitical instability necessitate a proactive approach to building a secure, domestically sourced energy infrastructure.

• Invest in a Diversified Technology Portfolio: Promote the deployment of a broader mix of proven technologies, including lithium, advanced lead, and vanadium, to meet the full spectrum of grid needs.
• Accelerate Domestic Manufacturing: Support the onshoring of battery manufacturing to create resilient supply chains, foster economic growth, and advance SDG 9.
• Prioritize Circular Economy Models: Champion technologies like lead BESS that demonstrate high recyclability and contribute directly to SDG 12, ensuring responsible resource management.

By strengthening the foundations of the domestic energy storage supply chain, the U.S. can deliver a more secure and flexible grid prepared to meet future energy challenges and achieve its sustainable development objectives.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 7: Affordable and Clean Energy – The article’s central theme is energy storage, which is crucial for grid stability and the integration of renewable energy sources, directly supporting the transition to cleaner energy systems.
• SDG 9: Industry, Innovation, and Infrastructure – The text focuses heavily on building a resilient domestic energy infrastructure, modernizing the electrical grid, and fostering innovation in battery manufacturing and technology diversification (e.g., vanadium and lead batteries).
• SDG 12: Responsible Consumption and Production – The article highlights the sustainability of certain battery technologies, specifically mentioning the “fully established circular economy” of lead batteries where “nearly 100% of battery materials are recycled.”
• SDG 13: Climate Action – By enabling the increased use of renewable energy and stabilizing the power grid, the energy storage solutions discussed are essential for mitigating climate change and adapting to its impacts, such as extreme weather events that strain the grid.
• SDG 17: Partnerships for the Goals – The article mentions the need for partnerships to overcome financial hurdles in localizing manufacturing, citing “joint ventures, mergers and acquisitions, and partnerships” as key strategies.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Under SDG 7 (Affordable and Clean Energy):
   • Target 7.2: “By 2030, increase substantially the share of renewable energy in the global energy mix.” The article supports this by discussing how energy storage helps “integrate renewable energy sources into the existing power mix” and supports “clean energy deployment.”
   • Target 7.a: “By 2030, enhance international cooperation to facilitate access to clean energy research and technology… and promote investment in energy infrastructure and clean energy technology.” The article’s call to invest in a “broader mix of proven technologies, such as lithium, lead and vanadium” and “accelerate the buildout of a robust domestic manufacturing base” aligns with this target.
2. Under SDG 9 (Industry, Innovation, and Infrastructure):
   • Target 9.1: “Develop quality, reliable, sustainable and resilient infrastructure…” The article directly addresses this by aiming to “build a resilient, future-ready energy storage ecosystem” to ensure grid reliability and modernize aging infrastructure.
   • Target 9.4: “By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies…” The promotion of lead BESS with its high recyclability and the diversification away from a single technology to create a more sustainable energy infrastructure fits this target.
   • Target 9.b: “Support domestic technology development, research and innovation…” The entire push for “reshoring the battery supply chain,” “technology diversification,” and building a “robust domestic manufacturing base” is a direct reflection of this target.
3. Under SDG 12 (Responsible Consumption and Production):
   • Target 12.5: “By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse.” The article explicitly points to this target by highlighting lead BESS, which has a “fully established circular economy, in which nearly 100% of battery materials are recycled.”
4. Under SDG 13 (Climate Action):
   • Target 13.2: “Integrate climate change measures into national policies, strategies and planning.” The article frames the development of a resilient energy storage supply chain as a “national priority” to handle challenges like “more frequent extreme weather events” and support the transition to clean energy, which are key climate strategies.
5. Under SDG 17 (Partnerships for the Goals):
   • Target 17.17: “Encourage and promote effective public, public-private and civil society partnerships…” The article identifies that smaller battery providers are using “consolidation strategies, including joint ventures, mergers and acquisitions, and partnerships” to fund domestic manufacturing, demonstrating this target in action within the industry.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Share of renewable energy in the energy mix (Implied for Target 7.2): The article mentions the “rising share of renewable energy sources” as a factor driving the need for energy storage, implying this is a key metric.
• Investment in domestic manufacturing and infrastructure (Implied for Targets 7.a and 9.1): The article discusses the high cost of building plants (e.g., “half a billion dollars” for a lithium cell plant) and the need to “accelerate the buildout of a robust domestic manufacturing base,” suggesting that investment levels and the number of new domestic facilities are key progress indicators.
• Diversity of energy storage technologies deployed (Mentioned for Target 9.b): The article explicitly calls for a “diversified portfolio of chemistries” and tracks the growing interest in alternatives like “vanadium redox flow batteries and advanced lead BESS.” The number and capacity of non-lithium storage projects, like the lead BESS installation at Georgia Tech, would be a direct indicator.
• National recycling rate of battery materials (Mentioned for Target 12.5): The article provides a specific indicator for lead batteries, stating that “nearly 100% of battery materials are recycled.” This rate can be used as a benchmark for measuring the circularity of different battery technologies.
• Number of industry partnerships for domestic production (Mentioned for Target 17.17): The text points to the formation of “joint ventures, mergers and acquisitions, and partnerships” as a specific strategy. Tracking the number of such collaborations would measure progress in mobilizing resources for onshoring.

4. Summary Table of SDGs, Targets, and Indicators

Source: utilitydive.com