BYD and Hithium’s Sodium-ion Announcements Are a Crucial Step Toward Meeting Utilities’ Energy Storage Needs

On December 12, Hithium, a Chinese battery manufacturer, launched Infinity Cell N162Ah, the first commercially available Sodium-ion (Na-ion) battery for utility-scale applications. Announced at the company’s Eco-Day in Beijing, the 6.25 Megawatt-Hour (MWh) battery is intended to support large-scale storage requirements, and was launched alongside a specialized, retail-scale microgrid system.

Throughout 2024, hype has built around Na-ion batteries’ potential for disrupting a battery market dominated by Lithium-ion (Li-ion) technologies. BYD, a leading Electric Vehicle (EV) manufacturer, has also developed its first utility-scale battery storage system, the MC Cube SIB ESS, with a capacity of 2.3 MWh. Earlier in the year, CATL, a major Chinese producer, broke ground on a 30 Gigawatt-Hour (GWh) Na-ion battery factory, which will produce its 2nd generation Na-ion line for market entry in 2025. Additionally, in August, U.S.-based Natron Energy announced plans to build its Na-ion gigafactory in North Carolina.

The push to commercialize grid-scale Na-ion batteries clarifies the technology’s prospective contribution to the energy transition.

Na-ion batteries will not replace Li-ion alternatives altogether. Na-ion systems tend to be larger and more unwieldy, and are, therefore, more suitable for static storage, short-distance transport, and powering heavy equipment. For now, Li-ion Battery Energy Storage Systems (BESSs) have higher energy densities, so they are ideal for high-performance applications. However, if sodium-based options become price competitive, the technology could find a comparative advantage in supporting retail, enterprise, industry, and utility-scale systems, for which lithium solutions may prove prohibitively expensive or ill-suited. As recent announcements indicate, grid-scale applications, where size and weight are less important, have been identified as a clear opportunity to spearhead commercial development.

Achieving price parity is not a clear outcome for sodium battery alternatives. A recent study from STEER, a Department of Energy (DOE)-funded project at Stanford University, finds that further breakthroughs will be needed before Na-ion batteries can compete with Li-ion technology, for which prices have fallen by 20% through 2024, according to BloombergNEF. To effectively compete, STEER argues that the cell-level density of Na-ion technologies must be significantly improved, with fewer materials—especially critical minerals—used in their manufacture. Until this is achieved, incumbent Li-ion batteries are likely to remain cheaper than sodium options.

Despite these challenges, the world’s largest battery producers are betting heavily on the applicability of Na-ion technologies—especially for utilities. With renewable intermittency and grid congestion being abiding challenges throughout 2024, vendors have recognized that system operators are actively seeking BESS solutions heading into 2025.

As recent flurries of Na-ion commercial announcements are a consequence of increasing demand, so are the increasingly optimistic forecasts by the manufacturers themselves. BYD estimates that its Na-ion batteries will reach cost parity with Li-ion alternatives by next year and undercut lithium-based solutions by as much as 70% in the long run. For its part, CATL—already a dominant player in the Li-ion industry—expects that, long-term, Na-ion BESSs will replace half of the existing market. If producers are correct, Na-ion batteries will be indispensable to the storage portfolio in years to come.

If adopted, effective, high-capacity Na-ion BESSs will allow utilities to better store notoriously intermittent renewable energy. This would serve a triple purpose. First, by reducing reliance on “feed-in” system management, whereby renewables are switched off at peak production times to reduce grid congestion, renewable output can be maximized and load effectively managed. Second, storage would nullify “system redispatch” practices, in which imbalanced energy generation is adjusted by activating conventional, fossil fuel-powered generators and plants, with batteries accounting for the difference. Third, by stabilizing per-MWh energy prices, Na-ion systems would bolster investment in additional renewable generation facilities—much of which was disincentivized by negative returns in 2024.

Therefore, as battery producers begin to launch grid-scale solutions, utilities must:

• Design Diverse Storage Portfolios: Na-ion BESS solutions will be valuable to system operators and should be adopted where suitable across grids. Additionally, finding applications where higher-performance Li-ion systems can complement and amplify storage across the portfolio will improve reliability, efficiency, and coverage.
• Reinforce Capital Expenditure (CAPEX) Investments with Complementary Operational Expenditure (OPEX) Approaches: While CAPEX investments in storage capabilities and grid expansions are necessary, adoption of operational and market-based solutions are just as important as physical alternatives. Dedicated support for, and involvement in, flexibility markets, in which excess energy can be bought and sold between operators and Distributed Energy Resources (DERs), will also be essential to create agile and uncongested grids.
• Invest in Long-Term Solutions: Battery systems—either sodium- or lithium-based—are inherently suited to shorter-term energy storage. To create a robust, layered portfolio for managing grid congestion and intermittency, long-term storage approaches should also be explored, with attention given to hydrogen and gravity solutions.

Na-ion batteries are not a panacea for utility-level storage demands. Li-ion batteries will still be essential for creating robust, uncongested grids, as will long-term storage methods and developed flexibility markets. Yet, Na-ion solutions are likely to form a cornerstone of the future energy system, especially in the large-scale applications required by contemporary operators. Their commercialization, therefore, is an essential initial step—one that utilities are set to be the first beneficiaries of.