The Sodium Ion Batteries Behind Reliance’s $135 million Purchase of Faradion

When Reliance announced the outright purchase of UK based Faradion Limited on the last day of 2021, it was widely seen as one more brick in the renewable edifice that Reliance has committed itself to. The Faradion investment was the 6th major investment by the firm into technologies or competency in the renewable space. But the Faradion buy, much like the earlier investment it has made into liquid metal battery startup Ambri, is also a punt on an alternative storage technology that is seen as most likely to challenge the incumbent no. 1, Lithium-Ion batteries.

In our current pursuit of transforming the global energy sector from fossil-based to zero-carbon by the second half of this century, the development of sustainable technologies — especially for electric vehicles (EVs) — is gaining a lot of momentum.

In any new research, increasing the efficiency and cost-effectiveness of available technologies is often a top priority. In the case of EVs and energy storage, for instance, sodium-ion (Ni-ion) batteries represent an attractive alternative to expensive lithium-ion ones, which are currently in commercial use. Depending on vehicles, Li-ion batteries contribute to 20-40 percent of EVs’ costs, adding an element of cost rigidity that vehicle makers abhor. The high costs of Lithium are behind this stickiness, even as China’s control over the supply chain also terrifies many firms. Attempts to reduce these costs by newer versions, like LFP (Lithium Ion Phosphate) as compared to the prevalent Lithium NMC batteries and other options are ongoing.

Sodium, on the other hand, is obviously abundantly available and easily harvestable: it can be simply extracted from salt, which itself is found in extremely high quantities in ocean and seawater, and can produce clean drinking water as a result as well. Sodium-ion material costs are expected to remain stable over the next 10 years, according to Wood Mackenzie.

Additionally, unlike Li-ion batteries that need the presence of the highly expensive cobalt, Na-ion batteries use iron and manganese, which are much cheaper and accessible in comparison.

For this reason, several companies are developing sodium-ion batteries for various electrical devices, including the Chinese lithium-ion battery giant CATL, which unveiled its first sodium-ion battery in July 2021. CATL plans to begin commercial production in 2023. Reliance Industries entry marks the biggest push from India.

By buying up Faradion, Reliance New Energy Solar Ltd (RNESL) will use Faradion’s state-of-the-art technology at its proposed fully integrated energy storage giga-factory as part of the Dhirubhai Ambani Green Energy Giga Complex project at Jamnagar, India, an official press release said.

In addition, RNESL also has plans to invest GBP 25 Mn as growth capital to accelerate commercial roll out.

According to RIL, Faradion’s sodium-ion technology is better than alternative battery technologies like lithium-ion and lead acid for the following reasons:

• Sustainable: There is no dependence and use of cobalt, lithium, copper or graphite. Sodium is the sixth most abundant element on the planet. Patented zero-volt safe transport and storage.
• Low cost: total cost of ownership already comparable to lead-acid with potential for further reductions in costs.
• Scalability: utilises existing lithium-ion manufacturing infrastructure and is already proven with multiple commercial manufacturing partners.
• Performance: energy density on par with lithium-ion phosphate and with wider operating temperature range of -30°C to +60°C. Fast charge/ discharge capability.

All of this combines to offer a next generation, high density, safe, sustainable and low-cost energy storage technology solution, says RIL.

“We will work with Faradion management and accelerate its plans to commercialise the technology through building integrated and end-to-end giga scale manufacturing in India,” said Mukesh Ambani, Chairman of Reliance Industries. It’s a well established template now, which Reliance has incorporated in its investment in Stiesdal for Hydrogen Electrolyser manufacturing, as well as possible manufacturing for Ambri. Do the all the manufacturing for the Indian market and region.

“Faradion has been one of the first to champion sodium-ion battery technology. Together with Reliance, Faradion can bring British innovation to India and globally, as the world increasingly looks beyond lithium,” says James Quinn, CEO of Faradion.

The cost of battery-grade lithium carbonate has more than tripled in the past 12 months, to above $30 per kg, according to the tracking firm S&P Global Platts. Meanwhile, the International Energy Agency forecasts that demand for lithium will increase by a factor of 43 between 2020 and 2040.

Sodium-ion batteries are expected to replace some of the LFP shares in passenger EVs and energy storage, reaching 20 GWh by 2030, finds Wood Mackenzie. The cost saving would be incredible: the production of 1 GWh Na-ion cells will save 41% of the material expense compared with LFP cells. By 2030, Na-ion cells are expected to drive 82 kt of aluminium, sodium and hard carbon demand, representing a niche market compared to Li-ion batteries.

Faradion claims to have a wide-ranging patent position relating to sodium-ion batteries, including eight families of patents that cover cell materials, cell infrastructure, and safety and transportation. To many, in acquiring Faradion, Reliance seems to have made a timely and lucrative deal.