Wärtsilä talks battery trends, hydrogen-led demand
In the energy storage sphere, Finnish energy solutions firm Wärtsilä is a battery system integrator, with over 12.5GWh of capacity awarded, contracted or in deployment globally.
In trailblazing Latin American storage market Chile, Wärtsilä has been present since 1992 and involved in energy storage locally since 2017.
Projects deployed include an 8MW/32MWh system for local generator Colbún at its 230MW Diego de Almagro Sur solar PV farm in Atacama region
To get an overview of storage trends and discuss green hydrogen’s potential as a demand driver, BNamericas conducted an email interview with Neha Sinha, energy storage systems product manager at Wärtsilä's energy storage and optimisation (ES&O) division, and Paulo Castro, business development manager.
BNamericas: What general trends are you seeing this year, for example in terms of battery pricing, and what impact is this having and what are the implications for the company?
Sinha: Following the elevated battery prices in previous years, we are now observing a continued decline in battery costs that exceeded predictions. This trend is intensifying market competition and creating new business opportunities for sites where reduced costs can significantly enhance the return on investment (ROI). Consequently, other components of a Battery Energy Storage System (BESS) site are becoming increasingly critical in determining the total cost of ownership. This shift underscores the importance of a comprehensive approach to site management and optimization to fully leverage the benefits of lower battery prices.
BNamericas: Where are things heading in terms of injection duration? As we understand it, the general global trend is for systems that can inject for longer. What about in Latin America?
Sinha: The global market continues to see a strong demand for products with lower durations, with 2-4 hour projects remaining predominant in all regions including Latin America. However, many in the industry project that within the next five to 10 years, there will be a significant shift towards longer-duration products. This anticipated change will necessitate a different strategic approach to maintain profitability and meet evolving market demands.
BNamericas: What about the longer term? For example, could space emerge for you to supply non- lithium-ion battery solutions, especially if indeed demand grows for systems that can inject for longer at competitive prices?
Sinha: There is a significant opportunity for alternatives to lithium-ion batteries to emerge in the market. Historically, we have seen the potential of these technologies, but none have yet reached the scale or cost efficiency required to compete effectively with lithium-ion batteries. We see two primary pathways for this shift to occur:
First, the global demand for battery energy storage is poised to one day surpass the global supply of lithium-ion batteries. In this scenario, alternative technologies such as sodium-ion batteries may become viable options for projects where the immediate availability of supply is crucial - therefore occupying a separate space in the market as opposed to directly competing with lithium-ion.
Second, the increasing demand for longer-duration energy storage solutions presents an opportunity for alternative technologies to compete in markets where the value proposition of lithium-ion batteries begins to diminish.
BNamericas: Green hydrogen, in Chile at least, could gain traction soon. How important a demand driver could this be for Wärtsilä and can you tell us whether potential clients are starting to enquire? Mining also seems another potential demand driver, given companies are looking to ‘green’ their operations.
Castro: Green hydrogen could indeed become a significant demand driver for Wärtsilä in Chile, especially considering the country's ambitious plans to lead in green hydrogen production and its abundant renewable energy resources. With several projects expected to come post-2027, there’s a clear alignment with Wärtsilä's investments in future fuels like hydrogen.
Our recent launch of the world’s first large-scale 100% hydrogen-ready engine power plant concept positions us well to capitalize on this demand. The W31SG engine, which will start with natural gas and 25% hydrogen blends, is set for sales in 2025, with deliveries in 2026. Additionally, we are already offering the W31SG with 25% hydrogen blends, showing our readiness to support these emerging opportunities. Gas will continue to play an important role in Chile's energy transition journey, providing a crucial bridge as the country moves towards more sustainable energy solutions.
Mining operations in Chile, aiming to ‘green’ their processes, also represent a potential market for our solutions. We have noticed increasing interest from potential clients in these sectors as they explore ways to integrate green hydrogen into their operations.
BNamericas: We understand that, globally, there is demand for higher energy density lithium-ion batteries. What are the benefits, what are the drawbacks?
Sinha: Lithium-ion batteries are the leading energy storage technology due to their capacity for high energy density and efficiency. The technology’s ability to store significant amounts of energy in a smaller footprint makes it an ideal option for many applications.
However, the growing demand for these batteries has highlighted challenges, including supply constraints on raw materials like lithium, as well as concerns about cost, safety, and lifespan.
BNamericas: In the energy storage integrator market, what is your unique selling point, what sets Wärtsilä apart?
Sinha: Wärtsilä ES&O’s unique selling point in the market is our comprehensive approach that combines cutting-edge hardware and software technology with a 100% fire safety record. This underscores our unwavering commitment to safety for our customers and the communities they serve.
Our hardware includes optimised rack-level control to maximise system performance, streamlined inter-unit design that enables more compact layouts at high site energy densities, increased energy density, and a back-to-back layout, amongst other distinguishing features.
Our GEMS 7 platform leverages advanced AI and machine learning to optimize performance and ensure efficient energy management across diverse applications, from grid-scale to hybrid systems. This enables us to handle our customers complex energy needs and adapt to changing grid requirements.
This dual focus on innovation and safety ensures that Wärtsilä remains at the forefront of the energy storage market.
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