In recent years, lithium-ion batteries have found a way to become a key energy storage technology in the global data center industry as operators search for solutions to reduce their carbon footprint and power consumption vs lead acid batteries, diesel generators and other traditionally deployed technologies.
According to Frost & Sullivan report Analysis of Lithium Ion Battery in Data Centres cited by DataCenter Dynamics, while in 2020 lithium-ion batteries accounted for 15% of the data center battery market, by 2025 they are expected to represent 38.5%. Smaller footprint, lighter weight, less maintenance and better environmental protection were included as benefits of lithium-ion over traditional VRLA batteries, making them an increasingly popular choice.
According to Statista, the data volume generated worldwide will exceed 180 zetabytes in 2025, which means an average annual growth of almost 40% over five years.
This strong increase in data traffic has caused lithium-ion batteries to become a viable alternative source of stored energy for data centers, due to their higher performance, flexibility of use and lower total cost of ownership (TCO) compared to valve-regulated lead-acid (VRLA) batteries.
A Vertiv evaluation determined that lithium-ion batteries have greater reliability and availability, have 60% less weight, greater energy and power density, and a resistance of up to almost 10ºC more than VRLA and double the useful life. Comparing total cost of ownership (TCO) of a 1500VA UPS with lithium-ion to a VRLA alternative over 10 years shows an estimated 41% lower TCO for the UPS using lithium-ion batteries.
The opportunity of Lithium in Latin America
According to data from the United States Geological Survey, lithium resources have increased substantially worldwide and total about 86 million tons, of which 52.9 million tons are located in Bolivia, Argentina, Chile, Mexico, and Peru (more than 61% of the world’s lithium reserves).
The importance that lithium is taking within data centers and the energy transition scheme of all industries in general represents a key opportunity for the mining industry in Latin America. According to the IDB, mining exports already represent over 50% of exports in countries like Chile and Peru.
It is this newfound interest worldwide that has caused lithium prices to skyrocket in the last two years more than 11 times, going from US$6,000 per ton in March 2020 to more than US$70,000 at its peak in 2022.
More growth demands more innovation and value
For the regional mining industry, this scenario undoubtedly represents a commercial advantage, especially if the value chain is strengthened, for which it is necessary to invest in Research & Development (R&D), with the aim of identifying investment opportunities in this field.
According to the IDB, mining suppliers could capture larger segments of the value chain by adding scientific and technological knowledge to their operations through biotechnology, new materials, information and communication technologies, and automation.
This innovation, at the same time, represents new opportunities for the data center industry, since it is the one that has the capacity to provide the storage, processing and control of the data generated through these technologies.
We see here a combined effort between both industries, being at this moment each of them an enhancer of the other. On the one hand, lithium is an essential asset for the development of data centers and data center energy storage and therefore its extraction will be key soon; on the other, the growth of the mining industry projected for our region makes it increasingly necessary to digitize and automate it to further increase its efficiency.
In response to this trend, Vertiv has sought to innovate alternative solutions for lithium-ion-based Uninterruptible Power Supply Units (UPS) in response to data center power needs. To learn more about our products, click here.
