Energy storage market shifts toward LFP and non-lithium tech for AI data centers

The growing demand for Energy Storage Systems (ESS) driven by AI data center expansion is reshaping the battery market. POSCO Future M has secured significant supply contracts for Lithium Iron Phosphate (LFP) cathode materials, including a 1.07 trillion won deal with SK On for delivery between 2027 and 2029. This shift toward LFP technology aims to provide cost-effective and stable power solutions for data centers.

Simultaneously, companies are developing non-lithium alternatives to mitigate fire risks associated with traditional lithium-ion batteries. US-based Form Energy is utilizing iron-air technology to provide long-duration energy storage for up to 100 hours. Eos Energy Enterprises is focusing on aqueous zinc-bromine batteries for 4 to 16-hour storage, while Cosmos Lab pursues zinc-halogen solutions. These technologies aim to address the safety and resource dependency challenges of the current lithium-dominated market.