Lithium-ion batteries
Lithium-ion batteries, essential for energy storage
Lithium-ion batteries are rechargeable systems capable of storing electrical energy and releasing it when needed. Their high energy density, efficiency and versatility have driven their use in electronic devices, electric vehicles and energy storage systems. Furthermore, their ability to store electricity makes them a key technology for integrating renewable energy and moving towards a more electrified and decarbonised energy system.
Your wireless headphones, your mobile phone, your smart watch, your solar panel installation or your electric car would not have been possible just a couple of decades ago. This revolution has come about thanks to, among other things, lithium-ion batteries. Their ability to store more energy in less space and their versatility have driven the electrification of numerous sectors, making them a key technology for energy storage. Their development will be crucial to establishing a clean and sustainable energy model, based on greater integration of renewable energy, energy storage and decarbonisation.
Added to this technological evolution is the importance of cost reduction. The price of lithium-ion battery packs has fallen by 93% since 2010, reaching an all-time low of $108 per kWh in 2025, according to BloombergNEF.
External link, opens in new window. Between 2024 and 2025 alone, the average price fell by 8%.External link, opens in new window. This trend has encouraged the expansion of electric mobility and, in particular, energy storage: battery packs for stationary storage (fixed systems for capturing, storing and feeding electricity back into the electrical network) reached $70 per kWh in 2025, 45% less than the previous year.
Thus, falling costs, together with technological advances, are helping to make batteries more competitive and facilitating greater integration of renewable energy.
What is a lithium-ion battery?
A lithium-ion battery, also known as a Li-Ion battery, is a type of rechargeable battery that uses lithium compounds and in which lithium ions move between two electrodes during the charging and discharging processes.
Its development was the result of decades of research. In 1985, Akira Yoshino developed an initial prototype based on previous research, while Sony brought the first lithium-ion battery to market in 1991. Since then, the technology has evolved, with new materials and designs aimed at improving its energy density, performance, cost and safety.
A key technology for energy storage
The ability of lithium-ion batteries to store a large amount of energy in a small space, as well as their efficiency and rapid response time, make them a particularly suitable technology for energy storage. They can store electricity when there is a surplus of generation, for example from solar or wind power, and release it later when it is needed.
In this way, they help to manage the variability of renewable generation and adapt the availability of electricity to the system’s needs.
Charging lithium-ion batteries, functioning and characteristics
Lithium-ion batteries are made up of the following parts: a negative electrode or anode from which the electrons are released and a positive electrode or cathode that receives them. When the battery is connected, lithium ions move from the anode to the cathode through an electrolyte, resulting in the potential difference that produces the current. When the battery is charged, the lithium ions return to the anode.
In turn, batteries are made up of one or more cells and, depending on their end use, there are different types: cylindrical cells, which are used in most electric vehicles, consist of sheets of different components that are rolled into a cylinder, while flat cells, such as those found in mobile phones and laptops, use lithium-ion polymer in the form of stacked sheets.
In addition, lithium-ion batteries incorporate other elements that improve their performance and safety: a temperature sensor, a voltage regulator circuit and a state-of-charge monitor. These components monitor the charge and current flow, record the last capacity reached at full charge and monitor temperature, which can negatively affect battery life.
Tips for extending the life of lithium-ion batteries
Minimise exposure to high temperatures in use or storage.
Minimise use at low temperatures, especially during charging.
Minimise charge time to 100%.
Minimise charge time to 0%.
Avoid the use of fast charge unless necessary.
Avoid discharging the device faster than necessary.
Avoid use or storage in humid environments.
Follow the manufacturer’s calibration instructions.
Source: University of Michigan
SEE INFOGRAPHIC: Advice for extending the useful life of lithium-ion batteries [PDF] External link, opens in new window.
What are the benefits and challenges of lithium-ion batteries?
Compared with traditional rechargeable nickel-metal hydride or nickel-cadmium battery technology, lithium-ion batteries offer a combination of features that has led to their widespread adoption over other rechargeable technologies.
Advantages of lithium-ion batteries
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High energy density
They store a great deal of energy relative to their size and weight.
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High efficiency
They offer good performance during charging and discharging and can recover energy more quickly than other traditional technologies.
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More compact
These batteries can be more manageable as they are smaller and lighter than traditional ones, making them more suitable for transporting energy.
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Low self-discharge
These batteries lose very little charge when not in use. Their ability to retain energy is useful for emergency applications.
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Long service life
Lithium-ion batteries are designed to last for many charge cycles, so they do not need to be replaced frequently.
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Versatility of application
They can be used in a wide range of applications, from electronic devices to vehicles and energy storage systems.
Disadvantages of lithium-ion batteries
Like any storage technology, lithium-ion batteries present challenges relating to safety, durability and the use of raw materials. Some of these are:
- Safety and protection systems. To ensure safe operation, they must incorporate management and protection systems that monitor parameters such as temperature, charging and discharging, and prevent situations that could damage the cells.
- Availability and extraction of raw materials. The sourcing of materials such as lithium, nickel, cobalt and manganese also presents challenges relating to supply and the environmental impact associated with their extraction. Technological developments aim to reduce the use of certain materials and diversify supply chains.
- Degradation due to use. This depends on factors such as the number of charge-discharge cycles, temperature and operating conditions. Therefore, proper battery management and extending their service life are key to improving their sustainability.
- Recycling and reuse. When a battery no longer delivers the performance required for its original application, its components may still have value and, in certain cases, the battery can be given a second life in less demanding applications. When it reaches the end of its service life, recycling processes enable materials to be recovered and reduce the need to extract new raw materials.
Applications of lithium-ion batteries
The advantages of lithium-ion batteries and their falling cost have led to their widespread use in a multitude of fields:
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Renewable energy storage solar
Batteries enable the electricity generated by renewable energy installations to be stored and used later when needed. This is particularly important for sources such as solar and wind power, where output depends on weather conditions.
In self-consumption installations, for example, they allow part of the solar energy generated during peak production hours to be stored for later use. On a larger scale, battery storage systems help to integrate more renewable generation into the electricity grid.
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Electric vehicles
The development and growing adoption of electric and hybrid vehicles is largely due to the efficiency, technological advances and cost reductions in lithium-ion batteries, which have helped to improve the competitiveness of electric mobility. Their industrial development has made it possible to increase the range and improve the performance of electric vehicles.
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Consumer electronics and mobile devices
Mobile devices have become the primary application for these batteries, enabling ever-greater miniaturisation. They are commonly found in mobile phones, laptops, smartwatches, wireless headphones and other devices that require a high amount of energy to be stored in a small space.
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Emergency power systems
In critical facilities, such as server farms, the batteries in a UPS (Uninterruptible Power Supply) protect them from power outages or fluctuations in the electricity supply.
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Mobility support solutions
These types of batteries are used in electric wheelchairs, stairlifts and motorised prosthetics, making life easier for people with mobility impairments.
What is the connection between lithium-ion batteries and BESS systems?
Lithium-ion batteries are not only used in individual devices, such as electronic devices or electric vehicles. They can also be grouped together in higher-capacity installations to store electricity and make it available to the grid when needed. These systems are known as BESS, which stands for Battery Energy Storage System.
A BESS combines batteries with other components needed to manage the stored energy, such as conversion and control systems, protective equipment, sensors and management software. Its function is to receive electricity, store it and subsequently return it at the appropriate time, adapting its operation to the needs of the installation or the electricity system.
In this type of installation, lithium-ion batteries are currently one of the most widely used technologies for responding rapidly to changes in demand or electricity generation.
Second life and lithium-ion battery recycling
The end of a battery’s first service life does not necessarily mean the end of its usefulness. Some batteries that no longer offer the performance required for applications such as electric mobility can be reused in stationary energy storage systems, where the requirements for power and energy density may be different.
When a battery reaches the end of its service life, recycling enables some of the materials it contains – such as lithium, nickel, cobalt or manganese, depending on its composition – to be recovered. These materials can be reintroduced into production chains, reducing the need to use new raw materials.
The combination of a long initial service life, reuse where possible, and end-of-life recycling helps to make better use of resources and move towards a more circular model for batteries.
The future of batteries and energy storage
The future of energy storage lies in improving current batteries and developing new technologies capable of meeting different requirements in terms of capacity, lifespan, cost and safety. Some of the main areas of development are:
- New generations of lithium-ion batteries: new materials, such as silicon, aim to increase energy density and extend service life.
- Solid-state batteries: these use solid electrolytes instead of liquid or gel electrolytes. They reduce the risk of explosion and fire and take up less space as they do not require as many safety-related components.
- Sodium-ion batteries: these use more abundant materials and represent a promising alternative for certain storage applications.
- New technologies: flow and metal-air batteries, amongst others, are exploring different solutions for storing energy over longer periods.
- Smarter batteries: digitalisation and advanced management systems enable the optimisation of their performance, efficiency and service life.
- Reuse and recycling: recovering materials and giving batteries a second life will be key to making better use of resources and moving towards a circular economy.
- Long-term storage: technologies such as pumped-storage hydroelectric power plants, thermal storage and hydrogen can complement batteries when energy needs to be stored for longer periods.
Iberdrola and the drive towards energy storage
Energy storage is a key component of Iberdrola’s strategy to move towards a more flexible electricity system with greater integration of renewable energy. We are promoting various solutions to store energy and adapt its availability to the system’s needs, such as pumped-storage hydroelectricity.
In this context, batteries enable a rapid response to fluctuations in generation and demand and complement other storage solutions, whilst digitalisation and smart management of the networks help to optimise when and how stored energy is used. The combination of technologies allows storage solutions to be tailored to the characteristics of each project and enables progress towards a more flexible and efficient energy system that is better equipped to integrate a greater proportion of renewable energy.