AleaSoft Energy Forecasting, December 12, 2025. In a market dominated by lithium batteries, a technology that has always been present is beginning to gain prominence. Nickel‑hydrogen batteries, used for decades in space missions due to their extreme reliability, are gaining ground thanks to recent advances that are lowering production costs. Their long lifetime, low maintenance costs and greater safety position them as a solid alternative for the large‑scale storage systems of the future.
Li‑Ion (LIB) batteries dominate the energy storage market and are used in a variety of fields: electronic devices, vehicles and electricity supply. Compared to their competitors, they have the highest energy density and are made with materials with more competitive prices. In the emerging race to integrate energy storage with renewable energy or data centres, other types of batteries could position themselves and come to dominate the market. Of particular note are nickel‑hydrogen (NiH₂ or Ni‑H) batteries, which have been used for many years, demonstrate proven reliability and have recently seen cost reductions that make them economically competitive.
The origins of Ni‑H batteries
Ni‑H batteries have been in use since the 1970s. NASA developed them for major projects such as the Hubble Space Telescope, the International Space Station, the Mars Rover missions and a wide variety of satellites. At the time when batteries were first required for such missions, lithium battery technology was at a very early stage of development, with a lifespan of only around 200 cycles, which led NASA to opt for an alternative technology better suited to its needs.
From the outset, Ni‑H batteries offered a lifespan of 30 000 cycles, positioning them as the optimal choice for long‑duration missions. The Hubble Space Telescope, launched in 1990 and still operational, has used them throughout its life. Thanks to the energy stored from the satellite’s solar panels, they can power its electronics during the periods of its orbit in which it passes through the Earth’s shadow. Besides their long lifetime, the other characteristics that make them the best option for space missions are their efficiency under extreme temperatures, both cold and heat, their stability and their low maintenance costs.
Until now, these batteries have used a catalyst made of costly materials such as platinum or palladium, viable for high‑budget projects like NASA’s but uncompetitive in the broader market. In recent years, a nickel‑ and cobalt‑based substitute has been discovered that has considerably reduced manufacturing costs, making them a current competitor and a potential mid‑ or long‑term replacement for LIBs.
Materials, cost and environmental impact
Their energy density is 140 Wh/kg compared to 260 Wh/kg of Li‑Ion batteries, meaning a greater number of these batteries is needed to store the same amount of energy. For this reason, after 18 years of using Ni‑H batteries, the International Space Station is replacing them with Li‑Ion batteries. They are not the most suitable option for projects involving small devices or vehicles. However, they are the right technology for grid‑connected static projects such as stand‑alone storage systems, hybrid systems, data centres or even self‑consumption.
At present, Ni‑H batteries are more expensive to produce than LIBs. Nickel prices reached a historic high in 2022, since then, prices have trended downwards, suggesting that production costs will continue to fall. Hydrogen can be obtained through various processes, which become more expensive the more sustainable they are. Carbon‑free processes (electrolysis via renewable energies) are twice as costly as the most polluting ones (Steam Methane Reforming). The middle ground lies in obtaining hydrogen through fossil fuels with carbon capture. Non‑polluting electrolysis processes are also expected to become cheaper in the future, making hydrogen production more economical and fully ecological in the long term. The start of large‑scale manufacturing is also helping to reduce production costs even further.
Ni‑H batteries use more environmentally friendly and very abundant materials, making them almost 100% recyclable. Nickel can be found on every continent, ensuring a secure and economical supply.
No cooling, no maintenance and safer conditions
Another critical aspect of Li‑Ion batteries is safety and stability. LIBs are composed of an anode, a cathode and a highly flammable liquid electrolyte. Over time and many cycles, lithium particles create fibres on the anode, known as dendrites, which deteriorate battery efficiency, cause instability and can lead to overheating, short‑circuits and fires. This phenomenon worsens under extreme temperatures.
Ni‑H batteries, by contrast, come in the form of canisters containing nickel and hydrogen. Chemical reactions generate hydrogen, which is stored under high pressure inside the container. They can be easily scaled by connecting them together. These batteries are much safer, as exceeding the maximum pressure triggers a mechanism in which hydrogen is converted into water by oxidation, releasing only gas to the outside without causing overheating, explosions or fires. They also do not suffer from dendrite formation, eliminating the need for periodic inspection and maintenance. Added to this is their ability to operate efficiently at room temperature as well as in extreme cold and heat (as in space or on other planets). No cooling system is required in battery warehouses and they can be installed anywhere on Earth, even in harsh climates.
A lifespan of more than 30 years for long‑term savings
Ni‑H batteries have a lifespan of 30 000 cycles (equivalent to about 30 years at three cycles per day), after which they still retain 86% of their original capacity, and their service life can be extended for more than 30 years under good conditions. In comparison, LIBs offer only around 8 000 cycles, after which their efficiency drops below 60%.
The long lifespan of Ni‑H batteries, together with virtually zero maintenance and cooling costs, better safety conditions, good scalability, manufacturing processes expected to become progressively cheaper, and proven reliability after decades of use in NASA projects, position these batteries as a direct competitor to Li‑Ion batteries and potential leaders in the market for large‑scale energy storage connected to the electricity grid.
AleaSoft Energy Forecasting at the forefront of the energy storage market
The future of the energy sector depends on electrification and decarbonisation, processes in which energy storage systems are absolutely essential. AleaSoft Energy Forecasting studies the market, considering all storage options, both currently deployed and under development. Its position as a market expert, supported by a team of PhDs and engineers specialising in the energy sector and research, enables it to anticipate market developments and new entrants. In addition to Ni‑H batteries, other models are currently under development and may come to share the market.
Solid‑state batteries (SSBs) have a similar structure to LIBs, replacing the liquid electrolyte with a solid material. This increases their energy density and lifetime, reduces their size and makes them safer. However, they are more expensive to produce and face mechanical stability issues that are still being optimised. They are still in development and are not expected to enter the market until 2027 or 2028, at which point they would begin to be deployed mainly in the electric vehicle sector, where they are receiving greater investment.
Redox Flow Batteries are the other major competitor that LIBs may face. With vanadium (VRFB) and zinc‑bromine (ZBB) as the best options for this type of energy storage system, they offer lifespans of more than 20 000 cycles and are safer than LIBs. Their low energy density and higher production cost mean they remain at a very early stage and are not yet competitive in the market.
The AleaStorage division analyses the viability of battery storage projects, both stand‑alone and hybridised with renewable plants. Using a proprietary hybrid model incorporating Artificial Intelligence, thousands of possible scenarios are simulated, estimating long‑term revenues and profitability, optimising operation and providing tailored analyses for different business models. AleaSoft Energy Forecasting supports all sectors involved in the energy transition, providing expertise and knowledge to enable this transition to be carried out optimally.
Source: AleaSoft Energy Forecasting.
