The growing popularity of the electrical smart grid is certain to spur huge demand for lithium in the days ahead, predicts Pan American Lithium Corp.

As of now, lithium battery technology is largely associated with mobile devices and hybrid car batteries, but nowadays it has even started powering smart grids, among many other applications.

As the demand for smart grid increases so does the desire for saving energy. The advances in lithium battery technology are easing the task of storing energy on a much larger scale than in the past. That means lithium is set to play a key role in the energy sector of the future.

Pan American holds rights in 11 lithium and potash-bearing brine projects covering over 20,000 hectares in Chile, so it hopes to profit from the world’s increasing need for lithium.

Pan American CEO Andrew Brodkey had cited the article by Tom Larsen of Palladium Energy to support his statement.

 Brodkey noted that overall demand for lithium-carbonate, which is the form of lithium used for batteries, is expected to be estimated to be growing approximately 5 percent per year with battery demand increasing over 25 percent annually.

Pan American also has noted that total lithium carbonate demand, which was estimated to be approximately 85,000 metric tons per year in 2007, is predicted to increase to over 200,000 metric tons per year by 2015.

In addition, Brodkey points out that Chile's combination of stable government, established law and regulation, and a business-friendly climate combine to make Chile the ideal location for lithium development.

Worldwide growth in renewable energy for solar and wind sources adds to the need for utility companies to store electricity. Additional factors driving the growth in demand for lithium are government incentives and mandates.

An example is the American Recovery and Reinvestment Act, in which the Obama administration called for $4.5 billion smart grid investment, including the installation of 40 million smart meters. The fact that smart meters must have backup battery power represents another opportunity for lithium technology.