Flow battery deals build manufacturing base for commercial phase

Major manufacturing alliances and growing product orders are driving renewed investor interest in flow battery makers including Imergy Power Systems and ViZn Energy Systems, raising the market prospects for a technology that has repeatedly stumbled at the commercial step.

Image credit: Imergy Power Systems, Inc.

While flow batteries make a small portion of the energy storage market, the new investment flows will give the technology an opportunity to prove itself as a commercially viable high-energy, longer-duration (four hours or more) battery storage solution.

The growing manufacturing capability associated with new investments will be important for the future success of flow batteries, said John Jung, CEO of Greensmith, a provider of grid-scale energy storage software and integration services.

“The thing that we pay attention to, beyond just the technical capabilities of the battery, is really is there an industrial complex that is going to scale to support the gigawatts of energy storage that’s going to go into the ground over the next 10 years,” he said.

Last month, vanadium flow battery maker Imergy signed a two-year agreement for an undisclosed amount with Juno Capital Group, a Beijing-based investment company, to target the market for weak grid and off-grid mobile base station power across the Chinese telecommunications sector.

This was the company’s second big partnership in Asia, after in October 2014 it signed a manufacturing deal with Taiwan-based Foxsemicon Integrated Technology, which provides CM services for semiconductor and TFT-LCD equipment manufacturing.

In March 2015, the company also booked a three-year order for 1,000 of its 120 kWh ESP30 Series systems from SunEdison in what is the biggest single order for any flow battery manufacturer to date.

The products, totalling more than 100 MWh, will be used for rural electrification projects in India. In the next six months, Imergy also has orders for 20 big-scale ESP30 units for the US market, the company has said.

Meanwhile, in June, zinc-iron redox flow battery manufacturer ViZn unveiled a manufacturing partnership with Jabil Circuit, the third-largest contract manufacturer in the world, to ramp up production capabilities for current orders and to meet expected growing delivery commitments over the next year.

ViZn currently has more than 21 MWh worth of commitments for projects in North America, Africa, Europe and Asia through the end of 2015 and into 2016, Ron Van Dell, ViZn’s president and CEO, told Energy Storage Update.

In October 2015, the financial markets advisory service Seeking Alpha highlighted Imergy’s and ViZn’s manufacturing alliances as worthy of attention from investors.

Calling flow batteries “a neglected story in the battery space,” author Keith Williams, a former research scientist, also noted that the listed Australian zinc-bromide flow battery firm Redflow had a similar arrangement with US manufacturer Flextronics International.

Redflow entered the European market in June 2015 after raising AUD$16.1 million (USD$11.7 million) from backers, including broadband entrepreneur Simon Hackett and online business founder Graeme Wood.

The company is targeting a number of applications in Europe, including off-grid remote rural power, telecommunications BTS sites, utility energy, commercial applications and renewable integration.

A special offer for existing investors was oversubscribed, Redflow said. ViZn also reports similar high levels of investor interest.

“We’ve already raised over $30 million at ViZn and are oversubscribed in the current round,” Van Dell said.

Market depth

Besides the growing industrial support, the extended cycling rates of flow batteries gives them a potentially lower levelized cost of energy (LCOE) compared to lithium-ion, which is leading to a resurgence of interest in the technology despite its relatively high system cost.

Flow battery makers say their products are capable of a 100% depth of discharge over tens and even hundreds of thousands of cycles, with discharge durations that can run into several hours. In comparison, many li-ion technologies hit a limit at four hours.

The fact that flow batteries can go through thousands of full charge-discharge cycles is the key to their low LCOE, said Matthew Clarke, energy storage specialist at Gildemeister Energy Solutions. Even with this cycling “you can still expect a 20-year lifespan,” he said.

According to a 2013 analysis by the Sandia National Laboratories of vendor quotes and system installation estimates, vanadium flow battery systems have an LCOE of between around $450/MWh and $800/MWh.

The LCOE for lithium-ion batteries varies according to application, but in transmission and distribution applications, for example, has a range of between around $650/MWh and almost $1,200/MWh, according to Sandia.

In terms of installed cost, in 2013 vanadium redox flow batteries were ranging between about $6,000 and $7,000 per kilowatt for transmission and distribution applications, whereas lithium-ion batteries were varying between around $2,000 and $11,000 per kilowatt.

Source: Energy Storage Update

And while lithium-ion batteries still trump flow batteries on efficiency (at 80-90% compared to 65-80% on average) and energy density (80-200 Wh/kg compared to 25 Wh/kg on average), these measures are less important than LCOE in stationary energy storage projects where plant size is not a problem.

As a result, flow batteries are increasingly being seen as potentially competitive with lithium-ion for long-duration stationary energy storage, leading to a growing commercial market for the technology.

In December 2014, Lux Research predicted the market for flow batteries could be worth $190 million by 2020, equal to 360 MWh of storage. The analyst firm cited vanadium redox flow batteries as leading the market in 2014, with 75 MWh of systems deployed.

Flow battery market evolution. Source: Lux Research.

Imergy President Tim Hennessy, however, has said he thinks Lux’s 2020 estimate is on the low side. 

Other flow battery makers seem to be preparing for major growth. ViZn’s deal with Jabil Circuit, for instance, could allow ViZn to produce 80 MW of battery systems annually by 2016.

Meanwhile GEC, a Chinese vanadium flow battery maker that has partnerships with BYD, Goldwind, Hanergy and the China State Grid, said it had completed a 10 MW, 60 MWh production line in 2014 and is building a 1 GW, 6 GWh production base.

The US Department of Energy database lists 72 flow battery projects globally – operational facilities, as well as announced, contracted and projects under construction – with a total rated power of 102,722 kW.

Growing scale

In the meantime, flow batteries are being deployed at ever-larger scales. June 2015 saw the commissioning of the largest flow battery to date in North America and Europe, the 1 MW, 4 MWh Uni.System product from UniEnergy Technologies, in Pullman, Washington State.

The system is being used for load shifting, frequency regulation and conservation voltage regulation on a distribution circuit belonging to Avista Utilities.

It is also supporting an Avista customer, Schweitzer Engineering Laboratories, with uninterruptible power supply, black-start and four-cycle ride through services.

“The Uni.System’s flexibility to deliver power and energy applications simultaneously multiplies the system’s value compared to traditional batteries that provide either power or energy, but not both,” said UniEnergy Technologies in a press release.

Although UniEnergy Technologies has not published LCOE details, its Uni.System is claimed to offer 100% capacity utilization over 20 years, with a discharge flexibility from fractions of seconds to up to 15 hours.

By Jason Deign