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27 February 2020

Flow batteries to fly to market on the back of Lithium Ion frenzy

Redox flow batteries struggled in 2019 when compared to their Lithium-Ion counterpart. Like many emerging technologies, the sector is in need of an innovative spark. We spoke to one of the finalists for the Start Up Energy Transition Award 2020, VoltStorage to get its views on how Redox flow will compete in the ongoing landgrab within the energy market.

VoltStorage claims to be the first company worldwide to take redox flow technology and apply it to residential storage to complement solar power systems. This is quite an alternative route-to-market for several reasons. Firstly, this is one of the most saturated segments of the market – attracting major tech players like Siemens (Junlight) and Tesla (Powerwall). These products have also all used lithium, with costs falling 87% since 2010.

But perhaps more intriguingly, the residential section of the market is one which is not where Redox flow has its key points of differentiation. Many in the market see the technology as the long-duration alternative to lithium, where upper limits of storage duration sit at around 8-hours at present. Redox flow can theoretically be scaled to suit any duration, so the residential market, which rarely requires 8-hours of stored power, is hardly the most logical place for the technology.

However, the residential storage market in Europe is set to grow 500% by 2024, with 6.6 GWh of projects to be installed across the continent, with economics favoring solar-intensive markets in Germany, Italy and Spain. There’s also increasing fears of repercussions due to a boom in lithium storage, with current recycling facilities not nearly at the capacity capable of dealing with the proposed build out of electric vehicles. The estimated value of this recycling market is $18.1 billion by 2030, but the industry buildout will be stretched, and VoltStorage will be among several players hoping to capitalize with a ‘waste-free’ proposition.

“At least at first” according to VoltStorage CTO, Michael Peither, who identified that current market conditions aren’t conducive to building out long duration storage to the point of mass-production and achieving the necessary economies of scale for cost reduction. Instead his company will focus on using the initial enthusiasm for short-term storage, in markets like the US, competing with residential powerpacks from the likes of Tesla and Sonnen.

The company currently achieves a relatively low levelized cost of storage (LCOS), partially though adopting a Chinese-heavy supply chain. Current products offer a levelized cost of storage in the region of €0.14 and €0.16 per kWh in its SMART storage system, lower than values quoted by lithium players Tesla and Sonnen. The VoltStorage product in particular is sold as a 6.2 kWh unit, with the ability to supply 1.5 kW of domestic power, at a cost to consumers of €5,800. While this is similar to the cost of products from competitors, the company cites the longer (30 years) lifecycle for flow batteries in quoting reduced figures for LCOS.

Due to this, the company, which was founded in 2016, is already making sales – with differentiation through increased durability and safety of flow batteries. VoltStorage made €300,000 in revenues last year, with the current backlog of sales to September suggesting that this will grow 10-fold through 2020.

Competing in this market is more of a stopgap for VoltStorage, with Peither acknowledging that prices will continue to fall aggressively within a busy Lithium market. But by building out production capacity in this early residential market, the company will be well equipped to start producing larger, long-duration storage technology at lower costs than other flow battery players – entering commercial and industrial markets. Peither indicated that the company is currently exploring industry-scale storage of between 50 kWh and 100 kWh.

The company is also aware that Vanadium may not be the electrolyte used in the future of this sector. Many have noted in the past that the relative scarcity of the metal compared to other materials may cause prices to spike as demand grows. Price increases may also be a result of a dependence on the steel and mining industries, which caused a brief but significant spike in production costs for Vanadium-heavy products in 2018. With this need in mind, VoltStorage is exploring options of alternative chemistries for future products, with a lower environmental impact.

This is primarily focused on Iron, due to its high abundance and associated low cost. While research is suggesting that the charge/discharge cycle is fairly similar, the chemistry is complex, and proof of longevity has yet to be fully achieved. Currently most research in this area is being conducted by academic institutions, although ESS in the US is working on a similar iron-flow battery for small-scale storage.

Other ‘organic’ technologies are also being considered, although Peither notes that the degradation process in these batteries is often irreversible, whereas Iron and Vanadium batteries may be reset for low costs, and without fully replacing electrolytes. VoltStorage currently has a patent pending for this ‘self-recharge’ technology, as well as for the company’s production methods, cell stack and auxiliary service.

The ‘start-small-think-big’ route to market of VoltStorage appears to be a logical way to piggyback on the rise of residential storage in markets like the US – although we are skeptical about how this will propagate globally. Other routes may be more appropriate in regions like the UK, where RedT has recently entered the market through a ‘hybrid’ battery project in Oxford’s Energy Super Hub. This takes more advantage of Vanadium flow’s longer duration, with the batteries set to complement and reduce the loads on Lithium batteries, by reducing the number of necessary charge cycles – which ultimately degrades Lithium technology.

Redox flow batteries operate using two tanks of electrolyte – one positively charged, one negatively charged – pumped to travel in a countercurrent flow through a ‘cell stack’, where the energy transfer takes place across a semi-permeable membrane. The cell discharges by the electrolytes trying to force a natural charge balance between the fluids, with the negative electrolyte giving up an electron, which flows through a circuit to the positive electrolyte. This positive electrolyte then accepts the electron, which will have been discharged in the circuit, causing a hydrogen ion to be released, which flows across the semi-permeable membrane to balance the charges. When charging, the provision of electrons causes this process to happen in reverse.