By Iain Wilson, BloombergNEF
Flow batteries based on vanadium will increasingly challenge lithium-ion technology as developers look for storage systems to back up wind and solar projects and support the grid –- despite a 10-fold spike in the cost of the silvery-gray transition metal late last year.
So said Stefan Schauss, president of Canada-based CellCube Energy Storage Systems Inc., in an interview with BloombergNEF. CellCube, capitalized at $11 million, is one of a number of companies manufacturing vanadium flow batteries. Supporters argue these have safety, recycling and scalability advantages over lithium-based storage systems. However, vanadium batteries face market skepticism. BNEF’s latest storage market outlook, published in January, predicted that lithium-ion accounted for 85 percent of storage project capacity commissioned in 2018, and would “remain the preferred technology”. It added: “The majority of providers of alternative technologies remain too early-stage, unable to deliver at the scale required by major developers and utilities, and unbankable.” The cost issue for vanadium batteries has been in the spotlight recently, with a 10-fold surge in the price of European-traded vanadium pentoxide from June 2016 to December 2018, when it hit a high of $28.75 a pound (see chart below). Prices have since returned to about $17 a pound. Steelmaking currently accounts for the great bulk of industrial demand for vanadium, and the price spike happened after China mandated more of the metal be used in steel rebar. Schauss told BNEF that vanadium supply issues would not stand in the way of the growth of flow batteries: “Vanadium is abundant in the Earth’s crust. It’s 10,000 times more available than lithium as a prime element for batteries.” He added: “Any price development or long-term anticipated shortage will probably be leveled out by other sources of vanadium coming online.” In January, CellCube announced a partnership with Immersa Ltd. to deliver large-scale vanadium redox flow battery systems for the U.K. Also in January, the company announced energy storage sales to Germany and the Czech Republic -- a combined 250kW/1.1MWh for the two systems valued at more than $1 million.
BNEF spoke to CellCube’s Schauss about the outlook for the battery technology. The following is an edited transcript.
Q: Can you describe what a vanadium redox flow battery is and how it differs from a lithium-ion battery? A: A flow battery works by storing electrical charges in a large reservoir of fluids. In order to do so, you’re using a charge conversion cell stack that is equivalent to battery poles. The conversion cells convert the energy from electricity into a chemical-bound energy and vice versa. Pumping all fluid through the conversion cells allows the fluid to charge or discharge the battery entirely. Q: What are the advantages to this approach? A: There are two key advantages. The first is that you can basically scale the rated power of the battery versus its energy capacity, which is unlike a lithium battery where you always have a pre-determined ratio between power and electricity. The advantage is that the fluid is the energy capacity. When you think of that, it’s really a physical capacity. When you extend the battery or you scale a long-duration battery as you add electrolyte or the fluid, it’s just in a tank so you pump more in. This way you can expand the system or determine the system right from the very start on a very large body on a very long-duration storage. The fluid is a fraction of the cost of what additional cells would cost. The other advantage is that because you have two fluids physically separated in two tanks, you never have a cell discharge phenomenon and you never have a degradation of usage. In a lithium cell you have anodes and cathodes and through the liquid travelling between the anode and the cathode you are always chemically binding and ripping apart the binding based on the charge and discharge level. In that case, you have an entropic behavior that over time kills the capability of separating and recombining. In flow batteries, you don’t have that because you always have the same fluid. You don’t have a physical change in the fluid. You just add charges directly to whatever the carrier medium is.
Q: So you’re saying there is no degradation and there is an infinite number of charging cycles? A: The pure substance never degrades. It’s just vanadium salts in water so it can’t decay in itself and it still has the same properties. We’re never changing the physical substance in the charge and discharge cycle and that is unlike other battery technology. Q: Can you talk about the safety aspect? A: We have to distinguish between the different lithium-ion technologies. The dominant model right now is anything with a nickel-manganese-cobalt type of cell. While this has an advantage on one hand, the chemistry has a certain property to incinerate when it is not treated right. Because of the way cells are built and the way overall the elements are working together, you have a certain danger you need to safeguard against. With flow batteries, there’s primarily an advantage on a large scale because it does not display any thermal runaway behavior due to its water-soluble base.
Q: If vanadium flow batteries are to be accepted more in the market, do densities need to be improved? A: The question is where you want to apply storage solutions. Applying it in a mobile environment like electric vehicles, then weight and density are major aspects in terms of the design. We see flow batteries for multiple-hour storage solutions in a stationary storage environment in very large scale. We’re only interested in applications where we’re talking a megawatt or above and most interested parties we’re talking with are working on schemes of 100 megawatts or more. When you look at the footprint density you will see that vanadium redox flow batteries are pretty much in line with what lithium has. Q: What is the ideal application then for this type of battery? A: We see flow batteries in general for large-scale renewable generation co-location. That means large solar plants, large wind farms in the multi-megawatt range either mandated or as a desire to deliver a higher-quality power output to grid systems -- being on the distribution or transmission grid level, and providing additional capacity to the grid. The other aspect is to provide reserve or reserve capacity for grid operators in large scale. Again, we’re talking 10 megawatts up to 500 megawatts. Third, we see it in microgrid environments where there is no decentralized storage application. This past summer we closed a deal for a system in Sweden, a 1.6 megawatt-hour system. It is a test bed for how a community microgrid might run. One hundred and fifty single-family homes that have pulled together to be powered out of renewables but also out of a central battery system. Q: In terms of technology, lithium-ion seems to be favored at the moment. Flow hasn’t seen much pickup for the past couple of years. How does CellCube see this changing? A: There is a common consensus building that lithium might be limited by its cost structure to solve the transition to a fully renewable power grid on the stationary energy storage side. Pair that with some of the safety problems we are currently experiencing on global deployments of large-scale lithium cell-based installations as well as the recycling question, which remains unsolved to a large extent. Flow batteries, for example, do not present any of these threats since they are inherently nonflammable or explosive and don’t have the recycling necessity. In flow batteries, the chemistry is undegradable and has an almost infinite life. Even when an end-of-life scenario for an individual deployed energy storage system is envisioned, the medium can be re-used. Q: What geographies are you looking at? A: We see North America, we see Europe coming up with a few exceptions. The Middle East is up and coming. We see Africa being developed and leaping a classical, conventional grid build out. We see Australia as a very strong market. There are several jurisdictions or regions where large-scale energy storage is today. We’re getting inundated with requests for large-scale projects. Every week we get three more coming in. Flow batteries, based on the chemistry and the economics and the sizing, work best for storage supplies of three hours or plus. The three- to four-hour mark is typically where we are butting heads in the market with lithium. Alternative technology always has to argue against the better economics or the better performances that you can achieve for the customer, but everything beyond four hours, a flow battery, and in particular our flow battery, we’re at a price point where we can definitely provide a cost advantage to any kind of project developer. We get a ton of requests and the project sizes are typically between 10 and 100 megawatts. Q: At what price point do flow batteries become really attractive? A: You see the need for storage not so much for the sake of storage but you see the need for storage either because there’s a higher demand at a point in time when wind is not available or there needs to be excess wind energy distributed because the demand side is requiring higher capacity on the grid. Typically, it’s a combination of how cheap the generated energy can be bought versus how expensive I can sell it for or what I can achieve on the market offtaking my stored energy. When you have an energy storage system that can reliably dispatch into the market at any given time, this is a higher quality of electricity than when it’s unpredictable or only partially predictable. So the question is at what level it makes sense. We have storage solutions from four hours onwards that, because of our long life and non-degradation in capacity, we’re getting resulting LCOS [levelized cost of storage] 3 cents to 6 cents per kilowatt hour or $30 to $60 per megawatt hour on stored energy when delivering power to the grid. Adding the combination of low-cost generated power and the combination of energy delivery rivals competitive power pricing at peak times, and hence displays a valid business case for putting storage in the mix.
Q: The price of vanadium pentoxide flake saw a huge spike in October and November last year. What drove the spike and does it concern you?
Europe-traded vanadium pentoxide (98% V205)
A: The peak we saw last year was primarily driven by the mandate that the Chinese government put in to increase the content of vanadium in rebar. With a slightly slowing economy, it has already been indicated that the consumption is not that much higher. The vanadium producers [have coped], and an increase in production has taken place. Vanadium is abundant in the Earth’s crust. It’s 10,000 times more available than lithium as a prime element for batteries. Any price development or long-term anticipated shortage will probably be leveled out by other sources of vanadium coming online.
In the short term, we’re buying vanadium from producers on the open market. However, we have long-term agreements that we had even before the spike so that we see a subdued rate on vanadium going forward.
