Redox Flow Battery Market Trends

Growth Drivers

• Grid modernization & stability requirements: As the world's governments invest huge funds into grid modernization programs to improve reliability and accommodate distributed energy resources, flow batteries are contributing to those objectives because of their ability to offer grid stabilization, fast response, and long cycle life. Flow batteries are equipped with unique benefits that support grid development by having the ability to support grid stability, fast response, and long cycle life.  As utilities pursue decarbonization objectives, modernizing their existing infrastructure with flow battery storage would aid substantially in meeting demand-response and capacity objectives. The U.S. Department of Energy’s funding to support domestic flow-battery supply chains establishes an intentional strategy for derisking and strengthening grid infrastructure resiliency.

Taxonomy of innovations for RFB

Initial Cost Benchmarking

The capital costs of each redox flow battery project typically vary depending upon site-specific factors, including plant size, location, technology, and required civil works. According to the July 2023 report by the U.S. Department of Energy, a 10-hour energy storage capacity 100-MW VFB system installation was estimated at USD 384.5/kWh. A 1,000-MW VFB set up costs USD 365.2/kWh. The table below depicts cost-to-performance 2030 assumptions for a 100-MW VFB system with the same hours of storage. The 10-hour system levelized cost of storage (LCOS) at a rated power of 1,000 MW and 100 MW is anticipated to reach USD 0.15/kWh and USD 0.16/kWh by the end of 2030.

Projected VFB cost and performance parameters in 2030 for a 100-MW, 10-hour VFB storage system

Source: U.S. DoE

Pathways to $0.05/kWh

DoE’s Energy Storage Grand Challenge Storage Innovations 2030 (SI 2030) brought together industry experts to identify potential roadblocks for future development and R&D opportunities to foster the USD 0.05/kWh LCOS goal. The following assessment was done by the SI Flight Paths Team in January 2023 after studying 14 commercial flow battery-related players (5 organic-based, 2 zinc-based, 3 vanadium-based, 1 iron-based, and 2 membrane companies) and focused on the impediments limiting flow battery technologies and component deployment.

Flow battery components that could benefit most from technological improvements

Source: U.S. DoE

• Demand for long-duration & large-scale energy storage: With grid-operators and utilities searching for grid-scale storage solutions capable of multi-hour discharge durations for future deployment, vanadium redox flow batteries (VRFBs) fit the profile and are ideal for these longer-duration applications due to their modular tank-based system design. Recent large-sized and sized verifications, like China’s 175 MW/700 MWh VRFB, stakeholder confidence in their large differentiated systems regarding scalability and durability is strengthened. VRFBs have decades-long lifespans with little capacity degradation and are functionally capable of holding energy for up to 80 hrs of utility dispatchable power.  VRFB systems are eminently feasible for utility-scale applications where long-duration and durability are economic drivers.
   
• Supportive government policies & incentives: Governments have also enacted other policies, mandates, and funding opportunities to promote the greater use of energy storage solutions. In the United States, the Department of Energy has funded over USD 120 million in grants to enhance domestic supply chains for the domestic flow-battery supply chain. These initiatives are designed to reduce reliance on foreign vanadium, increase domestic manufacturing, and maximize commercialization efficiency. As countries pursue clean energy targets and net-zero policies, government incentives and regulatory behaviors continue to promote the adoption of long-duration storage solutions (e.g., RFBs).

SME-Favored Capital Deployment Strategies for RFB Advancements (Cells with asterisks (*) represent the preferred mechanism)

Source: U.S. DoE

Challenges

• Low energy density & bulkiness: In contrast to lithium-ion batteries, RFBs have low energy density. The large tanks necessary for aqueous electrolytes compound issues of weight and space efficiency in these systems to the extent that it restricts their use in space-constrained spaces (for example, residential applications) or mobile applications (such as transport). The considerable amount of equipment usable for RFBs, including pumps, valves, membranes, and the like, exacerbates these volume and footprint issues. This means that RFBs are not ideal when compact power storage is a requirement or is desirable.
   
• Supply chain constraints & volatile raw‑material costs: Compounding these limitations is the reliance of RFBs on the supply chain of the dominant vanadium chemistry, which is geographically concentrated and prone to volatility, including China and Russia. Vanadium pentoxide prices can exceed $31/ kg, or can change quickly, creating unpredictability in the cost of vanadium if vanadium is run as a battery or fuel cell application on its own. Alternative electrolytes are still limited in development. The supply challenges and price instability with many critical materials create procurement risk as well as high inventory costs, which detract from consideration of financial investment.