UPDATE: We have found data for EWE’s proposed flow battery system on the EWE Gasspeicher website. The actual values are not far off those calculated in our original article below.
By Jason Deign
A study last week showed flow batteries could maintain a cost edge over lithium-ion chemistries, even in the face of massive deployment of the latter.
The research, by Imperial College London in the UK, estimated the future cost of different electrical energy storage technologies based on experience rates, or the rate at which product prices change with cumulative production.
It showed redox flow batteries achieving a ‘competitive’ capital cost threshold of USD$650 per kWh of capacity by 2019, once around 7GWh or $4bn of projects had been installed.
Lithium-ion batteries, in contrast, would require at least 33GWh of installations to reach the same level. This would take until 2023 and cost $94bn, the authors concluded.
The $650 price point was chosen as a level at which energy storage systems could be competitive based on their ability to deliver multiple services simultaneously.
System prices below $500 per kWh
However, warned the authors: “Some manufacturers already propose installed system prices below $500 per kWh.
“If these prices prove sustainable, this represents a step-change in cost improvement that is not captured in this experience-curve analysis.”
Nevertheless, the research team, led by Oliver Schmidt from the Grantham Institute and the Centre for Environmental Policy at Imperial, argued that their cost-forecast methodology might be better than other analyses.
“Cumulative production has been identified as the predictor of technology cost that performs best compared with other variables,” they said in their paper, published in Nature Energy.
The study looked at experience curves for 11 energy storage technologies, including pumped hydro, hydrogen electrolysis and fuel cells, and lead-acid, lithium-ion, nickel-metal-hydride, sodium-sulfur and vanadium flow batteries.
Converging on around $340 per kWh
It found they were all converging on a price point of around $340 per kWh for stationary systems and $175 per kWh for battery packs.
“Bottom-up assessment of material and production costs indicates this price range is not infeasible,” said the authors.
To achieve this price point would require around 1TWh of each technology to be installed, though. Depending on the technology, this might not happen until any time between 2027 and 2040, and could cost from $175bn to $510bn.
Nevertheless, the fact that all storage technologies tend to converge towards the same price “implies that the one technology that manages to bring most capacity to market is likely to be the most cost-competitive,” said the authors.
This could pose a challenge for flow battery developers.
Cheaper than lithium-ion batteries
The technology is usually viewed as inherently cheaper than lithium-ion batteries, particularly for long-duration storage, because it relies on more abundant and less costly materials. But its adoption has lagged far behind that of lithium-ion products.
Part of this is because flow battery makers mostly lack the corporate clout of big lithium-ion manufacturers such as LG Chem or Panasonic. That has made lithium-ion a much safer bet for battery buyers such as utilities.
But a perhaps much greater reason for lithium-ion’s predominance is its increasingly widespread use in the electric vehicle market.
Bloomberg New Energy Finance earlier this month predicted electric vehicles would make up 54% of all new car sales by 2040.
“We see a momentous inflection point for the global auto industry in the second half of the 2020s,” said Colin McKerracher, lead advanced transport analyst at Bloomberg New Energy Finance, in a press statement.
Lithium-ion “set to plunge in price”
Lithium-ion batteries for electric vehicles are “set to plunge in price,” the press note said.
Since 2010, Bloomberg New Energy Finance estimates lithium-ion battery prices have fallen 73% per kWh.
Manufacturing improvements and more than a doubling in battery energy density are set to cause a further fall of more than 70% in price by 2030, the analyst firm believes.
It is uncertain how lithium-ion battery costs could be affected by price increases in materials such as nickel, copper or cobalt, though.
At the same time, flow battery makers may take heart at the fact that their technology could become commercially attractive at much lower installed volumes than those required for lithium ion.
The world’s largest battery
That means a few very large projects could make a big difference to the flow battery industry. One such project was announced last month, when German utility EWE unveiled plans for “the world’s largest battery.”
The exact capacity of EWE’s proposed brine-based redox flow battery was not stated, but the utility said it should be “sufficient to supply a major city such as Berlin with electricity for an hour.”
Ignoring electricity for commercial and industrial use, a rough calculation of Berlin’s grid supply, based on an average household consumption of 3,512kWh a year and 2m households, yields around 7TWh a year.
This equals an average of around 800MWh in an hour, or more than 10% of the storage capacity that Imperial college says will be needed to for flow batteries to be competitive.
- Also in this week’s intelligence brief roundup: National Grid, Panasonic, Blue Bird and more. Get your free copy now.