What a fading ViZn means for other firms hoping to take on the lithium-ion market

ViZn's production process... as was. Pic: ViZn Energy.

ViZn’s production process… as was. Pic: ViZn Energy.

By Jason Deign

Analysts have rushed to highlight the challenges facing non-lithium-ion battery makers after news emerged last week that ViZn Energy was shutting up shop.

ViZn, a noted flow battery manufacturer, admitted to laying off almost all its staff after running out of time to sign up the lead backer in its latest financing round.

“ViZn’s technology is yet an​other variation of traditional flow battery chemistry with [a] zinc and iron-based electrolyte,” said Ravi Manghani, director of energy storage at GTM Research.

“The odd chemistry itself is not the cause of its hardships… but makes acceptance in the market bit harder.”

Flow battery vendors have two challenges, Manghani argued. One is technology-based, in being able to produce systems that have consistent performance characteristics at large scale, he said. 

Lithium-ion battery prices

But “the second one is the pace at which lithium-ion battery prices have come down, which has just constantly moved cost targets for competing technologies,” Manghani said.

GTM Research energy storage analyst Mitalee Gupta echoed this view.

“Flow batteries have seen price reductions in the past couple of years as result of technology advances, but these batteries will continue to face significant competition from bankable and proven lithium-ion technology,” she said.

“Commercialisation is extremely challenging for flow battery vendors as they are competing against a technology that makes up more than 90% of [the] energy storage market in the US today.”

Furthermore, lithium-ion technology has been around for several decades, is continuously experiencing improvements in energy density and has achieved more than a 60% price reduction in the past five years, Gupta said. 

Gigafactories coming online

“Prices for lithium-ion batteries are expected to drop by another 40% by 2022 as result of hundreds of gigafactories and megafactories coming online,” she noted.

Lithium-ion’s seemingly unstoppable march towards ever-lower costs is a problem not just for flow battery makers, but for all electrical energy storage contenders. Last year several companies faced a rocky ride.

The saltwater battery maker Aquion Energy, for example, was forced into insolvency despite touting an impressive cost reduction roadmap and the world’s most environmentally friendly electrical energy storage chemistry.

The company was supposedly bought out of insolvency last July, but there has been no news of it since and the Aquion website has disappeared.

And last October Eos, another manufacturer with a promising low-cost, common-materials-based battery chemistry, admitted to scaling-up challenges on the way to a product upgrade due out this year. 

GridBank maker Alevo

Even some of the more exotic flavours of lithium-ion have been having a tough time of it in recent months. In August last year, GridBank maker Alevo filed for chapter 11 protection after having put just one system into operation.

Alevo’s US production plant was subsequently bought by a consortium called Imperium3 New York, which is presumably intending to use the machinery to build more common-or-garden lithium-ion products.

And a similar fate may await Bosch’s production assets after the German multinational pulled out of the battery manufacturing game last month, amid concerns over being able to compete with Asia’s lithium-ion giants.

Bosch was looking to sell a solid-state lithium-ion battery subsidiary called Seeo, which it acquired in 2015, as well as divesting itself of Lithium Energy and Power, a manufacturing joint venture it had invested €500m in.

It is not all doom and gloom for alternatives to standard lithium-ion, though. 

The potential of flow batteries

There is still significant interest in the potential of flow batteries, for example, not least because some observers believe lithium-ion could come a cropper as demand for scarce materials such as cobalt grows.

In January, for example, the mineral extraction firm MGX Minerals announced plans to mass produce a zinc-based flow battery within a year. MGX yesterday said it would list its flow battery subsidiary, ZincNyx Energy Solutions.

And ESS Inc, which makes an all-iron flow battery system, has started shipping to Europe after finding funding from the chemical industry leader BASF in December. Even ViZn isn’t completely done for yet.

Although the company is out of cash and its workers are out of a job, ViZn’s leadership still hopes to find an alternative backer to take the place of its errant lead investor.

“The technology continues to show itself very well in front of many audiences,” said Stephen Bonner, ViZn’s chairman, interim CEO and president.

“This was going to be a major transformational year in getting the product out and installed. We have been moving to work through the process with other interested investors.”

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