The Value of Vanadium Flow Batteries in the Energy Storage Landscape

Vanadium redox flow batteries (VRFBs) are a promising energy storage technology because of their energy storage capacity scalability, full depth of discharge, ability to cycle frequently and for long durations, non-flammable construction, and recyclable electrolyte. Although the stationary energy storage market’s focus on short-duration and infrequently cycled applications has limited the demand for VRFB systems to date, there are operational systems of various sizes around the world that are filling gaps in demand for energy storage. 

How Competitive Are Flow Batteries?

As more energy storage technologies mature and begin to commercialize, there are complexities in measurements of key metrices. A more progressive approach is to understand that the diverse landscape of energy storage needs and demands is being met with a variety of technologies for different applications. 

VRFBs have unique capabilities that meet specific storage demands in the market.  VRFBs’ flexible design enables large-scale and long-duration energy storage (i.e., the ability to increase energy storage capacity by adding more tanks of electrolyte). As such, utility-scale applications are one of the key use cases for VRFBs. Because of the size and complexity of the systems required for VRFBs, they are primarily suited for stationary applications where large systems can be accommodated. Another key advantage for VRFBs specifically over other types of batteries is the reusability of the electrolyte. Liquid electrolyte used in VRFBs can be nearly 100% recovered and, with minimal processing steps and cost, reused in another battery application. This capability can be very advantageous as the energy storage industry strives for sustainability and a reliable supply chain. 

Even with these key advantages, lithium ion (Li-ion) technology dominates the storage market. According to a Guidehouse Insights report, Li-ion makes up around 86% of the total utility-scale storage market, while flow batteries make up around 3%. VRFBs have higher upfront costs, lower round-trip efficiency, and lower deployed projects compared with Li-ion. There are some hurdles that need to be overcome for VRFBs to be adopted at higher rates; however, they offer opportunities for safe and reliable long-duration storage. 

The Outlook for VRFBs

Despite slower growth in historical deployments, VRFBs have significant ongoing projects that encourage integration of large-scale variable renewable energy on the electric grids. Sumitomo Electric installed a 15 MW/60 MWh VRFB on the island of Hokkaido, Japan. The installation in 2015 was part of a demonstration project, supported by Japan’s Ministry of Economy, Trade, and Industry, to determine how to best incorporate large-scale wind and solar into the electric grid. The new VRFB system will be able to provide 17 MW for up to 3 hours or 51 MWh of energy capacity and will serve the grid from April 2022 to March 2043. 

Other countries are not lagging behind. The Energy Superhub project, led by Pivot Power and Invinity in the UK, has a power output of 2 MW and an energy capacity of 5 MWh, enough to serve the daily electricity needs of roughly 600 UK households. The hybrid battery system is the UK’s first and largest grid-scale battery storage system connected directly to the transmission network, allowing it to deliver large volumes of power to public and commercial EV charging locations across the city of Oxford without straining local electricity networks.

With proper funding, continued project development, and increased demand for long-duration storage or frequent discharge applications, the VRFB industry has the opportunity to grow as a significant solution in large and growing energy storage field. Overcoming the barriers related to high capital costs and limited deployments will allow VRFBs to increase their share in the energy storage market. Guidehouse Insights’ white paper further explores VRFB technology and market developments.