The flow battery market has changed considerably in the last few years and is now concerned with what industry needs, according to Alexander Schönfeldt, chief executive officer at Austrian flow battery company Cellcube. Four or five years ago, the flow battery industry was smaller and more preoccupied with the science. Andrew Draper met with him to find out more.
Referring to June’s International Flow Battery Forum meeting in Prague, Schönfeldt said there is a growing understanding of what the flow battery industry needs to do to change, and that calls for more standardisation and scaling as it industrialises. That will also provide more security for investors, he said.
“There are far more presentations about projects going on,” he said. “Not just scientific projects, but really on the kinds of deployments, which is good. It shows there is a kind of a change, which is important too for the outside world. But of course still I’m missing bigger commercial projects.”
Supply chain holding back the industry
The supply chain is currently holding back the industry, Schönfeldt said. There are 100 MW projects in the market but Cellcube is not currently able to deliver them in the 24 months clients are looking for. “So if I get an order for 100 MW, probably my supply chain needs 12 months to run to a level that they could start manufacturing 100 MW. Then another 12 months later I would maybe receive the material for 100 MW, and then I need myself another 12 months to manufacture the 100 MW.” Shipping and installation would take another year, meaning this kind of project is taking 4–5 years, which is not acceptable to project offtakers.
It means that Cellcube is being selective about the orders it accepts and is being upfront about the time required to fulfil, he said.
It is an industry-wide issue, he said, as there are not so many component suppliers out there who can meet the scale and quality required, and most flow battery manufacturers are using the same suppliers.
“Three years ago we were talking about projects which were between 10 kW and 100 kW. Now, we talk about projects which are between 1 MW and 5 MW. So I assume in the next 12–24 months, there will be projects which are 20 MW, 30 MW, and then 100 MWh,” he said.
Electrolyte is not the bottleneck, Schönfeldt said, though is often the talking point. The supply chain blockages are more to do with components and materials for key components. It may require changes to the way things like plastic are produced, Schönfeldt said.
Increasing project sizes
He said the company is working on increasingly bigger projects, 20–30 of which are in operation. Seven or eight have been deployed in the last year, ranging from 1–8 MWh. “I think now when we move forward on a larger scale, I wouldn’t expect that those project numbers would be bigger. Just the size of the project would become bigger.
“So we may expect, for example, to sign contracts in the range of maybe 150–200 MWh. But this is where I would say that’s something which needs to fit the production pipeline… We are probably talking about 2 GWh of pipeline that we have.” He sees a steady flow of new contracts over the next 6–9 months.
Need for resiliency and reputation
Cellcube has mainly industrial clients behind the meter who have a very strong need for resiliency. The demand is also being driven by clients’ ESG requirements and net zero targets, and the need to be seen to be proactive. Some customers are in heavy carbon industry, such as cement, and they need to reduce carbon emissions. This will generate deals in the next few years, he said.
“There is a group of corporates who are very dependent on, I would say, the reputation in the market of being carbon neutral. And they do not wait until they get forced by regulators to make changes. They have to find it themselves. And these are big brands like Google and Amazon. Those companies have decided themselves that for their own strategy and their own customer reputation it’s important to be net zero. And they’re taking steps themselves.”
Call for greater standardisation
Schönfeldt has called for a greater standardisation of material quality, technology and electrolyte. That would allow a quicker ramp-up of projects and give better security to investors in flow battery technology. A standard electrolyte that can be used in different makes of flow battery would create a new market for trading second-hand electrolyte.
“And that means we work right now in Europe with other OEMs on an electrolyte standard. And this is where we want that. If that standard becomes the standard, we can have two things. First, we can assure high quality standards for the reliability of the system and secondly, we can label it. If a customer is having that labelled and certified electrolyte, he can be well protected that this is not destroying his system.” This work is ongoing supported by the Flow Battery Europe industry body, he said.
Fifth generation technology coming
Cellcube is working on its fifth generation technology. He claimed that Cellcube stack technology is market-leading in its efficiency (over 80%) and cost, “but it’s still not good enough to compete with lithium long term,” he added. Cost per kWh and energy density have both improved with each new development, he said.
“Our overall target is to achieve the levelised cost of storage of five cents or below per kWh for an eight-hour system with an RTE of more than 82% on an AC level,” he said.
“Right now we are competitive for long duration… Generation five will kick us into the league of being competitive on a four-hour level for large-scale deployments,” he said. He sees four-hour duration as where the core market will be in the next three years. Cellcube is staying clear of the 2–4 hour market for now.
In principle its projects are profitable, he said. “So we are competitive in the behind-the-meter market and therefore all the projects are profitable. The point is, we are on a path towards a future development that requires further investments from the R&D perspective into manufacturing scale, that investment into all kinds of other scale-up requirements and therefore I think no flow battery company in this market can be profitable overall.”
Raising $30 million
The company is engaged in raising $30 million. He said the company is not in for a quick buck but rather about building a sustainable business.
“How can we establish something which makes sense for the people, you know? We want to use material which has a carbon neutral footprint. We want to use material which is just not waste.
“We know that electrolyte we are using can live forever – native electrolyte can be there 100 years and it will probably be worth more, as the value increases over time, because vanadium has that indefinite lifetime. These are things we really like and that’s what we want to bring forward, so that people start procuring based on real values and not just on the pure capex.”
Note: Schönfeldt was replaced by Volker Schulte as Cellcube’s CEO on 31 July
