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FBE calls for more flow battery investment in Europe

Thu, 11/04/2021 - 10:23 -- Paul Crompton

Energy storage organisation Flow Batteries Europe (FBE) is calling for an annual $100 million investment into the development and deployment of long-duration storage technologies in Europe.

The appeal came as the UK government called for evidence on facilitating the deployment of large-scale and long-duration electricity storage (LLES).

The consultation, which ran from 20 July to 28 September, focused on LLES’ role in decarbonising power networks, and questioned if flow battery technology faced market challenges that may hinder its deployment at scale.

FBE— and an international not-for-profit association— says that large-scale manufacturing would reduce costs to a level that’s competitive with short-duration storage technologies including lithium-ion and lead-acid.

An FBE spokesman told BEST the $100 million would pay for a 1.5GW flow battery manufacturing factory— with the cost of setting up new flow battery manufacturing facilities much less than the investment in a lithium-ion manufacturing plant.

Kees van de Kerk, president of FBE, said: “Investment in large-scale manufacturing of flow batteries is urgently required to support the deployment of large-scale, long-duration energy storage if carbon emission reduction targets are to be achieved.”

FBE says that failure to support the early deployment of LLES would delay the development of the technology, and installing short duration storage options would defer their replacement by LLES for an extended period, making it harder to decarbonise the energy system by 2050.

Accelerating LLES and bringing investment forward would help prepare the manufacturing and materials supply chains, limiting the deployment of non-LLES conforming storage, say FBE.

FBE answers BEST’s questions

How much investment does FBE think the Europe needs in LLES for the next 5-10 years?

Currently, a Tesla Gigafactory produces 35GWh per year and costs $5 billion, most of which goes into EVs. Therefore, if scaled, 1GWh would cost around $140 million. According to IHS Markit, the global energy storage market will add up to over 30GW a year by 2030. 

If, say, we need 30GW of stationary storage a year, and only 5% of that is flow batteries, that would still mean 1.5GW coming from flow batteries. A flow battery factory is half the cost of a lithium-ion factory. A 1.5GW flow battery factory would cost about $100 million.

We therefore think that Europe should invest a minimum of $100 million per year in flow battery manufacturing, to keep up with other technologies. Ideally, we would also expect any country that has accepted an EV gigafactory to make a similar investment. 

How would this investment help LLES technologies compete with lithium-ion and lead-acid ESSs?

Funding, such as grants for investment in R&D and manufacturing, are often made on a technology basis, with proposals assessed and public investment made on the basis on perceived benefit and priority. Often, money follows money. 

This sometimes means that newer technologies have a lower profile and are less able to attract funding.

Private investment often follows the development of the initial R&D. Private investors’ look at public funding assessments as a check on their proposed investments. Both private and public funding and investments often lean towards technologies with a clear value stream. 

For energy storage, the value stream drivers have been based on short-term energy storage, for example power quality, frequency response and short-term reserve and electric vehicles. This has focused attention on shorter duration batteries, for example, lithium -on.

Longer-term storage does not have such a well-developed fiscal rate of return, so tends not to be so heavily investable. It is not just a problem for flow batteries – other long-term storage technologies are also in the queue for more investment. We argue that the cost of setting up new manufacturing facilities for flow batteries is much less than the investment in a manufacturing plant for lithium-ion.

Flow battery consultation

The UK government’s consultation called for information to understand the barriers within the LLES market, how these might be addressed, and the risks that may be associated with potential interventions to support their deployment.

While flow batteries are already deployed for LLES applications, long-storage technologies need adequate market provisions to ensure that they can be deployed along the energy system, said an FBE statement.

FBE is stressing the importance of the following policy priorities:

The definition of LLES should include not only the consideration of MWs and MWhs, but also the cyclability and endurance of the technology.

That LLES should be considered to have a minimum duration of five hours; with energy storage systems delivering energy at its rated power for a minimum of five hours over a minimum of 10,000 complete cycles.

Long-term energy storage projects should be established as a separate asset class, alongside generation, distribution and transmission, and consumption. Doing so would allow for a market price of capacity, as opposed to just a market price of power. Defining batteries as a separate asset class has allowed projects with long-duration natrium-sulphur batteries in the Middle East to become financially feasible.

Other countries around the world, such as China and the US, have already started investing in different LLES technologies. 

FBE remains open to a dialogue with policymakers and other interested stakeholders to help ensure that LLES technologies receive more attention and investment in the coming years. 

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