Flow Battery Solutions to Lithium Battery Problems – Pangea Ventures, LTD.

May 16, 2016

The Future in Storage is Long (Part 2): A blog post by Andrew Haughian of Pangaea Ventures talks solutions that flow batteries have to solve the problems of lithium batteries.

Lithium Ion technology has a huge head start in the energy storage market. While many of the cost reductions are behind us, costs over time will continue to drop. (Part 1) Nevertheless, our entrepreneurial world is full of companies who have looked at that chemistry and said, “There has got to be a better way!”

Thin Film Solar, All Over Again?

In part one I drew the analogy of lithium storage to silicon solar. Looking back a decade ago, thin film solar generated incredible hype as the “theoretical” costs penciled in well under where silicon hit an asymptote. Similarly the “Beyond Lithium” battery world is ripe with approaches using lower cost metals or cheaper device structures in order to get to a lower cost. Aquion for example has developed a sodium ion battery with an aqueous electrolyte. Sodium is cheap and these batteries will not catch fire or be impacted by high temperatures. It really seems to address the weaknesses lithium has today. Ambri has a different approach where two liquid metals with different potentials are separated by molten salt electrolyte. As the battery is discharged the metals effectively form an alloy, while a process analogous to aluminum refining brings the battery back to a charged state. The usual battery decay mechanisms of solid material degradation are eliminated and high conductivity should reduce material costs.

While these companies are in their early days, NGK has been in the market with a high temperature sodium sulfur battery for years. Unfortunately the engineering challenges of producing a high temperature battery became apparent when a battery installation suffered a major fire in 2011. In all likelihood, Ambri is finding out right now how hard this “engineering” problem of sealing a high temperature battery may be.

Commercializing a new battery chemistry is hard. The crux of these approaches is that the time and cost to reach the necessary technology maturity and economies of scale required by this market. Lithium ion enjoyed the luxury of starting off with small format batteries serving premium markets, with relatively minor consequences in the event of a single failure. In the energy storage market, manufacturers are riding these technology advances and scaling efforts from the past, in order to produce a relatively low cost and reliable product that is meeting the needs of the short duration storage market today. Even GE didn’t have the stomach to keep the lights on at its Durathon sodium battery plant. A start-up trying to play this game had better have nerves harder than steel.

Go with the Flow

Flow batteries have been long been hailed as the solution to long duration storage and currently there are numerous start-ups pursuing this approach. The Vanadium Redox Battery (VRB) is the most mature technology. Unfortunately, high electrolyte costs combined with the engineering considerations of managing electrolytes with a pH well below 0 have made capital costs prohibitive. Proponents always point to extremely high cycle life as they attempt to make the LCOS math work but the market has never really taken off and one can only blame cost. Seeking to address this concern, chemistries such as Zinc Bromide, Iron Chrome and Zinc Iron have been pursued by various groups over the years. Unfortunately they typically introduce additional challenges such as electrolyte crossover or the safety considerations of large quantities of bromine. As a result, the jury is still out.

But unlike lithium and other battery chemistries where manufacturing can be complex, flow batteries are attractive for VCs in that standard manufacturing processes and even contract manufacturing can facilitate a scalable and capital efficient business model. For this reason, despite the historical shortcomings, Pangaea had long been intrigued by the flow battery approach, if only a low cost, safe and benign chemistry could be found. When we heard about an all iron flow battery developed by ESS Inc. we were more than intrigued.

Obviously we loved the cost headroom of utilizing the cheapest metal in the world. The benign nature of the electrolyte and avoiding pesky issues such as electrolyte crossover or electrode degradation made us believers that this battery could achieve the holy grail of low cost and extremely long life. But what really sold us was that the team had developed a full-scale working prototype in few short years with just over two million dollars in grant funding. Comparing that with capital consumed by others to get to the same point confirmed the elegance of the approach but also validated the resourcefulness and ingenuity of the team. We have been partnered with the company since early 2015.

For more reasons than one, we can’t wait to make a trip to the Stone Edge Farms winery in Sonoma Valley where ESS’s first commercial system is delivering solar power to irrigation pumps long after the sun has gone down. What has us even more excited is that low cost and long cycle life delivers LCOS numbers in low single digit cents per kWh, well below the tipping point where long duration storage starts to take off.

Go Long!

Solar and wind developers know that storage is the secret to continued renewable growth but until now, long duration batteries have not hit that cost tipping point these developers need. As the icing on the cake, once these long duration batteries start to establish a meaningful installed base, servicing all of the high value short duration applications will serve to juice returns. GWh’s of long duration capacity will be standing by and waiting for the opportunity to test their legs in a 100-meter sprint. Now is the time is now to go long.

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