Energy storage is poised to transform the electricity industry. In the
U.S. alone, energy storage will grow 6x, from 120 megawatts to over 720 megawatts
by 2020. Globally, it will bring power for the first time to over a billion
people by letting them tap into micro-grids.
Lithium and vanadium have both been offered up as a basis for the storage
economy. But which technology will win? Here are some facts about each – draw
your own conclusions.
Lithium batteries store their energy in cells. Some are flat. Some are
cylindrical, but you’re familiar with what they are: relatively small,
self-contained devices that get hot. There are probably two in your phone
and six in your notebook. But in a grid scale storage system, you need
hundreds of thousands of them. It would be sort of like building an industrial-scale
cold storage facility with a bunch of portable refrigerators. You can do
it; it just won’t work well.
Vanadium flow batteries store their energy in tanks. The electrolyte — the
fluid that transfers charges inside a battery — flows from one tank
through the system back to the same tank. The tanks can be fish tank size
or bigger than an above ground pool. As a result — and you will see
this over and over again — it’s much easier to adapt flow batteries
to industrial-scale applications without adding a lot of cost. You just
make the tank bigger.
Bloomberg New Energy Finance says the average cost of a lithium-ion based
storage system is $1,750 a kilowatt hour. The cost includes the cells,
electronics, installation and balance of systems expenses. By 2020, Baird
Research projects that Tesla Motors' planned gigafactory will be able to
produce energy storage systems for $400 a kilowatt hour — all in — and
sell them for $500 a kilowatt hour.
Some vanadium batteries already provide complete energy storage systems
for $500 per kilowatt hour, a figure that will fall below $300 per kilowatt
hour in less than a year. That is a full five years before the gigafactory
hits its stride. By 2020, those energy storage systems will be produced
for $150 a kwh.
Then there is scaling. If you want to double the size of a lithium system,
you double the price: a ten kilowatt system would cost $17,500. With vanadium,
you just increase the size of the tank, so the price per kilowatt hour
goes down. Suddenly, the prices are going in different directions. Bigger
Grid batteries have to last for decades. The average age of a substation
transformer in the U.S. is 42 years. Lithium ion batteries have a finite
life. Performance degrades over time and is impacted by heat, operating
conditions and how deep, and how often, they have been discharged. Battery
University notes that the capacity of lithium ion cells can drop to a 50
percent level after 1,200 to 1,500 discharges.
Vanadium-based flow energy storage systems can operate forever. The active
ingredient is a low-cost, rechargeable electrolyte, which never wears out
due to the type of chemical reaction involved. The electronics and software
to manage the system can be easily upgraded like any computer. The last
major component — the plastic tanks for holding the electrolyte — lasts
So with lithium you’ve got a small, expensive battery with a finite
lifetime. To build a storage system for running demand response programs
or a backup system that can provide four to six hours of power, you need
thousands of cells. It’s like building a warehouse-scale facility
But it gets worse. Lithium batteries also are subject to “thermal
runaway” reactions, i.e. they can blow up.
Vanadium-based systems are made for industrial-size applications from
a few kilowatts to several megawatts. And there is no danger of thermal
Manufacturing and Scalability
Manufacturing lithium ion cells isn’t easy. Lithium ion cell maker
A123 Systems filed for bankruptcy less than three years after it held an
“The lithium ion battery manufacturing space is not for the weak
of heart,” says Sam Jaffe, senior research analyst with Navigant
Research. “The electric vehicle market is growing slowly and the
battery manufacturers are engaged in a Darwinian fight for survival.”
Tesla Motors’ Gigafactory would double the worldwide capacity to
50 Gigawatt hours worth of batteries and cost $5 billion dollars. It’s
a big risk. It’s also worth noting that there is already significant
unused lithium ion battery manufacturing capacity among vendors in Korea,
China and Japan.
Setting up a Vanadium storage manufacturing facility is simple and very
low cost — orders of magnitude less expensive than the proposed Gigafactory.
The production process is also simple, and ecologically safe. The electrolyte
and other active components are combined as one process step, the enclosure,
made of pipes, tanks and electronics is assembled as a second process step,
and they are then assembled into battery packs. As a result, total worldwide
capacity can “flow” much easier: manufacturing capacity can
be added incrementally.
Lithium batteries are 85 percent efficient over shallow discharges when
new. Flow batteries are around 75 percent efficient. But if you operate
lithium ion batteries in an environment above 40 Celsius, the charge rate
(i.e. the time it takes to charge) drops by 25 percent and the lifetime
cycles drop by 33 percent. Below minus 20 Celsius, the charge rate drops
by 40 percent. Imergy’s Vanadium batteries aren’t impacted.
Lithium batteries for the most part aren’t recycled. Economically,
it is just not worth it. The price of battery grade lithium hydroxide has
more than tripled to $7,600 a ton.
Most lithium comes from mines and brine pit operations in Australia, Bolivia,
Chile and Argentina. Talison Lithium, the largest producer in the world,
extracts more than 350,000 tons of lithium ores out of a single mine a
Imergy Power Systems has come up with an innovative technique to extract
vanadium for its storage systems from mine tailings, depleted oil wells
and oil storage depots. To get our active ingredient, we clean up environmental