After years spent on the edges of the energy market,
renewable energy production has boldly stepped into the
limelight.
Solar photovoltaic (PV) has especially become increasingly
widespread and common in many developed markets, for both
residential and commercial usage. Wind is following closly:
tall wind farms rotating away have become an increasingly
common sight outside cities, in rural areas or, in some
instances, offshore.
As the market share of renewable energy expands,
availability of ways to store this energy – through
energy storage systems, or ESS – has become key.
"Energy storage becomes particularly appealing in
conjunction with energy generation through PV and in other
ways," Matt Roberts, CEO at US industry group the Energy
Storage Association (ESA), told IM.
The US has been at the forefront of development in energy
storage globally, whether it be in residential,
non-residential or utility applications.
Keeping up the pace of expansion of renewables, the US
energy storage/ESS market is expected to grow sevenfold between
2016 and 2021, reaching a worth of $2.8bn, according to
forecasts collated by GTM Research and the ESA. It is estimated
that cumulative storage market revenues in the 2016-2021 period
will be almost $9bn.
Investment in energy storage across the US hit $660m in the
third quarter of 2016 alone, setting an all-time
record.
"Energy storage markets are growing, investment is coming
in. Venture capital is increasingly looking into ESS. There are
thousands of local utilities in the US, and all are allowed to
own energy storage systems," Roberts said.
The short-term outlook is even more bullish for capacity
increase: GTM expects the ESS market in the country to grow
35-fold, increasing from 167 MWh in 2015 to 5.9 GWh in 2021.
"The residential space will be the fastest-growing segment
over the next five years, increasing in size by over 200 times,
from 7 MWh in 2015 to 1.6 GWh by 2021," it stated.
Utility applications are expected to account for the single
largest component of the expected market size in 2021, both
in revenue and capacity. Residential and non-residential
applications will experience strong traction, too.
This broad tendency has a direct effect on the market of
large-scale ESS providers.
"A large proportion of the stationary energy storage market
will be the coupling of solar with storage and in order to do
this, it requires a storage technology that can be used heavily
every day which will last over 25 years," Scott McGregor, CEO
of UK LSE-listed vanadium battery producer redT Energy Plc,
told IM. "Vanadium redox flow machines
are an energy storage asset, ideal for this task."
 |
| VRBs are "an energy
storage asset", according to redT’s Scott
McGregor. (Source: redT) |
Cheaper energy
Increasingly so, energy storage is following renewables on a
parallel trajectory.
At the heart of the uptrend, Roberts explained, are a number
of factors that cooperate to create the right conditions for
the expansion, including cost of energy and, as a result, a
shift in demand from users.
Arguably, the leading factor to consider is the increased
affordability of renewable energy.
The price gap between conventional energy sources, such as
coal, and renewables is shrinking at a rapid pace.
According to data from the US Department of Energy (DOE),
the cost of a KWh of solar photovoltaic (PV) energy at plant in
2015 was at $0.125, while coal ranged at a low end of $0.095
and a high end $0.15/Kwh.
In a handful of years, solar and coal have reached almost
price parity. Notably, this happened without taking into
account contributions from state subsidies. In other words,
this remarkable decrease in cost was primarily market-driven
rather than supported by external help in the form of, say,
tax breaks.
The DOE is expecting to see a continuation of the narrowing
of the gap going forward, which in turn will lead to increased
output of solar.
At the same time, such an expansion needs adequate ESS
capacity in place.
"In grid connected markets, renewables are currently
'stuck’ because existing grid infrastructure
simply cannot handle the additional generation," McGregor
told IM.
"To utilise this resource [solar and renewables] more
effectively, we need to remove the inherent issue of
intermittency and create 'firm’ power through the
use of long duration industrial scale energy storage
infrastructure, such as vanadium redox flow [batteries]."
|
VRBs are mainly
suitable for large-scale applications, such as industrial
or grid.
(Source: PNNL) |
Vanadium: old and new
The vanadium redox flow battery (VRB) technology has been
around for decades, but only recently has it started to
demonstrate its suitability to viable economic development on
a commercial scale.
A flow battery is charged and discharged by a reversible
reduction-oxidation reaction between the two liquid vanadium
electrolytes of the battery. Unlike conventional batteries,
electrolytes are stored in separated storage tanks, not in the
power cell of the battery. During operation, these electrolytes
are pumped through a stack of power cells, or membrane, where
an electrochemical reaction takes place and electricity is
produced.
Unlike the other leading battery technology, lithium-ion
(Li-ion), VRBs are not suitable for portable, small-scale,
light applications. Their low energy density requires large
space for installation to reach the desired capacity, and the
electrolyte must be stored in bulky, heavy tanks.
Among its main characteristics are a longer lifetime than
other battery types (20+ years), better resistance to heavy
usage, lower rate of degradation, easy scalability and higher
number of cycles, making VRBs particularly suitable for large
applications that rely on daily usage, such as industrial or
grid.
"The opportunities are related to potential economies of
scale. Of the six or eight flow battery technologies being
explored, vanadium is one of the most scalable,"
ESA’s Roberts said.
These are all good news for VRBs, which have been making
headlines as of late.
A 1.68MWh VRB system is being commissioned in the Isle of
Gigha, off the western coast of Scotland, with a view to
support power generation via the four wind turbines on the
island, which currently feed the local grid.
In Japan, Sumitomo Electric Industries is setting up a VRB
system in Hokkaido with a capacity of up to 60MWh, aiming to
increase Hokkaido Electric’s capacity for wind
and solar by about 40MWh.
With every new system that is installed, VRBs gather mounting
evidence to support their economic viability.
redT is currently working on several projects in the UK and
Europe as well as Africa, ranging from islands and off-grid
telecoms sites to large commercial and industrial premises in
urban and suburban areas.
The broad geographical span of the company’s
current projects points also to another characteristic that
will underpin VRBs’ future market penetration:
their adaptability to off-grid applications and secluded
areas.
In off-grid markets, energy security is a key driver for
demand, McGregor told IM: "Large parts of
sub-Saharan Africa struggle with grid access and, when a
connection is available, the grid can often be unreliable, weak
and prone to outages."
A similar scenario can apply to industrial and commercial
off-grid applications such as mining, which are often located
in areas with no available direct connection to energy
supplies. In these cases, the traditional solution is to run
diesel generators, but this requires fuel to be transported
to site mainly on trucks, generating a high although
necessary expense.
"Vanadium redox flow machines, implemented alongside
sufficient solar generation, can reduce diesel expenditure by
70% and don’t require frequent maintenance and
servicing throughout their 20-25 years of asset life. This
approach also allows project owners to fix prices for the
future and hedge against price volatility and supply risk,"
said McGregor.
"As a company, we are bullish about the market," he added.
Vanadium suppliers are equally optimistic in the prospects of
the expanding vanadium ESS customer base.
Canadian developer Largo Resources Ltd, which first brought
online the Maracás Menchen vanadium mine in Brazil in
2014, has gradually ramped up its production of vanadium
pentoxide (V2O5) from the operation, reaching current nameplate
capacity of 800 tpm.
According to Mark Smith, Largo’s CEO, the
vanadium market will see a sharp shift in the composition of
demand primarily on the back of VRBs, which will lead to
improved industry conditions for producers, counteracting the
low price trend seen in 2015 and part of 2016.
"There has been more vanadium used in redox flow [batteries]
in 2016 so far than in all previous years combined," he told IM
in October. "We think redox flow will become a dominant use of
vanadium [in the near future]."
Vanadium supply
Global vanadium production fell below 80,000 tonnes in 2015,
according to USGS data, while for 2016 it was put at an
estimated 76,000 tonnes (excluding the US).
Aerospace and chemical end markets take about 8,000 tpa
combined, according to industry estimates. Any volumes going
into batteries would add to that, with the rest going into
steel.
The USGS stated that metallurgical uses (primarily as an
alloying agent for iron and steel) accounted for about 94% of
the US’ domestic vanadium consumption in 2016.
According to Roskill Information Services, chemicals and
non-ferrous alloys take up to 8% of the global vanadium end-use
market, while over 90% goes into the steel sector.
All in, actual volumes of vanadium going into batteries are
below 1% of global production.