Renewable energy sources have expanded significantly in recent years, especially wind and solar.  One of the largest issues with wind and solar energy sources is the need to store and release the electrical energy produced.  A promising storage technology is vanadium redox flow batteries that will increase the demand for vanadium.

An example of the significantly expanded renewable energy sources is wind energy.  Global wind energy production has increased eightfold in the last 10 years.

Vanadium

Source: Global Wind Energy Counsel

Vanadium

Source: Global Wind Energy Counsel

After setting new records in 2014, the wind power industry experienced another record-breaking year in 2015, with 22% annual market growth and passing the 60 GW mark for the first time in a single year. According to the Global Wind Energy Counsel (“GWEC”), capacity growth will continue at double-digit growth rates and almost double the 2015 capacity by 2020.

Three big trends in my view will continue to drive growth in the medium term:

Climate Change:

The long-term targets adopted by the 186 countries gathered at the UN Climate Change Conference held in Paris in 2015, is a de facto call for a 100% emissions-free power sector by the year 2050 — benefiting renewable energy development such as wind and solar.

Falling Prices:

The costs of both wind and solar technology have fallen dramatically in recent years, and innovative financing and government subsidies are creating conditions for renewable energy sources to be competitive in many countries.

US Market Stability:

President Obama signed into law a long-term extension and phase-out of the Production Tax Credit (PTC) which has been the main federal policy mechanism of support for wind energy in the US. So, the US wind industry now embarks on its longest-ever period of policy stability, and the potential implications of this go far beyond the US market. The incoming US Secretary of Energy, Rick Perry, is a strong proponent of wind energy.

In their document, BP Energy Outlook 2035, the British multinational company, BP p.l.c. sees Europe leading the charge, with renewable energy accounting for 32% of its electricity generation by 2035.

All the while, BP sees China showing the largest absolute increase in renewables, as it looks to any source other than coal:

Vanadium

The high growth of renewable energy both in absolute numbers and as a share of total power supply, invites the questions:

How to plug the hole in the grid supply when the wind stops and the sun does not shine?

What to do with excess wind and solar power?

Batteries are the most practical solution.

The emergence of utility-scale battery storage for energy is happening now, accelerating, and will get bigger in the next two to five years, according to Andrew Slaughter, the Center’s Executive Director and co-author of Electricity Storage Technologies, Impacts, and Prospects[1].

Lithium-ion batteries have taken the lion’s share of the energy storage market, but technological advances in flow batteries that bring down costs and improve their safety and environmental profile are likely to boost utility-scale installations and deployments. Compared to lithium-ion batteries, vanadium redox flow batteries (VRB) are non-flammable, environmentally friendly, have estimated lifespans in excess of 10,000 cycles and maintain 90% of their capacity over 20 years thereby lowering the total cost of ownership. Getting 1,000 cycles of use out of a lithium-ion battery with full depth of discharge however, would be ambitious.

VRB is ideal for “grid constrained” solar and wind farms that currently struggle to sell their electricity at times of peak production but find other forms of storage are not economical.  The other advantage of VRB over lithium-ion batteries are a longer continuous discharge run time (6-10 hours versus 2-5 hours). The downside for VRB is their relatively lower round-trip efficiency (measured by power out over power in) of 70% compared to 85% with lithium batteries.

“…in Japan, Hokkaido Electric Power Co.’s 15-megawatt/60-megawatt-hour vanadium redox flow battery from Sumitomo [Electric Industries, Ltd.] started operation last December. Located next to one of the country’s largest solar power plants, it will be used for frequency regulation as well…. Korea’s largest battery installation was Korea Electric Power Corp.’s 28-megawatt lithium-ion array, which has also been earmarked for frequency regulation and will serve the grid around Seoul. The country says it is planning up to 2 gigawatts of storage by 2020.

‘Stationary energy storage continues to show strong growth in the number of projects delivered, the total amount of energy storage deployed, and the size of utility-scale storage systems. These trends are likely to continue as storage increasingly becomes a grid management asset, and we will consistently see records broken for the capacity of the largest stationary energy storage plants,’ said Dean Frankel, an analyst from Lux [Research]’s energy storage team.”[2]

It’s clear current utility-scale battery storage deployment is in its early infancy. However battery storage technology appears to be inching closer to a “sweet spot” due to the increase in storage demand from renewable energy and rapid advances in technology that drives down cost.

According to article titled “How Soon Can Tesla Get Battery Cell Costs Below $100 per Kilowatt-Hour?” at Greentechmedia dated March 15, 2016

https://www.greentechmedia.com/articles/read/How-Soon-Can-Tesla-Get-Battery-Cell-Cost-Below-100-per-Kilowatt-Hour

““Ben Kallo at equity analyst firm, Baird, believes that Tesla’s current battery costs are ~$150 to ~$200 per kilowatt-hour – well below the industry average pack costs of ~$350 per kilowatt-hour (as estimated by Bloomberg New Energy Finance). Kallo suggests that Tesla “could reach its <$100 per kilowatt-hour target in the intermediate term as Gigafactory production ramps up”.

The VRB cost is slightly behind the curve at $300/kWh to $500/kWh, however those costs are half of what they were 3 years ago and set to come down further. VRB can be stacked up to increase storage capacities whereas lithium-ion storage capacities are somewhat boxed-in by initial design. Unit cost for large-scale VRB goes down whereas it goes up for lithium-ion batteries. This means on a large-scale deployment, VRB is already likely competitive with lithium-ion batteries today.

The article: “How Cheap Can Energy Storage Get? Pretty Darn Cheap” provides a great overview on the cost versus benefit of energy storage:

“The cost of energy storage is, roughly, the up-front capital cost of the storage device, divided by the number of cycles it can be used for. If a battery costs $100 per kwh and can be used 1,000 times before it has degraded unacceptably, then the cost is one tenth of a dollar (10 cents) per cycle.”[3]   The article states earlier: “If you’re informed on wholesale electricity prices, the prices above may sound ridiculously high. Wholesale natural gas electricity from a new plant is roughly 7 cents per kwh (though that doesn’t include the cost of carbon emitted). How could batteries priced at 25 cents per kwh, or even 10 cents a kwh, compete? Particularly when you also have to pay for electricity to go into those batteries?

The answer is that batteries don’t compete with baseload power generation alone. Batteries deployed by utilities allow them to reduce the use of (or entirely remove) expensive peaker plants that only run for a few hours a month. They allow utilities to reduce spending on new transmission and distribution lines that are (up until now) built out for

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