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LARGE SCALE BATTERIES FOR ENERGY PROJECTS: FLOW TECHNOLOGY

This series of articles highlights the commercial case for two different types of large scale battery. Large scale batteries widely differ in terms of their flexibility, life-time resilience, day-to-day reliability, initial purchase price (or CAPEX) and the ongoing cost of their maintenance & upgrades (OPEX). It is, obviously, crucial to identify the right battery design and manufacturer.

Flow technology (1974) is older than Lithium (1986), but is not portable and generally less well understood. As recent technology breakthroughs makes Flow an alternative to Lithium and Sodium Sulphur, a quick background explanation may be useful.

Flow Batteries: 

Electricity is stored in electrolyte liquid in two storage tanks. The tanks feed (via pumps) into their own half-cell, each separated by an ion-exchange membrane or ‘exchanger’ (a delicate graphite film manufactured by Du Pont).

The same substance, vanadium is dissolved in sulphuric acid (solving the contamination problem which dogged other designs) is stored in both tanks but at different states of charge.

Vanadium ions are exchanged across the membrane as pumps are activated. Chemically-stored energy is 100% transferred into electrical energy (and 100% back from electrical energy to chemical energy when the battery is recharging).

Pros:

  • High round-trip efficiency, but slightly below ‘high-end’ Lithium and Sulphur designs. Yet significantly more flexible, reliable and versatile out in the field. Flexibility to charge / discharge up or down to any level with no wear or tear issue.
  • Capacity to reverse-flow i.e. charge-discharge-charge inside a 100th of a second’s notice.
  • This Flexibility makes them suitable for both Frequency Response and for Primary Control. Reserve/Storage i.e. one can use the same unit battery to fulfil both tasks and avoid overspend.
  • This cycling/frequency-response flexibility makes Flow suited to successive peak-shifting and arbitrage. This can earn a second revenue for the owner and help to pay down CAPEX. A commission Agency Trader (e.g. big six generator on commission can optimise the battery and extract trading economies of scale for the battery investor).
  • The storage capacity of a Flow battery is simply determined by size of the storage tanks.
  • Flow batteries have a higher CAPEX than Lithium or Sodium-Sulphur. However Flow batteries are more reliable and they require less maintenance. Also OPEX is low – circa 2.5% of CAPEX (less than Lithium or Sodium-Sulphur). For this reason, Flow batteries are generally the cheapest option when the full life-cycle of the system, including maintenance, repairs or part replacement are included in the calculation.

Cons:

  • Flow batteries are a less well known, less common and less understood technology. For this reason alone, they can be harder to win support from internal finance directors and external financers.
  • Flow batteries are less portable than many solid-state batteries due to their low energy density.
  • There are fewer Flow battery manufacturers and still many different variants of flow battery.
  • They use corrosive acid as the electrolyte which requires a robust and expensive membrane (the exchanger) for use in every cell. This cost can mount up and it partially explains the high price of Flow batteries. Continuous RND costs is another significant overhead which the consumer ultimately pays for in terms of CAPEX.
  • A Flow battery has a lower energy density than any Lithium Ion or Sodium Sulphur battery and so the actual space required to house this storage is significantly greater.

Lithium Ion v Flow Battery: Conclusion

A Flow design involves significantly less maintenance than a Lithium Ion or Sodium Sulphur.

The Vanadium variant battery (same electrolyte solution used in each tank (i.e. on both sides of the exchanger) has solved the ‘cross contamination problem’ with Flow technology.

OPEX is more quantifiable at the project outset than in a Lithium-ion battery. OPEX will be lower: ca. 2% of CAPEX vs. a significantly higher OPEX figure for Lithium Ion. e.g. replacement cells, annual maintenance and inspection of fire-prevention systems.

Consequently, the Flow battery is claimed to be the cheapest ‘Lifetime Option’ as well as the most robust and flexible alternative.

Recent trends in global Lithium Carbonate prices may conceivably lead to unaccounted for (all prices quoted are subject to change) increases in CAPEX cost or (perhaps more likely) increases in future OPEX costs.

Prospect Law and Prospect Advisory provide legal and business consultancy services for clients involved in the infrastructure, energy and financial sectors.

This article remains the copyright property of Prospect Law and Prospect Advisory and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

Dominic Whittome is an economist with 25 years of commercial experience in oil & gas exploration, power generation, business development and supply & trading. Dominic has served as an analyst, contract negotiator and Head of Trading with four energy majors (Statoil, Mobil, ENI and EDF). As a consultant, Dominic has also advised government clients (including the UK Treasury, Met Office and Consumer Focus) and various private entities on a range of energy origination, strategy and trading issues.

For more information please contact us on 020 3427 5955 or by email on: info@prospectadvisory.co.uk.

F0r a PDF of this blog click here

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LARGE SCALE BATTERIES FOR ENERGY PROJECTS: LITHIUM BATTERY DESIGNS

This series of articles will highlight the commercial case for two different types of large scale battery. Large scale batteries widely differ in terms of their flexibility, life-time resilience, day-to-day reliability, initial purchase price (or CAPEX) and the ongoing cost of their maintenance & upgrades (OPEX). It is, obviously, crucial to identify the right battery design and manufacturer.

Battery Designs

It is easy to waste money on an over-specified battery that offers expensive features and benefits you will seldom use.

It is also easy to waste money on a battery which is simply not up to the job, vis-à-vis Balancing & Back Up requirements and / or the climatic conditions faced and final costs of system failure there.

There is a multitude of different battery types. Their characteristics vary hugely. The manufacturers and the designs of each type vary widely too, in terms of the robustness, reliability and long-term performance and maintenance, warranty and general aftercare requirements.

Prices vary as well and price itself is not always a reliable guide to value or performance. In short, the large scale battery market is still evolving. Fragmented, unregulated, opaque: It is a challenge, but the rewards for getting it right are huge.

Lithium Battery Designs

Lithium ion is a ‘conventional solid-state’ battery which involves the exchange of free ions across an exchanger, a technology which was pioneered by Sony in the late 1980s. It is now over-taking sodium sulphur as ‘battery of choice’ in large scale battery applications.

Pros:

• Has the highest energy / power densities of any battery – 0.250 kWh/kg / 0.325 kW/kg.
• Simple ‘plug and play’ installation.
• Well known, commonly-understood technology with a large number of producers.

Cons:

• OPEX may be unpredictable and rise in the future if cell-replacement costs escalate – but some manufacturers offer a 10 year/100% performance guarantee.

• Batteries produce toxic and non-recyclable waste products, including hydrogen which is explosive, hence the need to assiduously manage the delicate operating balance of these batteries at all times using the control systems and maintaining fire prevention systems. In tropical climates there is a residual fire risk, however robust the product chosen.

• The price of the main raw material (Lithium Carbonate) is rising. This may affect CAPEX/purchase price in the short-term and OPEX over the long-term. Between 5% and 8% of fuel cells typically need replacing every year, although this will depend on how they are used & cycled. Whatever the figure is, this cumulative degradation effect needs to be reflected in the OPEX of any financial model.

Conclusion:

Lithium Ion is a proven and increasingly favoured technology which is fast becoming the large scale battery of choice among European smart grid and embedded generation developers.

That said, there is still concern about some safety and security issues, especially if the batteries are to be stored in a confined enclosure or catacomb where temperatures may surpass 35 – 40oC, or where humidity may change rapidly, or where they are left in exposed areas which may also be prone to very high ambient temperatures.

The risk of fire and of explosion are known risk factors with any lithium battery.

Large scale Lithium batteries are now believed to be illegal in New York for example. Fears of terrorism (or a proximate fire) may be the thinking behind this move. Whether these fears are founded or not, the concern is that a lithium battery may be a target object/hazard, even if the battery itself is properly maintained.

Prospect Law and Prospect Advisory provide legal and business consultancy services for clients involved in the infrastructure, energy and financial sectors.

This article remains the copyright property of Prospect Law and Prospect Advisory and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

Dominic Whittome is an economist with 25 years of commercial experience in oil & gas exploration, power generation, business development and supply & trading. Dominic has served as an analyst, contract negotiator and Head of Trading with four energy majors (Statoil, Mobil, ENI and EDF). As a consultant, Dominic has also advised government clients (including the UK Treasury, Met Office and Consumer Focus) and various private entities on a range of energy origination, strategy and trading issues.

For more information please contact us on 020 3427 5955 or by email on: info@prospectadvisory.co.uk.

For a PDF of this blog click here