These days, all of the headlines on energy storage seem to be focused on Tesla’s lithium ion Powerwall storage systems, and indeed the company has made significant progress. But that doesn’t mean the storage race is over. Large companies like BYD (which plans at least one gigafactory of its own), Samsung (which sells batteries to BMW and other automotive companies) and LG Chem are moving ahead with their lithium ion products. And some of the smaller start-ups have made significant progress in advancing their storage technologies as well.
One of these start-ups is Imergy, a company I have written about in the past. Imergy manufactures a vanadium redox flow battery. Vanadium is costly, but Imergy’s is sourced from recovered fly ash or as a byproduct in the slag that results during the process of making steel. It costs the company about half the price of buying vanadium on the open market, and it can be utilized at 98.5% purity.
Redox flow batteries are very different than lithium ion. While lithium ion comes in a solid form, and is deployed in cells, redox flow batteries use liquids with electrolytes. They come in various chemistries (including iron-chromium, zinc-bromine, and zinc-iron combinations).
And unlike lithium-ion, where you have fixed ratios of energy (kilowatthours - kWh) to capacity (kilowatts - kW), redox flow batteries allow you to scale up the energy-to-capacity ratio simply by adding more tanks of electrolytes. So, in areas where you need lots of energy, and where weight and volume are not an issue, (lithium ion batteries are dense and can pack a big punch in a small space, which is why they are used in vehicles) redox flow batteries represent a good option. The product also has a long duration, deep cycles, and the ability to support multiple cycles.
As far as the chemistry itself, Imergy chose vanadium for a number of reasons. It lasts indefinitely in the battery, because there is no cross contamination of chemicals – a characteristic which can occur in other redox flow chemistries. Vanadium is also a hard asset. CEO Bill Watkins observes that after 20 years of use, you can extract the vanadium out of the battery and re-use it. And since it represents about 40% of the total value of the system, it represents potentially bankable collateral.
Imergy has spent the past several years operating its products in harsh desert environments in India, supporting the telecoms industry. And while the technology is proven, Imergy has recently made some significant changes. The company has redesigned the entire product platform to better address various overseas market opportunities, where it believes it can sell in volumes and drive costs down - a critical prerequisite for future profitability.
Following the retooling, Imergy now has three new products. The first is a 5 kW DC-only system delivering up to 30 kWh (it will need an inverter for application in the residential sector). In the mid-range sector, Imergy has a 30 kW, up to 200 kWh product for microgrids. Finally, in the utility-scale range, it has a 250 kW (with up to 1 megawatt hour - MWh) containerized product for larger commercial and industrial applications.
The company has also made gains on the commercial side. SunEdison recently announced plans to purchase 1000 units to “be used to store solar-generated electricity for SunEdison's rural electrification and solar powered minigrid projects in India.” This is a big deal. Watkins notes,
We are going to customize for SunEdison. They have four systems now out in villages and at a university, and we are going to fine tune them. If you don’t need 30 kW, we can customize it. They will be nominally more like 20 KW and up to 150 kWh – we are seeing some villages aren’t using that much energy.
Watkins indicates that this modification of the product to a smaller scale option will be one of the keys to Imergy’s future success. It will allow the company to increase the number of units in the field and begin to drive economies of scale. He observes that the main thing that villagers are currently using energy for is lighting in areas where there is no power grid.
There are sites with one, two, or three telecoms towers and a village nearby with no electricity, with kerosene lamps. They may have diesel for irrigation, but no electricity whatsoever, and they are buying expensive kerosene. These guys come in and create a microgrid with the telecoms as the anchor sites. They make sure the telecoms site works and then also sell electricity to villages nearby.
For the villagers, it’s an opportunity to buy power as you go.
You pay to charge a small battery pack to run phone, lights and also perhaps a computer. Once you drain it you go back and recharge.
Watkins comments that the smaller product has been critical in increasing market adoption. In addition to SunEdison, the U.S. Navy is another client, having recently bought three of the units. Longer-term, the company hopes the bigger unit, ESP250, will also gain the necessary traction.
In two years we think this will be our biggest revenue generator. We sold our first one to a data center. The utility-scale storage 250 kW, 1 MWh unit will really hunt in that world.
Imergy recognizes that to compete in international markets it needs to continue to make progress with its overall cost structure. As a consequence, the company is migrating some production offshore, to Foxconn - the same folks that make some of Apple’s products.
FoxCon is making our products going forward with assembly lines in China... That’s our secret – how to make vanadium batteries cheap…We think we can get our cost under $300/kWh for the whole system including power electronics and packaging. The recent Tesla announcement shows lithium has a role, but not for multiple daily charges or long duration, or unlimited cycles. If you are deep cycle discharging more than two hours a day,we are by far the most effective solution.
What markets look the best these days to Imergy?
There are only a few companies in Africa making lead acid batteries, so we have a great opportunity there... we will be making a couple big announcements really soon. Europe is heating up. It will be more about microgrids and utility scale. And in India we are talking to a company with several refrigerated food warehouses.
Part of Imergy’s strategy is to sell at volume in Africa and India, so that the company can drive volume pricing on the ancillary equipment necessary to build the batteries.
We will sell a lot of volume on the 5 kW units so we can get cheaper components. Volume can help us cut prices of parts – thousands of contracts can help us do that. We are totally focused on that $300/kWh cost target.
The goal would then be to bring the product back to the U.S. when certain price points are hit. Watkins observes that this a very different strategy than that pursued by redox flow competitors such as Enervault (currently seeking new owners), which have focused on utility scale projects out of the box.
The problem for start-ups is getting the financing. Unless you have huge amounts of money in the bank, big infrastructure startups are hard to do. With our 5kW system, we have over 150 in the field generating revenue. We are coming off a base that allows us to get revenue. The big scale products take a year to develop and get revenue. Starting at a megawatt is a hard thing to do.
And so the storage race continues. With its name recognition and production volumes, Tesla may have an early lead. But the global market is potentially huge, with numerous potential applications. There’s plenty of room out there for multiple products to succeed, based upon customers' needs and the best technologies to meet their requirements. For now, then, Imergy is not even close to conceding that the contest is over. In fact, it has hardly begun.
