In April, one of BCI Technology Investment’s valued strategic partners achieved an exciting milestone. Avalon Battery completed a merger with UK-based flow battery leader, redT, to form Invinity Energy Systems (AIM:IES). This merger has enabled the team at Avalon to expand its reach into new markets and combine the existing strengths of both companies with the scale and market presence to compete with the major players in a global energy storage market.
Invinity’s flow batteries store energy in a non-flammable, liquid electrolyte, held in tanks within a self-contained module. Larger, safer, and more robust than lithium-ion systems, flow batteries do not degrade with use like conventional batteries and have a 20-25 year lifetime, significantly longer than comparable lithium-ion solutions. This key characteristic means flow batteries are well suited to heavy-duty, daily use alongside intermittent renewables such as solar, storing excess energy at times of peak generation then discharging it when required.
We were thrilled to catch up with Matt Harper, Chief Commercial Officer at Invinity Energy Systems, to hear his perspective on a number of topics including Avalon/Invinity’s history with BCI Technology Investments, the current state –and forward-looking outlook– for the energy storage market, the benefits of their recent merger, and the impacts of the coronavirus on the energy storage industry.
___
1) What are the benefits of flow battery systems? In comparison to lithium-ion?
Flow battery systems are a type of electrochemical energy storage which utilises a liquid electrolyte contained in large tanks, and are one of the most mature and widely deployed flow battery storage technologies. Invinity’s vanadium flow batteries store electricity safely, reliably and economically; these advantages are because of three main differences between them and conventional batteries.
First, flow batteries don’t degrade like conventional lithium-ion cells. Perhaps the easiest example of degradation in lithium cells is our cell phones: Most of us have experienced that after a few years of daily charging and discharging, they suddenly don’t hold their charge like they used to, and their batteries need to be replaced. Flow batteries, on the other hand, don’t suffer from capacity degradation because their energy is stored in a completely stable liquid electrolyte. Our batteries’ useful life is measured in decades, not years. This is really important for long term energy projects, especially those which involve renewable energy sources like solar PV, which typically has a service life of 25 years. This long service life means that our batteries’ cost per year over the course of a project is much lower than other technologies like lithium-ion, which makes a huge difference for solar-plus-storage project developers who need to plan for a decades-long project life.
Secondly, our vanadium flow batteries are very safe. The electrolyte in our systems is mainly water, meaning our batteries are not a fire risk. Lithium-ion cells can generate a tremendous amount of internal heat, which uncontained can result in thermal runaway and ultimately the possibility of fires. Our batteries are probably more likely to put out a fire than start one. Other than the obvious advantage that flow batteries don’t require fire suppression systems to be fitted to them, this characteristic also means they can be used in a broader range of environments – we’ve got batteries installed in the heat of sub-Saharan Africa and Australia for example.
Thirdly, flow batteries are fully recyclable. Our systems are made out of our liquid electrolyte, which never degrades, and easily recyclable materials such as steel, aluminum and polyethylene. At the end of life, our electrolyte can be repurposed or returned to the vanadium supply chain; the vast majority of the rest of our systems could be recycled in a residential recycling bin (though we don’t recommend actually doing so). This is another key advantage against lithium-ion batteries, for which recycling at reasonable cost is still not widely available.
2) Why should people care about energy storage?
The transition to renewable energy is here now, it’s undeniable. Solar and wind power are now cheaper than fossil fuel alternatives almost everywhere on earth – the economic case for the switch is incredibly compelling. This low-cost position, combined with the environmental benefits and the job creation (clean energy workers in the US now outnumber fossil fuel workers by a factor of 3 to 1) means renewables have seen tremendous growth. As a result, we’ve seen an explosion in renewable energy over the past 10 years. However, there’s a problem: Renewable generation is both unpredictable (clouds sometimes cover the sun) and intermittent (the sun doesn’t shine overnight). We’re now approaching an inflection point where our electric grid cannot absorb more renewables without destabilizing our electricity networks. This is why energy storage matters, now: We make renewable energy reliable, storing excess generation and delivering it when our homeowners and businesses need it. Our flow batteries will help unlock the full potential of renewable energy, and so will play a vital role in our future energy system.
3) How have you worked with BCI Engineering in the past as a partner?
BCI have been an integral part of our manufacturing operations since 2017, when we as Avalon Battery first launched our second-generation AFB2 product. BCI supported us not only as an investor into the company, but also helped us build our manufacturing and supply chain capabilities. We also built some of our pioneering projects together. Overall, BCI understood not only how a company at our stage needed to grow and scale, but also how critical it was for us to get our first demonstration products in the ground while remaining as capital-efficient as possible. We would not have gotten where we are today without their support.
4) What has been the biggest benefit of transitioning from Avalon to Invinity Energy Systems?
The formation of Invinity, through our merger with UK-based flow battery manufacturer redT energy, has allowed us to create a global leader in this space with best in class technology, and one of the best teams ever assembled in our industry. We are now active in every major geographic market for energy storage and have deployed more than 10MWh of our products, across more than 40 sites in 14 different countries. We have a fleet of over 200 individual flow battery modules now deployed; this is the largest fleet of any flow battery manufacturer, ever. Our merger has combined two leading development stage companies, to yield a truly commercially viable global player.
5) From an energy storage perspective, how do you see the industry being impacted by COVID-19?
I think at a market level, the industry has suffered a short term shock (like almost every other market), but the strong fundamentals which underpin demand for energy storage remain unchanged; in short, I remain very optimistic about our future prospects. In fact, the COVID-19 crisis has actually given us a glimpse into what our future grid network looks like: Reduced daytime demand as people stay home, combined with high output from solar and wind, has meant portions of our grid with high percentages of renewable generation have seen stresses on their operations and market pricing like never before. In California, for example, daytime electricity prices are near zero because of tremendous solar generation; by evening, that resource has gone away and loads spike as people turn on their TVs and start cooking dinner. Ultra-low costs during the daytime mean it is extremely difficult to justify running the conventional power plants that provide “base load” power overnight; similarly, the ramp from near-zero net demand to full grid peak demand within a few hours is extremely challenging and expensive for our grid operators. Even when we go back to our offices and electricity patterns return to normal, these kind of market fluctuations are going to become the norm as more renewable generation powers our grid; only by deploying ever more batteries will we be able to enjoy the ultra-reliable, low-cost power that we do today.
6) What safety-measures has Invinity Energy Systems been employing during the coronavirus outbreak?
Our staff across North America and in the UK have been working remotely where possible since the outbreak of the pandemic and have been following local regulations and best practices as advised by the various regional and national health authorities. Our manufacturing teams – both at BCI Suzhou and our stack manufacturing center in Vancouver Canada, are now back to normal production levels. We’ll be watching the situation and adapting our processes and procedures accordingly, but are hopeful that the worst of the disruptions are behind us.
7) What has growth been in energy storage over the past 5 years? Where do you see it going in 5 years?
The energy storage market has taken off in recent years, driven by massive cost decreases in both renewable energy and battery costs themselves. Bloomberg New Energy Finance estimates energy storage as a market will receive $622bn in new investment over the next 20 years, and you can see their growth projections in the diagram below.
I don’t believe this will ever be a single winner in the energy storage market; as my new best friends in the UK say, it’s a market where there will be “horses for courses”. Lithium has built a niche improving power quality and serving comparatively infrequent, short-duration capacity constraints; they’ve shown how batteries can integrate seamlessly into our existing grid infrastructure and make money doing so. However, our view is that the biggest opportunity in storage is to take renewable generation and convert it to baseload power, available 24/7 to follow consumers’ demand to feed our homes, our businesses, and increasingly our vehicles. The technology that can achieve that goal needs to be able to deliver full power overnight, needs to be able to charge and discharge multiple times per day, needs to present extremely low environmental and safety risks, and needs to be able to do all of that for decades. Our vanadium flow batteries are the only energy storage devices currently serving the electric grid that combine all of those characteristics. For that reason, we think the opportunities for our products, in our future highly reliable, low cost but completely environmentally sustainable grid, are almost limitless.
For more information on Invinity Energy Systems, visit: invinity.com