Interest in Using Flow Batteries for Long-Duration Storage Sees ESS Raise $13m – Energy Storage Report

Energy Storage Report is the weekly intelligence brief that scrutinizes the energy storage industry.

By Jason Deign, Energy Storage Report, Dec. 13, 2017

ESS Inc, the Oregon, US-based flow battery manufacturer, this week announced USD$13m in new funding from investors including the global chemical industry leader BASF.

BASF led the Series B round, which also saw money coming in from Cycle Capital Management, Presidio Partners Investment Management, InfraPartners Management and existing ESS investors including Pangaea Ventures.

The new funding will be used to expand and automate the manufacturing process for ESS’s iron flow battery, the Energy Warehouse, said ESS in a press statement.

“Leveraging the capital efficiency of the product’s advanced technology, the investment will enable 900MWh per year production capacity,” said the company.

“It will also support the company’s business development activities with system integrators and strategic partners, creating a stronger ecosystem for promoting clean, low-cost, long-duration energy storage.” 

Energy Warehouse iron flow battery

The Energy Warehouse iron flow battery delivers long-duration energy storage, with discharge times of more than four hours, for use in a range of utility and behind-the-meter applications.

It represents the consolidation of previous ESS battery designs into one system, housed in a 40-foot shipping container and capable of up to eight hours of continuous delivery.

The Energy Warehouse’s balance of system layout has also been simplified through the use of a single-tank design for energy storage and electrolyte management, said ESS.

The design allows the Energy Warehouse to be shipped dry and then hydrated with local water upon delivery, saving more than 60% in transportation costs compared to other flow battery products.

ESS’s latest funding round represents a vote of confidence from the world’s largest chemical producer. Similar to chemical industry rivals such as LG Chem and Sumitomo, BASF already has a presence in the energy storage sector. 

BASF’s historic energy storage strengths

It seems keen to consolidate this through further investments. One of BASF’s historic energy storage strengths has been the provision of sodium nitrate for molten salt stores in some of the biggest solar thermal plants in the world.

But the company has been aiming to become a battery storage leader too since at least 2012, when it acquired Ovonic Battery Company, Novolyte Technologies and Merck’s electrolyte activities.

The following year, BASF established a partnership with zinc hybrid cathode battery maker Eos Energy Storage.

And in 2015, BASF followed this with the launch of an Open Innovation Contest to find ideas to store energy from renewable energy sources.

The contest drew 122 applications and led to BASF putting €100,000 into each of four battery ideas, based on molten air, zinc, aluminium and sodium-ion chemistries. 

Continuing to invest in energy storage

BASF continued to invest in energy storage in 2016, with the purchase of EnerG2, a carbon provider to the battery and ultracapacitor industries.

Today, BASF sells a sodium-sulphur battery that employs “the usage principle of a flow battery [to] enable low specific costs while increasing the storage capacity.”

Until now, though, the industrial behemoth appears to have had relatively little exposure to the flow battery business.

Markus Solibieda, managing director of BASF Venture Capital, said the company had decided to invest in ESS “after conducting extensive research across a range of battery technologies, designs and developers.”

He said: “We’ve concluded that ESS offers a superior combination of low-cost, clean, safe and long-life chemistry, scalable architecture and management experience.” 

Growing interest in the use of flow batteries

The investment comes amid growing interest in the use of flow batteries for long-duration storage. A forecast by Frost & Sullivan last month predicted the flow battery market will be worth more than $1bn by 2023.

“The flow battery, with all its attractive features, is to become the most preferred chemistry for utility-based storage,” said the analyst firm.

“Thus, the global flow battery market will witness a steady growth in unit volume and revenue till 2023.”

Flow batteries are inherently designed for high scalability because of their ability to hold large volumes of electrolyte in tanks.

However, some chemistries may be subject to supply chain concerns similar to those already emerging for lithium-ion batteries. 

Dominating the flow battery market

Frost & Sullivan, for example, expects vanadium redox chemistries to dominate the flow battery market in the near term. While vanadium is not uncommon, its use in energy storage has already sparked fears of a price surge.

With a chemistry based on iron, ESS should be immune from such issues.

“We invested in ESS because they have the cleanest and the best low-cost energy storage solution on the market,” said Andrée-Lise Méthot, founder and managing partner at Cycle Capital Management.

“This solution meets real-world needs with highly favourable economics. We believe they are well positioned for rapid expansion.”