Tom Stepien, CEO of flow-battery maker Primus Power, is looking globally for expansion. Out with a new product and flush with tens of millions in venture capital, Primus is involved in "active discussions" throughout China, Europe and South Africa, where the company could announce deals sometime this summer.
Meanwhile, back on the company's home turf in California, the state-run Self-Generation Incentive Program is starting back up. The program, which is expected to be a boon for energy storage, will favor longer-duration technologies, such as the flow batteries provided by Primus Power’s Energy Pod 2, according to Stepien.
The new units have a number of improvements over their predecessor, including 5 hours of energy delivery, as compared with 3.5 hours for the original Energy Pod. They are also less expensive, and, according to Stepien, incur fewer additional costs for the purchaser.
Unlike the earlier model, the Energy Pod 2 can fit into a standard shipping container, be safely lifted by a forklift, and is inverter-agnostic. It can also work with any energy management system. These relatively small changes should reduce the total cost of ownership considerably, he said. New units have already shipped to several U.S. customers, including Puget Sound Energy in Washington state.
Further product improvements are expected, in part thanks to a new venture round worth $32 million. New investors include Hong Kong’s Success Dragon and Matador Capital. Existing interests Anglo American Platinum, DBL Partners, I2BF and the Russia Kazakhstan Nanotechnology Fund also made contributions.
This brings total equity investment to $94 million, plus another $20 million in government grants since the company was founded in 2009. Stepien said the new money would be split three ways. Around 60 percent would go toward developing commercial opportunities in key target markets of California, Europe, China and South Africa. Another 20 percent is being invested into developing the next generation of Energy Pods. And the final 20 percent of funds will go toward optimizing Primus’ supply chain and partnering arrangements.
A brighter future for long-duration storage?
Stepien said the wind is blowing in Primus’ direction. He sees growth in demand for longer-duration storage from technologies like flow batteries. “Looking at tenders, I’m seeing more and more requirements for 4 to 6 hours, or even 6 to 8 hours,” he said.
Another factor in Primus’ favor is lower total cost of ownership, according to Stepien. In addition to the new features that lower the soft costs of transportation, installation and operation, the basic build of the Energy Pod units is intrinsically cheaper than competing flow batteries, he claimed. The company calculates that the total cost of ownership is half that of lithium-ion batteries.
Having one tank of electrolyte also means only having one pumping system, unlike rival two-tank systems. In addition, the absence of a separator between electrodes brings down costs further. And the electrodes are metal, which, unlike more often-used graphite, does not degrade over time. As a result, the company guarantees operation for 10 years, and extends that period with a 10-year warranty.
For now, things are looking good for Primus.
“Primus has been fairly successful raising capital in recent months when several emerging battery technology vendors have faced hardships reaching commercial status, or, like Aquion, had to shut down their operations entirely," said Ravi Manghani, director of GTM Research's storage practice.
Other players in the flow battery space are seeing business activity pick up as well.
“Primus Power, UniEnergy Technologies and Sumitomo Electric are securing not just funding, but also -- just as importantly -- some significant commercial-scale utility contracts," said Yayoi Sekine, an analyst at Bloomberg New Energy Finance.
Frozen out by lithium-ion?
However, in the longer term, things might not be so rosy for flow batteries. The lithium-ion juggernaut might yet squeeze the technology out of the running.
"In the last three years, more than two-thirds of energy storage projects commissioned (based on megawatt capacity) are lithium-ion battery energy storage projects -- and this share has been increasing (it was around 90 percent of the 740 megawatts of energy storage projects commissioned globally in 2016)," said Sekine.
In addition, storage developers are able to deploy multiple hours of storage at a lower cost, due to continually improving energy densities. Meanwhile, the leading manufacturers in the world are doubling down on lithium-ion production, creating momentum that "will not be replicable in alternative technologies like flow batteries," said Sekine.
According to GTM Research's latest Energy Storage Monitor, lithium-ion batteries made up 98.4 percent of the American market in the last quarter of 2016. "This trend is expected to continue, as numerous megawatt-scale procurements were awarded in 2016 to developers implementing lithium-ion technology; these projects are expected to come on-line over the next three to five years," reads the report.