by Julian Spector
November 12, 2019

Sometimes the storage industry makes a splash; sometimes it just paddles along.

Last year’s Energy Storage North America conference, one of the major yearly storage-specific gatherings in the U.S., drove several headlines. Energy Vault unveiled its giant-block-stacking storage concept, which won $110 million from SoftBank's Vision Fund months later. Billionaire cancer-drug entrepreneur Patrick Soon-Shiong took a break from buying prominent newspapers to acquire some energy storage companies. California regulators approved the biggest grid battery so far, Pacific Gas & Electric’s Moss Landing project.

And this reporter’s flight out of Burbank took off over a pillar of smoke rising from the Santa Monica mountains, only to land in the smoke drifting to Oakland from an even bigger fire, which would destroy an entire town and bring down a major electric utility.

Last week's ESNA in San Diego took a decidedly quieter approach. No big names entered the market, but several former industry standouts faded into obscurity, while a roster of unconventional companies made their presence known. In the background, the only new disaster unfolding was California energy regulators’ belated realization that they need several gigawatts of additional capacity in the next few years to keep the grid running, a revelation that could prove lucrative for energy storage companies.

Sometimes what goes missing, unsaid or whispered tells its own story. Here’s what could be gleaned from the week’s events.

Out with the C&I...

The pioneers of commercial energy storage raised millions from venture capitalists to put batteries in businesses and save them money. But many of them now seem to have vanished from the scene. We’ve lost track of the value stack.

Indeed, the big names in this segment of the storage industry have shifted to other business models. AMS now sells software for economic dispatch of clean energy plants instead of developing behind-the-meter batteries. Stem likewise focuses more on selling software to larger front-of-the-meter systems. Engie Storage, formerly Green Charge, has pivoted to New England front-of-meter development as well.

None of them invested in a visible presence at ESNA. Strategen, the company that puts on the conference, shares staff and leadership with the California Energy Storage Alliance, making the event something of an annual reunion for members hoping to expand that state market. The commercial and industrial storage trailblazers still have their bases in California, but their attention is shifting to other geographies.

Stem did announce a master supply agreement with NEC Energy Solutions to lend that company's software to Stem's New England grid-scale storage integration efforts. NEC’s software crunches the costs of cycling a battery, while Stem’s calculates optimal economic return in complex market opportunities. They complement each other. In a world where Stem doesn't want to develop or bother with acquiring commercial customers, this kind of partnership offers a route to market.

...And in with long-duration storage

Saved from contemplating the delicate balance of customer bill management with aggregated grid services, conference attendees could focus on other topics. Into that vacuum stepped long-duration storage.

In past years, this quixotic subsector of the storage industry would merit a late afternoon panel in a windowless conference room. The technologies haven’t been proven at scale, the market doesn’t exist, and the companies keep running out of money. This time, following an unprecedented year of investment in the space, long-duration tech was bursting out all over.

Google spinoff Malta swung a keynote slot to discuss its storage technology, which transfers electricity into hot and cold thermal storage, then discharges it as electricity again. Malta came out of the X “moonshot factory” and raised $26 million as an independent company last year.

“When will it be commercially available? As soon as possible,” CEO Ramya Swaminathan said.

First, Malta needs to build a commercial-scale demonstration plant. The company is targeting an initial scale of 10 megawatts/100 megawatt-hours, with roundtrip efficiency greater than 50 percent. That’s a very low bar compared to lithium-ion efficiency, but Malta has taken the approach that it needn’t insist on high efficiency if it can make storage far cheaper. Swaminathan did not discuss what kind of market role this plant could serve or where it could go to market first.

Also planning a 10-megawatt/100-megawatt-hour plant s the storage division of defense contractor Lockheed Martin. At least, that was the stated capacity of the forthcoming flow battery displayed at the booth in an intricately detailed diorama (complete with shrubberies, a miniature Lockheed-branded Sprinter van, and tanks and tanks and tanks).

Lockheed stands to differentiate itself as a flow battery vendor with a bankable name. First, it must get beyond the 250-kilowatt beta units at its Andover facility. The company is looking to finalize a 1-megawatt/10-megawatt-hour system next year, but its go-to-market timeline has a history of slippage.

Iron flow company ESS recently raised $30 million for expansion to megawatt-scale projects, which it also hopes will come together next year.

Elsewhere, block stacker Energy Vault bought everyone drinks at the opening reception, and representatives of startup Form Energy made the rounds but politely declined to reveal the secret ingredient they have chosen to unlock weeks and months of storage duration. Hydrostor had a booth to show off its waterlogged-cavern storage technique.

Setting aside ESS' delightfully tangible investment, the recent positive feelings or "momentum" behind long-duration storage lack much evidence to back them up. But it's a notable qualitative shift, from the role of a beleaguered resistance to ascendant champions of the renewable revolution. We'll see if the companies can turn the mood into physical installations.

Know your flow

As part of ESNA, I got to tour a real live megawatt-scale flow battery in San Diego, so I can confirm that at least one of them exists.

San Diego Gas & Electric built the 2-megawatt/8-megawatt-hour vanadium redox flow system on a football-field-sized parcel of land next to a substation southeast of San Diego. The Japanese government subsidized half the cost of the system so that vendor Sumitomo could log some runtime with a respectable customer in the United States. It began operating in June 2017.

The supplier and utility spent the first year testing all the various operational modes, including solar smoothing, voltage regulation, peak shaving and more. Now they are operating it in the CAISO markets to test out different bidding strategies. SDG&E has an option to buy the facility after four years of demonstration.

A very real megawatt-scale flow battery in the United States. (Photo credit: Julian Spector)


It’s telling that it had to happen this way in the first place. Sumitomo has flow systems in Japan that have operated for 20 years, but it couldn’t sell that experience in the U.S. market without first running a subsidized trial case for four years.

By the time the demo wraps up, Sumitomo will have an entirely new product on the market. The company says it will halve the physical footprint per megawatt-hour and package more components in shipping containers to speed up installation and reduce labor costs onsite. It will also feature a new electrolyte to protect against the ups and downs of vanadium pricing. 

Understanding that Sumitomo's innovation has already moved beyond the design I saw, here are the immediate pros and cons.

The depth of discharge is unrestricted, and the low maintenance sounds appealing compared to lithium-ion's rate of degradation. So far, Sumitomo has sampled the electrolyte once a year but has not needed to add anything to it. The stack membranes are built to go 20 years without maintenance. The pipe systems have not leaked. The liquid won’t catch fire. 

Then again, the roundtrip efficiency of 70 percent means that much of the electricity stored never makes it back out.

There’s also a little caveat to the general assertion that flow batteries offer a safer alternative to lithium-ion batteries.

This particular vanadium sulfate electrolyte, we were informed, can generate a little thing known as hydrogen sulfide. The federal government describes this gas as "flammable" and "extremely hazardous," and best avoided by those who like breathing and continued consciousness. For protection, each electrolyte tank had its own device to coat the vessel with a protective blanket of nitrogen. Gas sensors ringed the facility, displaying a comforting 0 parts per million.

The plant is designed for unstaffed automatic operation, and its site is out in the open, thus unlikely to risk a high concentration of the noxious gas. Still, when perusing the menu of flow chemistries, absence of poisonous gas formation may be a worthwhile criterion.

Lastly, the price: A Sumitomo representative on the tour quoted a new system price as roughly $500 per kilowatt-hour. That puts it in the range that Wood Mackenzie says utility-scale lithium-ion systems sell for today. By the time the revamped flow product hits the market in 2021, lithium-ion will be cheaper.

It's very hard to see the flow product catch up from a place of no production scale, even as lithium-ion gets bigger than ever. And the containerized system is advertised as covering three to eight hours of discharge, not far from lithium-ion's current sweet spot for duration and thus easily within reach.

Cheaper lifetime costs sound great, but, at the point of purchase, they're largely theoretical. Why not buy cheaper batteries and swap them with even cheaper replacements in eight or 10 years as needed?

For this type of flow technology to make any headway, it will need to configure for substantially longer durations that lithium-ion cannot match economically, or target sites/customers with extreme aversion to fire risk. Currently, it remains stuck in an uncomfortable adolescent phase: too mature to be judged as a science project, but lacking sufficient capability to compete as a full-fledged commercial product.