POWER March 2020 - 29

ENERGY STORAGE
tery can potentially perform multiple use
cases, depending on market signals and
energy management system capabilities.
With the uncertainty surrounding ISO/
RTO storage market development and
the dynamically evolving resource mix on
the grid, an owner may be more confident
that a flow battery asset can stay relevant
in the market for a 20- to 30-year project
life. Example use cases include:
Arbitrage. Depending on your power
market, arbitrage might be the best use
case for flow battery capacity. Particularly
during high-peak seasons, wholesale
power markets have demonstrated rapid
pricing swings, and as power costs begin
to spike, capacity available from largescale
flow battery configurations can
become economical. By syncing flow
battery capacity to be available quickly
and with durations of six to eight hours
or more, while prices per kilowatt are at a
peak, significant revenue can be realized.
Behind the Meter. Commercial-scale
units
are being deployed behind the
meter in manufacturing facilities, hospitals,
campuses, and even residential
locations as a means to shave power demand
when premium rates are charged.
Depending on rate tariffs and demand
response energy curtailment programs
available from local utilities, flow batteries
can be an economical option to reduce
energy costs simply by discharging
batteries during periods of voluntary curtailment
or when local rates are high.
Volt/VAR Support. Inverter-based
generation, such as flow and lithium-ion
batteries, can perform similarly to synchronous
condensers on feeder circuits
due to their ability to provide quick-acting
voltage support. With the ability to generate
or absorb reactive power as needed
to adjust grid voltage, flow batteries
connected to smart inverters can provide
a distribution grid support function,
particularly as systems are designed for
emerging peak recharging demand from
electric vehicles.
Renewables Pairing. Both flow batteries
and lithium-ion batteries are emerging
as attractive options to extend the availability
of renewable solar and wind resources
across more hours of the day to
counter well-known intermittency issues.
With flow batteries capable of providing
power over longer duration, and with the
ability to ramp up or down with no degradation,
developers and utilities are actively
evaluating these technologies.
Black-Start Capacity.
Normally,
when a power plant is shut down, it will
draw power from the grid in order to proMarch
2020 | POWER
vide the initial power needed to restart
the large generators and return the plant
to full service. However, during a widespread
outage when backfeed power is
not available, generator startup may require
an on-site black-start unit. Conventional
black-start generators are fueled
by diesel or natural gas, but black-start
power also can be provided by batteries
scaled up to provide the necessary power
to return the plant to service.
Resource Diversity. Many utilities
have long opted for resource planning
strategies that make use of a variety
of energy sources, ranging from conventional
fossil and nuclear generation
to renewables and energy storage. By
blending the favorable characteristics of
both lithium-ion and flow batteries, utilities
can reduce risk across their entire
portfolio of energy storage options.
Barriers Flow Battery Technology
Must Overcome
Lithium-ion technologies are dominating
today's storage market and there are
good reasons for that. But as renewable
energy market penetration increases,
more owners are looking at longer-duration
storage assets.
Costs are declining for both lithium-ion
and flow battery technologies, and it is
difficult to predict where and when the
prices will settle. With today's technology,
lithium-ion unit costs ($/kWh) generally
flatten out beyond 4-hour storage
durations because of the essential addition
of higher quantities of the same batteries.
However, flow battery unit costs
continue to decline as the storage duration
increases to eight to 12 hours. The
power modules for a 4-hour system are
the same for a 12-hour system, so the
incremental cost of adding duration/energy
to a flow battery is tied to the addition
of electrolyte to the system.
Figure 1 shows the results of a lifecycle
cost analysis comparing 20-MW, 8-hour
(160-MWh) lithium-ion and flow battery
systems. The model includes capital,
O&M, and charging costs for a 20-year
project life. The net present value (NPV)
totals are calculated and compared.
The analysis is based on the following
key assumptions:
■ Single-contract, full-wrap engineerprocure-construct
(EPC) methodology.
■ Owner's costs, decommissioning
costs, insurance, taxes, and revenues
are excluded.
■ Costs are based on Burns & McDonnell
experience and vendor informawww.powermag.com
1.
The lifecycle cost comparison depicted
here shows the net present value (NPV) including
capital, charging, and operations and
maintenance (O&M) costs of lithium-ion and
flow batteries with similar capacities at the
point of interconnect (POI). Courtesy: Burns &
McDonnell
tion for technology available in 2021
and are not representative of any
particular technology or original equipment
manufacturer (OEM).
■ Routine maintenance for 20 years is
included. Augmentation is included for
lithium-ion technology based on minimal
initial overbuild.
■ Year 1 roundtrip efficiency values of
70% for the flow system and 84% for
the lithium-ion system are included.
■ Discount rate is 8.5%. Escalation rate
for O&M and energy costs is 2.5%.
With today's technology, flow battery
capital costs are nearly double the cost
of a similarly sized lithium-ion system.
With longer storage durations and longer
lifespans, the economics improve, but
it is not expected to achieve parity with
lithium-ion at today's pricing. Decommissioning
and recycling costs may favor
flow batteries because the electrolyte is
more easily recyclable or disposable (depending
on technology type), but these
costs are still developing. As flow OEMs
improve manufacturing scale and supply
chain efficiencies, and as EPC contractors
gain field experience, costs will
continue to plummet. Still, flow batteries
are chasing a moving target with falling
lithium-ion costs.
The primary barrier to full market penetration
of flow battery technologies
today is simply the lack of commercialization
compared to the heavy installation
base of competing lithium-ion technology.
In the near term, it is likely that more
relatively small flow battery facilities will
be installed until a widespread commercial
track record is established and use
cases, costs, and returns on investment
are proven. ■
-Tisha Scroggin-Wicker, PE is the
flow battery business manager, and
Kieran McInerney, PE is a senior
engineer at Burns & McDonnell.
29
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POWER March 2020

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