Lithium-ion batteries have held the largest market share of batteries since 2010 making it increasingly difficult for new battery
developments to take root. Advancements in battery technology have paved the way for new power developments such as flow batteries. Flow batteries are currently facing great difficulties in trying to secure a larger market share in the ocean of positive uses of a lithium-ion alternative.
New developments in flow battery technology have resulted in decreased costs and increased efficiency, yet the flow batteries have not been able to compete with the current market leader. There are many benefits to flow batteries, especially for utility grid use, and yet, the DOE reported that 640 MWh of grid installations have been lithium-ion batteries. The fluids used to power flow batteries allow for longer battery life and flexibility for the size of the grid.
Even though flow batteries are offering some positive benefits, lithium-ion batteries are still the market leader. Why is that? One reason for the prevailing popularity of the lithium-ion battery is its proven success in field installations. Not many other battery types have displayed the same field-tested success that lithium-ion batteries have. Price has also been a deciding factor in determining which battery to use. Since 2010, the price of lithium-ion batteries has decreased by an estimated $810 – from $1000/kWh to about $190/kWh. Analysts have reported that the stationary energy storage market has been largely centered on lithium-ion batteries because of its lower levelized cost of storage.
It seems that cost decline has largely influenced the success of lithium-ion batteries thus far. Their past success has resulted in difficulty for flow batteries and their market share. With lithium-ion battery costs on the decline, flow batteries are going to be facing tough competition in the battery market for grid installation. This information raises the question, is there any hope for the future of flow batteries? The answer lies in a variety of factors. Flow batteries need to display proven success for grid utilities in order to become a strong competitor. One project in Nicaragua, announced this week, may give flow batteries the credibility they need to take a stronger position in the market. ViZn Energy Systems Inc. has been awarded a project that will require the company to supply a 200kW/h battery in the region. The battery will be paired with solar energy technology in order to power the resort, Rancho Santana. The success of this project, and other similar projects, has the potential to bring major market share gains for flow batteries.
In the meantime, flow batteries are expected to face continued competition against lithium-ion batteries. Lithium-ion battery prices are expected to continue to decrease. The rate at which these prices decrease is also a major factor. Prices for these batteries are decreasing at a faster rate than prices of any other batteries on the market. This is bad news for flow batteries in terms of competition. Flow batteries may not be able to compete with the competitive pricing and existing market dominance that lithium-ion batteries have already established.
At this point, it seems that flow batteries may not stack up against the attractive costs of lithium-ion batteries. With some successes on projects, such as the ViZn Energy Systems project, flow batteries may be able to grow their market share, but for now, lithium-ion batteries are center stage.
