Recently, the National Development and Reform Commission, National Energy Administration, and National Data Administration issued the "Action Plan for Accelerating the Construction of a New Power System (2024-2027)" (hereinafter referred to as the "Plan"), which aims to explore the construction of a number of energy storage power stations with various technological routes such as flow batteries, flywheels, compressed air energy storage, gravity energy storage, carbon dioxide energy storage, liquid air energy storage, sodium ion batteries, lead carbon batteries, etc., based on the needs of climbing speed, capacity, long-term scale adjustment, economy, and safety in different application scenarios.

In the eyes of industry insiders, although flow batteries do not account for a high proportion of installed energy storage capacity, the "Plan" provides clear policy support for energy storage methods such as flow batteries, which helps guide funds and resources to tilt towards flow battery technology, promote its research and application, and create favorable conditions for technological progress and industrial upgrading.

At present, China's flow battery energy storage has formed a complete industrial chain, and the industry has gradually moved from the exploration and cultivation period to the development and promotion period. To achieve the healthy and orderly development of the domestic flow battery energy storage industry, the next step is still to improve the market mechanism, standard system, iterate new technologies, and explore the integration of flow and new energy systems.

The market demand continues to rise

As a long-term energy storage technology, flow batteries have significant advantages in terms of energy storage duration. In domestic flow battery energy storage projects, the energy storage time of flow batteries is generally more than 4 hours, and some projects have an energy storage time of up to 6 hours.

The Energy Storage Application Branch of the China Chemical Physics Power Industry Association recently released the "2024 White Paper on the Development of China's Flow Battery Industry" (hereinafter referred to as the "White Paper"), which shows that flow battery manufacturers are actively promoting the expansion plan of flow battery production. In 2023, more than 30 flow battery production lines have been signed, under construction, and put into operation domestically, involving various technical routes such as vanadium flow batteries, iron chromium flow batteries, zinc bromine flow batteries, zinc iron flow batteries, and water-based organic flow batteries. The total production capacity reaches 6GW/year, and it is expected that China's flow battery production capacity will jump to 30GW/year by 2025. It is expected that by 2025, the cumulative installed capacity of liquid flow battery energy storage in China will account for 1.1% of the cumulative installed capacity of new energy storage. By 2030 and 2035, this proportion will increase to about 2.2% and 3.0%, respectively.

Driven by national policy support and market demand, China's flow battery energy storage industry is accelerating its development, with rapid release of flow battery energy storage orders, an increase in newly registered enterprises, and continuous expansion of enterprise scale. Statistics show that in 2022 and 2023, the scale of orders received by China's flow battery energy storage industry exceeded 11.3 GWh, an increase of more than 10 times compared to the total order volume in 2021 and before, reflecting the high demand for flow battery energy storage applications. The strong demand for orders is driving the rapid expansion of flow battery energy storage related enterprises. Last year, the number of newly entered enterprises increased rapidly, and industrial clusters were initially formed. It is expected that the speed of industrial expansion will gradually accelerate in the future, and market competition will become increasingly fierce.

The flow battery industry in our country is gradually transitioning from the exploration and cultivation stage to the development and promotion stage. The White Paper shows that over 95% of China's flow battery industry chain has achieved localization, and the improvement of localization throughout the entire chain has created possibilities for further cost reduction and efficiency improvement in the future.

Since its invention, flow battery technology has taken more than 20 years to achieve significant localization in recent years. Prior to this, we had to rely on expensive imported ion exchange membranes, "said Zhang Cheng, General Manager of Yifu Energy Technology. Nowadays, many components of flow batteries have been successfully localized, which greatly promotes the development of the flow battery industry.

There are still shortcomings and challenges

Since 2023, various flow battery technologies such as vanadium, zinc iron, iron chromium, and all iron have flourished, and flow batteries have entered a period of full capacity and technological development. However, the industrialization of flow batteries still faces some shortcomings.

There is still significant room for optimization and improvement in terms of technology. Liu Yong, Secretary General of the Energy Storage Application Branch of the China Chemical Physics Power Industry Association, told China Energy News reporters that compared to other energy storage products, flow batteries have the advantages of long lifespan, high energy density, and high technological maturity. However, their power density and energy density indicators need to be further improved. It is necessary to develop new electrolyte systems, optimize stack manufacturing, power control system design and other elements to significantly improve the power and storage capacity per unit volume and mass of flow batteries, so that the overall energy storage efficiency can reach over 80%.

Zhang Cheng believes that in the current market promotion and technology development process, optimizing the electrolyte is one of the key technologies to effectively reduce the installation cost of flow batteries. At present, the preparation cost of electrolytes is relatively high. China has abundant coal vanadium resources, but the cost of purifying and preparing electrolytes is extremely high. If the preparation path of electrolyte can be optimized and simplified, it is expected to significantly reduce the cost of electrolyte for energy storage in flow batteries.

Industry insiders believe that there is still room for cost reduction in flow batteries. In the current situation where the cost of lithium batteries continues to decrease, the cost competitiveness and business model of flow batteries require the joint efforts of supply chain and industry chain enterprises to enhance efficiency and reduce costs. In 2023, the price of battery grade lithium carbonate continues to decline, resulting in a nearly halving of the average price of lithium energy storage systems compared to early 2023. In this situation, energy storage users are more inclined to purchase lithium iron phosphate energy storage systems. Although the cost of flow batteries has been significantly reduced, they still face significant cost pressure under the same bidding conditions. It is worth noting that the 'anti puncture' of ion exchange membranes needs to enhance independent research and development production capabilities to reduce costs. In addition, it is necessary to establish and improve the supply chain guarantee capability and engineering application integration capability of core raw materials and components such as stacks, electrolytes, bipolar plates, channel plates, and dedicated pipelines.

In addition, the current standard system for the flow battery industry is not sound, which restricts its large-scale application. The next step is to actively improve the technical standard system for flow battery energy storage products, systems, and engineering construction, and promote the healthy development of the industry.

Need to expand multi scenario applications

Although China has formed a relatively complete industrial chain for flow battery energy storage, there is still a lot of room for improvement in technological level, improvement of standard system, reduction of comprehensive costs, and expansion of application scenarios.

Although a series of standards have been introduced in the domestic liquid flow battery energy storage industry, the specific standard system for liquid flow batteries still needs to be improved. It is recommended to improve the standard construction work of liquid flow batteries in intelligent manufacturing, planning and design, construction and installation, intelligent operation and maintenance, logistics and transportation, and establish an industry chain standard system to ensure the full life cycle application of liquid flow battery products. Liu Yong admitted that in the future, further support for liquid flow battery technology innovation and research and development is needed, relying on technological breakthroughs to improve industrial value. For example, actively supporting innovation in key technologies such as electrolytes and ion membranes to improve performance indicators such as energy density and energy conversion efficiency. In addition, it is necessary to optimize the manufacturing process of the fuel cell stack to achieve the goal of cost reduction and efficiency improvement.

In the eyes of industry insiders, the flow battery energy storage project has not yet achieved full commercialization, and the development of the industry still requires support from regulatory authorities. At present, the competent departments at all levels support the development of the flow battery industry through demonstration projects, typical projects, etc., and have implemented many demonstration projects. It is recommended that relevant enterprises deeply summarize the experience and shortcomings of relevant demonstration projects, and accelerate the market promotion and application of long-term energy storage for flow batteries.

Next, we can actively explore the combination of long-term energy storage of flow batteries with other new energy systems and services, expand application scenarios and business models, "Liu Yong said. As a safe, efficient, and environmentally friendly energy storage technology, flow batteries have great potential and flexibility for long-term energy storage, and can be combined with energy systems in multiple fields such as solar energy, wind energy, electric vehicle charging stations, intelligent buildings, and smart transportation to form a mutually empowering energy supply model.