Australian battery storage maker Redflow to target residential and mining market after cost reductions take cost of storage close to grid tariffs. Predicts grid may be relegated to role of back-up.
Brisbane-based Redflow says it is fast-tracking the rollout of its battery storage products to the residential and mining sector, in yet another sign that storage costs are falling quicker than most imagined.
Redflow, which is bringing it unique zinc bromide flow battery to market, says its new products are 40 per cent cheaper than its first generation products, and are now approaching grid tariffs in some markets.
So much so, that CEO Stuart Smith says the grid, the backbone and chief source of electricity more than a century, could soon be relegated to the role of mere “back-up”. This, of course, has huge implications for existing utilities – be they network operators, retailers, and/or generators.
“We believe we have a disruptive, scalable technology whose applications are continually expanding,” Smiths says.
“The future where the grid progressively becomes a backup rather than the primary source of energy is fast approaching by integrating our products with renewables such as solar and wind at a residential and commercial level.”
Smith’s comments may be interpreted by some as mere enthusiasm from an aspiring player in the new market, but they should be seen in the overall context of change. Even AGL Energy said last week that battery storage is now becoming “interesting” for its consumers, and it tipped rapid change. Many experts say battery storage will follow the same cost trajectory, and system impact, than solar. Some say it will be even greater.
Smith’s comments came as the company announced the roll-out of two new products, the ZBM2 and ZBM3, which it will use to fast-track its entry into the residential and the mining markets.
Its previous focus had been on the telco sector, where storage is favoured for use to help provide power telecommunication towers. That is already economically viable.
Redflow says the new products designed for residential, commercial and the mining sectors – to be released in April – are cost-competitive already in some markets.
“This is an important step forward for us and our cost of ownership is fast approaching grid tariffs in some European countries before subsidies,” Smith says.
Redflow’s cost estimates are fascinating, because it has chosen to focus on the delivered energy cost of the storage, what it calls the “cost of ownership” rather than capital cost common in the industry.
Stuart argues that this removes misleading information caused by differences in depth-of-discharge, required operating temperatures and other factors. For instance, some might say their battery costs $800/kWh, but this takes no account of the depth of discharge of number of cycles.
Redflow’s first product ZBM, was a 3kW/8kWh system that produces 48V with 10MWh warranted energy throughput over its maintenance free operating life. That was priced at $US0.70c per kWh (rather than $700/kWh as the capital cost).
ZBM2 is a a 5kW/10kWh product, also producing 48V with twice the total warranted energy throughput at 20MWh The nominal deliver cost is 31 per cent lower at $US0.48 (€0.42) per kWh.
The ZBM3 is a 5kW/11kWh product producing 53V and a 220% increase in energy throughput capacity. Total energy throughput is warranted at 22MWh at a cost only 39% above the base price of the ZBM. But its energy delivery cost per kWh f is 37% better at $US0.44 (€0.38).
Smith says that initial markets will be in Europe, in countries such as Germany which has high electricity prices and lots of solar. But it will also become compelling in Australia.
Imagine, for instance, the 6c/kWh that solar households now get paid for exporting electricity to the grid. Imagine, also, the 52c/kWh they pay for importing at peak times in some instances.
That means that once battery storage gets below $A0.46/kWh, it is economic. It’s not quite there yet, but clearly not far away.
The ZBM3 will also be used in the Redflow Large Scale Battery containerised solution which has been re-rated to 660kWh per 20 foot shipping container for approximately USD$665,000 (€585,000). With 22,000 kWh energy throughput for each battery (there are 60 batteries in each container) the fully containerised cost per kWh reduces to USD$0.50 (€0.44).
“We believe these cost reductions make our product cost competitive in initial markets targeted and also open other markets such as residential and mining which we now intend entering earlier than previously planned,” Smith says.
Smith says the mining sector is an obvious target, with some paying up to $A2.50/kWh for diesel.
He says the zinc bromide batteries lend themselves to “energy use” rather than “power use”, meaning over a longer time frame rather than the short, sharp bursts required of, say, lithium ion batteries in the recently announced solar plus storage plan for Sandfire Resource’s deGrussa copper mine.
This will also suit the residential sector, which can use the storage to provide electricity in the evening hours, and depending on needs, overnight as well.
The Redflow products are now being manufactured by Flextronics and a number of trials underway are in progress in South, Central and North America, Europe, Australia, New Zealand, Philippines and Africa.
However, the company said sales in commercial quantities are currently slower than expected as the sales cycle for new technology and capital goods is longer than anticipated. It says the first small commercial orders have been received and it is confident that commercial scale sales will commence in the first half of this calendar year.