By Brian Warshay

VRFBs have the highest potential for growth in the emerging grid storage market, increasing their market share from 2% today to 17% by 2017, if developers can reach their targets of $750 per kilowatt-hour (kWh), fully installed. However, costs today are

Lux Research evaluated the potential for cost reduction by focusing on the electrolyte, which alone accounts for 32% of the total system costs for a VRFB. Electrolyte costs can be reduced along two pathways, controlling the price of vanadium, a major component of the electrolyte, or by increasing the molarity of the electrolyte, thereby increasing energy density and saving costs on the balance of system, land, and installation.

A doubling of the market price of vanadium causes system costs to increase by 31%, which overshadows the 17% costs savings that result from doubling the molarity of the electrolyte. Even dramatic technological improvements in the electrolyte are for naught if the price of vanadium cannot be managed.

Lux Research encourages developers to engage all members of their multi-disciplinary project development teams to ensure that vanadium prices are managed by procurement and finance teams concurrent with research and development focusing on performance enhancement,as both approaches are required for developers to reach $750/kWh and access the $5.35 billion VRFB market opportunity in 2017.

Brian Warshay is a research associate for Lux Research, which provides strategic advice and on-going intelligence for emerging technologies. For more information, visit the Lux Research site.

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