Flow battery companies look beyond Vanadium to compete with lithium-ion

While testing a red paint’s ability to store a charge, it was found that the material, used as a light harvester for solar cells, worked as a battery molecule.

Sisto adds: “It’s a really old set of molecules, like 1900s kind of molecules, back when chemistry was taste, like, how you characterise, it’s like, ‘oh, this is sour,’ this is that kind of chemistry, old, old chemistry. But nobody had ever used it for this application. And so that’s the novelty. It’s not water-soluble. So, the real invention of XL was bringing it into a solution, bringing it into pH-neutral water.”

Since that invention, XL was accepted into climate tech accelerator Third Derivative in 2021.

In January 2023, the company announced a partnership with global storage provider Stolthaven Terminals. The two companies signed a memorandum of understanding (MOU) for the development of a flow battery with industrial-scale electricity storage capability.

The next month, XL announced the closing of a US$10 million series seed II round led by Catalus Capital with participation from additional investors, including Myriad Venture Partners, SIP Global and founding investors Jeffrey Schwarz, Joel Greenblatt, and Robert Goldstein. 

The company began expanding its team with Dr. Bart Riley, an early innovator of lithium-ion (Li-ion) batteries and CTO and co-founder of A123 Systems, joining as Chief Commercial Officer.

Now, beginning the move into commercial product design and engineering a commercial product that Sisto says will be ‘ready to hit market fairly soon’, the company is aiming for market dominance.

‘We are the same as a Vanadium flow battery’

While explaining the pH-neutral chemistry used by XL Batteries, Sisto elaborates: “We are the same as a Vanadium flow battery for all intents and purposes but take the Vanadium out and take the sulfuric acid that the Vanadium is dissolved into out and replace it with organic molecules and pH-neutral water.”

Vanadium redox flow batteries (VRFB) are the most commonly developed type of flow battery technology.

VRFBs employ liquid electrolytes that are stored in dedicated tanks and circulated through a membrane to facilitate an electrochemical reaction, thereby generating electricity.

Advocates of this technology assert that it possesses a longer operational lifespan than lithium-ion batteries, enhanced scalability, and superior fire safety characteristics, among other benefits.

Vanadium is the most costly component of a VRFB, making it a critical factor in the overall expense of these systems. Sourcing Vanadium can be challenging due to its limited availability and the complexities involved in its extraction and processing.

Currently, China stands out as the world’s largest producer of Vanadium, meeting both domestic demand for its own VRFB projects and supplying the global market. The largest operational VRFB projects in the world, by some distance, are there.

In addition to this, Vanadium is dissolved in sulfuric acid, which produces a hazardous residue and means that VRFB equipment needs to be corrosion-resistant.

“If you replace it with organic molecules as the charge storage molecules and then pH-neutral water as the liquid, you change all of the costs. But essentially, the device is the same, and there are some subtle nuances there, obviously, but you can think of us just like a Vanadium flow battery,” Sisto says.

Flow batteries are one of the most commercially mature long-duration energy storage (LDES) technologies. However, they are still more expensive to produce than Li-ion batteries, which dominate the energy storage market.

BloombergNEF did a deep dive on the costs of different LDES technologies, including flow batteries, in 2024, covered by Energy-Storage.news.

The cost survey found that the average capital expenditure (capex) required for a 4-hour duration Li-ion BESS was US$304 per kilowatt-hour (kWh).

Flow batteries, which were the primary electrochemical energy storage technology being compared against Li-ion, had an average fully installed cost of US$444/kWh in 2023. But that figure includes China, and if you excluded it, the figure goes up by nearly two-thirds to US$701/kWh.

It was also noted that LDES technologies may struggle to match the economies of scale achieved by Li-ion battery manufacturers.

But XL believes its technology can overcome constraints around cost and scale. Sisto says:

“Based on current modelling, we expect installed system costs to be competitive with other emerging technologies in the market, with the expectation of near-term costs that are less than $200/kWh installed for long durations.”

A number of factors go into this much lower-than-average figure. For one thing, Sisto emphasised the ‘ubiquitousness’ of XL’s supply chain, being ‘free’ from geopolitical constraints.

The company makes its batteries using globally sourced, oil & gas-derived commodity chemicals. This gets XL around the limited supply of Vanadium.

Additionally, a benefit that already exists for many LDES technologies is the potential to decouple costs related to power and energy.

Sisto notes that because the volume of electrolyte is not confined inside the cell but the tank, it can be changed independently.

Stated another way, the tanks storing the liquid can be made larger without affecting the cell, whereas a technology like Li-ion requires additional battery stacks and power conversion equipment.

‘We see market dominance, and we aim for that to be true’

Sisto notes that XL sees the ability for revenue stacking  as a major benefit to not just its own batteries but flow batteries in general, adding:

“I think one of the benefits of us as an electrochemical device, versus, maybe, say, like a kinetic device that spins something or compressed air, or some of the electrochemistry, is that as a flow battery, we can do every use case. We’re instant response, ancillary services, all the way out to days.”

Providing those services for days requires large systems, in this case, large tanks, and Sisto also believes this to be a key strength of XL.

If thermal runaway occurs in a Li-ion battery cell, it can spread to adjacent cells, with the potential for a severe fire.

As explained in greater detail in a guest blog for Energy-Storage.news by Johnson Controls’ industry relations fellow Alan Elder, Li-ion battery fires are difficult to fight. They require large amounts of water to be applied for hours and, in some cases, days.

Because of these potential risks, many steps are involved in preventing thermal runaway and providing fire suppression systems in the case that it does happen.

VFRBs do not go into thermal runaway, and in XL’s case, the pH-neutral solution being used is an additional plus for safety.

Sisto says about these differences and potential safety concerns: “I don’t think (Li-ion) makes sense as these massive installations. You’re seeing a lot of fire as you get more and more cells; you just have mathematically more bad cells.”

“Even with great engineering, you just have a number of bad cells when you get above 100MW. As you start to get bigger and bigger, it becomes much more of a challenge. To get to true utility-scale, ubiquitous across the globe, it’s a big challenge with lithium and the fire risk.”

Quino Energy also competing in flow battery technology

California-headquartered water-based flow battery startup Quino Energy is also looking to compete against Vanadium and Li-ion.

Quino has twice received funding from the US Department of Energy (DOE), first in 2021 as a US$17.9 million investment for four research and development projects.

In 2024, Quino received a US$2.6 million grant from the US Department of Energy Advanced Materials and Manufacturing Technologies Office (DOE AMMTO). The DOE AMMTO grant was to support the company’s effort to demonstrate its flow battery technology in existing oil and fuel storage infrastructure.

The company claims that flow batteries have the lowest levelised cost of storage (LCOS), pointing to an LDES study from the DOE which contains a low LCOS projection for flow batteries in 2030.

Eugene Beh, CEO of Quino, tells Energy-Storage.news: “This low LCOS is driven by three factors. The first is low CAPEX of organic active materials, like the ones we source for Quino Energy’s systems.”

“The second is the capacity degradation of flow batteries is much lower than Li-ion. Lastly, flow batteries have a more accessible state of charge range than Li-ion. In fact, deep cycles cause Li-ion batteries to degrade faster, but most flow batteries do not have this limitation.”

The company uses materials made from abundant sources, such as coal tar chemicals and non-toxic food additives in its systems, which it highlights as a positive for both cost and maintaining a US supply chain.

“Outside of cost and safety, organic active materials can be domestically produced from abundant precursors such as petroleum aromatics and coal tar chemicals. This opens an avenue for flow batteries to be entirely sourced in the US. Li-ion batteries cannot claim to be 100% US-sourced.”

Beh continues: “These organic active materials, such as those made by Quino Energy, offer the potential to greatly lower the cost floor of flow batteries such that they are competitive with not just Vanadium flow, but also Li-ion.”

The company also notes the fire risk of Li-ion technology, citing the Moss Landing fire and the increased restrictions recently imposed on BESS in California in the wake of that event.

Beh adds that the flow battery industry in China is rapidly expanding, and this is at least partially due to restrictions on flammable battery deployments in urban areas.

In the US, New York State has imposed some similar restrictions. In 2021, the International Fire Code included regulations that prohibited installations inside buildings in New York City. Further updates were proposed in 2024.

Quino is paying particular attention to how flow battery cost decreases with increasing duration. Beh says:

“Quino Energy is targeting a capacity of at least eight hours of energy storage, where flow batteries are more competitive in cost with lithium-ion and where deep cycling (that would degrade lithium-ion batteries quickly) is more frequently required. This would be for many applications such as renewables integration.”

Conclusion

While XL and Quino boast an experienced team with a promising technology, achieving market dominance is not easily accomplished, and others have tried.

These solutions have still not been proven at scale, and if that time comes, proving reliability is a continuous process due to the nature of the industry. CMBlu is another firm with ‘organic’ electrolyte-based technology.

Recently, after experiencing slower-than-expected growth, the CEO of hybrid flow battery manufacturer ESS Tech resigned. While the company is actively bidding for projects, it is having a difficult time scaling up due to competition from the dominant Li-ion technologies.

In 2024, Australian zinc-bromide flow battery manufacturer Redflow went out of business when the company’s administrators were unable to find buyers.

Looking even further back, companies like Imergy, which had promise in introducing flow batteries into the market, failed for various reasons.

Of course, every business is different, and the flow battery technologies of these companies is different. There are several flow and VRFB-specific companies that seem to be well positioned for the future, at least at this moment.

Stryten Critical E-Storage and Largo Clean Energy Corp. (LCE) recently announced the formation of joint venture Storion Energy.

It aims to create a vertical supply chain for utility-scale flow batteries by combining access to Vanadium from the only Vanadium mine in the western hemisphere with US electrolyte production.

H2, Inc, based in South Korea, is working on what it claims is the largest VRFB project in the US. This 20 MWh system is in California and began construction in December 2021, although no update has been provided since then.

Despite the challenges, Sisto and XL remain enthusiastic, adding: “We have a really solid team that has done this, specifically in these products. I think we have a core technology that’s ready to move into commercial scale demonstrations as our next phase, and then we have partners to execute that.”

“I think it’s a unique opportunity as a company to make what is a small change at the chemistry level that ripples through an existing and scaled device.”