On November 24-26, the Hunan (Changsha) Battery Expo and the Second China International New Energy Storage Technology and Engineering Application Conference, jointly organized by the Hunan Provincial Department of Industry and Information Technology, the Hunan Provincial Department of Commerce, the Changsha Municipal People's Government, and the Energy Storage Application Branch of the China Chemical and Physical Power Supply Industry Association, were held at the Saint Louis Hotel in Changsha with the support of over 100 institutions. The theme of this conference is "New Energy, New Opportunities, and New Heights".
During the meeting, the organizing committee invited Huang Mianyan, CEO of Beijing Puneng Century Technology Co., Ltd., to share the theme report "* High capacity all vanadium flow battery energy storage technology helps carbon neutrality and the construction of new power systems". The following is the main content of the speech:
Huang Mianyan: Experts, leaders, and colleagues, it is a great pleasure to have the opportunity to share with you some of the development status of all vanadium flow batteries during this special period.
Firstly, there is a brief introduction to long-term energy storage and all vanadium flow batteries. It is known at all industry conferences that lithium batteries have achieved excellent development after so many years of development. When it comes to energy storage or new types of energy storage, the first person to think of lithium batteries is lithium batteries. However, lithium batteries have some inherent shortcomings, which have led to the transition of new energy storage or energy storage applications from power to capacity, and there may be some less than ideal occasions, In this situation, the attention of national policies, industry, and capital to liquid flow batteries, especially all vanadium liquid flow batteries, is also increasing. After so many years of development, the energy storage market has gradually transitioned from short-term power type to long-term capacity type. This is some analysis reports from abroad. As the proportion of renewable energy increases, the requirements for energy storage duration will become higher, and the market share of long-term energy storage will also become larger. This is mainly to illustrate these.
When it comes to the main new energy storage technologies, especially those suitable for large capacity and long-term energy storage, we think there are four types. One is pumped storage, the other is compressed air, and the third is lithium batteries. Lithium batteries can also be used for long-term energy storage, but there are some drawbacks, and the fourth is vanadium batteries. Each technology has its own advantages and adaptability, and I mainly focus on vanadium batteries. In fact, the scale of vanadium batteries has increased from a project of a few megawatts to a hundred megawatts level. A few days ago, the first phase of the Dalian project of 200 megawatts, 800 megawatts, and 400 megawatt hours was successfully connected to the grid. This project should be the pioneer of a hundred megawatt level liquid flow battery in the world. Encouraged or driven by this project, At present, I know that there are about a dozen or even larger projects with a hundred megawatt level of all vanadium flow batteries in China, with only two GWh of all vanadium flow battery projects. This is the scale of the projects, and the other is safety. The reason why I pay so much attention to liquid flow batteries is because they overcome some unavoidable shortcomings faced by lithium battery energy storage, and everyone needs a safe and long-life technology, Vanadium flow batteries are very suitable.
Of course, the point to be addressed here is the efficiency of liquid flow batteries. Generally, the system efficiency can reach 75%, which is basically close to pumped storage. Another important feature is the long lifespan of liquid flow batteries, which is 30 years. Lithium batteries are usually used for 10 or 15 years, but in reality, they can be used for less than 10 or 15 years. Liquid flow batteries can be used for 25 or 30 years, because this is determined by their working principle. We have been running the system in the factory for 13 years, starting from 2019 and continuously charging and discharging every day, so the lifespan is supported by theory and practical projects Actual data support. In addition, its characteristic is that the construction period is very short, like pumped storage, which usually takes 8-10 years. This type of project usually takes one or two years, because the initial investment time of Dalian's project is relatively long, mainly due to policy factors in the early stage, not the construction period. Therefore, liquid flow batteries have high safety, long lifespan, and efficiency that can be comparable to pumped storage, without regional restrictions, green, and circular utilization. From our perspective, we believe that liquid flow batteries will serve as peak shaving power stations, grid side, and new energy generation side in the future long-term energy storage field. As a beneficial compensation for pumped storage, we cannot replace pumped storage. However, we can use liquid flow batteries in places where pumped storage cannot be achieved or there are no resources, or where the ecology is relatively fragile, which is very suitable.
There are various technologies for liquid flow batteries, and all vanadium is just one of them. There are also zinc bromide, iron chromium, all iron, and so on, which are mainly divided into several categories. The all vanadium liquid flow battery technology I just mentioned should be considered as a mature technology, with many projects, and close to commercialization or at the forefront of commercialization in the liquid flow battery industry worldwide. Another type is represented by zinc, as it is a good metal material and also has good chemical activity. There are also iron based flow batteries. Vanadium flow batteries are too expensive and require cost reduction. They are all compared to vanadium flow batteries because the cost of vanadium is too high. Without vanadium, using other metals or substances to replace vanadium can reduce the cost. This is a good starting point, but the energy storage system is very complex, and electrolyte is only a part of the cost. Is there a need for more complex systems to support stability, such as batteries, BMS, PCS, and cooling systems? Pressing one end to loosen the other may have solved the problem with the electrolyte, but other issues have not been as satisfactory. For example, if we solve the problem of vanadium, but the power density is relatively small, which is the size of the battery stack. Because liquid flow batteries are mainly divided into power and capacity parts, using the same materials, the power part is twice that of vanadium batteries. That is to say, the cost of my battery part is one to two times, and the electrolyte is cheaper, but the battery cost increases. The cost may be even higher than that of all vanadium batteries, so this is a common situation in the industry, It's not that other technologies are not good, but it still takes time to optimize all aspects, achieve optimization of all elements, and reduce costs. Such a system has a place in the market environment where costs are already starting to be seen, blooming with all kinds of flowers, but we must find a path suitable for our own development and reach the optimal state.
The advantages of all vanadium flow batteries include safety, long lifespan, * DOD, and the ability to recycle the electrolyte. 70% of the cost is in the electrolyte, which can be fully recycled without lifespan constraints. For example, after the completion of these 25 year projects, the electrolyte can be directly pulled from one project to another for * recycling. If I don't do this project, I want to recycle this electrolyte into vanadium, and its output value is also 70%, Because you need to convert vanadium containing electrolytes into vanadium products, the processing cost is around 20% -30%, and the difference in output value is between 70% -80%. Overall, its advantages are still very prominent, but there are also some drawbacks. The energy density of the technology is relatively low, about 1/10 or even lower than that of lithium batteries. How can we make a system with such a low energy density? What is the floor area of the system? I will tell you that this is just the level of the battery cells. After a project is truly completed, the floor area of vanadium flow batteries can be lower than that of lithium batteries. You may find it incredible. I can provide you with some data, such as the 100 megawatt level project we are currently working on, including the 100 megawatt to 400 megawatt hour project just announced by Dalian. The floor area of approximately 100 megawatt to 400 megawatt hours or 500 megawatt hours is less than 30 acres of land, In a building. Lithium batteries require approximately ten megawatts and twenty megawatt hours of land on thirty acres. If it is really a large project, the floor area of liquid flow batteries is even half that of lithium batteries. This is a very important information because it is real data, not our prediction. The designs made by domestic design institutes are based on this standard.
I'll give you a rough overview of these. Just now, I talked about the many advantages and promising market prospects of liquid flow batteries. Why is it that its market share has been around 1% for so many years? I remember 8 years ago, it was around 8% -10%, and now it may be less than 1%. The core issues are mainly a few. Firstly, its comprehensive cost is too high. Over the years, its cost has been too high, relatively high compared to lithium batteries, lead-carbon batteries, and lead-acid batteries. The second is the scene that was not adapted to in the past. Thirdly, the project scale is limited.
The high comprehensive cost is mainly due to several issues. Firstly, the industrial chain is incomplete, which includes some core components. Secondly, upstream resources mainly refer to vanadium. There may be too much to talk about vanadium, but I just want to briefly tell you that currently, the vanadium purchased in China is not prepared for vanadium batteries, but for the steel industry. Therefore, vanadium batteries need their own vanadium. Previously, no one specialized in developing low-cost vanadium, which also leads to relatively high overall costs. The applicable scenario is quite clear because in the past, energy storage was mainly focused on short-term power applications. Long term capacity applications were also introduced this year, especially since this year when Xinjiang and Inner Mongolia began to recruit 4-hour energy storage systems, which were not available before. Therefore, the market share of all vanadium flow battery energy storage in the past was very small, but the situation is completely different now, Next, this situation will change *. Thirdly, the project scale is limited. In fact, as I mentioned earlier, the market size of the entire liquid flow battery used to be 1 megawatt, 2 megawatts, and 10 megawatts, which is * large. One hundred megawatts has just emerged, and more hundred megawatts are currently only under planning. I believe that after the completion of these planned 100 megawatts, the market share of liquid flow batteries will probably reach 10% -20%. This is not what I predicted, but what experts from various sources predicted.
These are the situations of liquid flow batteries, especially for some production and manufacturing companies around the world who produce all vanadium liquid flow batteries. Of course, this is only a partial list, because there have been some new situations recently. Fluid battery technology is too hot, and we usually see some big news in this industry every week. Some listed companies have started to integrate some resources into this industry, so the development of this industry is still very fast. However, overall, we have not seen anything that can surpass these players in terms of fluid battery energy storage technology, Both domestically and internationally, there are still some new technologies and concepts, but these new technologies and concepts require time to verify their feasibility and mature engineering products. Everyone is involved in system integration, which should be well understood. Any new concept or technology must go through a relatively long process of accumulation in order to achieve maturity and perfection.
This is an overview of the industry. I won't go into more detail, let me briefly explain it to everyone. In fact, I just mentioned the situation of manufacturers. To briefly summarize, countries mainly composed of China, the United States, Europe, and Japan should be very confident. Currently, China has led the development of all vanadium flow batteries, whether it is in terms of industry scale, cost, or enterprise size, it is leading the development of the industry. But one thing to emphasize is that the so-called new technologies, such as some new liquid flow battery technologies, and some of the things that people imagine about new vanadium batteries, may still be better done in the United States because they may have a better atmosphere for innovation or this kind of venture capital.
The current market situation has very obvious characteristics. We believe that in the early stage of market-oriented commercialization, it has entered the market commercialization stage, but it is still in the early stage. The characteristic of production based on sales is obvious, and there is no very stable daily production like lithium batteries. Then you come and I will directly sell it to you, basically focusing on project customization because the quantity of this project is still small. Mainly driven by government projects, especially in recent years, new energy has been used for energy storage. If the government provides you with new energy indicators, you need to support some energy storage industries. At this time, liquid flow battery energy storage will reach some agreements with new energy manufacturers and local governments to promote the implementation and construction of liquid flow battery projects. The scale of the project has advanced from the megawatt level to the hundred megawatt level. Another is the expectation of development. We believe that this industry will be in a rapid development stage in the next 1-2 years, with the project scale continuously expanding and the industry chain gradually improving. I just talked about the issue of upstream resources, and now the problem of upstream resources is gradually being solved. Many enterprises are participating in the development of upstream vanadium resources.
Next, let's talk about our company's situation. In fact, we have been working in the vanadium flow battery industry for 15 years in China, and have been doing this for so many years. Established in 2007 and acquired VRB Power in 2009, VRB Power was one of the best companies in the industry at the time. It began producing megawatt level products in 2010 and began large-scale energy storage projects from 2011 to 2014. It has also conducted representative megawatt level energy storage projects in countries such as China and the United States, setting some local precedent. In 2014, we also undertook the national 863 project, and I was the chief expert on this project at that time. This is our first generation product. Due to the iteration of the product generation by generation, we started producing the second generation product in 2016. By last year, we had already started producing the third generation product, which has now been launched into the market. We have also started some development work for this type of 100 megawatt level project, and some projects have already entered the bidding stage.
In the capital market, we have raised approximately $200 million since 2007, and many of our investments have set precedents in this industry, making it very difficult. Especially a few years ago, General Energy invested approximately $100 million to develop liquid flow batteries, which would not have helped the entire energy storage market. Instead, we invested $100 million to do this. Therefore, you can imagine that the capital market is actually optimistic about this industry and recognizes General Energy's technology and professionalism. These are some of the management teams of General Energy, but I won't go into more detail. We will mainly talk about our core technical team, which now has about 30 people. Basically, everyone has been working in this industry for more than ten years and is very professional. They have a theoretical background and engineering practice. It is this group of energetic people who have pushed our products forward generation by generation.
These are some of the projects we have completed, some of which we have already installed and put into operation, which cannot be compared to lithium batteries. So far, we have put approximately 100 megawatts into operation and built 100 megawatt hours. Over the past few years, there have been approximately 100 megawatt hours of energy storage projects in nearly 70 countries around the world. Of course, one thing is that if the projects we are currently working on can be quickly implemented, we will immediately upgrade from 100 megawatt hours to the GWh level. Because every project we are currently working on is growing rapidly at a scale of 500 megawatt hours and 400 megawatt hours. These are some liquid flow battery projects currently being planned in China in the past year or two, and the volume is very large, which may still be some data updated a few months ago. At present, it should be much more than this because new projects appear every week and the scale of the projects is constantly expanding. The comprehensive project I just mentioned has also seen the emergence of a GWh project, including several projects in Xinjiang GWh and a hundred megawatt hour project. Therefore, the scale and quantity of these projects are rapidly increasing.
At present, the cost situation of vanadium flow batteries, if calculated in 4 hours, we all refer to the net output of AC, which is about 2-3 yuan per kilowatt hour of electricity. Each household is different, and about 60-70% of this is the cost of electrolyte, and about 40% is the cost of battery stack. The battery stack I am referring to includes batteries, pipelines, storage tanks, pump cooling, and PCS. The entire system, except for the electrolyte, is about 40%, and this cost is currently rapidly decreasing every year. We expect to reach 2 this year, for example