Investors are taking note of increased appetites and needs for longer duration storage, with Invinity Energy Systems eyeing greater scales of vanadium flow batteries following 2021’s £25 million fundraise.
Speaking to Current± in late 2021, Ed Porter, Invinity’s business development director, said that more and more people are taking an interest in the longer duration energy storage space.
Even two or three years ago, medium to longer duration storage was a “side thought” for net zero, whereas now players such as the Department for Business, Energy and Industrial Strategy (BEIS), National Grid, consultancies etc. are calling for longer duration storage to solve locational problems, balancing problems and net zero hurdles “that we just hasn’t had a consideration of”.
“We’re now seeing investors take note of that,” Porter said, with the funding Invinity secured through its oversubscribed share placing being used to help it continue to scale its product.
The company has just completed the 2MW/5MWh system for the £41 million Energy Superhub Oxford project with Pivot Power, with larger systems on the cards. Porter said that he’s often asked if the company wants to do projects around the 100MW/400MWh scale.
“The answer is yes, but at a certain time. You almost need to go through the process of scaling your manufacturing; people familiar with supply chains will recognise that you can’t take a supply chain that’s providing 100 units of something and then ask it the next day to do a million.”
As such, the next logical stepping point for Invinity is a project around the 10MW/40MWh scale. From there, the company would probably look at something like a 50MW/200MWh project, Porter said.
Challenges in the supply chain have been exacerbated due to COVID-19, as they have for many industries across the globe. Porter said that Invinity has spent a huge amount of time going through supply chains to make sure its got redundancy in its supply chain and trying out providers for additional capacity.
“COVID-19 has forced us to do it, as has building things of scale.”
The market for vanadium is primarily driven by the steel industry, and so it’s unlikely that vanadium flow batteries will have any material impact on the stock price of vanadium today, Porter added.
“I don’t think we’re too concerned about that side of things. It’s really that security and resilience of supply chains. That’s the important thing.”
Perceptions of – and the appetite for – longer duration energy storage have been changing, however, with it now widely recognised that longer-duration storage will be required in some capacity to operate a net zero energy system.
Indeed, this has also found its way onto the agenda of the government, with BEIS having issued a call for evidence on how to enable the technology in July. Barriers to deployment was a particular area BEIS was seeking views on, as well as information on the types of capital available from what types of investors.
There’s a bankability element to get through for newer technology, such as longer duration storage – which includes a variety of battery chemistries – which can be a hurdle, Porter said.
However, there’s a growing emergence of people willing to take merchant risk in markets, according to Porter, particularly off the back of the current market in terms of short duration flexibility and achievements made by lithium-ion battery storage in the past year.
Additionally, subsidies for longer duration storage are likely to happen, Porter said, and this in turn will attract private investment.
“I think there’s a growing recognition within government that they want something to fill that medium to longer duration energy storage; they like pumped hydro but pumped hydro can’t do everything.
“There’s almost an emergence of a desire to do medium to long duration, low carbon flexible storage.
“We’re in a heavily regulated market, there will be regulation that will support further medium and longer duration storage, it’s just what that looks like and when it comes to market,” he said.
But at the moment, Invinity is working to build out scale, get projects in the ground and prove concepts “as and when those opportunities come out”.
