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Sumitomo Electric to expand US flow battery business
Excerpt
Rising tide of US clean energy investments could lift flow batteries
Sumitomo Electric’s announcement comes just a few days after another Asia-headquartered flow battery company said it would establish US manufacturing capacity. Singapore’s VFlowTech plans to use a US$10 million Series A funding round towards setting up a 200MWh factory in the US to scale up production of its 250kWh VRFB units.
In mid-January, South Korean VRFB company H2 Inc said it was also scaling up its US activities, raising US$18 million in a Series B that it said would help progress a planned 5MW/20MWh VRFB installation in California at the site of a decommissioned peaker plant. H2 Inc broke ground on a factory in South Korea last year with 300MWh annual production capacity, scheduled for opening this year.
One common denominator these companies share is the likely influence of the US’ Inflation Reduction Act (IRA). The US$369 billion federal legislation incentivises both manufacturing and deployment of clean energy technologies and in an interview last year, one lawyer specialising in the US energy sector told Energy-Storage.news it could have a transformative impact on the business case for flow batteries.
Flow batteries are in many ways technically superior to other options including lithium-ion, Morten Lund of law firm Stoel Rives said, but despite their lower cost of ownership over their lifetime, their upfront capital cost remains higher than lithium-ion battery energy storage systems (BESS), making the investment case tricky pre-IRA.
Last week, Senator Joe Manchin and a bi-partisan group of colleagues urged the US to prioritise investment in non-lithium technologies for energy storage, calling on the Biden-Harris Administration to “use future funding for both lithium and non-lithium battery chemistries to reduce America’s reliance on foreign supply chains and strengthen our energy security.”