Flow Battery Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The flow battery market was valued at around USD 457.46 million in 2020, and it is anticipated to reach USD 1.2 billion by 2027, registering a CAGR of more than 12% during 2022-2027. The COVID-19 pandemic did not have much impact on the flow battery market. The major application of flow batteries is in energy storage systems, which witnessed growth when paired with renewable power systems. Renewable power generation went up from 2789.2TWh in 2019 to 3147 TWh in 2020; in fact, all other sources of energy went down, but renewables witnessed high demand even during the economic downturn. The flow battery market is likely to grow during the study period due to the growing penetration of the technology in long-duration energy storage applications, such as renewable power systems and long service life. However, the market may see stunted growth in the near future due to the low energy density of battery cells.

Vanadium redox batteries are expected to witness significant growth during the forecast period due to the fact that they are the most convenient sources of electrical energy storage for grid-scale applications.

The new technological innovations to diversify the scope of flow batteries in new commercial areas create tremendous opportunities for market growth. For example, Vanadium Corp Resource Inc. recently announced that it had started commercial development of the first phase of key design and engineering of next-generation vanadium redox flow-battery systems (VRFB Battery) for marine applications.

The Asia-Pacific region is expected to grow at the fastest rate during the forecast period due to many upcoming renewable plus storage projects in the region.

Key Market Trends

Vanadium Redox Flow Batteries are Expected to Witness Significant Growth

The vanadium redox flow battery (VRFB) is a proper redox flow battery (RFB) that stores energy by employing vanadium redox couples (V2+/V3+ in the negative and V4+/V5+ in the positive half-cells). The power and energy ratings of these batteries are independent of each other, and each may be optimized separately for a particular type of application.

Many countries have consistently focused on increasing energy demand without any intermittency; thus, numerous energy storage systems have been installed in standalone and renewable energy systems. China, which has achieved the strongest commercial success in renewables, installed 1.6GW of energy storage in 2020. A number of new technology energy storage projects are lined up in other countries as well.

In July 2021, Canada-based Largo Resources signed an agreement with Enel Green Power Spain, the Spanish branch of Enel Green Power, to supply VCHARGE ± vanadium redox flow battery system for the upcoming renewable power project of the company. Largo Clean Energy is expected to provide a five-hour, 6.1 MWh battery system for a project in Spain, which is expected to get commissioned in the third quarter of 2022.

In September 2021, U.S. Vanadium commenced the capacity expansion project for the production of Ultra-High-Purity Vanadium Redox Flow Battery Electrolyte at its electrolyte manufacturing facility in Arkansas, United States. The project included an investment of USD 2.1 million. The initiative is expected to influence the vanadium redox battery sales of the entire region.

Such developments are expected to propel the market during the forecast period.

Asia-Pacific is Expected to Dominate the Market

The Asia-Pacific region is at the top position in the battery manufacturing industry. The highest volumes of batteries worldwide are manufactured in this region. Countries like China and South Korea set the benchmark for the industry.

Another prominent driver for the region's battery market is the energy storage projects, which are currently at the fastest pace in the region. Countries like China, Japan, and India are constantly involved in becoming carbon-neutral countries. Thus, many renewable and energy storage projects are coming up.

Further, China made mandated energy storage systems for its solar and wind projects in its latest five-year plan (2021-25). This may also support the market to grow in the region during the study period.

In August 2020, Japan-based Sumitomo Electric Industries Ltd bagged a contract to supply and install redox flow battery systems with 51 MWh of capacity, or 17 MW for three hours, for a renewable grid expansion project in Hokkaido. Hokkaido Electric Power Network Inc. (HEPN) has chosen the company to expand the interconnection between wind power generation and the grid by using flow battery energy storage. The battery system is likely to be operational by April 2022.

In September 2021, VRB Energy, the vanadium redox battery manufacturer, started the construction of a battery energy storage system with 100MW/500MWh capacity in Xiangyang, in China's Hubei province. It is installed for the Automobile Industrial Park of the Xiangyang high-tech development zone. The project is expected to be completed by late 2022.

Hence, with upcoming manufacturing facilities and renewable and energy storage projects, the region is expected to dominate the market during the forecast period.

Competitive Landscape

The flow battery market is moderately fragmented. Some of the major players in the market include VRB Energy, RedFlow Ltd, Invinity Energy Systems PLC, Primus Power Corporation, and ESS Tech Inc., among others.

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• The market estimate (ME) sheet in Excel format
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