Iron Flow Batteries Turn Negative Pricing into Positive Returns

Today's energy grid was built to transmit power from large, centralized generating stations (usually powered by coal or nuclear) to distant load centers. The dynamics of the grid are evolving rapidly as more intermittent renewable electricity is added, creating economic and operational challenges and opportunities across the system.

Renewable energy intermittency isn't only a challenge on a cloudy day, when there may not be enough solar energy to meet demand. The opposite problem - too much renewable generation- creates challenges as well. In sunny California, over 2.7 TWh of renewable energy (mostly solar) were curtailed last year, and in the windy Midwest, periods of excess wind generation now lead to electricity prices on the grid routinely entering negative territory.

Negative Location Marginal Pricing (LMP) is caused by grid congestion and creates challenges for utilities, transmission operators, and power producers. This problem is well documented by leading analysts from the Lawrence Berkeley National Lab, among others, who have shown that negative LMP is now a widespread reality at numerous points on the grid for significant portions of the year.

In a May presentation to the New York Battery and Energy Storage Technology Consortium, Wood Mackenzie forecasted increasing negative pricing instances through 2040. They not only predict that negative pricing will worsen in areas it already exists today but will also expand to new energy markets like the American Northeast.

However, the growing number of locations with pervasive negative LMP represent a tremendous opportunity for long-duration energy storage (LDES) with storage durations of eight or more hours.

Technologies such as ESS' iron flow batteries provide an opportunity to improve renewable utilization and grid operation while delivering favorable returns for asset owners. Due to their inherent capabilities, iron flow batteries offer more operational and market flexibility than lithium-ion energy storage, enabling operators to leverage multiple revenue streams and to flexibly adapt as the future markets evolve. We explore this in our recent whitepaper, "The Opportunity in Oversupply: Deploying Long-Duration Energy Storage to Capitalize on Negative Pricing."

Unlimited cycling unlocks multiple revenue streams

Unlike lithium-ion systems, iron flow technology provides unlimited cycling ability with zero capacity degradation over a project's lifetime. While lithium-ion systems can cycle once per day, iron flow systems can cycle continuously, increasing revenue opportunities.

Iron flow systems allow owners to leverage multiple revenue streams to capitalize on negative pricing while still meeting local market and grid needs. With anticipated fast charging capabilities, iron flow systems could maximize the use of negatively priced energy to generate revenue from day ahead and real time market arbitrage while also serving capacity markets. Serving multiple markets at once is how iron flow batteries make an economical, resilient renewable energy system possible.

ESS Iron Flow Technology Offers Attractive Returns

In this paper, ESS modeled the internal rate of return (IRR) for a stationary 50 MW / 400 MWh 8-hour storage project, hypothetically located at a node in the New York ISO which experiences frequent negative pricing. The model results compare the expected IRR of equivalent lithium-ion and iron flow battery projects across three scenarios, incorporating various assumptions about merchant and capacity operation on an annual basis.

The results are clear - iron flow technology can deliver very attractive returns in regions. Learn how iron flow batteries can offer attractive returns in "The Opportunity in Oversupply: Deploying Long-Duration Energy Storage to Capitalize on Negative Pricing" white paper. Then, contact usto discuss how iron flow technology can benefit your clean energy portfolio.

Iron flow batteries demonstrate the lowest climate and environmental footprint <_o3a_p>

This is why we're especially proud of the work we do at ESS to deploy iron flow battery technology which not only enables decarbonization of the grid, but which does so by leveraging a responsible supply chain with a low carbon footprint.   <_o3a_p>

ESS' long-duration energy storage systems are powered by earth abundant, non-toxic ingredients - iron, salt and water - and ideally complement renewable generation by providing up to 12 hours of storage. Containing one-third the embodied carbon emissions of lithium-ion batteries, ESS' systems leverage a predominantly domestic supply chain and use widely available materials, increasing flexibility and reducing impacts. <_o3a_p>

A study by researchers at University of California, Irvinefound that iron flow technology has the lowest lifecycle carbon footprint of any competing energy storage technology. Researchers put iron flow batteries head-to-head with vanadium- and zinc-based flow batteries, finding that iron flow to be the cleanest in six out of the eight environmental impact factors measured. Those factors included global warming potential, particulate matter pollution, freshwater pollution and more. <_o3a_p>

Today's actions will define tomorrow's impact <_o3a_p>

As energy storage deployments accelerate, decisions made today will have carbon implications for decades. Lithium-ion batteries typically require "augmentation," or, the replacement and/or addition of new cells partway through a project's operating life, to maintain full capacity. This means that not only is a lithium-ion system more carbon intensive today, it will require the addition of more carbon-intensive materials throughout its operational life. As utilities, project developers and other large energy users scale their energy storage infrastructure, they must consider the full environmental implications of those investments to minimize current and future impacts. <_o3a_p>

This Earth Day, we find ourselves at an important moment in the clean energy transition. As new clean energy technologies, including long-duration energy storage, come of age and grow from megawatt-hour to gigawatt-hour scale, we're building a system that can better use current renewable generation while laying the groundwork for the continued shift to wind and solar. It is an incredibly exciting time to be in the business of building the clean energy future and I am optimistic that we will meet the challenges ahead if we lay a sustainable foundation.  <_o3a_p>