Min Tang: 0:00

Our electrolyte is 60% water and the electrolyte is taking 40 to 80% of the total cost of the battery. No one want to ship water around the world. So as long as there is trigger demand in local country, we can start battery assembling very easily in that country. And that will help every country to achieve its energy, independency and to improve their energy security.

Tom Raftery: 0:34

That one line reframes storage. As more than a grid technology, it becomes an energy security and industrial strategy question. Good morning, good afternoon, or good evening, wherever you are in the world. This is Climate Confident Stories and Strategies That Cut Emissions episode 279, and I'm your host, Tom Raftery. My guest today is Min Tang, Director of International Business at Rongke Power, one of the world's leading vanadium flow battery companies. We talk about why long duration storage is becoming critical as renewables scale, how flow batteries compare with lithium, and why safety, blackstart capability, lifetime cost, and local supply chains may matter just as much as headline battery price. So I started by asking Min to explain what vanadium flow batteries actually are and why they matter now. Min, welcome to the podcast. Would you like to introduce yourself?

Min Tang: 1:40

Thank you. Thank you very much, Tom, for having me here. My name's Min and I represent RKP, the world's largest Vanadium flow battery manufacturer. I'm in charge of the international business. I'm leading the global expansion of this technology right now, and I proudly to say that RKP, we are the largest manufacturer of Vanadium Flow Battery, and also we are the leading innovator in this technology.

Tom Raftery: 2:04

And for people who might be unaware, Min, can you give us a 101 on vanadium flow batteries? What are they? How are they different from lithium ion batteries, for example, which most people are well familiar with at this point.

Min Tang: 2:20

Well, well, it's not 101. It's a very basic introduction of us that we are doing on daily basis. First of all, vanadium flow battery is a emerging technology, so it's okay that the people do doesn't know about this technology. Vanadium flow battery actually originate from Australia. Professor Maria invent this technology back in 1980s. So it has been developed for more than 40 years, and now it's commercial ready compared to mainstream batteries like lithium batteries, vanadium flow battery do have some unique specifications and there's some facts that make it different from other battery technologies. So first, this battery is based on water based electrolytes, so that make it super safe with no risk of thermal runaway or fire or any explosion. And secondly, this battery is designed to last for more than 25 years with 100% of initial capacity. So that means this battery can run up to more than 20,000 cycles without any degradation. And we have project, a commercial project that's up and running for more than 14 years to prove this. So we are not talking about some theoretical number in lab. We are talking about real world application with more than 25 years of life with 100% of capacity retention. So this is a battery, very suitable to be built at the power system infrastructure. And the last this battery has decoupled design of power units and the capacity units. So this battery with longer duration, the CapEx will be cheaper per kilowatt hour because just like, a car, when we want a car to run more mileage, we just need to add more gasoline in the tank. We do not need to buy a new engine. So that apply the same to this battery with longer duration, the CapEx will be cheaper. Combining together all of those three facts will contribute to the lower level as cost of storage. and the lower level as cost of storage will help us to use more affordable and more reliable renewable power supply.

Tom Raftery: 4:33

And just when you say that the batteries can last for 20,000 cycles, how does that compare to lithium ion batteries, for example? Because, I think some lithium ion batteries are between five and 10,000. Is that fair?

Min Tang: 4:47

Yes, it's fair. And for lithium batteries, when we do apple to apple comparison, we need to know that lithium battery, all the cycle numbers, they are tested under certain temperature in a lab environment. And when we say we have 20,000 cycles that mean we are saying that this battery can run more than 20,000 cycles in most temperature range and in most environments. So, if we compare to lithium battery, we can say we have no cycle number limit.

Tom Raftery: 5:15

And again, just for clarification's sake, the vanadium flow batteries, because they're water based, they're typically lower energy density than lithium-ion batteries. So, and probably take up more land as well, or more space. So they're good for example, energy storage that's stationary. But you're not gonna be putting a vanadium flow battery into your EV.

Min Tang: 5:40

Yes, correct. We are not going to replace lithium battery. Actually we are not competing with lithium battery because we are a long duration energy storage technology that targeting as infrastructure sector. This battery cannot be used on EV, this battery cannot be used on cell phone, so we are not really competing with lithium battery in most sectors. I would like to correct you a little bit on the footprint part. Yes, we have lower energy density, but for footprint we are not necessarily bigger because for stationary battery stations, we need to consider safe distance as well. For lithium battery, there is safe distance required between containers and that safe distance will take much more space than the space actually taken by batteries. But for our battery, since it's water based, there's no safe distance required. This battery can be put back by back and it can be stacked. So for any project with more than 40 megawatt hours storage capacity, this battery, this technology will save some footprint compared to lithium batteries.

Tom Raftery: 6:45

Good to know. Thank you. And has long duration energy storage become more urgent recently than it was five, 10 years ago now?

Min Tang: 6:56

Yes, indeed. This is a very clear trend because right now I think just last week or something that IRENA just published a report saying that renewable plus storage can provide more affordable electricity to our grid and to our end user compared to traditional power source. So that will definitely make renewable concentration increase. And we are already seeing clear trend that most countries right now the renewable concentration are growing from 10% to 30%, and after passing 13%, it will become a different era because renewable are very fluctuating by nature on generation side. And that will create lot of challenge for grid operators. For long duration energy storage we are providing the resilience and also the effective load carrying capacity as required by the grid operators. For shorter durations for two hour duration, it may not provide the required resilience of grid operators, but for longer duration, definitely we can provide a higher effective load carrying capacity. In addition we see more and more distributed power supply use cases, for example, remote mining site and some area with very expensive grid connection right now. With long duration energy storage, they have another option that they can have the generation on site. Then plus the long duration energy storage. Then they can enjoy 24 hours of stable renewable power supply without grid access. And also this can replace the traditional diesel generators has been used in that area. So it could be cheaper option and also it help to reduce the carbon emission. All of this can be achieved only there is commercial grid, long duration energy storage technology.

Tom Raftery: 8:50

And for grid scale, the trend towards longer duration energy storage, is that coming from curtailment, grid congestion, reliability, something else? You know, the pressure is increasing for it. Where do you see that pressure coming from?

Min Tang: 9:08

I would say first they come from reliability. Curtailment is part of the reason, but not the majority because curtailment can also be reduced by shorter duration energy storage. Reliability that's the most pressure come from. And also our grid right now is facing, fluctuating from power generation side from power producers because most producers are becoming renewables and also from the load. So fluctuating on both side do require longer duration energy storage for a grid operators. And not to mention that we have one name critical infrastructures or critical applications that's require, much, much more stability from the grid than before. For example, AI data centres. They just need lots of electricity and they load varies as they are calculating our comments. That is increasing demand. And also beside AI data centres, we do see lots of traditional industry users trying to use longer duration energy storage to minimise their electricity bill. Because our electricity price right now is fluctuating, and the fluctuation is much greater than before. So by applying long, longer duration energy storage, they will be able to catch every minute of the price fluctuating and help them to minimise their electricity bill. And also for standalone base station, they can participate in the electricity market by doing arbitrage, by catching every minute of the price fluctuating.

Tom Raftery: 10:37

And what about geographically are you seeing differences in the requirement for storage in different energy markets?

Min Tang: 10:44

Yes, definitely. Geographical difference is quite big. For example, you cannot expect the same battery to be used in Saudi Arabia where they have the highest average temperature, and Canada, where they have probably much lower temperature range. So, there will be very different technical requirements for different use cases and also different renewable concentration. Also, the differences on power sources make different requirement on energy storage as well. For example in France they're mostly powered by nuclear, which is much more stable. So, their investment on long duration energy storage could be deferred. Their demand on longer duration will be less compared to Australia, where they're going to renewables with higher percentage, but with limited capability to build pumped hydro stations. So in Australia, they need alternative to nuclear and to pumped hydro which give vanadium flow batteries. That's almost the only option there. That may apply to some parts of Europe as well. For example, in Spain, grid resilience could be a big topic there. And also in Spain you have abundant solar. So in that area, I would say flow battery could be a very good option to improve the grid resilience and to improve the stability and to help the local power system to accept more renewables.

Tom Raftery: 12:10

Okay. Seeing, as you mentioned, Spain and grid resilience, how are vanadium flow batteries when it comes to black starting grids in case there's an a grid outage like we had last year?

Min Tang: 12:21

Well, actually, Vanadium Flow Battery is the first battery ever done grid scale black start experiment. No lithium battery has done that before. In June, 2024 there is a Vanadium Flow Battery station with 100 megawatt 400 megawatt hour scale located in China. Has done the grid a grid scale, black start experiments and witnessed by IEE and, many international and professional organisations. Vanadium flow battery this battery can overloading so it can charge or discharge over its rated power without any, safety concern. And also it will not create any damage to the battery itself if the overloading is only for short period of time. That will provide the resilience that grid operator need most during black start and also this station. during data operation can be used for peak shaving, for grid services, for ancillary services. So it have economical value during data operation. During emergency the power in there can be used to start ancillary system in coal-fired stations or gas stations. The battery can switch smoothly between grid following and grid forming mode. So that will help the local grid operators to operate the battery that more flexibly and also provide them with more stability. And this battery can generate its revenue to sustain itself during daily operation. Compared to lithium battery, this battery and also the capacity in this station does not change over 25 years. For grid operators, they can always see there is, for example, its initial capacity as 400 megawatt hour after 20 years, after 25 years, still have 400 megawatt hour. So the capacity does not degrade, and they always have enough resource for this grid level black start. And also for the for the data operation.

Tom Raftery: 14:19

Okay. It's a pity it doesn't work for mobile phones.'cause my mobile phone's at about 80% right now of where it was when where it was when I bought it..

Min Tang: 14:25

Well, sorry, it doesn't work for mobile phones and you definitely do not want to carry liquid in your mobile phone.

Tom Raftery: 14:32

True. True. You mentioned Canada there, and that brings me to the thought. I know lithium-ion batteries in cold environments tend to not perform as well, but if vanadium flow batteries are water-based or have a lot of water in them, does that mean that there's a chance that they freeze up in very cold weather? Or how do you manage that?

Min Tang: 14:56

Well, the electrolyte used in vanadium flow battery do have 60% water, so it could freeze if you put it in idle status for a very long time in minus 10 or minus 20 degrees. But during the real operation of the battery, there is efficiency loose, and that efficiency loose create heat and that will keep the electrolyte above zero. So we do have actual commercial project deployed in area even well in China, in northern eastern China, in area, even colder than Canada, where they have minus 35 winter. That project has been deployed and up and running for several years. There's no problem for getting frozen. That's, of course, we will provide a little bit extra heating in winter time. But in general, the energy efficiency still look very good and the performance of the battery does not impacted by the cold temperature. And also for hot temperature this battery has operating temperature range for environmental temperature from minus 40 to above 60. So, which is much bigger than lithium batteries because in hotter temperatures that lithium battery can easily get on fire but this battery because it's water, it's very hard to get on fire. You can let, you can never light up the electrolyte. And so even for hotter temperature, it's very hard to increase the temperature inside the battery because water do absorb more heat.

Tom Raftery: 16:20

And then what about the economics? Because is there like a crossover point where vanadium flow batteries become more economic and more favourable to instal rather than lithium ion?

Min Tang: 16:35

Well, first of all, I want to emphasise again that we are not competing with lithium battery. We are different technology targeting at different use cases. There are some certain use cases we do have advantage. For example, with longer duration, with anything with more than four hours duration this battery will be able to provide lower levelised cost of storage. So that means the electricity discharge from this battery will be cheaper than from other battery technologies. But of course, for project, the financial decision is always complicated. People have more considerations. For example, they need to look at IRR, they need to look at payback. Sometimes they need to look at ROI. So there would be different factors or different parameters investor are looking for. So they, that will influence the the investment decision. In general, this battery will provide lower levelised cost of storage. Any scenario with more than four hours duration. And also I would say in some certain areas, for example chemical parks, you definitely cannot have a potential fire risk in there. So that will give a unique advantage for this technology because this technology does not have any fire risk. So it can be deployed in oil, well, in gas field, in chemical parks. And this already has been commercially done. So that's scenarios for us. We're not going to compete with lithium. There will be different market for vanadium flow battery and lithium battery. And in some cases we are also creating hybrid system using lithium and vanadium flow battery to deliver the lower levelised cost of storage. Because for example, for EV charging the battery may not need to be fully charged and fully discharged every time when there's a car come here to charge. So for the multiple cycles flow battery can run more cycles, but when all the cars come in and occupy every charging post in that station, they require higher power, but for very short period of time, then that time lithium battery can be used to charge those cars but the lithium battery may be probably only run one cycle or 0.5 cycle per day. But vanadium flow battery can run multiple cycles per day. So combining together that will give longer service life to the lithium battery. And also in general, the levelised cost of storage for that station can be reduced and could be lower than or than just build the site by vanadium flow battery or lithium battery. A hybrid system could make more sense.

Tom Raftery: 19:33

And we've seen with lithium ion batteries that the cost of them has fallen 90, 95% in the last 15 years. Are we seeing similar price drops in the cost of vanadium flow batteries? You know, is there a learning curve that makes the cost go down? Is there economies of scale that make the price go down as well? How is price working over time for vanadium flow batteries?

Min Tang: 19:59

Well, from 2016 to 2026, within 10 years, the cost of vanadium flow battery has been reduced by more than 50%. The learning curve is very significant because we are still in early stage of commercialisation. We only have one giga factory, and we are the only one in the world. So we are expecting the cost to be further reduced with increase of the production scale and more, complete supply chain. Because right now the supply chain we can see we are commercial ready, but the supply chain part, we don't have too many suppliers. With the economy of scale, the cost will be reduced. And also this technology is very fastly evolving. We do see the energy what we call it current density in the stack, in our power units. Current density has been increased by more than 50% in the past 10 years. And we are further increasing the current density. So that will reduce the material we use in our power units that will help the cost reduction. And also the activeness of vanadium ion inside our electrolyte can be increased. And we do have our technology and we are also improving it, so we can use less vanadium in the electrode to store the same amount of electricity. So that will also help the cost reduction. So I would say the cost reduction will be driven by two forces. First technical improvements and future development Secondly economy of scale. We do see the cost will be reduced very fast in next 10 years. It has already been reduced by more than 50% in the past 10 years. And the next 10 years, the cost will be reduced further.

Tom Raftery: 21:39

Okay, And RKP has deployed systems in city centres, renewable integration sites, lots of other places that you've mentioned now. Which of those projects would you say best shows what vanadium flow batteries are capable of today?

Min Tang: 21:57

Well, for RKP, we have deployed more than 3.6 gigawatt hour of projects, so that's a lot. That covers almost all the use cases that we have identified But if I need to choose one project to say that's the best showcase, I will say that will be the concurrent station located in Dalian China. That concurrent station is 100 megawatt, 400 megawatt hour. That's the first vanadium flow battery station with more than 100 megawatts in scale. And also that's the first VFB station or first battery to have finished the grid scale black start. So that do have demonstrate this technology in scale and also that's serving as a trigger demand for the industrialisation of this technology. And also it provide lots of services to the grid and do prove its economical benefits and also proof the financial certainty of this technology.

Tom Raftery: 22:57

And that's, if I remember correctly, that Dalian battery is is a city centre site, correct?

Min Tang: 23:03

Yes. It's a city centre site. Within 500 metres, there's more than 10,000 household. Within 300 metres, there are two gas stations.

Tom Raftery: 23:11

Okay. Fair enough. Good. And if the batteries are capable of lasting 25 years, as you say, what does that change then in the financial model?

Min Tang: 23:22

Well, there are two things that's change in financial model. The first we have longer time to calculate the levelised cost of storage. We will have more electricity discharged from this battery during lifetime. So that means the electricity discharge from this battery will be cheaper. And secondly, the electrolyte using this battery actually has no life limit at all because it's the same chemical in anode and cathode so positive and negative electrolyte, they are actually having the same chemistry. So doesn't matter how many cycles it runs, the chemistry doesn't change. And there's no life limit on the electrolyte. So there's possibility for financial institute to treat the electrolyte as assets and they can lease it to the end user so they could reduce the CapEx of the battery even more, and improve the payback period of the entire project. So financially the long life will have two major advantage. First, cheaper electricity from the station. Secondly the CapEx may be further reduced and the payback period can be shortened.

Tom Raftery: 24:32

And for people who are unaware, vanadium flow batteries, do they use critical minerals? You know, are you using child labour in the likes of the Congo to mine, vanadium.

Min Tang: 24:47

Well, first of all 100% of the vanadium RKP is using right now is from recycled steel slag. So we are using 100% recycled material to help, to make our product more friendly to the environment because we are technology supposed to make our planet better. Also for vanadium, it's a very abundant resource in lots of countries in Australia, in Brazil, in South Africa, in Russia, in China, and even in crude oil in some countries. And vanadium is if I remember correctly, ranked 17 in abundancy in all elements on Earth And lithium is ranked 33rd. So that means there's more vanadium on this planet than lithium, and well if it is from energy, perspective, it could be considered as critical mineral, but it's abundant mineral. For the source of the vanadium. Normally right now vanadium is produced by steel makers and we can recycle vanadium from steel slag. And there are also lots of unmined vanadium resource existing in Australia, South Africa, Brazil, many countries, and I don't think there will be forced child labour in Australia.

Tom Raftery: 26:08

Fair enough. And what about end of life for the batteries then? What happens after that 25 years?

Min Tang: 26:12

After 25 years, the electrolyte can be reused directly. For the other parts of the battery, there's no hazardous waste. It's just a carbon material that's our electrode. And there will be plastic material that's our membrane and the frame of the stack. And there will be metal because we use copper to collect the current in the battery. So there will be copper, there will be sometimes there will be steel because the container shell will be steel. And also there will be some supporting structure as steel and there will be some pump that got retired from there. But no hazardous waste as well. So most likely 100% of the battery can be fully recycled and the electrolyte in the battery can be directly reused.

Tom Raftery: 26:56

And are there ways of reducing the upfront cost of vanadium flow batteries? You know, do you do like battery as a service kind of thing?

Min Tang: 27:06

Right now for RKP, we are battery manufacturer. We do not do battery as a service, but we have done electrolyte leasing working together with our financial partners. Our financial partners they do, see the value of vanadium and the vanadium is a public traded commodity, so they decide to hold vanadium in electrolyte inside our battery as a asset. And then that will reduce the CapEx of the battery by more than 50%. With longer duration, the greater the reduction because longer duration will use more electrolyte. That has been done in commercial project in both front of the metre and behind of the metre use cases. And as a result in both use cases, the financial performance of the project has been significantly improved. Internal rate of return has been improved by more than 2% in both use cases and also the payback period has been reduced. So we do see there will be innovative commercial models that will help the deployment of this battery and also help people to use more renewables and that will make our electricity from renewable more affordable.

Tom Raftery: 28:16

And you mentioned earlier the, I think it's called Woniushi Wind Project, which has been operating since 2012 with a hundred percent capacity retention after 13, 14 years. What lessons have come outta that project?

Min Tang: 28:32

Well, I would say the biggest lesson we learned from that project is we need to do standardisation. That project is one of the earliest project that we have deployed. Back then we don't have containerised solution. We have standard stack manufacturing in our factory, and then we do all the piping, all the wiring, all the connection on site. We thought it could be more flexible. But then we learn the lesson that standardisation is more important than flexibility on site because there will be thousands of piping connections and there will be lots of varying points and onsite quality control will be very challenging. So we do see some mistakes there. And we do see some errors and we have to spend more time and more effort to correct them afterwards. So after that project, we decide to move into fully containerised solution to have industrial scale FAT process, and to test every stack that leave our factory to ensure the reliability. Because after all for a battery system, for energy storage system, the weakest battery in that stream decide the performance of the entire stream. So, right now we think standardisation will be the key for commercialisation, and for the performance of the battery system.

Tom Raftery: 29:57

Makes sense. And what has been harder to scale? Is it battery technology, project economics, supply chain, something else entirely?

Min Tang: 30:08

I would say it's a combination of all of them, but the hardest part will be the supply chain. But luckily, we already have solved that problem because at the beginning, no one is producing this battery at scale. So it's super hard to find suppliers. Sometimes we are required to do the manufacturing of some parts we are not supposed to manufacture by ourself. But luckily we solved the problem by develop project in mega scale in hundreds of megawatt hour scale. So we have a trigger demand. So we start a really giga industrial scale production, and then we attract enough suppliers, so step by step and also we built our own electrolyte facility at right now is operating at 4.5 gigawatt hour production capacity per year. So then we have the supply chain established and then we can support more peers. For RKP right now we are also supporting other VFB manufacturers on electrolyte and some core components. So we want to see more peers and we are willing to share of established supply chain so that we hope that will make the scale up of this industry easier for everyone else. Then we can make this industry a better industry for everyone.

Tom Raftery: 31:22

And where do vanadium flow batteries fit best over the next decade? Would it be utility grids, industrial users, data centres, islands, remote grids, something else entirely?

Min Tang: 31:38

I would identify three top priority markets. First that will be utilities because this battery will provide the resilience, utilities, and the grid operators require. Secondly, I would say remote areas. For example, island, remote mining sites. Right now, they will have option as distributed power generation. They don't need to rely on grid. We can provide stable off grid options for them. And thirdly I would say AI data centres and the emerging energy consuming industries because this battery will definitely improve the power quality and also provide them with most economical solution for their power supply.

Tom Raftery: 32:23

And which markets are moving fastest today and why?

Min Tang: 32:27

Well, it's hard to say. All the market are moving very fast because we are in a transition period. Right now everything is under transition, so it's hard to say which one is moving the fastest. So, right now everything is moving very fast and we need to work in full speed to make sure we can keep up with the speed of the industry and of the customer.

Tom Raftery: 32:49

And if listeners stopped thinking of batteries as backup and started thinking of them as grid infrastructure, what would change?

Min Tang: 32:59

Well, I don't think anything will change because for our listeners and for end users, people just need stable electricity. They don't care where that electricity is provided. As long as it's clean, it's stable, it's affordable, people doesn't care. So it's our job to make sure people does not feel the transition, especially for the end customer. We do not want them to feel the pain of transition. There should be smooth and seamless transition and then we switch to clean, stable, and affordable electricity supply. So it's our job to make sure that happens. That's why we believe vanadium flow battery could be a accelerator for our net zero targets and also could be a accelerator for the electrification in many sectors.

Tom Raftery: 33:51

We're coming towards the end of the podcast now, Min, is there any question I have not asked that you wish I did or any aspect of this we haven't touched on that you think it's important for people to think about?

Min Tang: 34:02

Yes. There's one thing I want to mention. Vanadium flow battery, unlike lithium battery, is providing opportunity for every country in the world to develop its own supply chain. For lithium battery intensive supply chain support is required and you need to have lots of supporting suppliers to be located close by the lithium battery manufacturers. But for vanadium flow battery, this is a more tough battery. This is very similar to car manufacturing. You can have automakers in many countries as long as there's local demand because the shipping cost is very significant and that applies the same for our battery because our electrolyte is 60% water and the electrolyte is taking 40 to 80% of the total cost of the battery. No one want to ship water around the world. So as long as there is trigger demand in local country, we can start battery assembling very easily in that country. And also, as long as there's vanadium resource in that country, we can start the production of electrolyte in that country. So localisation is deep in the root of this technology and that will help every country to achieve its energy, independency and to improve their energy security. So this is a very unique technology. This give equal chance to lots of countries and also the supply chain is relatively not easy, but relatively easier to be localised and to be built in a country. So I would say this is a very important factor. I want our listener to know, and this is something we are also telling the same stories, the same ideas to lots of government agencies and lots of policy makers in the world.

Tom Raftery: 35:52

Fascinating. Great. Min, that's been really interesting. If people would like to know more about yourself or any of the things we discussed on the podcast today, where would you have me direct them?

Min Tang: 36:01

Well, my LinkedIn profile, if people search Ronke Power on LinkedIn, Ronke Power RKP or my name on LinkedIn it will show up. Please feel free to contact me via LinkedIn and we have our accompanying pro website. Feel free to drop a message.

Tom Raftery: 36:18

Great, I'll put those links in the show notes as well, so everyone will be able to get them Min. Thanks very much

Min Tang: 36:22

Thank you,

Tom Raftery: 36:24

Min. That's been really interesting. Thanks so much for coming in the podcast today.

Min Tang: 36:27

Thank you, Tom. Thank you for having me. It's really pleasure to talking to you.