Trump card for decarbonization strategies for factories and industrial facilities using BESS flow batteries

The combination of BESS (Battery Energy Storage System) and flow batteries is attracting attention as an innovative technology that simultaneously realizes decarbonization of the manufacturing industry and reduction of power costs. In particular, at Japanese factories developing business in Thailand and Southeast Asia, it is expected that the payback period will be drastically shortened towards 2030 by combining it with strong renewable energy policy support from the government. There is a high possibility that the superiority of long life and high safety demonstrated by Sumitomo Electric Industries in 50 projects around the world and the Thai government's 10,000 MW BESS introduction plan will fundamentally change the power strategy of the manufacturing industry.

Basic technology and innovative features of BESS flow batteries

Basic Structure and Operating Principles of BESS Systems

BESS is a system for storing and releasing electric power in connection with a power system, and flow batteries, which are its core technology, circulate two types of electrolytes with a pump to perform charging/discharging by redox reactions. This technology, whose basic principles were proposed by NASA in 1974, is being put into practical use mainly with vanadium redox flow batteries (VRFB).

Technical components of flow batteries

The system configuration consists of a cell stack which is the core of the electrochemical reaction, an electrolyte tank for storing the active material solution, a pump/piping system for circulation, and an ion exchange membrane for separating the positive and negative electrode electrolytes. Due to this structure,Scalability to independently design power (MW) and capacity (MWh)It has been realized.

Safety advantages in industrial applications

The biggest feature of flow batteries is safety. Since it uses a non-flammable aqueous solution and operates at room temperature, the risk of fire is extremely low, and thermal runaway does not occur. Furthermore, a cycle life of 10,000 times or more and a practical life of 20 years or more have been achieved, and there is almost no electrolyte deterioration, and maintainability is good.

A decisive differentiator from other energy storage technologies

Performance comparison with lithium-ion batteries

In important technology comparisons in manufacturing industry implementation studies, flow batteries show an overwhelming advantage in specific applications. Compared to lithium-ion batteries, although the energy density is as low as 20-80 Wh/kg, the cycle life is 2-4 times 10,000 to 20,000 times.

Competitive advantage in long-time discharge characteristics

Long-time discharge characteristicsFlow batteries are the biggest competitive advantage. While lithium-ion batteries are suitable for short-time use of about 1-4 hours, flow batteries demonstrate their true value by storing electricity for a long time of 4-8 hours or more. This characteristic is a decisive differentiator in factory nighttime power supply, peak shift support, and fluctuating absorption of renewable energy.

Safety advantages in factory facilities

From a safety perspective, this is a particularly important consideration in the manufacturing industry. In contrast to the fire risk of lithium-ion batteries, the fire risk of flow batteries is extremely low due to the use of non-flammable aqueous solutions. This is a practical advantage directly linked to reduced insurance costs and reduced safety management load at factory locations.

Rapidly growing global market and key player trends

The global market for flow batteries is entering a period of rapid expansion. According to the latest forecast by Grand View Research, it will grow at an average annual growth rate of 22.8% from 490 million dollars in 2024 to 1.68 billion dollars in 2030. In particular, the Asia-Pacific region has a market share of 47.7%, with China, Japan, and Australia leading the way.

At major Japanese manufacturers,Sumitomo Electric Industries has the world's biggest track recordI'm proud of it. It has a track record of implementation in 50 projects, 52 MW, and over 190 MWh worldwide, and is being deployed in 7 countries. The new RF battery, which is scheduled to be announced in 2025, will achieve a 30-year lifespan, and transportation and construction costs will be drastically reduced with a container-type system.

Toshiba's SCiB™ (lithium titanium batteries) have received high praise in industrial applications, achieving conversion efficiency of 98.5% and charge/discharge efficiency of 95% or more. It also has the world's largest track record of 40 mW/20 MWh for Tohoku Electric Power.

Overseas, China's Rongke Power has begun operating the world's largest 100mW/400MWH VRFB, and occupies 60% of the global market share. Canada's VRB Energy differentiates itself with a lifespan of 25 years or more and technology that is 100% recyclable.

Proven implementation effects and success stories in the manufacturing industry

Clear ROI realization cases have been accumulated in implementation cases at factories and industrial facilities. At Jan De Nul in Belgium, the Invinity VRFB 800 kWh system was integrated with 578 kW solar power, and self-consumption optimization and CO2 reduction were realized during a test period of 4 years.

Within Japan, following the world's largest 15 mW/60 MWh system (2015) in Hokkaido, the latest 17 mW/51 MWh (2022) system is in operation. Monetization through participation in the electricity trading market has also been realized in Kashiwazaki City's 1 mW/8 MWh (continuous for 8 hours) system.

In Singapore, the largest 200MW/200MWH BESS in Southeast Asia is scheduled to be operated in the Jurong Island industrial district, and will be responsible for stabilizing power and supporting renewable energy integration for industrial facilities. These examples areLong-time power storage demand of 8 hours or moreIt has been demonstrated that a flow battery is the optimal solution.

Huge growth opportunities for the Thai and Southeast Asian markets

According to the Thai Government's Power Development Plan (PDP 2024-2037)10,000 MW BESS capacityThey have set an ambitious goal. In the plan to raise the renewable energy ratio from 36% to 51%, it is expected to be a power storage system that absorbs variability of 24,412 MW of solar power and 5,345 MW of wind power.

As of 2024, 24 BESS integration projects have been approved, reaching a total capacity of 994 MW. Southeast Asia's largest BESS project (45 mW/136.24 MWh) has also started operation, and regional technology demonstration is accelerating.

Government support measures have also been enhanced. BOI investment promotion provides an 8-year corporate tax exemption for high-density battery manufacturing, and the FIT system provides a 25-year fixed purchase system for solar+BESS. The direct PPA system introduced in 2024 made it possible for companies to procure 2,000 MW directly from renewable energy operators.

According to the trend of Japanese companies, Hitachi Energy has built the largest private sector microgrid of 214 MW at the Saha Industrial Park and established a Thai deployment pattern for Japanese companies. Toyota companies are also promoting a BESS conversion demonstration project for EV batteries.

Economic analysis and investment criteria for implementation studies

In the economic evaluation of introducing flow batteries, TCO (total cost of ownership) advantage over 20 years of long-term operation is key. According to the latest cost analysis, the system cost is 49,000-62,000 yen/kWh, but the annual cost is drastically reduced due to long-life characteristics.

Basic ROI calculation scenariosThen, we assume 20 years of operation with a basic case of 60,000 yen/kWh and an optimistic case of 80,000 yen/kWh. While lithium-ion batteries require replacement after 10-15 years, flow batteries can be operated for 20 years or more, and significant cost advantages are created when replacement costs are taken into account.

As an advantage in terms of operation, electrolyte management and pump maintenance are necessary, but since there is no risk of thermal runaway like lithium-ion batteries, insurance costs are reduced. Also, opportunities for monetization through participation in the electricity trading market are also increasing.

A minimum of 1 MW or more is recommended on an implementation scale. This is because participation in various power markets through direct grid connection is possible, and profit opportunities in the capacity market and adjustment power market can be maximized.

Strategies for utilizing a full subsidy system and policy support

In Japan, the government has established an active support system. A maximum 30% subsidy of equipment costs was received from the Ministry of Economy, Trade and Industry's large-scale BESS subsidy, and in fiscal 2022, 13 billion yen was fully allocated in a short period of time. Target requirements are at least 1 MW, direct grid connection, and ability to participate in various markets.

NEDO has invested 151 billion yen into next-generation battery development, and is providing 100% subsidies for the first stage in the international demonstration project, and generous subsidies for 1/2 of large enterprises and 2/3 of small and medium-sized enterprises and ventures even after the second stage.

In terms of the tax system, investment tax credits, green investment incentives, and research and development tax systems can be applied, and the total implementation cost reduction effect is significant.

Strong support measures are also being developed in Thailand. Electric vehicles and storage battery manufacturing are supported by the BEV 3.5 policy (2024-2027), and loans of 820 million dollars have also been implemented from ADB. By utilizing the benefits of BOI investment promotion, local expansion of Japanese companies can also be advantageously promoted.

Future prospects for achieving carbon neutrality and technological innovation

The degree of environmental contribution is extremely high. According to IEA analysis, 60% of global CO2 reduction will be related to storage batteries by 2030, of which 20% will be directly reduced (EV, solar+electricity storage) and 40% will be responsible for indirect reduction (promotion of electrification, integration of renewable energy).

Flow batteries are positioned as an important basic technology in achieving Japan's 2030 46% reduction target and 2050 carbon neutrality. According to McKinsey analysis, 500 mtCO2e can be reduced by 2030, and an economic effect of an average cost reduction of 34 dollars/tCO2e is also expected.

In the direction of technological innovation, the development of vanadium replacement materials is accelerating. AIST has demonstrated twice the power capacity of vanadium with organic flow batteries, and is pursuing lower costs with iron-based flow batteries without resource restrictions.

In the 2030 technology roadmap, the goals are to reduce costs by 40%, put non-vanadium into practical use, and realize smart batteries fully integrated with AI. According to the US Department of Energy's forecast, it is possible to achieve 0.052 dollars/kWh (66% reduction) in 2030 from the current 0.160 dollars/kWh.

As a core technology for manufacturing decarbonization strategies

BESS flow batteries have a decisive competitive advantage as a strategic technology that simultaneously realizes decarbonization of the manufacturing industry and reduction of power costs. The characteristics of long time power storage, high safety, and long life provide an optimal solution for power demand of 8 hours or more in factories and industrial facilities.

In business development in Thailand and Southeast Asia, the payback period will be drastically shortened by utilizing the government's aggressive renewable energy policy and abundant subsidy systems. By combining the technological superiority of Japanese companies with local partnerships, it is possible to establish positions in regional markets.

Towards 2030, continuous technological innovation is expected as a key technology for achieving carbon neutrality, and in particular, market expansion is clearly seen as an essential technology for system stabilization and renewable energy integration. For management in the manufacturing industry, introducing a flow battery BESS can be said to be a strategic investment that balances decarbonization strategies and strengthening business competitiveness.

Main source links

Technical information and manufacturer materials

• Sumitomo Electric Redox Flow Batteries
• What is AIST redox flow battery?
• US Department of Energy Flow Battery Technology Strategy Assessment

Market analysis and statistical data

• Grand View Research Flow Battery Market Report
• MarketsAndMarkets flow battery market analysis
• IEA batteries and a safe energy transition

Thailand/Southeast Asia Market Information

• Asian Insiders Thailand's BESS Demand and Targets
• Watson Farley & Williams Thailand Renewable Energy Incentives
• Energy-Storage.News Southeast Asia's largest BESS

Policy and subsidy information

• Gore Street Capital promotes BESS investment in Japan
• NEDO International Demonstration on Decarbonization and Energy Transition
• McKinsey Japan's Path to Achieving Carbon Neutrality

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