October’s SoftBank-led investment in iron flow battery startup ESS represented an unusual event in 2019: a piece of good news for the flow battery sector. The $30 million cash injection was a rare sign that there may still be life in an energy storage technology class that had almost faded from view in recent months.

Leading players such as Sumitomo Electric and Dalian Rongke Power, the latter of which once boasted the world’s largest vanadium flow battery project, have gone silent. EnSync Energy Systems pivoted away from flow batteries last year and folded in March.

CellCube Energy Storage Systems has also run into problems this year. In October it advised shareholders that “each division is suffering from a lack of working capital” and added that management was “reviewing strategic alternatives focused on maximizing shareholder value.”

Even those companies still touting contract wins in 2019 have hardly set the world on fire. RedT Energy installed Australia’s largest commercial energy storage system, a 1-megawatt-hour system at Monash University, but more recently announced a merger with Avalon following reported losses.

Meanwhile, UniEnergy Technology’s sole deal-related press release this year was to celebrate the commissioning of a 7.5-kilowatt, 30-kilowatt-hour flow battery in Brussels.

Despite this, a smattering of players, including Avalon, Lockheed Martin and U.S. Vanadium, remain bullish. And Dan Finn-Foley, head of energy storage at Wood Mackenzie Power & Renewables, cautions against writing the sector off just yet.

“We haven't seen much activity from the flow battery space in terms of deployments or major announcements,” he acknowledged, “but there are key steps happening behind the scenes.”

Researchers advancing flow battery technology are either partnering with companies with large balance sheets or securing insurance to back up their claims of long system lifetimes and low degradation, he said.

“The next steps will be continued pilot programs and strategic targeting of favorable market niches, all critical stepping stones toward true commercialization,” Finn-Foley said.

Flow battery vendors could benefit from state-level 100 percent clean or renewable energy policies in the U.S., Finn-Foley noted, since it is remains unclear whether lithium-ion batteries alone can meet storage needs beyond durations of approximately eight hours.

Flow batteries are seen as ideal for large-scale, long-duration storage because they can store large amounts of energy using scalable tanks of relatively cheap electrolyte. The problem is that nobody seems to need this long-duration capacity just yet.

Finn-Foley said the biggest unknowns for the flow battery sector “are the timing of when these long-duration needs will emerge and how low vendors will be able to drive costs by then with few other opportunities to scale.”

This is emerging as a significant issue in 2019. While flow battery technology is waiting for prime time, its main competitor, lithium-ion, is already racing ahead on scale and cost-competitiveness thanks to the growth of the electric vehicle industry.

In March, QY Research Group predicted the global redox flow battery market would be worth $370 million by 2025, based on a roughly 14 percent compound annual growth rate (CAGR) from 2018.

For comparison, a May study by Prescient & Strategic Intelligence estimated the lithium-ion market would be worth close to $107 billion by 2024, with a CAGR of almost 22 percent.

Even ignoring the fact that the lithium-ion industry is on a quest to use lower-cost materials, it is hard to see how flow batteries will be able to compete on price against such a thoroughly commoditized rival.

The state of play was perhaps best summed up by Rebecca Kujawa, chief financial officer and executive vice president of finance at NextEra Energy, during an earnings call in October.

Asked by Pavel Molchanov, an analyst at Raymond James & Associates, whether NextEra had found any storage technologies other than lithium-ion that are worth commercializing, she said: “We always remain technology-agnostic.”

But she added: “What we continue to see, and what we are currently signing contracts for with our customers, is predominantly lithium-ion. Those producing lithium-ion batteries are investing in manufacturing scale, which is producing significant cost improvements."

Kujawa concluded: “In the middle part of the next decade, you're talking about a $5 to $7 per megawatt-hour adder to get to a nearly firm wind or solar resource, and that's a pretty attractive price. To beat that, you'd have to see a pretty big step change in where some of these other technologies are.”