Imergy’s Success in Vanadium Flow Batteries
With renewable energy sources such as wind and solar becoming more economically viable, the need for large-scale energy storage is expected to grow dramatically in the next 5 years. While storing energy doesn’t sound like a very sexy investment, the staggering growth forecasts by Lux Research for grid energy storage should draw the attention of any investor:
The above numbers show an average year-on-year growth of 169% with the total global market for energy storage to exceed $113 billion by 2017. Just to put this growth into perspective, if you were a small startup today managing to capture just 1% of the grid energy storage market, you would be realizing yearly revenues of about 20 million. If you were able to grow revenues at the same rate as the market grows, in just 3 years you would have revenues of $1.13 billion dollars still at just 1% of total market share. Imagine the revenue growth if you could also grow market share at the same time.
One potentially disruptive grid-scale energy storage solution is that of flow batteries. A flow battery is a type of rechargeable battery in which large tanks of chemicals are used to create chemical energy which is then converted to electricity. While more complicated than standard batteries, the advantages of flow batteries include flexible layout, long life cycle, quick response times, no harmful emissions, and in some cases low maintenance.
In a past article, we looked at a publicly traded company called American Vanadium (CVE:AVC) which is looking to mine vanadium in order to supply it for use in vanadium redox batteries, a type of flow battery that already has numerous successful installations. But the demand for vanadium has not yet been driven by use in batteries. According to an article by the BBC, the use of vanadium to harden steel accounts for about 90% of the current demand for the metal. One startup which is looking to use recycled vanadium to power their flow batteries is Imergy.
Founded in 2004, Silicon Valley based Imergy has taken in funding of just $15 million so far from the likes of Nokia, Draper Fisher Jurvetson, and New Enterprise Associates. In late 2013, the Company changed their name from Deeya Energy to Imergy which coincided with the introduction of a new management team to include Imergy’s current CEO, Bill Watkins, who was previously the CEO of Bridgelux (an LED startup sold to Toshiba) and Seagate (an $18 billion data storage company). During his time at Seagate, Mr. Watkins was named the “Forbes CEO of the Year” for 2008. Imergy has also been focused on developing their patent portfolio. In April of 2014, the Company received their 6th U.S. patent issued or allowed within the past 12 months at that time.
The Imergy Advantage
While the technology for vanadium batteries was invented in 1985, the batteries have been limited by two factors; the cost of vanadium and the fact that the electrolyte becomes unstable at 95 degrees Fahrenheit. Imergy has solved both these problems with their vanadium flow battery system. The unique chemistry of Imergy’s vanadium electrolyte used in their batteries allows it to remain stable up to 131 degrees Fahrenheit without the need for expensive cooling solutions. The same novel chemistry of this electrolyte allows the battery to use a much lower grade of vanadium, mainly recycled vanadium. Recycled vanadium can be extracted from iron ore waste, oil sludge or fly ash generated by coal-powered power plants.
Imergy is working with Flextronics who will help them design and manufacture a flow battery by 2015 that will store energy at less than $300 per kilowatt hour compared to lithium ion batteries which cost $1,200 per kilowatt hour. But Imergy is not just in design phase. In India alone, the Company has installed over 75 systems in the past five years with virtually no failures for clients include Airtel and American Tower. In an interview held with TowerXchange in May this year, Imergy executive Tom Tipple was quoted as saying that Imergy was expecting a “a 200 system order with a big Indian telecoms operator in the next month”.
With Imergy enjoying such a success in India, other emerging markets are soon to follow including pilots in various parts of Africa. Imergy has the backing of investors who have a great deal of capital, a seasoned management team that knows how to run and build businesses, and a patented technology that seems to be finally making vanadium flow batteries economically viable.
Are you paying too much in transaction fees to your broker? Check out a brokerage firm called Zacks Trade that's offering $1 trades on U.S. stocks and options for an entire year. After that, you'll pay just $3 a trade or a penny a share, whichever is greater. It's one of the cheapest brokers out there and we use them to trade stocks on over 90 foreign stock exchanges. Open an account today and get $1 trades for a year.