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Flow batteries: Economics

Why vanadium nearly matches lithium at ten hours

What this tab covers Economics and financial structure: capital versus operating cost, levelised cost of storage, and how the asset earns money.

Vanadium flow costs roughly as much per kWh as lithium-ion at 10 hours but more at shorter durations, and DOE's 2030 LCOS projection is still three times its long-duration target. The supplier base outside China is financially fragile.

Capex versus opex

Mixed

Upfront cost is high: about USD 385/kWh for a 100 MW, 10-hour vanadium system in 2021. The electrolyte keeps its value at end of life, so some projects lease vanadium to cut upfront cost, and 30% of respondents in a DOE industry session named electrolytes among the most promising areas for cost cuts. Running costs come from pumps, stack overhauls (DOE assumes a 12-year stack life) and auxiliary power rather than whole-battery augmentation. Vanadium price swings feed directly into capex.14

Installed cost, 100 MW / 10 h (2021) USD 385/kWh1 Stack and pump life 12 years4

Levelised cost of storage

Mixed

DOE projects vanadium LCOS in 2030 of about USD 0.16/kWh (USD 160/MWh) at 100 MW and USD 0.15/kWh at 1,000 MW, against its target of USD 0.05/kWh for long-duration storage. For comparison, Lazard puts US standalone 4-hour lithium-ion LCOS at USD 210 to 292/MWh in its 2026 edition (USD 115 to 254/MWh in 2025, before US tariffs on Chinese cells bit), and PNNL estimated USD 100 to 110/MWh for compressed air and pumped hydro at 1,000 MW and 10 hours, the long-duration technologies flow batteries compete with.14920

Vanadium LCOS, 2030 projection USD 0.16/kWh (100 MW); 0.15/kWh (1,000 MW)4 DOE long-duration target USD 0.05/kWh4 US lithium-ion LCOS, 100 MW / 4 h (2026) USD 210-292/MWh (USD 115-254/MWh in 2025)920 CAES and pumped hydro LCOS, 1,000 MW / 10 h (2021 basis) USD 0.10 and 0.11/kWh1

Revenue stack and market participation

Mixed

Flow batteries suit daily energy shifting of 6 hours or more, capacity contracts and grid-forming support; Rongke's 175 MW / 700 MWh plant in Xinjiang, completed in 2024, is grid-forming. Short-duration arbitrage and frequency markets are dominated by cheaper lithium-ion. Dedicated long-duration tenders are the most reliable route to market: in India, NTPC Renewable Energy tendered a 16.7 MW / 100 MWh vanadium system at Khavda in Nov 2025 and awarded it to Delectrik Systems (with Bondada Engineering) by Jul 2026, and in Australia projects of 864 MWh to 1,200 MWh are in development.1213192122

NTPC REL Khavda vanadium project 16.7 MW / 100 MWh; tendered Nov 2025, awarded Jul 20261221 JENMI-Enerflow Australian vanadium project (cooperation agreement) 350 MW / 1,200 MWh22

Vanadium flow versus lithium-ion cost indicators149

IndicatorVanadium flowComparatorBasis
Installed cost, 100 MW / 10 hUSD 385/kWhUSD 356/kWh (LFP)US, 2021 (PNNL)
LCOSUSD 160/MWh (100 MW / 10 h)USD 210-292/MWh (lithium-ion, 100 MW / 4 h)DOE 2030 projection vs Lazard 2026
LCOS targetUSD 50/MWhUSD 100-110/MWh (CAES, pumped hydro, 1,000 MW / 10 h)DOE target vs PNNL 2021

Sources

  1. 2022 Grid Energy Storage Technology Cost and Performance Assessment (PNNL-33283), Executive Summary p. vii Pacific Northwest National Laboratory for US Department of Energy, 2022
  2. Technology Strategy Assessment: Flow Batteries (Energy Storage Grand Challenge), Table 2 p. 5 US Department of Energy, 2023
  3. Lazard's Levelized Cost of Energy+ (LCOE+), July 2026 (LCOS v11.0 key assumptions p. 38; LCOE v19.0 assumptions p. 28) Lazard, 2026
  4. Indian power utility invites bids for a 100 MWh vanadium redox flow battery (20 Nov 2025) ESS News (pv magazine), 2025
  5. Idemitsu plans 864 MWh vanadium flow battery at Australian coal mine site (22 Jul 2026) ESS News (pv magazine), 2026
  6. Rongke Power completes grid-forming 175MW/700MWh vanadium flow battery in China, world's largest Energy-Storage.news, 2024
  7. Lazard's Levelized Cost of Energy+ (LCOE+), June 2025 (LCOS v10.0 Appendix B p. 43) Lazard, 2025
  8. India's Delectrik wins 100MWh VRFB storage project (21 Jul 2026) Argus Media, 2026
  9. Australian 1.2 GWh vanadium flow battery project moves ahead with China's Enerflow as supplier (25 Nov 2025) ESS News (pv magazine), 2025