Summary of Key Points
2025 is a crucial year for the all-vanadium redox flow battery (RVFB) industry as it moves from being a concept to a reality: Policies have clearly defined the requirement for long-duration energy storage (over 4 hours), which is driving the commercialization of RVFBs; the industry's grid-connected capacity has exceeded 2 GWh, entering the gigawatt-hour market, although the growth rate has slowed down (24% compared to 600% in 2024). Leading companies are demonstrating their capabilities to reduce costs, with bid prices falling below 2 yuan/Wh for the first time, though they are still 4-5 times more expensive than lithium-ion batteries. However, the industry still faces challenges such as high initial costs, insufficient technical standardization, fierce competition, and a single profit model, as it transitions from a nascent stage to one of scaled growth.
I. Dual Drivers: Policy and Demand
The rise of RVFBs in 2025 is primarily due to policy support: The National Development and Reform Commission (NDRC) and the National Energy Administration have mandated that long-duration energy storage account for more than 30% of new energy storage by 2027, with a focus on promoting RVFBs. The Ministry of Industry and Information Technology has also expressed interest in developing low-cost vanadium-based RVFB equipment. This provides the industry with both a license to operate and an acceleration boost.
There is also a strong market demand: The International Energy Agency (IEA) states that to triple renewable energy installations by 2030, global energy storage capacity needs to increase sixfold. Since wind and solar power generation is unpredictable, long-duration storage is essential for storing electricity for later use, and RVFBs excel in this role due to their long lifespan, safety, and suitability for large-scale, long-term energy storage.
The achievements of 2025 are evident: 27 projects were connected to the grid nationwide, with a total capacity of 2.16 GWh (enough to power approximately 20,000 households for one day), representing a 24% increase from 2024. Additionally, the world's first 1 GWh-scale project was launched in Jimsar, Xinjiang, marking a shift from small-scale trials to large-scale deployment.
II. The Battle to Reduce Costs: From 2 Yuan/Wh to 1 Yuan/Wh
The biggest obstacle to the widespread adoption of RVFBs is their high cost. In 2024, the bid price for RVFBs was 2.1 yuan/Wh, while lithium-ion batteries were only 0.4 yuan/Wh, a five-fold difference. However, in 2025, there was a breakthrough: Dalian Rongke's bid price dropped to 1.958 yuan/Wh, the first time it has fallen below 2 yuan/Wh.
Cost reduction is mainly achieved through two strategies:
1. Improving Battery Stack Efficiency: The battery stack is the core component, and previous versions were large and complex, prone to liquid leakage. In 2025, companies focused on streamlining the design: Dalian Institute of Chemical Physics doubled the power density of their new battery stacks, reducing costs by 40%; Yifu Energy used laser welding instead of traditional stacking methods, cutting costs and the risk of leakage in half. This transformation has made the battery stacks more efficient and reliable.
2. Reducing the Cost of Electrolytes: Electrolytes account for half of the total cost. In 2025, production capacity increased by 62%, and utilization rates reached 82%, resulting in a 43% reduction in costs compared to 2021. New approaches such as electrolyte leasing (rental instead of purchase) have also lowered the initial investment barrier.
The cost per kilowatt-hour of energy stored has dropped to 0.33 yuan, narrowing the gap with lithium-ion batteries, but further efforts are needed to achieve parity.
III. Three Competitors with Different Approaches
There are three leading companies in the RVFB industry, each with unique strategies:
1. Dalian Rongke (Established Player): With the most extensive experience, Dalian Rongke has collaborated with Dalian Institute of Chemical Physics (led by Zhang Huamin, a pioneer in RVFB technology). They hold over 60% of the global market share and are working on a 500 MW vanadium energy storage project with Huaneng. They also explore hybrid storage using vanadium and sodium batteries. Although they have strong expertise, their market operations are somewhat limited.
2. Liu Liu Energy Storage Technology (Newcomer): Founded in 2022, this company has raised tens of millions of yuan from investors like CICC and Hillhouse Capital. Their advantage lies in a comprehensive value chain: they partner with Shandong Haihua for electrolyte production and Shandong Electric Power for power station construction. Their products have high power output (125 kW battery stacks), and they have secured an overseas order for 1.2 GWh in Australia. However, their experience with long-term projects is limited.
3. Xing Chen New Energy (Cross-Industry Player): Established in 2021, this company relies on Central South University to develop hybrid storage solutions combining RVFBs and lithium-ion batteries with AI for power trading. They have built a 300,000 cubic meter electrolyte production facility in Xinjiang and aim to reduce costs to 1 yuan/Wh by 2030. Their hybrid storage technology still requires extensive verification.
While each company has its strengths and weaknesses, it is uncertain which one will emerge as the leader, but all are competing for a share of the long-duration energy storage market.
IV. Challenges on the Road to Commercialization
Despite progress, the industry still faces several hurdles:
1. High Initial Costs: Even at 1.95 yuan/Wh, RVFBs are still 4-5 times more expensive than lithium-ion batteries. Investors are wary of high upfront investments and slow returns, though electrolyte leasing can help mitigate this issue.
2. Lack of Technical Standardization: Different manufacturers use varying battery stack designs and system integrations, leading to delays in project delivery, higher maintenance costs, and increased failure rates. RVFBs are currently mainly used in large-scale power stations and are not yet widely adopted by commercial and residential users.
3. Fierce Competition: Not only RVFBs but also other types of redox flow batteries (iron-chromium, zinc-iron) and compressed air energy storage technologies are competing for the long-duration storage market. Companies are all working to reduce costs; those that can first achieve prices below 1 yuan/Wh will gain a competitive advantage.
4. Single Profit Model: Current projects rely mainly on policy subsidies and capacity leasing for revenue, lacking diversified sources of income (such as power trading or ancillary services). This makes the industry vulnerable to changes in subsidy policies.
Conclusion
2025 marks a significant milestone for RVFBs, as they move beyond the initial stages of development. However, the road to widespread commercialization is still fraught with challenges. Once companies can overcome these issues—such as reducing costs, standardizing technology, and finding stable profit models—the industry will truly thrive. For consumers, this means more reliable and affordable green energy. After all, energy storage is essential for the widespread adoption of renewable energy, ensuring a sustainable future.
The spring of RVFBs may be near, but we must first endure the current challenges.