‘Vertical integration to the dirt in the ground’: Invinity hunts flow battery supply chain, manufacturing advantage

The MoU sets out an intent for the pair to collaborate on manufacturing facilities through working capital investment and access to Xiamen C&D’s supply chain capabilities, furthered by support from the regional government of Xiamen.

Matt Harper is speaking with ESN Premium on the sidelines of RE+, a few months after Invinity’s announcement of a first China partnership, with Chinese battery materials and manufacturing specialist Guangxi United Energy Storage New Materials Technology Limited (UESNT).

In an interview at that time, Harper said the tie-in with UESNT would help achieve lower costs and better supply chain access for the manufacture of Invinity’s flow battery solution, Endurium.

The president said then that this would include producing systems for sale in other markets and eventually tackling the ultra-low-cost Chinese market itself.

The new partnership adds another layer to Invinity’s China partnership, Harper tells us at RE+. The deal pulls in the involvement of a consortium that includes existing partner UESNT, but now also Hong Kong-based International Resources Limited, which has a controlling interest in a vanadium mining operation in South Africa.

These mines have “historically been some of the world’s largest sources of vanadium,” Harper says, and the access to raw materials could transform Invinity’s strategy to encompass “vertical integration, all the way back to the dirt in the ground.”

As for C&D, Harper notes that Hithium, one of the fastest-rising among China’s vertically integrated lithium-ion (Li-ion) BESS suppliers, is also headquartered in Xiamen. The regional government is keen to explore whether it can achieve in vanadium flow batteries what has been achieved in the Li-ion BESS space with Hithium.

“C&D is going to help us scale up and industrialise the factory that we announced a few months ago, that is going to be manufacturing product for the rest of China, but that will ultimately be part of our global supply chain, based out of that part of China,” he says.

Harper notes that the move has some precedence within China, with domestic VRFB player Rongke Power supported by the governments of Dalian and Bolong, an industrial group also rooted in the province.

“This is a very prominent example of a very large existing industrial company in China taking an interest in this space. China is the most cost-competitive energy storage market in the world. If you look at the prices at which lithium projects have been successfully bid, prices are lower than anywhere else,” Harper says.

“For us to work alongside a partner in country that is confident they are going to have a cost-competitive product for that domestic market, while giving us access to the supply chain for those products for deployment of the rest of the world, is, in our view, the fastest possible way to get our costs way down.”

He argues that adding access to vanadium from South Africa, which will be brought into China as ore and processed into electrolyte, is a level of vertical integration comparable to that achieved for lithium batteries.

“That level of vertical integration is one of the reasons why China’s lithium battery industry has been so phenomenally successful. This will give us the chance to do exactly the same thing.”

Through the partnership, Invinity hopes to target “a couple of very large storage solicitations in China that would require product to be delivered starting in the latter half of next year,” along with opportunities in other countries like the UK’s Cap and Floor long-duration energy storage (LDES) solicitations, similar procurements in California and the Eastern US seaboard as well as in two provinces of Canada. All of those would require delivery from the first half of 2027.

However, as may be obvious to regular readers of Energy-Storage.news by now, flow batteries made in China in the next couple of years will likely find new foreign entity of concern (FEOC) rules on investment tax credit (ITC) eligibility and import tariffs are major barriers, if not outright prohibitive, to supplying the US market.

“That’s absolutely true. What we will be able to do is leverage some of the manufacturing technologies,” Harper says.

Invinity already has existing production facilities in Scotland, UK and in Canada.

“A lot of the work that we’re going to be doing is to rationalise the manufacturing of these devices. As we are learning how to do that through the capital backing of our partners in China, to build those factories over there, that will allow us here in North America to be essentially fast followers into those manufacturing techniques.”

“A lot of those programmes that we’re looking at here in North America for hundreds of megawatt-hours or more are looking for non-lithium [technologies], and they’re looking for delivery starting in late 2026, early 2027. That should give us the runway to go and do those based on what we’ve learned.”

During the show, a few days later (11 September), Invinity announced a £25 million (US$34 million) investment from, and partnership with, India-headquartered biofuels, LDES and urban mobility group Atri Energy Transition and Next Gen Mobility, a new energy tech IP company incorporated in the UK Channel Islands tax haven Guernsey.

Both companies agreed to purchase 12.5 million ordinary shares of Invinity stock each. As reported by our colleagues at Solar Power Portal, the flow battery company hopes the relationships will, among other things, enable better access to the growing stationary energy storage market in India and help it establish a cost advantage in manufacturing there in future.

Our interview took place two days ahead of the announcement, and with Invinity bound by market rules, Harper had been unable to mention or discuss the deal at the time. However, he hinted that a deal announcement in a new territory was imminent and said the company was excited by its prospects.

Another announcement that Harper could talk about was the launch of Endurium Enterprise, an adapted version of the utility-scale Endurium product, aimed at the commercial and industrial (C&I) market.

Announced the same day as the Xiamen C&D MoU, Matt Harper says Endurium Enterprise’s launch does not mark a pivot away from large-scale into distributed storage.

It could be an interesting new avenue to partner with companies offering C&I electricity users packaged turnkey solutions for managing their energy costs and power quality, though, he says. It does also mark Invinity’s return to a market segment Harper says it had “neglected for three to five years”.

“Where we are today with our products, if you look at a cold storage warehouse in Southern California, you can install solar on the roof and have one of our batteries absorb that energy and dispatch it 24/7, and you can be materially cheaper as a total cost of energy, than you would be if you were doing either storage alone or solar alone,” Harper says.

“Solar costs have supported that paradigm for a while but I think where storage costs are, especially for longer duration, high cycle, low levelised cost technologies, that paradigm is going to start to become a lot more important.”