The reach of the recently signed $740-billion Inflation Reduction Act is broad, but without question its biggest impact will be on the energy sector. Nearly half of the bill’s funds, $369 billion, will go toward efforts to improve energy security and help slow the effects of climate change.

Many of the proposed strategies focus on supporting U.S. manufacturing and assisting      corporations in the shift to cleaner sources of energy. They include extending and modifying existing energy tax credits, creating new credits that will advance clean energy technologies, and adopting a methane emissions reduction program. The bill funds key programs that are estimated to reduce greenhouse gas emissions by 40% by 2030. A recent Bank of America report estimated that it will save corporations $84 billion on decarbonization efforts.

This certainly isn’t an overnight effort, but it’s a good step toward building more sustainable businesses, particularly when it comes to manufacturing and the supply chain. Most manufacturing facilities are using energy from coal and natural gas. They have a grid connection that comes from a centralized power plant, and are agnostic as to what’s going on behind the meter. With an acceleration toward sustainable sources of power instead, energy independence is visible on the horizon.

Creating Energy Security

You don’t have to convince supply chain professionals that the future is green, because the demand for cleaner energy is already here. It’s manifesting itself through the shift away from centralized models of power, and toward a more distributed model. For businesses, the benefits of this shift are twofold: They’re gaining more control of the sources of energy they utilize, and they’re becoming less reliant on the traditional, aging grid, which has become more prone to brownouts and possible blackouts in the face of extreme weather.

Of course, while power sources such as solar and wind are renewable, they’re not always available. Solar energy systems can only charge while the sun is shining, and wind turbines aren’t generating power when the air is still. As we move away from the traditional grid, it’s important that energy providers focus on building safe, effective and reliable energy storage systems, so that businesses can power crucial facilities — such as data centers and distribution centers — even when their power systems don’t charge for long periods of time. These storage systems will also be necessary for improving the efficiency of the electrical distribution grid, reducing power surges and balancing the load over time.

Building Up Reserves

In preparation for this increased focus on clean energy, battery manufacturers need to start thinking about the types of systems needed to manage excess reserves. More than 35 gigawatts of new energy storage solutions are predicted to be deployed by 2025. 

Although lithium is often considered to be the predominate chemistry for these storage systems, much of the supply is being used by the electric vehicle market, both for consumer vehicles and warehouse vehicles such as forklifts. Lithium batteries also face challenges running over longer durations of time. While they can be discharged longer than an hour or two, they do so at a significantly lower power rating – meaning businesses must overbuy power capacity to achieve higher power, long-duration energy. That’s why a variety of advanced battery chemistries will be needed to meet the demand for energy storage.

Vanadium can be the answer to this challenge. It’s particularly well suited for long-duration energy storage, largely because these batteries provide independent control over power and energy. Vanadium flow batteries also have a near-infinite cycle life (they can function 30-40 years without the electrolyte losing energy storage capacity), are manufactured primarily from domestic sources, and are recyclable at end of life. With such a long lifespan, these battery systems could offer sustainable energy storage technology for powering entire warehouses and distribution centers.

Whether we’re powering the clean energy revolution with lithium or vanadium batteries, being prepared to store this energy is a process, so we need to start creating solutions now. The Inflation Reduction Act is a catalyst, encouraging and incentivizing demonstration projects and other regulatory improvements that will allow flow battery technologies to become more widely used. We must use this opportunity to meet the supply chain’s needs, offering long-duration energy storage for renewable sources that will make net-zero emission goals a reality.

Scott Childers is vice president, essential power with Stryten Energy.