CPD Assignment_draft

NEW CONCEPT EVALUATION WITH PLANNING
& EXECUTION PROPOSALS
ENERGY STORAGE DEVICE
Prepared by: Anton Orlov, PM
Prepared for: Board of a Solar Energy Group
Date: April 27, 2015

Executive Summary
The aim of this report is to assess various energy storage technologies and to analyse latest
trends on the market of domestic energy consumption in UK, as well as to construct a business
plan to entry the market with a single concept to further support the growth of the company.
This report consists of two main parts. Part 1 presents assessment of potential energy storage
technologies, as well as a comparison of their advantages and disadvantages. In addition, this
part has an analysis of the energy consumption in UK. Gathered information helps to conclude
that the electricity consumption in all areas of the UK reduces, which can be explained by new
more efficient appliances. However, electricity bills continue to grow sufficiently fast, leading to
the conclusion that people should be very interested in technologies for energy storage, as a
mean of bills reduction.
Part 2 contains the eight-stage business plan for the development and subsequent launch of a
new product on the market. This plan covers all the main aspects of the new product
development process and the associated with them risks. The report provides a plan of the
interaction between the various departments of the company.
As a core technology for home energy storage device, it is proposed to use the flow battery.
However, the report does not specify the final subtype of the battery, thus leaving room for a
more detailed analysis to be conducted by R&D department to select the most advantageous
and profitable chemical combination. Flow battery technology better than others meets various
special requirements, such as: little degradation over thousands of charge cycles, long-time of
discharge, long cycle life, low maintenance and small footprint. However, the main advantage of
this technology is its cost. At the moment flow batteries are more than two times cheaper than
the most popular technology of lithium-ion batteries. Moreover, lithium-ion batteries have a
lifespan of no more than 5 years, while flow batteries guarantee 20 years of steady work and it
is not the limit.
Taking into account the company’s current good financial situation, the proposed step would be
to enter the new and fast growing market of energy storage devices, while it is still not very
competitive.
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Contents
1 Scope ......................................................................................................................................4
2 Part 1.......................................................................................................................................4
2.1 Background.......................................................................................................................4
2.2 Relevance to the company ................................................................................................4
2.3 Energy usage in UK ..........................................................................................................5
2.4 Types of energy storage..................................................................................................10
3 Part 2.....................................................................................................................................13
3.1 NPD process...................................................................................................................13
3.2 Stage 1 – Idea Generation ..............................................................................................14
3.3 Stage 2 – Idea Screening ................................................................................................15
3.4 Stage 3 – Idea Development and Testing........................................................................17
3.5 Stage 4 – Business Analysis ...........................................................................................19
3.6 Stage 5 – Beta Testing and Market Testing.....................................................................20
3.7 Stage 6 – Technical Implementation................................................................................20
3.8 Stage 7 – Commercialization...........................................................................................22
3.9 Stage 8 – Post Launch Review and New Product Pricing................................................22
4 Conclusions and Recommendations......................................................................................24
5 References ............................................................................................................................25
Appendix 1 – Product Design Specification (PDS)....................................................................28
Appendix 2 – Gantt chart and Department Involvement............................................................31
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1 Scope
This report contains the analysis of energy consumption in the domestic sector in UK and the
percentages used for various devices as well as evaluation of the latest technologies for the
energy storage. The aim of this report is to construct a business plan for the development and
realisation of the energy storage device based on technology more than others satisfying
specific requirements which will allow the company to enter new market and support its growth.
2 Part 1
2.1 Background
In the near future electric energy storage will be one of the most important directions in the
electrical industry. Technologies available now are already used in many areas, while emerging
storage technologies are expected to have a much better performance and be cost-effective.
Recent developments in the energy storage and power electronic technologies as well as
changes in the electricity market indicate about new and fast-growing market of electricity
storage.
A distinctive feature of the electricity market is the fact that the generation of electricity is
relatively fixed, while the actual demand is different during the day. As a consequence, there is
a need in the development of the technology that will store electrical energy for the later use
then it is really needed which in turn will greatly help to manage power consumption and
straighten peaks.
Already now it can be stated about the phenomenal growth of sales of solar PV, both at the
domestic market and utility-scale. This growth, in turn, motivates the business of energy storage
technologies, thereby complementing the puzzle of green future and the widespread use of
renewable energy.
2.2 Relevance to the company
Solar Energy Group specialises in the production, retail and installation of solar PV and taking
into account the company’s current high sales the next step would be to enter the new market of
energy storage devices. Such business expansion will allow offering customers a complete
package of services (solar PV + energy storage device), thus practically to eliminate the use of
electricity from the grid (Figure 1), which in turn is a very strong marketing tool. Since the
company is focused on the domestic market, respectively the energy storage device should
correspond to particular requirements such as:
• Little degradation over thousands of charge cycles
• Long-time of discharge (no less than 6 hours)
• Long cycle life (no less than 15 years)
• Low storage requirements
• Easy to install and use
• Maintenance-free
• Small footprint
Figure 1: Consumption reduction (Energy Storage Systems 2015)
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2.3 Energy usage in UK
This section illustrates a brief overview of the trends and some key drivers that have influenced
energy consumption within the domestic sector in the UK. At the same time, this section plays a
very important role and helps better understand market opportunities and drivers that will make
potential customer be interested in energy storage devices. Analysis is based on data from
DECC’s annual publications.
Since 2011 there was a steady decrease in energy consumption, whilst there has been an
increase of 11 per cent in the number of households and a 9 per cent increase in the population
in UK. In 2013 domestic consumption was 29 per cent of total UK final consumption of energy
products. Domestic use fell by 1.8 per cent in 2014 Q3 (Figure 2).
Figure 2: Final consumption of electricity 2011 – 2014 (DECC 2015a)
Figure 3 shows the change in total electricity consumption, as well as again it can be observed
that every region follows a similar decreasing trend.
Figure 3: Change in electricity consumption over time by region (DECC 2015b)
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Figure 4 illustrates final domestic consumption in 2013 by fuel type, whilst Figure 5 presents
average domestic electricity consumption per household and average gas consumption per gas
customer. The chart also illustrates temperature corrected electricity consumption. When
temperature is taken into account, the difference in average electricity consumption is minimal.
Figure 4: Domestic consumption by fuel (mtoe), UK 2013 (DECC 2015c)
Figure 5: Average domestic (unadjusted and temperature corrected) gas and electricity
consumption, UK 2008 - 2013 (DECC 2015d)
6

Figure 6 shows the total amount of electricity consumption by household domestic appliances
between 1970 and 2013. It is noticeable that in 2013, consumer electronics were the largest
consuming domestic appliances group, followed by wet appliances. Home computing also had a
steady growth and fell in consumption only between 2012 and 2013. Electricity consumption
from lighting and cold appliances fell significantly between 2000 and 2013.
Figure 6: Electricity consumption by household domestic appliance, by broad type, UK 1970 -
2013 (DECC 2015e)
Mean domestic electricity consumption per meter in Great Britain has decreased by 14.4 per
cent between 2005 and 2013. (DECC 2015f) There are a number of factors which may have
contributed to these reductions in consumption, including; weather conditions, energy efficiency
improvements11, such as increased levels of insulation, new boilers and more energy efficient
appliances; increased prices12; the recession; changes in the building stock; and household
composition (DECC 2015f). Figure 7 (see page 8) shows average domestic electricity
consumption per meter by local authority in 2013.
Improvements in energy efficiency have helped to reduce total domestic energy consumption in
the UK, both through improvements to the energy efficiency of appliances (such as
fridges/freezers, light bulbs, and so on) but also through improving the energy efficiency of
buildings through insulation and more energy efficient heating systems.
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Figure 7: Mean domestic electricity consumption per meter by local authority (DECC 2015g)
8

While the energy consumption in UK decreases, electricity bills continue to grow, as illustrated
in Figures 8 and 9. In 2014 the provisional average electricity bill across all payment types rose
by £15 compared with 2013, to £592. In 2014 the average provisional Economy 7 electricity bill
across all payment types rose by £25 compared with 2013, to £801.
Figure 8: Average annual domestic standard electricity bills by home and non-home supplier
based on consumption of 3,800 kWh/year (DECC 2015h)
Figure 9: Average annual domestic Economy 7 electricity bills by home and non-home supplier
based on consumption of 6,000 kWh/year (DECC 2015k)
All of this suggests that typical consumer should be quite interested in reduction of his bills even
though it will require an investment in both solar PV (or another renewable energy source) and
energy storage device. In the long run such system will not only help to save a significant
amount of money, but even will allow earn an income.
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2.4 Types of energy storage
While it is not possible to store energy in the form of electricity, it is possible to convert electrical
energy to another form that can be stored. The stored energy then can be converted back to
electricity when it is desired. There are a wide variety of possible forms in which the energy can
be stored. Common examples include (Figure 10):
• Batteries - a range of electrochemical storage solutions
• Flywheels - mechanical devices that harness rotational energy to deliver instantaneous
electricity
• Energy in the form of magnetic fields.
• Compressed Air Energy Storage - utilizing compressed air to create a potent energy
reserve
• Thermal - capturing heat and cold to create energy on demand
• Pumped Hydro-Power - creating large-scale reservoirs of energy with water (Energy
Storage Technologies 2015).
Figure 10: Different types of energy storage (personal collection)
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Figure 11: Comparison of four types of energy storage (personal collection)
Despite all the advantages of the technologies discussed above (Figure 11), they are not
suitable for the domestic market. Energy storage by means of flywheels could be a solution
(Figure 12). Dimensions of the existing models are well suited for installation at the basement or
garage. However, they have a very short time of discharge (from few seconds to several
minutes). This fact makes them ideal for use as an Uninterruptible power supplies (UPS), but
not a solution for domestic energy storage.
Figure 12: Pros and Cons of Flywheels (personal collection)
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As a result, there is only one energy storage type left – batteries. This technology is quite
mature and meets the initial requirements better than all. However, recently there are a lot of
concepts and existing prototypes that are cost-effective (low cost per per kilowatt-hour) enough
to compete with such technology as Pumped Hydro-Power energy storage. One of these
developments is the Molten Salt Battery (Figure 13 and 14). The advantages of this technology
are the potential low cost (inexpensive raw materials), high cycle life (liquid electrodes) as well
as the good energy and power density. But at the same time high operating temperatures of
400 °C (752 °F) to 700 °C (1,292 °F) lead to challenges of thermal management and safety,
which makes use of this technology also not unacceptable at domestic environment.
Figure 13: Molten Salt Battery (Fang 2015a)
Figure 14: Molten Salt Battery (Fang 2015b)
The remaining two types of batteries (Solid State and Flow) have characteristics that are close
enough to original requirements and could be used as an energy storage device for the
domestic market. The final decision will be illustrated in the next part of this report.
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3 Part 2
3.1 NPD process
The second part of this report provides an analysis of the main issues related to new product
development, as well as presents the eight-stage business plan (Figure 15) for the development
and subsequent commercialization of the product. Figure 16 shows different company’s
departments. Appendix 2 illustrates a Gantt chart with involvement of different departments at
various NPD stages.
Figure 15: NPD process (personal collection)
Figure 16: Company’s departments (personal collection)
Idea Generation
Idea Screening
Idea Development and Testing
Business Analysis
Beta Testing and Market Testing
Technical Implementation
Commercialization
Post Launch Review and New Product Pricing
Finance
Operations
Research and Development (R&D)
Marketing
Legal
Strategy
Logistics
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3.2 Stage 1 – Idea Generation
In the part 1 of this report have been already discussed the current trends on the energy market
in UK and a lot of energy storage technologies have been evaluated. However, Figure 17
presents a SWOT of the company as well as Figure 18 illustrates PESTEL analysis.
Figure 17: SWOT Analysis (personal collection)
Figure 18: PESTEL Analysis (personal collection)
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3.3 Stage 2 – Idea Screening
Part 1 of this report contains an evaluation of various technologies of energy storage. However,
despite all the benefits of a particular technology, all of them did not meet the specific
requirements to be met by a domestic energy storage device. Figure 19 illustrates the main
advantages and disadvantages of the three types of batteries, that currently are based on a
quite mature (Lead Acid and Lithium Ion) and new (Flow Battery) technology.
Figure 19: Battery technology comparison (personal collection)
In turn, Figure 20 shows that flow batteries could be the best solution. As a result, it is proposed
to enter the market of domestic energy storage with a device based on this technology.
Figure 20: Battery technology comparison (personal collection)
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Energy market is one of the largest in the world and such factors as rapid growth of population
in the world, increasing energy consumption and its unevenness during a day and a year,
makes energy storage market one of the most potential and rapidly growing. Figure 21
illustrates the forecasted growth of this market. The forecast is presented for the grid-scale
energy storage market, though it can be assumed that domestic market will also benefit from
the constant growth of investments in search for new and cheaper ways of energy storage
technologies.
Figure 21: Grid-scale energy storage market potential (Climatecrocks 2015)
Since Solar Energy Group is directly related to the solar energy, it is also important to note the
fast growing trends in solar PV deployment in the UK, as Figure 22 presents. Buyers of
company’s solar systems are the main potential clients, as the combination of solar PV + energy
storage device is the most beneficial for both the customer and for the company, as it will
significantly increase the company's sales and consequently support its growth.
Figure 22: Solar PV deployment in the UK, capacity in megawatt (Wikipedia 2015)
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3.4 Stage 3 – Idea Development and Testing
This stage of the new product development process will require the active participation of
several departments of the company. Engineers from the department of research and
development (R&D) in cooperation with specialists from the production department will have to
examine in more detail the currently existing types of chemical reactions on which flow batteries
are based. Their research should be directly related to the work of the legal department that
should search for existing patents and their possible applications. At this point search for a
patent in an international database provides a lot of different types of flow battery technology.
There is also a challenge associated with this technology. In the world there are several major
and best-known companies that are currently involved in the development of this type of battery
(Figure 23).
Figure 23: Flow battery manufactors (personal collection)
All of them have not yet entered the retail market and currently are engaged in private projects.
This, in turn, complicates obtaining from them the rights on intellectual property (IP), as they
possibly will try to keep their existing knowledge and experience related to this technology.
However, around the world regullarly appears news about opening new chemical reactions.
Therefore, in case of patent rights purchase failure, this will require additional active work and
investment in R&D department to search for a new combination of electrolytes. In event of
successful negotiations with the rightholders the financial department will have to estimate the
financial side of the project and propose an approximate retail price.
This estimated price will also allow professionals from the marketing department to start building
a successful advertising campaign. The marketing side of the project should certainly be deeply
considered, since the cost of the current company's products (solar PV) and a new energy
storage device is around several thousand pounds, which requires from people confidence that
these kind of poduct is good investment. One of the areas in which marketing department can
do the accent, is an environmental factor and the undoubted profit in the long term. Another
direction will be to offer customers a Full Pack, i.e. the solar PV system + energy storage device
(Figure 24, see page 18), allowing them to largely align and reduce the average consumption of
electricity per day, as shown in Figure 25 (see page 18). The previous customers could also
modernize their current systems with the same objective to reduce the cost of their electric bills.
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Figure 24: Solar PV + Battery System (Samsung 2015)
Figure 25: Electricity consumption reduction during the day (Rakuten 2015)
The product must meet various requirements. Figure 26 illustrates some of them, but that does
not mean that they should be exactly the same. R&D and production departments need to
assess if it is technically feasible to design and manufacture it, as well as to cooperate with the
marketing department to make product’s design more attractive. The more computer rendering
and rapid prototyping will be done at this stage, the less will be the cost of change in
subsequent stages.
Figure 26: Proposed product characteristics (personal collection)
One of the most important activities at this stage will be the close work of marketing and
financial departments on the analysis of the target customers. This is most likely to be people in
the age group from 30 to 60 years who have sufficient income and their own dwelling, because
the product requires a significant investment. Also it is necessary to conduct a survey on the
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topic if they are ready to install the energy storage device in their apartment or
basement/garage of their house. Also, it will be important to test the whole idea of domestic
energy storage, with a possible explanation of the technology and its benefits, as well as the
presentation of the proposed size of the product or a small prototype of the device. This
feedback will play a huge role in the future development of the final concept of the product.
3.5 Stage 4 – Business Analysis
The financial department at this stage must calculate all the possible costs and associated with
them risks, to determine the most effective and profitable course of the company’s development.
As already stated in the previous section, one of the most important issues is to obtain the right
to use an existing patent. This factor may largely affect the additional costs and will require
additional investment on the side, or company can use existing resources for independent
product launch. Other important financial aspects could be:
• Launch costs
• Registration/permits
• Expenditure up to first revenues
• Rental/Leasehold
• Advertising
• Distribution
• Corporate taxes
• Insurance policies
• Patent, licence, franchise fees, etc.
• Production facilities, machines, tools
• Operating and business equipment
• Vehicles
• Material store, goods store
Based on a survey of potential customers, as well as the analysis of the internal market and
points of sale of the product, it will be possible to draw conclusions about the approximate sales
volume and as a consequence, it will help to assess the profitability of company’s expansion.
In terms of financial benefit to the customer, it will be helpful to calculate several schemes o the
payback time, as well as how much the client could reduce his electricity bill. They could be as
follows:
1) Customer has already purchased the company’s solar PV system and wants now to
upgrade it with the energy storage device.
2) Customer is going to purchase a full pack (solar PV + energy storage device).
3) Customer is interested only in energy storage, and wants to charge the battery at night
(when electricity is cheaper) to use it then during day peaks.
In case of scheme 2, it is likely that the customer will use a Feed-in Tariff, i.e. he will be paid for
every generated kW of electricity, even if he will use it himself + for extra electricity (not uses)
he exports back to the grid. Taking into mind current rather low prices for solar PV systems it
could be assumed that it will take customer around 6-7 years to get his return on investment into
this system only by means of Feed-in Tariff. However, if to add all the benefits of the energy
storage device and calculate the reduction in electricity consumption during morning and
evening peaks, the payback time on the complete system should even be improved. The tariff
lifetime is 20 years, so customer will definitely receive profit in the long run. As a result, the
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decisive factor should be the price of the energy storage device, which should not exceed 5,000
pounds and to be no less than two times cheaper than the most common at the moment
technology of Li-Ion batteries.
3.6 Stage 5 – Beta Testing and Market Testing
After finishing the computer simulations it is necessary to release the first physical prototype
(Figure 27). This stage requires active participation from the R&D department that should use
their knowledge and experience to help to modify the product’s design if physical prototype will
fail tests. It is also important to conduct bench tests to various effects, such as mechanical,
climatic, thermal, electrical, electromagnetic and others. It is necessary to test the product for
strength, stability and transportability. Only after satisfactory performance in all tests, it will be
possible to conduct about the high reliability of the product. Also at this stage it will be
necessary to test the product in typical conditions, i.e. check the purchase process, delivery,
unpacking and installation of the product. To do this, it is best to conduct focus group interviews
with potential customers or to introduce a device at trade show. There is also an opportunity to
try to sell the product in the test market to determine the response of the buyers. At this stage, it
will be necessary to analyse customer’s feedback to make the final adjustments in the device
itself, as well as in the packaging.
Figure 27: Product computer model and physical prototype (Reflow 2015)
3.7 Stage 6 – Technical Implementation
This is one of the key stages of the new product development process where a lot of
departments should work at the same time. In particular the production department should plan
how to manufacture the product and marketing have to launch an active advertising program
and plan the distribution process.
The production department will have to provide a full product’s documentation, in particular the
technical data sheet, manual, MSDS sheets, well-formed 3D model of the device ready to send
to manufacture. It is also will be necessary to obtain or renew the of ISO 9001 certificate, as the
marketing department could use it as a strong point of the product. Quality of the product at the
moment is probably one of the main factors for the buyer when he purchases goods.
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Respectively, after the tests in the previous stages, a significant amount of time should be paid
on the quality of the goods and the duration of the possible. The longer warranty company will
make, the more confident will be the buyer about his purchase.
Before the product launch a plan of action in case of problems with the transport of goods or
suppliers should be created. It will be necessary to calculate the company's resources.
However, perhaps the greatest responsibility at this stage of the development process will lie on
the logistics department and negotiations with the suppliers.
All activities during the process of product development should be directed on the continuous
improvement of the quality and at the same time on the reduction of the final cost of the product.
In this case, a smooth release of a new product to market could be possible. The energy
storage device has quite complex design and consists of many different parts. Therefore a huge
role in the success will play a good selection of the suppliers. Since the work of the battery
depends on the reaction between the two substances and R&D department at the stage of
testing will determine the most suitable chemical combination, it will be necessary to analyse the
cost of raw materials and the most profitable locations for its acquisition. The production
department has to start the selection of the most favourable combinations of materials even
earlier, perhaps at the stage of initial testing. This will allow coming to this stage of the product
development with the existing information about trends in the market of raw materials and
knowledge of possible high-priority suppliers.
Figure 28 illustrates different participation of suppliers in the design process: from a simple
consultation to full responsibility.
Figure 28: Various supplier responsibility (Petersen 2005)
There are several difficulties in supplier selection process:
• How to select the best time for finding?
• How to know that this provider is the best and company should work with him?
• How to know that the supplier will be responsible and faithful and the whole chain will not
collapse?
There is also another aspect that should be considered. Manufacture of batteries is always
associated with the chemical aspect, which makes their production in the UK quite a complex
task because of the high taxes on possible dirty works. Therefore, the option of the device
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production in Asia, in particular countries such as China or India should be considered. This
means a lot of work has to be done by a logistics department to find the most effective solution
of how to deliver product to UK by means of ships, planes, trains or trucks (Figure 29).
Figure 29: Logistics (College of Warehousing 2005)
Logistics plays a key role in a situation where goods are manufactured in one part of the world
and sold in another. Any problems in the system can lead to delays in time, which affects the
availability of goods and thus may negatively affect the client. Logistics must also be in touch
with marketing, R&D and operation department at an earlier stages to have information about
the approximate dimensions of the packaged device, as well as about the planned distribution
points. The first consignment has to be sent to a warehouse in the UK at the end of this stage.
As a warehouse company can use its current buildings or evaluate nearby warehouses if the
proposed volumes will be great.
3.8 Stage 7 – Commercialization
At this stage the product is to be released on the market, which means its first sales. Technical
support should constantly monitor the progress of sales and send all the information to the
finance department for further analysis and comparison with the planned volumes. It will
important to find as much as possible to points for distribution at the potential market and fill the
shelves with company’s goods. Another important step will be to update the advertising
campaign, in order to maintain the appearance of the product and make potential customers
remember the product.
3.9 Stage 8 – Post Launch Review and New Product Pricing
Post Launch analysis is crucial, because product may simply fail, if no actions will be
undertaken. Company must constantly monitor performance of the new product, thereby to
handle with a huge amount of information. At this stage, it will be necessary to analyse
customers’ reaction to the product, their satisfaction by operation of the device and company’s
service.
At this stage financial department should provide a value analysis (internal and external) and
assess the current demand, sales and profits. Is it planned figures or not? If not, where was the
mistake, in the wrong assessment at the planning stage or unforeseen circumstances in the
market at the moment? It will be important to recalculate new demand and profit, taking into
account the current market situation and its further growth. In addition, it will necessary to
assess the satisfaction of middlemen and suppliers.
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The marketing department must also make their own calculations and report on the compliance
of their expected reaction of buyers with the real one. A marketing strategy should go up with
the latest changes in the market.
As the market of energy storage is still quite young, by the time of product’s launch there should
appear new competitors with similar products. In-depth analysis of alternative technologies will
be required. The presence of competitors in the market can both improve sales and have a
negative impact on them, so monitoring of competitors should be done on the regular basis.
In the end, it is necessary to analyse the impact of the new device on the entire product portfolio
and after new proposed volumes and profits will be calculated, it is necessary to reconsider the
price of the product with the possibility to lower it.
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4 Conclusions and Recommendations
The main objective of this report was to analyse the current situation on the market of energy
storage in UK and to construct a business plan to develop and enter the domestic market with
an energy storage device. Considering various factors, device should be based on the
technology of flow battery. This technology is better than the others meets the special
requirements for the domestic device. In particular, flow batteries have small footprint,
environmentally friendly, have long discharge time and most importantly – price is more than
twice lower than the most currently common lithium-ion technology. This report does not specify
the final subtype of the battery, thus leaving room for a more detailed analysis to be conducted
by R&D department to select the most advantageous and profitable chemical combination.
Domestic energy storage market is quite young, but very fast growing, so given the real scope
of the company and related marketing opportunities of product promotion, it is proposed to enter
the market in the near future, while market still has low competition.
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5 References
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national_electricity_and_gas_consumption_summary_report_2013.pdf [Accessed 21 Mar.
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Appendix 1 – Product Design Specification (PDS)
1. Product Description
Energy storage device is based on the technology of Flow Battery. The main aim of this device
is to be charged at night when electricity is cheaper or via solar PV and any other renewable
energy sources and to bу discharged during morning and evening peaks to align and reduce the
average consumption of electricity.
2. Budget
Project budget needs to be calculated and assessed after series of negotiations various
departments, such as R&D, finance, marketing, operation etc. Different changes to the budget
have to be pre agreed by senior managers.
3. Target Market
a) Regions – UK, especially South West, South East and East of England.
b) Customer - People in the age group from 30 to 60 years who have sufficient income and their
own dwelling, because the product requires a significant investment.
c) Sex of customer – Both sexes could be interested in such a device.
4. Specification
Energy storage device should correspond to particular requirements such as:
• Little degradation over thousands of charge cycles
• Long-time of discharge (no less than 6 hours)
• Long cycle life (no less than 15 years)
• Low storage requirements
• Easy to install and use
• Maintenance-free
• Small footprint
5. Performance
Only approximate product characteristics are available at the moment:
Rated Voltage 48VDC
Rated Power 5kW
Rated Energy 30kWh
Rated Energy Efficiency 75%
Total Weight 240kg
Weight Without Electrolyte 90kg
Rated Time 6h
Maximum Power 20kW
Cycle Life 20000 Times
Storage Life Limitless
Working Temperature -30~60℃
Dimensions 830 L x 823 H x 400 W (mm)
28

6. Environment (during manufacture, storage and use)
It is necessary to conduct bench tests to various effects, such as mechanical, climatic, thermal,
electrical, electromagnetic and others. It is necessary to test the product for strength, stability
and transportability. Now it could only be concluded that working temperatures should have an
approximate range from -30 to 60 ℃.
7. Target product cost and other financial considerations
Based on a survey of potential customers, as well as the analysis of the internal market and
points of sale of the product, it will be possible to draw conclusions about the approximate sales
volume. Flow batteries are two times cheaper than the most popular technology of lithium-ion
batteries. All these factors will play a great role in product pricing.
8. Competition
In the world there are several major and best-known companies that are currently involved in
the development of flow batteries. However, market is new, it is expected a very fast growth of
competition.
9. Manufacture & Volumes
All the manufacturing aspects have to be considered by various departments, as well as
financial department should present calculated volumes of the product to be produced.
10. Quality and consistency
Quality standards and quality control have to be established both for the product and
manufacturing process.
11. Materials
The energy storage device has quite a complex design and consists of many different parts.
Since the work of the battery depends on the reaction between the two substances and R&D
department at the stage of testing will determine the most suitable chemical combination, it will
be necessary to analyse the cost of raw materials and the most profitable locations for its
acquisition. The production department has to start the selection of the most favourable
combinations of materials at early stages, perhaps at the stage of initial testing. This will allow
having enough information about trends on the market of raw materials and knowledge of
possible high-priority suppliers.
12. Standards & Regulations
After collaboration of several departments various standards to which the product should
require have to be identified.
13. Packaging and transportation
Logistics must be in touch with marketing, R&D and operation departments at an early stages of
development to have information about the approximate dimensions of the packaged device,
which will have to identify distribution and storage requirements.
29

14. Aesthetics and ergonomics
Aesthetics and ergonomics have to be assessed and finalised, as well as future initial market
tests with the physical prototype should help to receive a customer’s feedback for subsequent
changes in design.
15. Intellectual Property
There are a lot of existing patents on the Flow Battery technology. Therefore, new chemical
combination has to be found by R&D department or company should provide negotiations with
the potential right holders to purchase IP rights.
16. Market constraints
Domestic energy storage market is quite young, but very fast growing. There is still very low
competition. Energy storage device is proposed to have a lifespan of no less than 20 years, so
potential customer might purchase the system only once. It makes the company to increase its
customer base and always search for new potential buyers. Customer’s feedback on the first
manufactured devices have to be evaluated.
17. Company constraints
Product perfectly fits in with company image and entire product portfolio. A complete package of
solar PV + energy storage device should be very popular among customers.
30

Appendix 2 – Gantt chart and Department Involvement

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