Are lower vanadium prices triggering a wave of giant new VRFB developments?
The notion that safer, longer-lasting vanadium redox flow batteries (VRFB) are better suited for large stationary storage than lithium-ion is well established.
Recently, the largest barrier to uptake has been cost.
At last year’s +$US30/lb prices for V2O5, it didn’t matter how good VRFB was. It just couldn’t compete with lithium-ion on price.
Vanadium batteries are not viable at V2O5 prices over $US10/lb “in any form”, says David Gillam of consultancy Mastermines, but prices below this should spark the battery sector into action.
“Batteries have the ability to soak large volumes of V205 from the supply chain and will be critical for the future,” Gillam told Stockhead last week.
“With pricing at current levels, we believe that [battery] projects on hold will restart and assist the recovery.”
Then look what happened. Check out this absolute behemoth:
HOT NEWS #Vanadium #Dalian City has just signed a syndicated loan agreement to fund the first stage of 200/800MWh #VRB. First stage of the project would be 100/400MWh. Construction has officially commenced and the first stage is expected to be completed by Mid 2020.
BIG !!! pic.twitter.com/BrsfktEbDN
— Mastermines (@VanadiumWorld) July 23, 2019
About 9.89 tonnes of V2O5 is used per MWh of storage.
See the ‘suburb-sized’ Dalian battery? It would use almost 8000 tonnes of V2O5 for a 800MWh installation. If the italics didn’t work for you, current global production is just 140,000t a year total.
We say total because about 90 per cent of production goes into the steel industry; and Dalian isn’t the only big VRFB in the works.
There are more than 100 operational vanadium redox flow battery installations globally, and this number is growing.
They are also getting bigger.
In the US, California has launched a four-year pilot project testing the performance of vanadium flow batteries in the commercial wholesale market.
The pilot will provide 2MW/8MWh of storage – enough to power 1000 homes for four hours. A successful outcome could lead to the development of grid-level vanadium storage on a large scale.
Producer Bushveld Energy, which reckons VFRB tech is a front-runner to meet South Africa’s growing need for energy storage, is preparing to tender for the massive 360MW/1440MwH battery energy storage systems (BESS) project.
Canadian company Cellcube Energy Storage Systems and Pangea Energy plan to build a grid-level 50MW/200MWh energy storage system in Port Augusta, South Australia.
Flow storage company RedT is deploying its first grid-scale project in the UK; a 50MW lithium-vanadium hybrid storage system in Oxford.
In case you missed it:
Vince Algar, managing director at advanced explorer Australian Vanadium attended the 10th International Flow Battery Forum, in Lyon, France earlier this month.
He says when prices skyrocketed last year, VRFB producers couldn’t afford the vanadium to put in their batteries.
“They all had a near death experience last year,” Algar told Stockhead.
“Now that the price has come off, they came to the conference aware that they needed to talk to producers to lock in future supply.
“They had lost a little bit of the arrogance they might’ve had a few years ago, thinking they could get cheap vanadium from anybody.”
Algar says the number of VRFB installation is increasing again after many of these companies went into a holding pattern last year.
That’s because the electrolyte can represent between 20 and 50 per cent of the total cost of the battery – even at today’s prices.
“I wouldn’t even want to contemplate what those costs were when the vanadium price was at its highest,” Algar says.
“Between $US8-$US12/lb is a good balance. Too low and you knock too many tonnes out of the market; too high and the battery guys become unviable.
“We are looking for that ‘Goldilocks’ price – something ‘just right’ where everyone can benefit.”
Algar says if battery producers can lease vanadium, or secure its supply at “reasonable” prices, then it makes for very low costs per kWh over the asset life compared to lithium-ion.
The important thing about the leasing model is that it is unaffected by fluctuating vanadium prices. And it allows the producer, battery maker, and financier all to benefit, says Algar.
“Those leasing deals are already starting to happen, and they are probably directly impacting the increasing rollout of flow batteries,” he says.
“It’s the tipping point we are trying to get to.”