Developing Europe’s Premier Vanadium Project

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Vanadium is primarily used to produce high strength specialty steel alloys, with the steel industry accounting for approximately 90% of current vanadium consumption. However, expected demand growth is most pronounced for its use in Vanadium Redox Flow Battery (VRFB) technology for grid storage to complement renewable energy.

 

Vanadium is listed as a critical raw material by the European Union and is included in the United States Department of Interior’s 35 commodities regarded as critical to the economic and national security of the country.

 

Supply

The vast majority of vanadium mining is in South Africa, north-western China and eastern Russia, with greater than 90% of global reserves attributable to those regions. Vanadium-containing products are centralised around ferrovanadium (FeV) and Vanadium Pentoxide (V2O5). V2O5 represents the most common intermediate product with purities ranging from steelgrade of at least 86% up to battery grade of 99.8%.

 

The combined impact of Chinese environmental policy change and bans on imports of vanadium bearing waste slags has triggered a tightening of supply in ferrovanadium and V2O5.

 

Since 2014 global vanadium supply has dropped more than 10%.

Demand

Robust global steel production is expected to sustain traditional vanadium demand by 2.24% (compound annual growth rate) through to 2027. Steel demand is largely driven by the introduction in 2018 of revised tensile strength rebar products in China, which in 2017 represented approximately 42% of demand.

 

Demand for vanadium used in VRFB applications is expected to grow rapidly with global vanadium consumption required for VRFBs expected to grow from 2% currently to 20% of vanadium production by 2030. Approximately 15 tonnes of V2O5 is required to construct a 1.6MWh VRFB unit.

 

Battery Storage

In October 2018 the IPCC reported that 85% of energy production must come from renewable sources by 2050 to keep the temperature rise beneath 2 °C. They also state “While acknowledging the challenges... solar energy, wind energy and electricity storage technologies have substantially improved over the past few years (high confidence). These improvements signal a potential system transition in electricity generation”.

 

VRFB technology is favoured for grid storage because of long lifespan cycles and the ability of a VRFB storage unit to charge and discharge without appreciable loss of capacity. This long operating life complements renewable development projects and enables more favourable financing solutions. Further, the material is recyclable at the end of the battery life with little to no degradation, thereby making it a truly sustainable metal.

 

By 2024, roughly 45GW / 81GWh of energy storage worth ~$44bn, will be installed globally. Grid scale VRFBs have already been deployed to date in California, Washington, Hawaii, Singapore, and Japan. Rongke Power in Dalian province, China, is building an 800MWh VRFB, which will need about 7,000 tonnes of vanadium pentoxide. This will be the largest battery on the globe in terms of storage capacity.

See HERE for an infographic from the Visual Capitalist which shows an expected 60% CAGR on energy storage demand through 2020.

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