Developments in China's vanadium redox flow battery (VRFB) industry are expected by market participants to boost future vanadium demand.
China's aim to accelerate a transition to lower energy consumption and to stimulate demand for renewable energy and energy storage products during its 14th five-year economic plan for 2021-25 has prompted many companies to develop new VRFB projects.
Domestic energy firm VRB on 15 March announced a framework agreement to build a 100MW solar photovoltaic and 100MW/500MWh vanadium flow battery integrated power station in Xiangyang city in central China's Hubei province. The firm is also building several grid peaking plants with partners in multiple provinces.
Shanghai Electric has unveiled plans for a 100MW/400MWh VRFB project in Yancheng in east China's Jiangsu province. Rongke Power is on track to launch a 200MW/800MWh facility in Dalian in northwest China's Liaoning province this year.
Sichuan Xuteng Battery Energy in Panzhihua in southwest China's Sichuan province has signed an agreement with the local government to build a research and development industrial park for VRFB energy storage projects. Jiangxi Yinhui New Energy plans to build a new facility with output of 66,000 m³/yr for vanadium electrolyte in Yichun city in south China's Jiangxi province.
Yichun Jinkong has raised $1.5mn to finance a production project to demonstrate vanadium battery industrialisation.
VRFBs have a much larger energy storage capacity than lithium batteries. It is more effective for China's plans to achieve its target of peak carbon emissions by 2030 and carbon neutrality by 2060, according to market participants. China aims to install 120GW of new wind and solar power generation capacity in 2021.
Market participants estimate around 9.25t of vanadium pentoxide is used in each MWh of vanadium storage battery. China is expected to install around 30-60GWh of new energy storage capacity by 2030, corresponding to 28,000-56,000t of extra demand for vanadium pentoxide.
Vanadium accounts for 48pc of VRFB manufacturing costs. Vanadium pentoxide flake suppliers are selling ammonium polyorthovanadate or vanadium pentoxide powder to VRFB producers at prices above $5/lb because of firm production costs.
VRFBs have better economics than lithium-ion batteries when vanadium prices are at $5/lb. Argus today assessed the range for 98pc pentoxide flake at Yn105,500-107,000/t ex-works ($7.52-7.67/lb), unchanged from yesterday but down from Yn105,500-108,000/t ex-works on 11 March in response to a rise in spot availability and lower buying interest from alloy smelters with subdued demand from steel mills.
More and more attention has been paid to the application and industrialisation of VRFBs in the past two years. The world is forecast to build 1,000MWh of new VRFB capacity within a year, according to industry projections.
Steel still accounts for around 90pc of vanadium consumption. Of the remainder, 9pc is used in aerospace alloy and chemical catalysts, and 1pc goes into VRFBs.
VRFB technology allows varied oxidation states of dissolved vanadium in electrolytes to store or deliver electricity. Electrolytes are continuously fed from a tank system into the reaction cell. The battery can either store or discharge energy, depending on demand, which makes it attractive for static energy solutions, often coupled with renewable forms of energy generation.
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