‘Mega scale’ capacity could blow the lid off vanadium demand High Voltage: ‘Mega scale’ capacity could blow the lid off vanadium demand.
Reuben Adams, Jan 17 2023
Excerpt
Vanadium demand in batteries expected to grow ~10.6% a year between 2021 and 2050
New supply needed from 2029 as demand overtakes supply: WoodMac
“The development of vanadium redox flow batteries for mega scale energy storage is developing very quickly”: Richmond Vanadium Technology
Battery grade vanadium in short supply
Most of the current vanadium produced is as a by-product of magnetite or uranium processing, with a limited supply of battery grade material, says Richmond Vanadium Technology (ASX:RVT) managing director Shaun Ren.
“The vanadium industry is very concentrated. China supplies 70% of vanadium to the market, and the rest mostly comes from South Africa and Russia, with a small amount from Brazil,” he told Stockhead.
“Much of that is a product called ferrovanadium, which is used to strengthen steel.
“To purify ferrovanadium to battery grade vanadium is an additional cost. So, the production of battery grade material is just beginning right now.
“At the same time, the development of vanadium redox flow batteries for mega scale energy storage is developing very quickly.”
The largest VRFB development in the world, the Dalian/ Rongke Power energy storage system, was connected to the Chinese power grid in May 2022.
The energy system currently has a capacity of 100 MW/400 MWh, although a second phase of construction intends to increase its total capacity to 200 MW/800 MWh. And it could be just the start.
Take all projections with a pinch of salt
As Roskill’s steel alloys principal consultant Erik Sardain told us in 2021 – “It is early days” for the VRFB sector.
“Our base case is that by 2030, 10% of vanadium demand is going to come from batteries [up from ~1% currently],” he says.
“But if the tech develops, this estimate will be far too low; if it doesn’t take off, that estimate is far too high.”
One thing is clear — China will be the driver if the technology is to succeed.
“I strongly believe that the VRFB technology is going to come from China, or it is not going to happen,” Sardain says.
“If the Chinese demand take off the rest of the world will follow.”