Vanadium flow batteries are an important building block in the new clean energy landscape that we expect to emerge as governments around the world seek to reduce carbon emissions over the next decade. Known also as redox flow batteries, vanadium flow batteries store electricity in electrolytes rather than the electrode materials of conventional batteries.
Although invented in Australia in the 1980s, vanadium flow batteries are coming to the fore as a solution to the energy storage needs of the global renewables market. While many investors are focused on the clean energy generation capacity of this new economy, they are ignoring the opportunity that also exists in the storage of that energy.
Consider this: solar and wind farms can generate electricity, but what happens when the sun doesn’t shine and the wind does not blow? Bigger consumers of power, like hospitals, factories, schools and small communities need access to electricity on a 24 hour basis. Vanadium flow batteries are big batteries, that can store the energy they need.
Work continues to be done on the development of even bigger batteries – the Rongke Power project in China is aiming to bring online a vanadium battery that is capable of holding 800 MW hours of electricity.
Demand for vanadium batteries is picking up
We have already seen that companies in this space, like Invinity Energy Systems (LSE:IES), are experiencing considerable order flow and are popular with investors. Invinity just recently announced a vanadium electrolyte supply joint venture with Bushveld Minerals which will see Invinity providing electrolyte rental services to customers in the power sector.
This illustrates another important factor when it comes to vanadium’s credentials in next generation electricity storage: vanadium batteries can be recycled, with the vanadium itself being reprocessed for future use. That means miners can lease their vanadium rather than simply sell it downstream.
The growth numbers for the vanadium battery market also look impressive. The flow battery market was valued at $187m in 2017 but is expected to reach $946m by 2023 alone, representing a CAGR of 32.7%.
Vanadium is also used in steel production, and historically, vanadium prices have fluctuated a great deal as steel consumption has grown or ebbed. Establishing more consistent supply networks for vanadium is going to be critical in the years ahead as we see the roll out of this technology.