Vanadium redox flow batteries (VRFBs) are regarded as a frontrunner technology for meeting the growing demand in the energy storage sector, says Bushveld Energy CEO Mikhail Nikomarov.

Energy head, who spoke during a webinar on energy storage this month, noted that data by US-based multiservice professional firm Navigant shows that VRFB demand is expected to increase to over 18 000 MWh by 2027.

However, in view of market researcher BMI Research’s suggested 25% market share, Nikomarov notes that this could increase to over 27 500 MWh by 2027.

If these forecasts hold true, 82 000 t of vanadium will be needed just for VRFBs, he says. Taking the BMI forecast into account, this could increase to over 96 000 t.

“This is significant demand, and actually presents us with an upside,” he says.

Nikomarov says VRFBs offer clear advantages, both technically and financially, which “sets it apart in large-scale stationary applications”.

Despite vanadium’s limited share in current markets, the demand for vanadium – which offers future opportunities in consumer and mobile energy storage – remains underwritten by the steel market.

Existing demand from the steel and chemicals markets, Nikomarov says, implies a vanadium demand compound annual growth rate (CAGR) of 2.5% from 2017 to 2027.

The high dependence of VRFB on vanadium may increase this demand CAGR to 8.4%, he adds.

Supporting this growth is the industry’s optimism surrounding VRFBs.

n the battery technology’s favour, he highlights, is the evolution of energy storage cases that are “actually what a vanadium battery does” – being operational for longer periods and serving multiple purposes from one battery, as well a reduction in cost and consolidation.

The technology has Chinese political support, which is leading to greater VRFB deployment in Asia, compared with other regions.

Other advantages include an internal rate of return of between 2% and 22% and flexibility in its uses, as well as a movement to long-duration storage.

Compared with lithium-ion batteries, which Nikomarov notes are much stronger for shorter-duration applications, VRFB growth will be seen in large-scale uses, such as utility-scale energy storage over the next decade, especially in view of the need for transmission, distribution and generation capacity.

Lithium-ion batteries, on the other hand, are more commonly used in power markets, where frequency control is remunerated and monetised.

“It’s important to [keep in mind] that, within this kind of framework, it’s not really exclusive. There [are many] areas in between where you could use either technology from a technical, commercial or hybrid perspective,” Nikomarov states.

Additionally, he highlights, those who require long duration, such as utilities, will comprise about 90% of the market, which is favourable to the growth and increased use of VRFBs.

Shorter-duration storage, which is an established market, is what VRFB has historically been used for, but it is not growing as fast as some of the other sectors, and will not be such a large market, Nikomarov says.

Further, despite initial start-up costs being a bit more expensive, he believes that, in the case of VRFBs, end-users have the potential to get greater capitalisation.

“It brings the cost of the battery down and it brings it down to something that is below lithium. And, in some cases, [this decrease in cost is significant].”

In terms of pricing and costing, Nikomarov refers to data from Navigant, which forecasts that cost decreases for lithium-ion are expected to slow, whereas the same degree of slowdown cannot be applied to VRFBs.

“Costs are expected to come down for all technologies, owing to scale, completion and lower transactions,” he says, adding that vanadium, which is used in both the cathode and the anode of a VRFB, will further reduce the cost of the battery technology.

“In summation, we see an extremely exciting sector in vanadium. If you look at steel, and the current application it allows, there’s a CAGR of about 2.5%. Once we start looking into some of the scenarios for vanadium battery adoption, that number increases,” Nikomarov enthuses, adding that, combined, both the vanadium and steel markets can expect to see a growth of over 10% over the next eight years.

Bushveld Minerals CEO Fortune Mojapelo, meanwhile, says the primary vanadium producer has articulated an ambition to grow its production platform to more than 10 000 t/y of vanadium in the medium term, which will principally be driven by its subsidiary, Bushveld Vametco.

Of this target, 5 000 t/y will come from Vametco, where the producer is aiming to further increase its production capacity.

Bushveld, which is also the parent company of Bushveld Energy, continues to look at further targeted brownfield opportunities, which it believes will see the company grow to beyond the 5 000 t/y of vanadium envisaged for Vametco.

“We see portfolio diversification through the supply of electrolyte for VRFBs for energy storage and particularly some of the activities. We are confident that the stage is set to really unlock the opportunity for downstream integration through Bushveld Energy in the energy storage sector,” Mojapelo comments.

Meanwhile, Bushveld looks forward to completing the commissioning and development of a VRFB battery, with a peak of over 120 kWh, for State-owned power utility Eskom’s research facility.

The battery is expected to be commissioned during the last quarter of this year.

The producer is also working with the Industrial Development Corporation on an electrolyte production facility located in the East London Industrial Development Zone.