Bushveld rolls out vanadium electrolyte rental scheme

Bushveld Minerals, a major source of vanadium, has set up a rental scheme for the key vanadium-based ingredient in large industrial-application batteries for power utilities and businesses.

Bushveld, which is traded on London’s Alternative Investment Market (AIM) and plans to list on the JSE in 2019, is evolving a complex and all-encompassing vanadium mining and supply strategy.

This includes providing vanadium to the steel industry and building a presence in the increasingly important energy-storage or battery market, targeting power-generating companies that need a way to save electricity from renewable sources to supply it on demand, Bushveld CEO Fortune Mojapelo has said.

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With the cost of vanadium in a vanadium redox flow battery (VRFB), which are large stationary storage devices, making up between a third and a half of the cost of the battery, Bushveld regards the ability to rent out vanadium electrolyte component as a way to make the technology competitive with other storage solutions, including lithium ion batteries.

At prevailing vanadium prices, the vanadium electrolyte makes up 35% of the cost of a vanadium battery.

Bushveld is building a vanadium electrolyte plant for $10m in East London as part of its battery strategy.

On Monday, Bushveld through its 84% held Bushveld Energy subsidiary agreed a deal with California-based Avalon Battery Corporation to roll out this rental strategy.

Sandbar Solar and Electric, based in Santa Cruz, California, which has removed itself from the state’s electricity grid, is renting its vanadium electrolytes.

“The upfront cost of high-quality energy storage batteries like Avalon’s has kept some of our customers from making the investment. Renting electrolyte makes energy storage truly economical,” said Sandbar CEO Scott Laskey. The batteries stored renewable energy for when it was needed, he said.

Analyst John Meyer of SP Angel, a broker to Bushveld, said this was an important agreement for the deployment of vanadium batteries.

“This agreement now enables power utilities to use a rental structure to fund the contained vanadium in VRFBs. This should make VRFBs more competitive compared with lithium-ion installations and enable the roll-out of significant numbers of new VRFBs for grid installation,” Meyer said.

Eskom wants to deploy 1,400 megawatt hours of battery storage capacity by 2022.

At an Eskom test site, Bushveld and US-based UniEnergy Technologies have a VRFB in a 20-foot container that can store 450 kilowatt hours. It contains an estimated $100,000 or nearly R1.5m worth of vanadium.

seccombea@bdfm.co.za