The next big thing: Vanadium

Until recently, this metal was overlooked and underpriced. Today, vanadium is vitally needed – by both the renewable energy and the steel/construction sectors. Indeed, vanadium-flow batteries (VFBs), also called vanadium redox flow batteries, are being heralded as an answer to the “missing link” in clean energy production – lack of volume storage for the electricity generated by solar and wind power installations. Among their advantages, batteries made with vanadium:

• can meet the power demands of everything from a single home (kilowatt hour capacity) to a power grid (megawatt hour capacity);
• have a lifespan of 20 years or more (tens of thousands of cycles);
• can charge and discharge simultaneously;
• do not produce profuse amounts of ambient heat while charging; and
• can release massive amounts of electricity instantly – and repeatedly.

With a roughly 90% efficiency rating, the scaled-up version of VFBs – in multi-megawatt, boxcar sizes – can “stockpile” on a utility scale, the power from intermittent sources for use on the grid during periods of high demand at a moment’s notice.
What’s more, vanadium holds great promise as the supercharger of choice for the lithium-ion (Li-ion) batteries in electric vehicles – millions of which are expected to be on the road within the next decade. The lithium-vanadium-phosphate combination may be the best contender for the next generation of automotive batteries because of its ability to produce very high energy density and voltage. For the driver, this means the ability to travel a great distance on one charge, and enjoy mega torque and rapid recharging – all without excess engine heat. What’s more, lithium-vanadium-phosphate is cheaper than alternatives such as lithium-cobalt.
In construction, vanadium alloys are being used to strengthen structural steel to withstand seismic events. A small amount of vanadium adds reinforcement, toughness, and heat and corrosion resistance. In recognition of those properties, steel specifications could be raised in the rebuilding of Japan; however, it is also likely that other vulnerable geologic regions worldwide, such as the West Coast of the United States, could begin to specify stronger steel grades for their building and construction industries. China already did so last year, mandating higher-grade steel for all new construction projects. In addition, nations that are, literally, building up their infrastructure, such as Brazil and India, will add to the vanadium demand.
The price is already soaring. Until recently, vanadium was mined and sold in only three places on Earth: Russia, China, and South Africa. Now, one of those suppliers – China – is said to be hoarding vanadium for use in its own growing steel and battery industries. In fact, according to industry sources, China may need as much as 20,000 metric tons of vanadium for domestic production within the next two years.
In reaction, U.S. President Barack Obama has said that he would go through the World Trade Organization to address what he said was China’s limitation on rare earth exports.
And China is not the only one. Demand may soon exceed supply, as nations worldwide bet billions on vanadium as “the next big thing” to revolutionize the grid and to reduce dependence on fossil fuels.

The right place, at the right time

All of this comes as good news to American Vanadium Corporation, a five year old tier-1 metals exploration and development company based in Vancouver, BC, Canada, that owns the rights to North America’s first and only primary producer of vanadium – the Gibellini mine in Nevada, about 350 miles north of Las Vegas.
American Vanadium holds a 100% interest in the vanadium-rich Gibellini property – which covers about 3,397 acres in the aptly named Eureka County, Nevada.
Company President Bill Radvak says the mine – which is designed to be an open pit, heap leach operation – will provide both vanadium electrolyte for green energy applications and vanadium pentoxide for the steel industry. The mine will have the capacity to produce 14 million pounds of vanadium pentoxide, which is about half the total vanadium consumed in North America and about 5 percent of global consumption, according to Michael Hyslop, director of Corporate Development, American Vanadium.
Moreover, a feasibility study conducted on the property by AMEC E&C Services, Inc. (AMEC) of Sparks, Nevada, projects that American Vanadium could potentially become the lowest-cost primary vanadium producer in the world – with a strip ratio of 0.22 and a unit operating cost of US$4.10 per pound. “Because of the unique geology in Nevada, we can produce vanadium at very low expense,” Radvak told pv magazine.
The company picked up the rights to the Gibellini property in 2005 – before worldwide demand for vanadium had begun to rise.
“Historically,” Radvak says, “China never used vanadium in any real quantities until about 2000.” Now the company is in prime position to dominate the U.S. vanadium market.
“Vancouver is a hotbed of Canadian mining. It’s not unusual for Canadian companies to reach out all over the world for rights,” Radvak commented. “With that said, this metal is not on a critical supply list in the United States. In fact, the USA still does not have a rare earths policy. I would consider that to be a lack of foresight, because so much of infrastructure and telecommunications relies on rare earth supplies.
“But it’s a moot question anyway,” continued Radvak, “because the company largely comprises U.S. shareholders now – and our mission is to create the leading grid-scale energy storage business in the United States, in partnership with companies that already are in the battery business.” He added, “U.S. utilities have a mission to spend billions to deal with peak loads. They don’t need more substations or infrastructure; they need volume storage for electricity. This will be a critical industry for the United States in the coming years.” The Gibellini Project is expected to start vanadium production by 2013.
Worldwide, a handful of other small vanadium developers are also hard at work trying to commercialize their own discoveries. However, American Vanadium appears to have the early advantage and is expected to be the first to commercialize its increasingly strategic domestic resource, according to Toronto-based Byron Capital Market’s researcher Jon Hykawy, in an interview with The Gold Report.

A fledgling industry

In recognition of the potential of vanadium flow batteries to create a highly competitive position for the United States in the global energy marketplace, on August 2, the Department of Energy (DOE) announced that 19 transformative new projects will receive a total of US$43 million in funding from the Department’s Advanced Research Projects Agency-Energy (ARPA-E) to develop breakthrough energy storage technologies.
The institutions that are receiving funding are:

• the Palo Alto Research Center (US$4,018,960),
• Ford Motor Company (US$3,128,000),
• GE Global Research (US$3,128,285),
• the Oak Ridge National Laboratory (US$1,000,000),
• Utah State University (US$3,070,051),
• the Battelle Memorial Institute (US$600,054),
• the Pennsylvania State University (US$1,000,000),
• Washington University in St. Louis (US$2,000,000),
• Det Norske Veritas (US$2,030,962),
• the Southwest Research Institute (US$712,500),
• Robert Bosch LLC (US$3,100,000), and
• Eaton Corporation (US$2,481,588).

In addition, funded in part by the Energy Storage System Program of the DOE through the National Energy Technology Laboratory (US$3,500,000), Painesville Municipal Power, in Painesville, Ohio, is conducting a Vanadium Redox Battery Demonstration Project, using an eight megawatt hour redox flow battery to demonstrate the benefits of energy storage at a 32 MW coal-fired facility.
In a speech at a “Winning the Future” forum in Cleveland in February 2011, U.S. President Barack Obama was among the first to tout the green-energy applications of this project – “a next-generation energy storage system” being funded with a DOE loan guarantee and built in the State of Ohio.
Referring to the company providing the battery for this pilot project, Ashlawn Energy, he said: “It’s a company that provides multi-megawatt energy storage solutions using – and I have no idea what this is – vanadium redox fuel cells. That’s one of the coolest things I’ve ever said out loud.” Starting in 2009, a strong collaborative team worked on the Painesville project – headed up by Alexandria, Virginia-based Ashlawn Energy, LLC, a leading redox flow battery designer and manufacturer, and comprising:

• University of New South Wales, Sydney, Australia, a celebrated developer team of redox flow batteries chemistry and materials;
• Parma, Ohio-based GrafTech, the largest U.S. manufacturer of graphite plates for hydrogen fuel cells and vanadium flow batteries;
• Pacific Northwest National Laboratory (PNNL) in Richland, Washington, with extensive R&D experience in electrochemical energy storage, materials chemistry, and photochemistry;
• Beverly, Massachusetts-based Innoventures, a fuel cell stack and component supplier; and
• Concurrent Technologies Corporation of Johnston, Pennsylvania, a prototype test bed and engineering group.

The new vanadium flow battery project is expected to create 30 to 50 jobs nationwide; and 15 to 20 positions in northeast Ohio, alone. On November 15, 2011, a ribbon-cutting ceremony was held to commemorate the opening of the 12,000 square foot VanCharg energy storage system (proprietary name and design by Ashlawn Energy) final assembly facility in Painesville, Ohio.

Turning onions into energy

In California, what has been described by Bethesda, Maryland-based Prudent Energy as the “largest flow battery system in the world,” received permission on April 19 of this year from Southern California Edison to operate at Gills Onions, a major fresh-cut onion processor located in Oxnard.
In an exclusive interview with pv magazine, Jeff Pierson, Senior Vice President of Prudent Energy, said that his company’s proprietary Vanadium Redox Battery Energy Storage System (VRB-ESS) took “a little over six months to install,” and was financed by “strategic and venture capital investors in the United States, Europe, and Asia.” The 600 kilowatt system has been performing well,” says Pierson, “although it is too early to disclose specific results.” The VRB-ESS project has been designed to improve the efficiency of an existing advanced energy recovery system (AERS) located on Gills’ 14 acre property that turns daily onion waste into biogas, which in turn feeds into two 300 kilowatt fuel cells to produce ultra-clean heat and power.
The VRB-ESS will also provide the Gills facility with emergency backup power and reduce the company’s need to draw electricity from the grid when rates are highest. As a result, Gills Onions is expected to save hundreds of thousands of dollars each year in operating expenses.
The VRB-ESS provides clean power on demand for maximum periods of six hours – or 3.6 megawatt hours of capacity, equivalent to the high afternoon time of use (TOU) hours in Southern California Edison’s service area. In return for a share of the energy savings resulting from the project, Prudent Energy and its investors built, own, and will operate the VRB-ESS. Those energy savings are calculated as the avoided charges, costs, and fees that would otherwise be paid by Gills to the local utility. In the past, these charges have been very high, given the facility’s energy-intensive, around-the-clock operations.
“We are extremely pleased to host a VRB system at Gills as an expansion of our advanced energy recovery system,” said Steve Gill, the company’s president. “Energy storage has become an absolutely essential part of integrating renewables into the electricity grid reliably and efficiently, and Prudent Energy’s system does this very well. Prudent has also shown it will stand behind its product and share the financial risk of putting these projects into the field, so their commercial and environmental benefits can be realized as quickly as possible.” With a showcase installation in California, Prudent Energy now has “a robust pipeline of projects under development in North America, Europe, and Asia,” commented Pierson.
“We are involved in three main markets for grid-scale energy storage, all of which are growing,” Pierson explained. “The first is solar and wind power integration. The second is the ancillary power services market – using storage to provide an extremely fast and accurate response for grid operators, who must constantly manage voltage and frequency fluctuations. The third market is the industry end-user – on-site storage to help large electricity users cut their utility bills.” What about the competition that will quickly grow in vanadium-powered systems?
“At this point,” says Pierson, “we really don’t see ourselves competing against other storage vendors. Our technology has unique benefits to customers, but we are rooting for all storage companies who can get to market with a competitive product that solves a real commercial problem – and thus makes sense as a long-term investment. We probably are competing mostly now with companies selling power generators!” Pierson would not reveal Prudent Energy’s source of vanadium, or the price of recent purchases, saying, “We control this activity very closely.” Indeed, as competition starts to heat up, many companies and individual investors are getting in on the action – but quietly. Even über-investor Warren Buffett is rumored to have put some money into BYD Company Ltd., a Shenzhen, China-based auto and battery manufacturer that is developing lithium-phosphate-vanadium batteries for its next generation of fuel-efficient electric vehicles. Will Google and Facebook be next?