Vanadium is a ductile, malleable, and corrosion-resistant transition metal with a wide range of uses, it can be found in automobiles, pipelines, jet engines, redox flow batteries, and as an alloy in steel production.
Currently 90% of global vanadium production is used as a strengthening alloy in the manufacturing of steel, with the grade of the steel proportional to its vanadium content. Countries in the Western Hemisphere typically use more vanadium per tonne of steel than emerging industrial economies including China and India. That being said, historically China has been the largest consumer of vanadium, with a 2017 market share of 42%. In 2007, approximately 85% of the 60,000 tonnes of vanadium produced was used as a steel additive. The remainder is largely used in catalysts (in the form of vanadium pentoxide, in the manufacturing of sulphuric acid, and ceramics). Vanadium is used in other alloys as well, including by the aerospace industry, which uses the metal to strengthen titanium.
Vanadium Redox Flow Batteries
The emerging market for Vanadium Redox Flow Batteries (VRFBs) shows tremendous potential. VRFBs are non-flammable, reusable over semi-infinite cycles and do not degrade for more than 20 years, rendering them far superior to traditional lithium-ion batteries for large grid power storage (think green energy).
The use of vanadium in battery cathodes results in higher voltages than traditional phosphate compounds — approximately 20% higher than its comparable counterparts. Batteries made with vanadium results in more power, and more importantly, are capable of storing more rechargeable energy with significantly less corruption over time: meaning a longer-lasting, more reliable rechargeable power source.
The energy generated by renewable sources such as wind and solar power is not constant over time and presents an excellent use case for VRFBs to store excess power generated during peak production periods, which can be utilized during seasons with low wind or sun exposure.
Vanadium Uses by Application
Demand Versus Supply
The rapid development and corresponding demand for electric cars and smartphone technology, as well as stronger steel production, have caused the value of vanadium to increase exponentially in the last ten years. The price of vanadium is one of the fastest-growing within the battery metals group (Li, Co, Ni, Cu). Since early 2017, it has climbed from under $5/lb to more than $29/lb. Vanadium’s price rose 72% in 2016, and in the first half of 2018 rose 55%, growing five-fold since November 2015. In January 2018, Bloomberg stated that vanadium outperformed cobalt as the best performing battery metal. In China, prices of vanadium more than tripled in 2018.
Furthermore, new regulations recently put into place by the Standardization Administration of China (SAC), as well as in Japan, have eliminated Grade 2 steel rebar production in the region, replacing it with Grades 3, 4, and 5, which each consume progressively more vanadium. Global industrial growth and increased building standards in earthquake prone areas — such as the aforementioned regions — are forecasted to keep demand for vanadium strong.
While VRFB technology is in its nascent stages, the recent commissioning of the world’s largest-ever battery, a 200MW/800MWh vanadium flow battery in Dalian, China, is evidence that the technology is progressing at a fast rate. In Hubei, China, a 400 MWh VRFB is being developed as the cornerstone of a smart energy grid in the province. The is projected to be completed by 2020. These are two of many different VRFB projects being commenced around the world.
The current global supply of vanadium has been almost completely depleted, meaning that new deposits will need to be located, or current supplies will need to be managed more creatively to mitigate market volatility. As demand increases and speculative activities continue to emerge, the price of vanadium is almost certain to remain on an upward trajectory.
Vanadium Tomorrow – The Future of Electrification
Greentech Media’s 2017 Energy Storage Summit poll of 500 North American professionals on the next five years of energy storage, flow battery technology received overwhelming supports. Just 25% of respondents indicated faith in lithium-ion batteries as the dominant medium, with 60% of respondents pointing to flow batteries taking over the majority of the market. Vanadium is the most expensive component of a VRFB, comprising more than 30% of the cost. This presents a strong opportunity for vanadium suppliers. Currently VRFBs account for 2% of global vanadium demand, while many estimates are forecasting the market share for VRFBs to increase substantially as the emerging VRFB space continues to grow.
- Long lifespan: ability to charge and discharge approximately 35,000 times over a duration of 20 years
- 100% depth of discharge without performance degradation
- Low cost per kWh when used fully, rendering VRFBs less expensive per use than lithium-ion batteries
- Safer: no fire risk from thermal runaway — fire safety is an inherent risk of solid state batteries (including lithium-ion, flooded cell, and sodium sulphur)
- The vanadium is reusable upon decommissioning of a VRFB unit
- The MW-range is flexible and scalable, allowing for larger energy storage