Bushveld Minerals Limited (LON: BMN), the AIM listed, integrated primary vanadium producer, with ownership of high grade vanadium assets in South Africa, has today announced, that its 84%-owned energy subsidiary, Bushveld Energy Limited, has enabled the successful deployment of an innovative vanadium electrolyte rental product in industrial-scale batteries developed and sold by Avalon Battery Corporation of Fremont, California.
Bushveld Energy and Avalon Battery worked together to structure and design this specific rental product. This included creating a financial model for the product and a set of legal agreements for the transaction. The complexity stemmed from developing financial and non-financial terms acceptable to three different parties – a vanadium producer, a battery company and an electricity customer. The structures and documentation created from this project are available to both Bushveld Energy and Avalon Battery to use in future projects, making it easier and faster to execute vanadium electrolyte rentals in the future.
Avalon’s customer, Santa Cruz Westside Electric Inc., doing business as Sandbar Solar & Electric, a leading Santa Cruz, California-based installer of commercial, industrial, and residential solar photovoltaic systems, recently installed a solar PV mini grid at its 11,500 square foot facility. Sandbar incorporated an energy storage system consisting of three Avalon Vanadium Redox Flow Batteries for full independence from the electric grid. Sandbar chose to rent the vanadium electrolyte component of the Avalon batteries from Avalon, rather than purchase it outright, due to the cost efficiencies of the Bushveld-Avalon rental structure.
Batteries that use vanadium electrolyte to store energy have a major advantage over competing battery technologies as vanadium does not degrade, therefore, the performance of electrolyte batteries does not deteriorate with age. Renting the electrolyte reduces capital costs, and essential consistent performance reduces overall costs, making VRFBs the most dependable, safe, and economical battery for energy storage systems.
The rental structure makes commercial sense for both battery manufacturers and vanadium producers and the residual value of the vanadium is essential to making this structure economically efficient. The majority of the challenges in implementing the product commercially were not financial but legal, including title ownership and risk allocation. Considering the uniqueness of the product, it was also critical to draft a legal agreement that current and future customers would be amenable to.
Mikhail Nikomarov, CEO of Bushveld Energy commented:
“Renting electrolyte is only practical with vanadium because the metal does not degrade after its useful life, one more reason that vanadium is the preferred mineral for energy storage systems. We are pleased to partner with Avalon Battery for commercial deployment of a concept that has been in development for a while, but not successfully implemented. Now vanadium takes its place alongside gold, silver, and platinum, as a metal that can be leased, opening up immense future opportunities for this model.”
Matt Harper, President and Chief Product Officer of Avalon Battery commented:
“Avalon is thrilled to have partnered with Bushveld Energy for a project that both benefits our customers and highlights Bushveld Energy’s spirit of innovation. Avalon’s mission is to deliver battery solutions that are dependable, safe and economical, each a critical attribute for energy storage that will drive our electrical future. Renting electrolyte is a massive leap forward.”
Scott Laskey, Founder and CEO of Sandbar commented:
“Energy storage makes renewable energy a resource our customers can use when they need it, not just when they make it. However, 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.”
Bushveld Minerals plc is a low cost, integrated, primary vanadium producer, with ownership of high grade vanadium assets.
The Company’s flagship vanadium platform includes a 74 per cent controlling interest in Bushveld Vametco Alloys (Pty) Ltd, a primary vanadium mining and processing company; the Mokopane Vanadium Project and the Brits Vanadium Project.
Bushveld’s vision is to become a significant, low cost, integrated primary vanadium producer through owning high grade assets. This incorporates development and promotion of the role of vanadium in the growing global energy storage market through Bushveld Energy, the Company’s energy storage project developer and component manufacturer. Whilst the demand for vanadium remains largely anchored in the steel industry, Bushveld Minerals believes there is strong potential for an imminent and significant global vanadium demand surge from the fast-growing energy storage market, particularly through the use and adoption of Vanadium Redox Flow Batteries.
While the Company’s focus is on vanadium operations and the development and promotion of VRFBs, it has additional investments in coal, power and tin.
The Company’s approach to project development recognises that, whilst attractive project economics are imperative, they are insufficient to secure capital to bring them to account. A clear path to production within a visible time-frame, low capital expenditure requirements and scalability are important factors in ensuring a positive return on investment. This philosophy is core to the Company’s strategy in developing projects.