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Earth to Energy: Creating a Domestic Supply Chain for Vanadium Flow Batteries

The Inflation Reduction Act provided incentives for companies to invest in domestic manufacturing within the clean energy sector. These provisions include the Advanced Manufacturing Production Credit (AMPC), which introduced Section 45X to the tax code to provide incentives specifically related to solar, wind, batteries and critical mineral components.

However, the Bill’s efforts have focused heavily on lithium battery production. China currently dominates global lithium battery production and is projected to control almost 70 percent of total capacity by 2030. While U.S. lithium battery production capacity is projected to grow more than 10 times, it would still only represent 10 percent of global capacity even if America can grow at that rate.

We must capture all available energy generated by renewable power sources to ensure U.S. energy security and independence. The intermittent nature of wind and solar has created the demand for long-duration energy storage (LDES), which offers the ability to shift renewable energy over periods of four hours or more. However, electrification powered by renewables also needs to consider the sustainability of the LDES systems.

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An Ideal Chemistry for Long-Duration Energy Storage

Combined with the need for increased safety and stable capacity over years and decades, LDES is leading us toward a different path, where new promising battery chemistries such as vanadium redox flow batteries (VRFB) are poised to take a prominent role. VRFBs are unique in that they can discharge over many hours and can be deployed with separate power requirements from energy requirements. Vanadium electrolyte can be recycled infinitely without losing its ability to store or deploy energy.  VRFB solutions are the perfect complement to renewable energy sources due to their long cycle life, safety and reliability profile.

Unfortunately, China is rapidly positioning itself to dominate these important markets as well. China has invested heavily in VRFB systems with approximately 30 projects registered or in planning with a total capacity in excess of storage. Although they produce the majority of lithium cells, China is looking to VRFBs to solve the need for true LDES. That is why China is taking steps to control the entire supply chain for this market as they do for lithium batteries. 

We have a brief window of opportunity to avoid repeating the painful lessons of lithium batteries. That opportunity is here to take charge of our VRFB destiny and create a domestic supply chain and manufacturing capacities—not dependent on countries or foreign entities of concern.

Today’s Production Vanadium

Vanadium is on the U.S. Critical Minerals list, which means it is necessary to meet national defense or national security requirements, including requirements relating to supply chain resiliency or the economic security of the United States. Most of the current supply is from international sources, particularly China and Russia. These countries of concern account for South Africa, Brazil and India account for the remaining 14%. NATO-friendly sources of vanadium are limited and under severe pressure from China’s current pricing wars to drive out competition. Aggressive policies are necessary to ensure the projected rapid growth in LDES demand can be supplied with vanadium that is not sourced from countries of concern.  

Meeting the Growing Demand

To meet the expected demand for VRFB alone, vanadium production would need to increase by more than doubling the current production. For U.S. deployments, it becomes increasingly important to onshore or friend-shore the supply chain to support the anticipated of energy storage required to transition to clean energy. Despite significant deposits, there are no primary producing vanadium mines in North America. However, plans are underway to address this situation.

The Gibellini vanadium project in Nevada has completed the federal permitting process. It will produce nearly 10 million pounds per year, more than 50% of US demand, which is currently met entirely by imports. Western Uranium & Vanadium has acquired a site in Utah and begun work on designing and permitting the facility to process vanadium, uranium and cobalt from the restarted Sunday Mine Complex. The company expects the plant to be licensed and constructed for annual production of six to eight million pounds of vanadium pentoxide, with initial production in 2026.

These new mines are expected to take time to ramp up. Concurrently, we should support the existing NATO-friendly sourcing in Brazil and secondary sourcing via recycling spent catalyst as a bridge to the required future.

Today’s Vanadium Electrolyte Production

Currently, China is the major producer of vanadium electrolyte. While it also consumes much of that electrolyte for its own VRFB installations, they are targeting U.S. VRFB projects with below-market electrolyte exports to capture the emerging U.S. market. If this path continues, China will control the most significant portion of the VRFB supply chain – vanadium, the critical material, and vanadium electrolyte production.  

To protect U.S. energy security, we should consider sourcing primarily from allies. NATO-friendly countries producing vanadium electrolyte include Australia, Germany, Japan and the United Kingdom. Currently, there are only two vanadium electrolyte producers in the U.S., but they are not capable of large-scale, domestic production of vanadium electrolyte is necessary to secure steady supply and support the increasing demand.

Accelerating the Deployment of VRFB

The DOE recognizes that VRFB is well-suited for energy shifting, but it has also identified a range of cost improvements. Three main challenges are inefficient and expensive manufacturing technologies, lack of robust, standardized supply chains and system integration challenges, and challenges with manufacturing scale-up

Vanadium electrolyte production is a key cost reduction target within the manufacturing scale-up challenge. This component typically constitutes 40 percent to 60 percent of the bill of materials cost for VRFB systems. Based on the expected U.S. demand for grid-connected long-duration VRFB, 100 percent of the western-friendly vanadium supply could be consumed as electrolyte in the next three to five years.

Today’s Manufacturing of Vanadium Redox Flow Batteries

While many vanadium flow battery manufacturers are headquartered in the West, many companies utilize a contract manufacturing model. Between 70 and 80 percent of a battery system is sourced from and built in China, then shipped to finishing locations where power assemblies are added. The stack power assembly is where the electrochemical reactions occur between two electrolytes, converting chemical energy into electrical energy during discharge. The systems are then filled with electrolytes, and final functional testing is conducted. China’s growing domestic VRFB industry will directly compete with the emerging U.S. VRFB industry through the export of vanadium electrolyte, stack power assemblies and other battery components.

Securing U.S. Energy Independence

Today, products qualify as Made in America for federal procurement if 65 percent of the value of their component parts are manufactured domestically, and it will increase to 75 percent in 2029.

While EU-based VRFB companies are trying to establish U.S. footprints, there is currently one U.S.-owned and operated VRFB manufacturer focused on establishing a domestic vanadium supply chain – from Earth to Energy. A fully integrated domestic VRFB supply chain will strengthen U.S. job growth and workforce training, reinforce technology leadership and foster export market development. Enhanced supply chain resiliency for VRFB LDES solutions will provide the necessary path to protect energy independence and national security.

Introducing Storion Energy

Stryten Energy, through its affiliate Stryten Critical E-Storage LLC, is partnering with Largo Clean Energy Corp., a subsidiary of Largo Inc., to break the barriers to grid-scale installations of VRFB systems. These two industry leaders are forming Storion Energy, a new company focused on scaling up the commercialization of VRFBs. Storion will have a to Largo’s mine in Brazil, which produces some of the purest vanadium flake in the world.  Storion will also have exclusive access to provide “leased” vanadium to the market through Largo Physical Vanadium. With this solution, the U.S. Department of Energy’s (DOE) Long Duration Storage Shot goal to reduce the levelized cost of storage (LCOS) to $0.05/kWh by the end of the decade can be accomplished today. Achieving the U.S. goal of energy independence while answering the need for sustainable LDES solutions requires the development of non-China controlled vanadium mining, processing, electrolyte production, stack manufacturing and VRFB assembly. This cost-effective domestic supply chain for vanadium electrolyte will provide the opportunity for rapid adoption of VRFB technology, which will completely replace lithium in the utility arena in the next five years.

Scott Childers
Vice President of Essential Power

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