Aim-listed Bushveld Minerals intends to establish a vanadium redox flow battery (VRFB) investment platform to lead investments for original-equipment manufacturers (OEMs) with upside potential.

The company and its initial investment will play a catalytic role and mobilise additional capital from third-party funders to establish an investment capital pool to support VRFB OEM growth.

Additionally, the partnerships with VRFB OEMs through the platform are expected to help promote joint development of region- or project-specific business models for vanadium electrolyte rental, and joint development of large potential customers of projects well-suited for VRFBs.

“VRFB OEMs are the critical drivers for the success of the VRFB technology and vanadium demand in energy storage,” Bushveld said in a statement on Monday.

The partnerships that Bushveld intends to facilitate through the platform support sister company Bushveld Energy’s business model that includes electrolyte, VRFB manufacturing and deployments.

Bushveld Energy is now in an even stronger position to capitalise on the VRFB market dynamics given its knowledge of the vanadium market, first-hand battery expertise and strong relationships across the industry.

Bushveld believes that VRFBs, with their long lifespan, intrinsic safety and scalability, among other benefits, are well placed to capture a significant share of the long duration stationary energy storage market.

Bushveld Energy was established with the objective to drive the adoption of VRFBs in the energy storage market to create significant upside for vanadium demand; provide a natural hedge to vanadium price volatility; and deliver an additional compelling commercial opportunity for the Bushveld group and its shareholders.

Combining these benefits with low-cost upstream vanadium assets, uniquely positions Bushveld to create additional value through vertical integration.

“The energy storage market presents a sizeable commercial opportunity, potentially exceeding $660-billion by 2040 according to Bloomberg, and significantly greater than the value of the vanadium supply opportunity on its own.

“The VRFB Investment Platform is an exciting new opportunity to directly access the massive upside in energy storage and support select OEMs. In addition, pursuing a wide array of partnerships with VRFB OEMs that cover supply, deployment and investment gives Bushveld many more options to unlock value through its integrated strategy,” Bushveld CEO Fortune Mojapelo said.

Bushveld Energy will continue to pursue value accretive relationships with VRFB companies along these three avenues, reinforcing the company’s leading position as a growing, low-cost, vertically integrated vanadium company.

MARKET DYNAMICS

Bushveld said medium- and long-term trends continued to reinforce the strong potential of the stationary energy storage market, especially VRFBs.

Energy storage is needed to stabilise and make variable generation from solar and wind dispatchable. It is, therefore, a key element in the shift towards increased renewable energy sources.

The stationary energy storage market is forecast by Navigant Research to grow at a rate of 58% a year, exceeding 100 GWh and $50-billion a year by 2027.

Technology companies with direct intellectual property are expected to capture a large portion of the value created within the energy storage sector. Ninety per cent of the market will be dominated by long duration use cases, including transmission and distribution asset optimisation and peak load support, requiring four or more hours of storage.

“VRFBs are competitive for long duration applications, with Navigant forecasting flow batteries to capture an 18% share of the total stationary energy storage market by 2027.

“By 2050, installed energy storage capacity will approach 30 TWh. In comparison, that amount is six times what will be deployed through pumped hydro and more than twice the energy storage capacity provided to the power system by electric vehicles,” said Bushveld.