Vanadium: Energy's storage solution Excerpt of special to the Financial Post Published: Wednesday, October 14, 2009

Every 20 minutes enough of the sun's energy strikes the surface of the United States to power the country for a

year.

President Obama's recent pledge to double production of renewable energy reflects a growing desire to tap into

the immense power of solar, wind and geothermal energy -- a trend occurring around the world as governments

seek to lower emissions, decrease dependence on diminishing resources and free their economies from the

politics of world oil production.

But while the future may belong to renewables, they also pose a challenge: what happens when the wind dies

down or the sun stops shining, especially as power demand peaks? Abrupt power drops can occur, causing

blackouts such as the ones that crippled Toronto and the northeast U.S. seaboard in the summer of 2003.

The solution lies in storage. In order to provide the grid with significant levels of power, renewable energy

needs batteries big enough to store the energy generated when the sun and wind are strong, and release their

energy when they disappear.

Currently, any surplus loads of renewable energy are discharged back into the ground, meaning all that potential

energy is wasted.

One key hindrance to finding a storage solution for renewable energy has been battery technology, which hasn't

experienced any significant changes in more than 20 years. Current generation batteries cannot scale up large

enough to be able to store the vast amounts of energy that a power grid requires.

In addition to not scaling well, they are still toxic, hold only a few hundred recharge cycles, gradually lose

power when not in use and are prone to overheating.

Added to this equation is the state of our existing power grids, which are antiquated and in need of substantial

upgrades.

But battery technology has been given a huge boost by a little-known element: vanadium.

Why is vanadium so special? A strategic metal that has long been a mainstay of the aerospace, automobile and

construction industries, vanadium has a remarkable ability to make steel alloys both stronger and lighter. In fact,

vanadium-titanium alloys have the best strength-to-weight ratio of any engineered material.

Often called the plastics of the 21st century, demand for them is strong and growing.

The recent declaration of China -- the world's second largest supplier of vanadium -- that it intends to ban

further exports of rare-earth metals and increase its insatiable appetite for strategic metals, only fuels the

prospect of increasing worldwide demand for vanadium.

Economic stimulus packages, which are now funding a global boom in infrastructure projects -- bridges,

highways, airports, pipelines -- all of which utilize vanadium, will also increase worldwide demand. World

markets estimate that global infrastructure spending will reach US$35-trillion over the next 20 years.

But while vanadium has been, up to this point, almost solely associated with steel, it is poised to play a crucial

new role in helping renewable energy succeed. This is because vanadium also makes highly powerful and

efficient batteries -- both in a stand-alone capacity for large-scale power grid usage and as an additive in small-

scale battery applications.

The Vanadium-Redox Flow Battery (VRFB), invented at the University of New South Wales in Australia, is

structurally and chemically different from any other battery in ways that could help us overcome battery

technology's current shortcomings. VRFBs are nontoxic, have a lifespan that can be measured in decades, and

do not self-discharge while idle or generate high amounts of heat while charging.

On top of all that, the VRFB has a marvellous advantage over lithium-ion and most other types of batteries: It

can absorb and release huge amounts of electricity instantly and do so over and over again, making it the only

battery technology today capable of connecting directly to power grids and smoothing out the unpredictable

flow of energy from wind turbines and solar cells without any energy capacity limitations.

VRFBs are already being adopted and embraced across Europe, Japan, China and the United States. One has to

wonder, however, why such a potentially formidable solution to large-scale renewable energy storage has yet to

achieve global market penetration, especially in North America.

Martha Schreiber, chief operating officer of Cellstrom GmbH, a private Austrian manufacturer of progressive

VRFBs which have been in steady growth mode in the European market since 2005, summarizes what is

holding back the VRFB from mass-adoption:

"The highly volatile price of vanadium makes it very difficult to calculate stable price conditions not only for

manufacturers, but for the end consumer as well. Moreover, this leads to a very conservative pricing policy by

manufacturers to the detriment of mass market penetration. The technology for VRFBs has also been blocked

by original patents dating back to 1987. It has only been since their expiry in 2007 that has allowed companies

to openly develop the technology."

Vanadium has also proven to be an effective additive to existing batteries in small-scale applications. For

instance, in the case of electric cars, vanadium, when combined with lithium, acts as a 'supercharger' that

increases the battery's energy density -- and in the case of vehicles, this equates to the distance a car can travel.

Subaru's recently revealed G4e concept car uses a vanadium-lithium battery, which dramatically extends the

travel distance from 40 kilometres to 200 km on a single charge.

The recent news of Esther S. Takeuchi, the inventor of a battery that is used in implantable cardiac

defibrillators, who received the United States' top honour for technological innovation from President Obama,

illustrates the impact vanadium can have as an additive. Her invention: the vanadium-oxide-lithium-silver-

battery.

The need for vanadium is expected to exceed current supply. Since 2005, high-strength steel (for construction)

and specialty steel (for aerospace) have been the fastest growing sectors in the steel industry --and vanadium is

an essential ingredient in both.

The off-take of vanadium for steel looks even stronger when considering the following: what if only 10% of the

US$35-trillion outlined for global infrastructure projects went toward vanadium-based developments? That

could represent an additional 232,750 tonnes of vanadium needed, or 3.4 times the current world-wide annual

supply.

But when one looks at the demand potential of vanadium for large-scale energy storage, it could be explosive. It

is estimated that 3,300 gigawatts are required to power the U.S. grid. A VRFB with a one-gigawatt-hour

capacity requires 4,000 tonnes of pure vanadium. If just 5% of the U.S. power grid was sourced from renewable

energy and stored in vanadium batteries, then 660,000 tonnes of vanadium would be needed, or 10 times the

current world-wide annual supply.

The increasing demand for vanadium looks to be a two-sided growth story: steady growth from steel

applications and potentially explosive growth from emerging battery applications.

Whichever side of the growth story you choose to view, vanadium is poised to play a major role. It is no wonder

that Discover Magazine recently called vanadium "the element that could change the world" (October 2008).

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Special to the Financial Post Published: Wednesday, October 14, 2009