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American Vanadium: Mining for billions in the Nevada desert

Out of a number of nascent storage technologies, flow batteries are thought to offer a pretty good shot at scalability. Batteries made with vanadium flow technology can be scaled up simply by increasing the size of the storage tanks used to pump electrolytes through the cell.

American Vanadium, headquartered in Canada despite the name, claims it has a plan to commercialise the technology to scale. Quite simply, the company plans to source vanadium from its own mine in Nevada and combine that with the assembly and delivery of battery systems. Partnering with large scale-battery maker Gildemeister (now DMG MORI SEIKI), the company has already been commissioned to install a high-profile storage demonstration project in New York at the Metropolitan Transportation Authority offices which run New York’s subway system. PV Tech Storage spoke to chief executive Bill Radvak to find out more.

The Gildemeister CellCube modular battery system. Image: American Vanadium.
PV Tech Storage: Can you tell us a little about what it is that you think makes American Vanadium unique and well placed in the energy storage market?

American Vanadium started out as a mining exploration company and it has control of the only advanced vanadium deposit in North America. Almost all vanadium is mined in China, Russia and South Africa, and [currently] over 90% of it is used for strengthening steel. It has a long history of doing that very successfully.

So it’s really quite lumpy, volatile pricing. Vanadium pentoxide on the world market right now is priced at about US$6 to US$6.50 a pound. For the companies that are in production of vanadium flow batteries, the market is in excess of US$25 per pound equivalent.

PV Tech Storage: So you had access to vanadium, looked for a way to take the material to its highest financial value and then looked for a use?

Yes…Our ability to produce vanadium electrolyte is quite straightforward and inexpensive for us, for example. So we took this and said we’ve gotta go to that market - but two years ago no one was even talking about energy storage really.

We looked around and said that if we’re going to sell our product for this much higher price, we’re gonna have to help create the energy storage market in North America. What’s unique about these batteries is, you’re actually storing the energy in the vanadium electrolyte so they constitute about 40% of the cost of these batteries; Sumitomo just got a contract to deploy a battery for about US$200 million, for a 60MWh system. So when you’re looking at a tremendous portion of that cost coming from the vanadium and you can’t control [the pricing] and the price spikes, you’re gonna lose a lot of money. We went around and talked to everybody and said “what we’ll do from our mine in the long run, when volumes are up, is we’ll give you a stable price and a long-term secure supply and so we’ll de-risk your future growth”.

Colourful rocks of vanadium mined in the US by American Vanadium. Image: American Vanadium.
PV Tech Storage: So what was your strategy for stimulating interest in your product and pairing it with companies that would be a good fit to take it to the marketplace? If American Vanadium wanted to vertically integrate, I presume you went to find a manufacturer of systems, while you mine the vanadium?

We went with the company that was the furthest advanced commercially – Gildemeister which is now DMG MORI SEIKI. They have sold 65 of their storage units so far. They do installations globally, but none in North America to date. Also, DMG MORI SEIKI, has a division, Gildemeister A+F which has done [deployed] 200MWp of solar. So they’ve tremendous experience in solar and that’s what really got them into the storage business four years ago. It maximises the value of our business, whereas theirs they can - not so much maximise it - as grow it to any scale they want as a business, which would be in great jeopardy if they didn’t have a secure vanadium supply.

PV Tech Storage: A lot of the people we’ve spoken in the industry say standardisation and education are the most urgently needed components of a healthy energy storage industry. Do you sometimes worry that the technology may already be maturing, but that people's knowledge of the technology and what it can do isn’t matching that?

I was pretty horrified last year – from two angles. One was that the level of education from people I fully expected to be up on this was really poor. The other side that was really troubling me was that a lot of companies that are just in development with their systems made massive claims on when they could launch, how much they could provide at these low costs. It was…I’m trying to find the polite word!

When you understand what it takes to engineer a megawatt of energy storage that’s reliable, you don’t do that overnight, it takes years to get it off the bench and years to scale up. The cost, it’s never that cheap. So a lot of companies were actually using the lack of education out there to get a lot of attention but I think it’s turned dramatically in the past year, a shockingly fast learning curve.

PV Tech Storage: How about the installation for the New York MTA offices, what are some of the ideas behind that and what are you and your partners looking for with the project?

The New York installation is half-funded by New York State. It’s a major demonstration in downtown Manhattan, at probably one of the most high profile buildings in North America, the headquarters of the New York Subway system, the MTA at 2 Broadway. It was without power for two weeks after Superstorm Sandy. They have huge energy demands but they’re also looking at it from the perspective of back-up.

Vanadium flow batteries keep 99% of the charge for up to a year, so they’re fantastic storage systems as well. We’re also looking at demand response, how long-duration batteries can help statewide in New York, not just shifting the load from peak but we’re looking at demand response. [Investor owned energy company] ConEdison has sponsored this part of the programme. That’s where it [the energy storage market] is different in America. They’re not looking at storage just to save dollars and cents but actually to save billions in infrastructure charges.

Bill Radvak of American Vanadium. Image: American Vanadium.
PTS: Finally, with American Vanadium being a commercial proposition and your product being commercially motivated – why would you stay in storage if the market doesn’t pan out as you’d hoped? Where can you find that balance between a need for storage to deal with, for example, energy security and environmental concerns, while ensuring that your company stays in business?

I almost don’t think that’s a valid question any more. It’s a matter of us executing properly. The market will come, it’s more of a matter of when. It’s up to us to make sure we don’t shoot ourselves in the foot and try to grow too fast but then again we gotta be ready to grow extraordinarily quickly when it happens.

So it’s much more a matter of execution here. If we’re not around it’s because we failed on the execution side, it’s not because the business isn’t going to come. We’re in an extraordinarily strong leadership position…we just have to make sure we move our mine forward judiciously and look for these key early orders here to do it.

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