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Burning fossil fuels releases CO2.
Bloomberg
Carbon emissions from burning fossil fuels climbed to a record in 2016.
Governments around the world are looking at ways to reduce carbon
emissions. Two ways we can reduce CO2 emissions are to stop burning
fossil fuels to power our energy grid and by adopting electric vehicles for
the transportation of people and goods.
Electric vehicles are going to become very popular.
According to Bloomberg New
Energy Outlook Report:
Renewable energy will dominate new investment in power to 2040.
Bloomberg, Follow the Money
By 2040, 34% of worldwide electricity will come from wind and solar and
72% of the $10.2 trillion spent on new power generation worldwide to 2040
will be invested in new wind and solar PV plants.
Investment in renewables across the Americas averages $50 billion per year
to 2040, to reach almost $1.5 trillion over 2017-40.
Large-scale solar will be cheaper than new coal plants in essentially all
major economies in 5 years.
Bloomberg
Inside Climate News
Quartz Media
Renewable incompatibility
Unfortunately wind and solar energy output is not very flexible - they
produce only when the sun is shining and the wind is blowing and that’s a big
problem for the utilities that deliver power to consumers.
“A major constraint with such renewable sources is that energy is
generated with a highly variable output in an intermittent manner. Therefore,
the surplus energy is required to be stored so that it can be supplied during
non-optimal generation periods such as at night time or when the wind is not
blowing. Storage at a large scale has remained a major challenge.”Cision,
Grid Scale Energy Storage Technologies Market
A second problem with renewable energy is most solar energy produced hits
the grid between noon and 4pm. Wind blows the most during the day as the sun
heats land and water.
Demana – Residential power load.
The Commercial sector has a very similar daily average power demand compared
to the Residential sector. The Industrial sector’s demand is relatively
constant.
Peak demand for electricity generally comes in the late afternoon and evening,
when everyone gets home after work, turns on the lights, heating or air
conditioning, cooks dinner, turns on computers and TV’s etc.
As we can see renewable energy’s output isn’t naturally compatible with
our daily energy usage cycle. Utilities transmission grids need stable,
predictable supplies of electricity.
Without some way to store the excess energy produced, or store the energy
produced at the wrong time, limits to renewable energy’s penetration into our
electricity market, and a limit to reducing carbon emissions from the burning
of fossil fuels will quickly be met.
Having the flexibility of being able to store electricity, and using it
when the grid needs it, has always been one of the biggest challenges for
renewable power. Currently natural gas ‘peaker’ plants are used to supply
energy to the grid during peak usage periods.
Batteries can achieve the needed flexibility, and are much cleaner than
fracked (Hydraulic Fracturing),
methane producing, not clean and green natural gas. But the batteries used
need to last for more than the 300 or 400 charge/discharge cycles of
lithium-ion batteries – replacing your batteries every few years is not cost
efficient.
That’s where vanadium comes in. An emerging technology known as the
vanadium redox-flow battery will allow utilities to store the electricity
generated by large-scale wind and solar farms until it’s needed.
Vanadium Flow Battery
Vanadium pentoxide (V2O5) is the main ingredient, the electrolyte, in the
vanadium redox flow battery (VRFB) aka the Vanadium Flow Battery (VFB) or V
flow battery.
Vanadium is the only material that can
convert back and forth from its various different liquid states which carry
different positive charges.
In VFB batteries, liquid vanadium in two different states (V2+/V3+ and
VO2+/VO2+), is pumped into a tank. A thin membrane separates the two liquids
but the liquids are able to react and an electric current is generated.
The risk of cross contamination is eliminated as only one material is
used. They are also safer, as the two liquids don’t mix causing a sudden
release of energy. The electrolytes used never need to be replaced, they’re
nontoxic and non-flammable.
Vanadium-flow batteries can be manufactured to be ‘plug-and-play’ and used
with the largest utility size application down to any of the smallest micro
solar/wind system.
Vanadium Flow Battery’s can store large amounts of energy almost
indefinitely, which makes them perfect for wind/solar farms, industrial and
utility scale applications, to supply remote areas, or to provide backup
power. These batteries can also ramp up or down and pass through full
charge/discharge cycles in a matter of milliseconds enabling them to deliver
electricity at utility-scale over periods of four, six and even eight hours.
Rapid response and smooth ramp-up and ramp-down translate into a more
efficient delivery of electricity at lower cost. These attributes are also of
critical importance when it comes to recovering from grid outages and
failures, which enhances the resiliency and reliability of electricity
supply.
Longer discharge duration and greater scalability (you only need to add
more electrolyte to add more hours of storage capacity), are other key
differentiating factors of vanadium-flow batteries.
Consider - vanadium flow batteries have the advantage of a much longer
life expectancy then competing battery chemistries. Controls can be upgraded
much like a computer’s software/hardware, holding tanks are plastic lasting
forever, the electrolyte lasts decades and is recyclable. All of these
benefits allow the costs to be spread over several decades. I’ll repeat that,
not over a few years – over a couple decades.
“Many people see affordable storage as the missing link between
intermittent renewable power, such as solar and wind, and 24/7
reliability…For large-scale firming of wind power, our model shows that flow
cells can be more economic than lithium-ion cells for all but the shortest
periods (less than an hour) and are projected to continue to lead on cost
through 2020.” McKinsey & Company, The New Economics of Energy
Storage
Vanadium supply
Vanadium is mined mostly (85% of global production) from vanadium-bearing titaniferous
magnetite found in ultramafic gabbro bodies in South
Africa, north-western China, and eastern Russia.
“Surging vanadium prices so far this year are underpinned by
structural supply side changes and stable, growing demand from most end uses,
analysis by independent market intelligence firm Roskill has
found.” Abeyla Exports,Structural
supply side changes, growing demand support rising vanadium prices
Risk List
The British Geological Society (BGS) published its first study, and
ranking of the criticality of metals at the end of the last decade. Since
then the BGS’s list has come to be known as the “Risk List”.
Here is the latest Risk List’s Top 13 Critical Metals. Can you spot two
startling similarities they almost all share?
It would seem as if the Chinese have supply dominance in almost all of the
metals the BGS deems critical to the functioning of a modern economy. Of
course with supply dominance comes the ability to shut off the supply tap.
Note vanadium is the 5th ranked most critical metal.
The future of Russian imports of vanadium into the U.S. might very well
depend on results of investigations regarding Russian meddling into 2016’s
Presidential elections.
There are no currently operating primary vanadium mines in North America
and there hasn’t been since the 1980’s. Fact is there are only a handful of
vanadium deposits in North America and only a couple of these will make ‘the
grade.’
Vanadium One Energy Corp. (TSX.V:VONE, FSE:9VR1)
Vanadium One Energy Corp. is looking to develop its 100% owned
vanadium-titanium-iron deposit, Mt. Sorcier, into production.
In 1974 Campbell Chibougamau Mines Ltd, while looking at the potential of
a Mt. Sorcier large open pit operation, published a resource estimate
(resource is historical and non-43-101 compliant):
South Zone = 102,800,000 tons 27.4% Fe 1.05% TiO2. After concentration -
2.88 tons of magnetite rich rock would produce 1.0 ton of concentrate –
tonnage/grade were: 35,694,444 tons @ 0.68% V2O5, 0.95% TiO2, 67.8% Fe.
North Zone = 171,000,000 tons 30.0% Fe 1.06% TiO2. After concentration -
2.88 tons of magnetite rich rock would produce 1.0 ton of concentrate –
tonnage/grade were: 59,375,000 tons @ 0.57% V2O5, 1.32% TiO2, 66.2% Fe.
That’s a total, in situ historical resource of:
- 1.16b pounds of vanadium pentoxide (V2O5).
- 63,507,083 tons of iron (Fe).
In 2013, a two hole drill program by Chibougamau Independent Mines
Inc. confirmed Campbell Chibougamau Mines historical widths and grades.
When a metal’s, indeed any commodities supply side is constrained, in
combination with strong demand, that commodity is in a situation that almost
guarantees upward pressure on its price. Add in geo-political concerns about
the commodities major producers and a share price rise for the junior
resource company, who can potentially supply said commodity is, in this
author’s opinion already baked in.
For us as retail investors the trick is to find that potential future
producer.
Vanadium One’s vanadium deposit is crucial for North America’s energy
storage future.
Conclusion
The use of vanadium to harden steel accounts for about 90% of the current
demand for the metal - demand for vanadium is not yet driven by use in
batteries. Your author believes that’s about to change with the North
American grid energy storage market developing into a multi-billion dollar
industry within a few years.
Energy storage is ‘the Holy Grail’ of renewable energy. Having the
flexibility of being able to store electricity, and using it when the grid
needs it, has always been one of the biggest challenges for renewable power.
Vanadium flow batteries offer high capacity energy storage enabling wind and
solar farms to out-compete fossil fuel plants for flexibility, stability and
reliability.
Is the dawn of a vanadium based energy storage market on your screen?
If not, it should be.
aheadoftheherd.com
Richard’s articles have been published on over 400 websites, including:
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Legal Notice / Disclaimer
This document is not and should not be construed as an offer to sell or
the solicitation of an offer to purchase or subscribe for any investment.
Richard Mills has based this document on information obtained from sources
he believes to be reliable but which has not been independently verified.
Richard Mills makes no guarantee, representation or warranty and accepts
no responsibility or liability as to its accuracy or completeness.
Expressions of opinion are those of Richard Mills only and are subject to
change without notice. Richard Mills assumes no warranty, liability or
guarantee for the current relevance, correctness or completeness of any
information provided within this Report and will not be held liable for the
consequence of reliance upon any opinion or statement contained herein or any
omission.
Furthermore, I, Richard Mills, assume no liability for any direct or
indirect loss or damage or, in particular, for lost profit, which you may
incur as a result of the use and existence of the information provided within
this Report.
Richard owns shares of Vanadium Energy Corp (TSX.V:VONE) and VONE is an
advertiser on his site.
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