Australian Vanadium Ltd (ASX:AVL, OTCQB:ATVVF) has launched Project Lumina to develop a modular, scalable, utility-scale battery energy storage system (BESS) using vanadium flow battery technology (VFB) via its subsidiary VSUN Energy Pty Ltd.
VSUN Energy’s analysis of its VFB technology indicates the levelised cost of storage (LCOS) for a 4-hour 100 megawatt (MW) VFB BESS would amount to about $274 per megawatt hour (MWh), give or take 30%.
Achieving said LCOS would bring VFB battery systems to a similar level as lithium-ion BESS products currently on the market.
VFB batteries have several advantages over lithium-ion batteries as utility-scale systems – they’re safer, made of non-flammable materials, have a longer lifespan of 30+ years compared to lithium-ion’s 10-year life and handle greater temperature ranges comfortably, with minimal requirements for heating or cooling infrastructure.
Importantly for environmental concerns, the batteries can also be almost completely reused or recycled, recovering 99% of materials.
Creating fully integrated VFB supply chain
“We are pleased to be able to share the significant steps that we have taken to develop the downstream value of our business,” Australian Vanadium CEO Graham Arvidson said.
“The need for long-duration energy storage in Australia is rapidly growing and the work the team is undertaking with Project Lumina is a key enabler to create a platform for us to deliver competitive long-duration battery energy storage solutions.
“The scale of the projects VSUN Energy is pursuing aims to provide AVL with the ability to utilise our own manufactured vanadium electrolyte, ultimately unlocking the development pathway and full value of the Australian Vanadium Project.”
AVL intends to manufacture vanadium produced from its Australian Vanadium Project into vanadium electrolyte and then into VFB batteries, creating a pit-to-battery strategy.
The strategy underpins AVL’s ambitions to address Australia’s growing need for long-term energy storage while also providing the company with a lucrative offtake opportunity.
The company is considering a range of funding options for Project Luminas, which will likely include debt supported by strategic equity or cornerstone equity funding, including from Australian Government agencies.
Next (LON:NXT) steps
AVL and subsidiary VSUN have laid out a detailed road map for phase 2 of Project Lumina, including:
- Development of a construction-ready, detailed design and delivery strategy for modular, commercial, turnkey, utility-scale 100MW VFB BESS on a 4-hour (100MW/400MWh) and 8-hour (100MW/800MWh) duration.
- Delivery of a definitive basis for estimates of LCOS, capital cost, operating cost and revenue opportunities, refining from the Phase 1 accuracy of ± 30%.
- Exploration of the option of a ‘deconstructed’ VFB BESS to drive optimised economic returns and to potentially extend operational life to 40 years and beyond.
- Optimisation of the design with a cost-effective means of independently scaling either power (MW) or duration (MWh of discharge) to capture opportunities emerging from the evolution of the Australian energy markets and deliver a competitive advantage via in-built optionality.
- Advancement of conversations with potential energy offtake partners for the deployment of energy storage solutions.
- Progression of discussions on land access for the future deployment of energy storage solutions.
- Continued development of a funding strategy (debt and equity) to allow for the rapid deployment of energy storage solutions.
- Determination of the merits of deploying a VSUN Energy Build-Own-Operate (BOO) business model as well as delivering on an engineering, procurement and construction (EPC) basis.
AVL plans to make a final investment decision for the deployment of utility-scale VFB BESS solutions by VSUN Energy shortly, although that timeline may shift.