As the world races to decarbonize, there is increasing focus on increasing the penetration of variable renewables such as solar and wind. This means that there will be a critical need for large-scale storage systems for various energy storage applications. More importantly, long-term storage will play a key role. Redox flow batteries have long held promise to play an important role, and developments in this field are covered extensively here. CleanTechnica.
Bushveld Minerals Limited, an AIM-quoted integrated primary vanadium producer and energy storage solutions provider with high-grade assets in South Africa, has been working hard for the past six years to finally bring a large-scale Vanadium Redox Flow Battery (“VRFB”). ) to South Africa and the African continent in general.
China is the world’s largest producer of vanadium, accounting for 60% of global vanadium supply in 2020, with the majority of vanadium coming from co-production. Russia is the second largest producer and South Africa is the third largest, accounting for 17% and 7% of 2021 supply, respectively. Bushveld Minerals is a major vertically integrated vanadium producer. It is one of only three major vanadium producers, owning 2 of the 4 primary vanadium processing facilities in the world. One of those objects is the Vametco mine. Bushveld’s target is to increase production organically to more than 8,400 mtVp.a. in the medium term.
Bushveld Minerals Limited, through its 84% owned energy subsidiary Bushveld Energy Limited, has completed development and achieved financial close for a 3.5 MW solar PV plus 1 MW / 4 MW Vanadium Redox Flow Battery (VRFB) hybrid mini-grid project at the Vametco mine, which will operate as a funded independent power producer (“IPP”). .
Bushveld Energy and NESA Investment Holdings, a South African investment company, have signed a shareholder agreement as strategic equity partners in the implementation and financing of the project, with the project housed in a separate special purpose vehicle (SPV). The press release adds:
NESA provided 60% of the capital and Bushveld Energy provided 40%. Bushveld Energy will recognize the development fee of ZAR 5.6 million as project revenue after financing closes. ABSA Bank has approved a ZAR 64 million (approximately US$4.1 million) loan to finance the construction of a South African mini-grid project. The total cost of the project is estimated at ZAR 113 million (approximately US$7.1 million).
The project will be constructed on a turnkey basis by NESA Power, which has already executed an Engineering, Procurement and Supply (EPC) Agreement alongside the SPV. As previously announced, the project’s 1 MW/4 MW VRFB will be supplied by CellCube. Original equipment manufacturer VRFB, in which Bushveld has an indirect 25.25% stake. Vametco has sold 26 mtV to produce the required electrolyte for VRFB, which is currently converted to electrolyte abroad. The preparation of the site for construction started in the 1st quarter of 2022. The project is now fully funded and is expected to be completed in the first half of 2023.
says Fortune Mojapelo, CEO of Bushveld Minerals: “At Vametco, we are very pleased to have secured the necessary financing for the EPC of the hybrid mini-grid. This project is the first of its kind in South Africa and will serve as a VRFB reference site in South Africa for the mining industry, utilities and other users. This VRFB mini-grid project is a useful demonstration of the greater technological merits of long-term VRFB systems when used in conjunction with renewable energy. At a fundamental level, the project perfectly demonstrates the sustainable use of vanadium and positions it as a key metal in the green energy transition.
“It is also very encouraging to note that the majority of the capital invested in the mini-grid project has come from sources outside of Bushveld Minerals. This proves the attractiveness of the business case for long-term energy storage using vanadium and demonstrates the market interest of investors in the application of VRFB technology.
“In the future, we expect the demand for projects combining solar PV and VRFB technology to increase, especially in regions with similar challenges to South Africa.”
Percy Ying, director of NESA Investment Holding, commented:
“NESA Investment Holdings and NESA Power Group are proud to partner with Bushveld Energy to develop Bushveld Minerals’ flagship renewable energy project for its Vametco mine. As well as creating long-term positive benefits for the mine, the project will also be one of the first renewable energy projects in South Africa to use vanadium battery storage technology and demonstrate its commercial viability at scale. Realizing the value proposition of Vanadium Redox Flow Batteries for South Africa, we are confident that once the project is completed, it will accelerate the further deployment of large-scale vanadium battery energy storage systems in South Africa and contribute to securing the country’s energy future.
Justin Schmidt, Head of Renewable Energy at ABSA Relationship Banking commented:
“We are happy to be a part of this project and relations. The project is further evidence of the ever-growing market for solar energy. In addition, it also highlights the important role that regulatory reforms play in ensuring energy affordability for businesses.
The project is part of Bushveld’s strategy to demonstrate the greater technological merits of long-term VRFB systems when used in conjunction with renewable energy. The hybrid mini-grid project will provide approximately 10.7% of Vametco’s electricity, while demonstrating the technical and commercial feasibility of hybrid mini-grids using solar PV and VRFB technology at grid parity. Vametco has signed a 25-year power purchase agreement for electricity. In addition, Vametco sold vanadium for the battery at current market prices. The project will help reduce the carbon footprint of Bushveld mining and processing activities. CHO2 emissions will be reduced by more than 8,000 metric tons and CO2 by more than 200,000 tons per year2 during the duration of the project. This will help Bushveld Minerals achieve its environmental, social and governance (ESG) objectives and contribute to South Africa’s national Climate Goals.
Bushveld Energy has begun developing options for up to 120 MW of PV and up to 180 MW of storage within the Bushveld Minerals Group. NESA and Bushveld Energy expect to collaborate on future projects and NESA has been granted the right of First Refusal to finance any equity in captive options not accepted by Bushveld Energy or its affiliates. As part of a broader, long-term ESG strategy, these initiatives will reduce the Group’s dependence on the Eskom grid, help limit energy cost growth and reduce the carbon footprint of its vanadium production. The mini-grid will also use locally mined and beneficiated vanadium, demonstrating how VRFB energy solutions can provide more local value for South Africa than any other storage technology, thus enabling a Fair Energy Transition in South Africa. The Vametco project will be financed as an off-balance sheet independent power producer and will be one of Africa’s first solar mini-grid projects with long-term storage that will house one of the largest flow batteries on the continent.
Image courtesy of Bushveld Energy
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