Vanitec – 4th Energy Storage Meeting (Part 2)


27 July 2018

9th July 2018, Lausanne - see the Vanitec page for copies of the presentations

... continued from Part 1.

Vanadium Leasing - Alberto Arias, Arias Resource Capital Mgmt. and Largo Resources

Alberto laid out the potential arrangements for a Cobalt27 style financial intermediary at a previous ESC meeting so I will recap only briefly the basic principle shown below:

Here it is the financial intermediary that takes long term ownership of the key commodity, in this case Vanadium. In undertaking to lease it they remove from themselves the possibility of simply selling the commodity at the peak in any pricing cycle - thus they are not positioning themselves to speculate on price rises of the commodity - something which I suspect may have driven interest in the Cobalt27 floatation.

Despite this there are plenty of example of leasing arrangements for critical metals, as shown by Alberto, so perhaps the Cobalt27 comparison should not be made too directly - after all when you put cobalt in a battery there is little chance you will ever get it back, unlike Vanadium in a VRFB.

Clearly the unique properties of Vanadium in VRFB's (long term stability, easy recyclability, ready market for Vanadium outside of VRFB's) are eminently suitable for supporting a rolling Vanadium licensing model.

In the case of Cobalt27 they have approximately 50% of their fund value in physical Cobalt and the rest in a diversified mix of cobalt and nickel royalties and company interests.

In the case of a potential Vanadium vehicle it would seem that as well as owning physical metal such a fund may also wish to have interests in those that would benefit from such a leasing model, namely Vanadium Miners and VRFB manufacturers. It occurs to me that it might take a critical mass of listed companies in these sectors to provide such a fund with the investment opportunities it might wish to have alongside it's metal assets.

Whilst no Cobalt27-like Vanadium vehicle has yet emerged Alberto pointed out that a number of companies:- Glencore and Pangang group (with VRB energy) have made progress with leasing models, though details were scant at this stage.

Given the recent VRB Energy announcement of a leasing/electrolyte buyback model I used the question and answer session to pose the question to Alberto as to whether he knew if their model avoided the initial upfront cost the VRFB purchaser (as a buyback model might appear not to at first sight.)

Alberto rightly referred the question to, I believe, Mianyan Huang of VRB energy - alas the answer was not articulated sufficiently clearly for me to confidently assert a positive response. Greater clarity on this point, as I am sure will become apparent, will certainly help potential VRFB customers in their initial budgetary comparisons with Li-ion batteries.

Despite this Alberto certainly seemed confident, as did Fortune in separate discussions later - it would appear that a lot of progress has been made behind the scenes and leasing models are coming, and when they are they will be broadly announced. [Note this sentence was written before the investment by Leon Cooperman was publicly announced.]

Electrolyte Standards, Next Steps - Nataliya Roznyatovskaya, Fraunhofer ICT

Nataliya, an electrolyte electrochemist at the Fraunhofer Institute for Chemical Technology at Pfinztal (near Karlsruhe) again raised the thorny issue of electrolyte standardisation. She outlined the challenges as :-

Of these it appears that 2 is is the toughest one to get buy-in on - a request by Mikhail to all the VRFB manufacturers present to see if any would be willing to even consider participating in a standardisation programme met with stony silence.

The slide below shows how technically easy or difficult different aspects of the (standard, not mixed acids) electrolyte would be to characterise - the only problem is persuading VRFB manufacturers/electrolyte users that it is in their interest to make use of a standard electrolyte.

It may be that until the commercial advantages of a standard electrolyte are known (eg lower price, reliable quality and supply, not overspecifying the purity of the electrolyte components) perhaps no VRFB manufacturer wishes to be seen to be the first to suggest that their electrolyte does not contain some special magic dust which sets them apart from everyone else. Perhaps they are simply not yet ready to go public with their position - if so then once standardisation programmes are started they will no doubt change their position and wish to make very sure that the standard is not being set at a level that would leave them out in the cold.

Notwithstanding this implicit standoff on electrolyte composition there are plenty of other aspects of standardisation that could be considered (as evidenced by Jens Noack's entirely independent work on the IEC TC21 flow battery standard that was presented in the International Flow Battery Forum meeting).

Standardisation of terminology is perhaps the easiest to get over, and the issues are not huge - interchangeability of units is something that engineers deal with day-in-day-out and so they are not phased by different units.

Standardisation of test procedures is perhaps the easiest low hanging fruit to address - Fraunhofer ICT could simply state what they do when characterising samples for themselves/research partners/potential commercial users and could simply put these forward as a standard test which anyone who wishes to undertake similar testing can follow assuming they have the right instrumentation. This would require no company to reveal any IP.

Vanitec VRFB Marketing Plan - Gabriella von Ille, Lifa Communications

At the last ESC meeting we were introduced to Lifa communications, who have been tasked by Vanitec with the job of bringing together our many different VRFB/VRB/Vanadium Flow/Rainbow battery messages and helping get a stronger message out to the rest of the world.

They have evidently started in earnest producing a series of short, tweetable videos that boils the VRFB story down to short messages that can be easily remembered, and for those under the age of 50, retweeted and shared over different social media platforms.

Gambit will be able to attest that the battle over names at the previous meeting was an altogether gruelling process as everyone came with their pet favourite, but a single name had to be chosen to describe the single thing we are all trying to bring to the world, and this name is 'VRFB'. Vanitec cannot impose this on any other organisation who in principle they can carry on using what their own pet name might happen to be, but as far as Vanitec is concerned from now on they are going to use the term 'VRFB'. To be honest, from now on so should anyone else who is keen to encourage this industry.

They have also produced a helpful marketing guide which lays out the core messages that we should all be trying to get out on behalf of VRFB systems. These are:

Vanitec's primary VRFB messages 

 1) VRFB is available for implementation right now - it is not a laboratory scale or research system.

2) The long battery life makes the VRFB a truly sustainable and environmentally friendly technology.

3) VRFB's make long term sense for power utilities with their competitive cost AND large scale.

Now/Life/Cost/Scale gives the acronym NLCS which I remember as 'Never Let Critics Succeed'

The Vanitec ESC VRFB Marketing guide also lays out a number of secondary messages about the technology:

i) The Vanadium supply IS sufficient - see Terry Perles discussion in Part 1 of this review.

ii) VRFBs are highly recyclable and have low fire risk - both unlike lithium-ion. At the IFBF Rick Winter of UET pointed out that the New York Fire Department will not allow any Lithium-ion based energy storage in their city, and especially not in skyscrapers.

iii) Simplicity - 100% of the VRFB is Vanadium, the complex chemical reactions that go on in solid state batteries are avoided and the operation of the VRFB is easily understood.

How can we help ?

Having grown the independent Bushveld Minerals community by ourselves we are in a useful position to use our network of contacts to influence the following groups with positive messaging about VRFB's.

Financial actors such as Investors and Banks

Technologists and Journalists who write on investing or the subject of energy storage and renewable energy - don't just give them a hard time about not covering Bushveld Minerals.

Government Policymakers and those in Power Utilities - both need to know that VRFBs are here and competitive now so they start asking why-not-VRFB? questions of project partners.

The General Public - this is not just an unthinking catch-all - it points to the fact that clear and easily accessible messaging pitched at the general public may also influence many important individuals who might normally not come across or respond to overtly technical communications. (Okay so I mean politicians who may know what Tort is but not Torque.)

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