The comprehensive utilization rate of vanadium and titanium resources will be increased to over 55% and 35% respectively, and the integration of vanadium battery system will reach 1GW/year, striving to break through the shortcomings of complete dependence and heavy dependence.
Vanadium and titanium resources are valuable strategic resources, but there are many barriers and constraints in terms of scientific and technological research, resource allocation, and element guarantee. Chinese vanadium battery companies should seize the opportunity that China has listed the development of vanadium and titanium strategic resources as a major special project to create a favorable policy environment for the development of vanadium and titanium industries.
1. Vanadium battery industry is in the early stage of industrialization
Although the vanadium redox flow battery has the advantages of technology and safety, the high construction cost in the early stage has restricted and delayed the large-scale promotion of industrialization to a certain extent. In the case of continuous iterative updating of battery technology and decreasing costs, experts in the industry generally believe that the current vanadium redox flow battery is the most mature flow battery, and vanadium redox flow battery has already met the conditions for commercial large-scale development. Specifically, according to relevant statistics, the investment cost per kilowatt of vanadium redox flow battery (vanadium battery) is 4500-6000 RMB. The cost per kilowatt of pumped storage and lithium battery is 750 - 1200 RMB, 2500 - 4500 RMB.
The high cost makes the application of vanadium battery in the field of energy storage not widely. However, the stack cost of vanadium batteries is decreasing rapidly. The vanadium electrolyte can be recovered almost completely, which can be effectively reduced by renting the electrolyte. In the cost of vanadium batteries, the cost of stack and electrolyte account for about 40%. Based on typical project calculations, assuming that the charge and discharge times of vanadium batteries reach 12,000 times, the cost of vanadium batteries in the whole life cycle is 0.72 RMB/KWh, which is lower than the cost of lithium battery storage 0.80 RMB/KWh.
If the recovery for vanadium electrolyte is considered, its full life cycle cost is only 0.48 RMB/KWh. With the cost reduction brought about by the industrialization of vanadium batteries, the energy storage for vanadium batteries may gradually get rid of subsidies in the future and achieve economical efficiency. It is estimated that vanadium batteries are on the eve of industrialization. With the development of storage, the penetration rate of vanadium batteries will increase rapidly.
2. Vanadium battery is the best choice for large-scale energy storage
The core requirements of large-scale energy storage are mainly safety and cycle life economy.
The relevant documents issued by relevant Chinese departments on power production accidents clearly mentioned that medium and large electrochemical energy storage power stations should not use ternary lithium batteries and sodium-sulfur batteries, and cascade utilization power batteries should not be used. Although lithium batteries have a certain cost advantage at the moment, safety accidents have repeatedly occurred in both ternary and iron-lithium structures, while vanadium batteries have an overall advantage in safety due to their physical and chemical properties, and there is no risk of combustion.
● Cycle life economy
From the perspective of the whole cycle life, vanadium batteries have obvious cost advantages. Taking the 500MWh vanadium redox flow battery energy storage project in Xiangyang as a comparison with the 500MWh lithium battery energy storage project in Fujian Province, regardless of the recovery of electrolyte, the full cycle life cost for vanadium redox flow battery is 0.72 RMB/kwh. The life cycle cost of lithium batteries is 0.8 RMB/kwh. Considering the recycling of the electrolyte, assuming that the cost of the electrolyte accounts for 41% and 80% of the cost can be recovered, the full cycle life cost of the vanadium battery is 0.48 RMB.
Taken together, vanadium batteries will become the best choice for storage in the future, promoting energy storage to achieve economy. Industry professionals also said that vanadium batteries are promising in the field of storage, especially in the field of long term energy storage. With the upgrade of storage safety requirements and the increase of storage time, based on the high safety for vanadium batteries and the characteristics of small marginal cost increase with the increase of storage time, the installed capacity of vanadium batteries is expected to enter the stage of accelerated growth.
In terms of market space, it is estimated that by 2025, China's vanadium redox flow battery storage will increase by 14.2GWh, with an installed power of 3.5GW and a penetration rate of 20%, corresponding to a market size of 29.7 billion RMB, with a compound annual growth rate of 92% from 2021 to 2025.
3. What industrial chains are included in the vanadium battery?
The vanadium redox flow battery industry chain can be divided into three links: upstream raw materials, midstream manufacturing and downstream applications.
The upstream raw materials mainly include vanadium pentoxide and perfluorosulfonic acid resin exchange membrane. The midstream is the design and manufacture of the vanadium redox flow battery storage system, which is composed of inverters, intelligent controllers, stacks, diaphragms, electrolytes, storage tanks, etc., and the core components are stacks and electrolytes. The downstream is mainly the application of vanadium redox flow batteries, including wind power generation, photovoltaic power generation, and power grid peak regulation. Among them, electrolyte and proton exchange membrane are expected to fully benefit.
As the charging and discharging time increases, the proportion of electrolyte cost in the vanadium battery storage system increases, and the cost of electrolyte in the 4-hour storage system accounts for 50%. The longer the time, the higher the proportion of electrolyte. At present, enterprises that produce electrolytes in China mainly include ANSTEEL, HBIS, YINFENG NEW ENERGY, etc. It is estimated that the demand for vanadium pentoxide driven by vanadium batteries in 2025 will be 61,000 tons (pessimistic) and 129,000 tons (optimistic). Assuming that the price of vanadium pentoxide is stable at 100,000 yuan/ton, the corresponding market sizes are 6.1 billion yuan and 12.9 billion yuan respectively.
● Proton exchange membrane
The role of the proton exchange membrane is to allow hydrogen ions to pass through while preventing the mixing of vanadium ions of different valence states in the positive and negative electrolytes, which requires high chemical stability and ion selectivity. Currently, perfluorosulfonic acid resin membranes are mainly used. Only Dongyue Group and Suzhou Thinkre have mass production capacity for proton exchange membranes in China.
It is estimated that the demand for proton exchange membranes for vanadium batteries in 2025 will be 1.52 million (pessimistic) and 3.2 million square meters (optimistic). Assuming that the unit price of proton exchange membranes will drop to 2,000 RMB per square meter in 2025, the corresponding market sizes will be 3 billion RMB and 6.4 billion RMB respectively.