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Thenextbigthing:Vanadium

Raw materials: One of the worlds newest super powers is not on the map yet, has not been recognizedbytheUnitedNations,andwillnotmakeanappearanceatComicConInternational. Its name is vanadium (chemical symbol: V), and it is a grayishwhite, ductile and tensile metal thathasunexpectedlybecomeoneofthemostpreciouscommoditiesontheplanet.

Vanadium holds great promise as the supercharger of choice for lithiumion batteries. Pictured here:threesamplesofpurestVanadium99.9%crystalbarsanda1cm3vanadiumcube. Photo:Wikipedia/Alchemisthp Until recently, this metal was overlooked and underpriced. Today, vanadium is vitally needed by both the renewable energy and the steel/construction sectors. Indeed, vanadiumflow batteries (VFBs), also called vanadium redox flow batteries, are being heralded as an answer to the missing link in clean energy production lack of volume storage for the electricity generated by solar and wind power installations. Among their advantages, batteries made with vanadium:

canmeetthepowerdemandsofeverythingfromasinglehome(kilowatthourcapacity) toapowergrid(megawatthourcapacity); havealifespanof20yearsormore(tensofthousandsofcycles); canchargeanddischargesimultaneously; donotproduceprofuseamountsofambientheatwhilecharging;and canreleasemassiveamountsofelectricityinstantlyandrepeatedly.

Witharoughly90%efficiencyrating,thescaledupversionofVFBsinmultimegawatt,boxcar sizescanstockpileonautilityscale,thepowerfromintermittentsourcesforuseonthegrid duringperiodsofhighdemandatamomentsnotice. Whats more, vanadium holds great promise as the supercharger of choice for the lithiumion (Liion) batteries in electric vehicles millions of which are expected to be on the road within the next decade. The lithiumvanadiumphosphate combination may be the best contender for the next generation of automotive batteries because of its ability to produce very high energy density and voltage. For the driver, this means the ability to travel a great distance on one charge, and enjoy mega torque and rapid recharging all without excess engine heat. Whats more,lithiumvanadiumphosphateischeaperthanalternativessuchaslithiumcobalt. In construction, vanadium alloys are being used to strengthen structural steel to withstand seismic events. A small amount of vanadium adds reinforcement, toughness, and heat and corrosion resistance. In recognition of those properties, steel specifications could be raised in the rebuilding of Japan; however, it is also likely that other vulnerable geologic regions worldwide, such as the West Coast of the United States, could begin to specify stronger steel grades for their building and construction industries. China already did so last year, mandating highergrade steel for all new construction projects. In addition, nations that are, literally, buildinguptheirinfrastructure,suchasBrazilandIndia,willaddtothevanadiumdemand. The price is already soaring. Until recently, vanadium was mined and sold in only three places on Earth: Russia, China, and South Africa. Now, one of those suppliers China is said to be hoarding vanadium foruse in its own growing steel and battery industries. In fact, according to industry sources, China may need as much as 20,000 metric tons of vanadium for domestic productionwithinthenexttwoyears. In reaction, U.S. President Barack Obama has said that he would go through the World Trade OrganizationtoaddresswhathesaidwasChinaslimitationonrareearthexports. And China is not the only one. Demand may soon exceed supply, as nations worldwide bet billionsonvanadiumasthenextbigthingtorevolutionizethegridandtoreducedependence onfossilfuels.

Therightplace,attherighttime
AllofthiscomesasgoodnewstoAmericanVanadiumCorporation,afiveyearoldtier1metals explorationanddevelopmentcompanybasedinVancouver,BC,Canada,thatownstherightsto North Americas first and only primary producer of vanadium the Gibellini mine in Nevada, about350milesnorthofLasVegas. American Vanadium holds a 100% interest in the vanadiumrich Gibellini property which coversabout3,397acresintheaptlynamedEurekaCounty,Nevada.

CompanyPresident BillRadvaksaysthemine which isdesigned tobean open pit, heapleach operationwillprovidebothvanadiumelectrolyteforgreenenergyapplicationsandvanadium pentoxide for the steel industry. The mine will have the capacity to produce 14 million pounds ofvanadiumpentoxide,whichisabouthalfthetotalvanadiumconsumedinNorthAmericaand about 5 percent of global consumption, according to Michael Hyslop, director of Corporate Development,AmericanVanadium. Moreover, a feasibility study conducted on the property by AMEC E&C Services, Inc. (AMEC) of Sparks, Nevada, projects that American Vanadium could potentially become the lowestcost primaryvanadiumproducerintheworldwithastripratioof0.22andaunitoperatingcostof US$4.10 per pound. Because of the unique geology in Nevada, we can produce vanadium at verylowexpense,Radvaktoldpvmagazine. ThecompanypickeduptherightstotheGibellinipropertyin2005beforeworldwidedemand forvanadiumhadbeguntorise. Historically, Radvak says, China never used vanadium in any real quantities until about 2000.NowthecompanyisinprimepositiontodominatetheU.S.vanadiummarket. Vancouver is a hotbed of Canadian mining. Its not unusual for Canadian companies to reach out all over the world for rights, Radvak commented. With that said, this metal is not on a critical supply list in theUnited States. In fact, the USA stilldoes not have a rareearths policy. I would consider that to be a lack of foresight, because so much of infrastructure and telecommunicationsreliesonrareearthsupplies. Butitsamootquestionanyway,continuedRadvak,becausethecompanylargelycomprises U.S. shareholders now and our mission is to create the leading gridscale energy storage business in the United States, in partnership with companies that already are in the battery business. He added, U.S. utilities have a mission to spend billions to deal with peak loads. They dont need more substations or infrastructure; they need volume storage for electricity. This will beacriticalindustryfor the United States inthe coming years. The GibelliniProject is expectedtostartvanadiumproductionby2013. Worldwide, a handful of other small vanadium developers are also hard at work trying to commercialize their own discoveries. However, American Vanadium appears to have the early advantage and is expected to be the first to commercialize its increasingly strategic domestic resource, according to Torontobased Byron Capital Markets researcher Jon Hykawy, in an interviewwithTheGoldReport.

Afledglingindustry
In recognition of the potential of vanadium flow batteries to create a highly competitive positionfortheUnitedStatesintheglobalenergymarketplace,onAugust2,theDepartmentof Energy (DOE) announced that 19 transformative new projects will receive a total of US$43

million in funding from the Departments Advanced Research Projects AgencyEnergy (ARPAE) todevelopbreakthroughenergystoragetechnologies. Theinstitutionsthatarereceivingfundingare:

thePaloAltoResearchCenter(US$4,018,960), FordMotorCompany(US$3,128,000), GEGlobalResearch(US$3,128,285), theOakRidgeNationalLaboratory(US$1,000,000), UtahStateUniversity(US$3,070,051), theBattelleMemorialInstitute(US$600,054), thePennsylvaniaStateUniversity(US$1,000,000), WashingtonUniversityinSt.Louis(US$2,000,000), DetNorskeVeritas(US$2,030,962), theSouthwestResearchInstitute(US$712,500), RobertBoschLLC(US$3,100,000),and EatonCorporation(US$2,481,588).

In addition, funded in part by the Energy Storage System Program of the DOE through the National Energy Technology Laboratory (US$3,500,000), Painesville Municipal Power, in Painesville, Ohio, is conducting a Vanadium Redox Battery Demonstration Project, using an eight megawatt hour redox flow battery to demonstrate the benefits of energy storage at a 32 MWcoalfiredfacility. In a speech at a Winning the Future forum in Cleveland in February 2011, U.S. President Barack Obama was among the first to tout the greenenergy applications of this project a nextgeneration energy storage system being funded with a DOE loan guarantee and built in theStateofOhio. Referring to the company providing the battery for this pilot project, Ashlawn Energy, he said: Its a company that provides multimegawatt energy storage solutions using and I have no idea what this is vanadium redox fuel cells. Thats one of the coolest things Ive ever said out loud. Starting in2009, a strong collaborative team worked on the Painesville project headed upbyAlexandria,VirginiabasedAshlawnEnergy,LLC,aleadingredoxflowbatterydesignerand manufacturer,andcomprising:

UniversityofNewSouthWales,Sydney,Australia,acelebrateddeveloperteamofredox flowbatterieschemistryandmaterials; Parma, Ohiobased GrafTech, the largest U.S. manufacturer of graphite plates for hydrogenfuelcellsandvanadiumflowbatteries; Pacific Northwest National Laboratory (PNNL) in Richland, Washington, with extensive R&D experience in electrochemical energy storage, materials chemistry, and photochemistry;

Beverly, Massachusettsbased Innoventures, a fuel cell stack and component supplier; and Concurrent Technologies Corporation of Johnston, Pennsylvania, a prototype test bed andengineeringgroup.

The new vanadium flow battery project is expected to create 30 to 50 jobs nationwide; and 15 to 20 positions in northeast Ohio, alone. On November 15, 2011, a ribboncutting ceremony was held to commemorate the opening of the 12,000 square foot VanCharg energy storage system (proprietary name and design by Ashlawn Energy) final assembly facility in Painesville, Ohio.

Turningonionsintoenergy
In California, what has been described by Bethesda, Marylandbased Prudent Energy as the largest flow battery system in the world, received permission on April 19 of this year from SouthernCaliforniaEdisontooperateatGillsOnions,amajorfreshcutonionprocessorlocated inOxnard. In an exclusive interview with pvmagazine, Jeff Pierson, Senior Vice President of Prudent Energy, said that his companys proprietary Vanadium Redox Battery Energy Storage System (VRBESS) took a little over six months to install, and was financed by strategic and venture capital investors in the United States, Europe, and Asia. The 600 kilowatt system has been performing well, says Pierson, although it is too early to disclose specific results. The VRB ESS project has been designed to improve the efficiency of an existing advanced energy recovery system (AERS) located on Gills 14 acre property that turns daily onion waste into biogas, which in turn feeds into two 300 kilowatt fuel cells to produce ultraclean heat and power. The VRBESS will also provide the Gills facility with emergency backup power and reduce the companys need to draw electricity from the grid when rates are highest. As a result, Gills Onionsisexpectedtosavehundredsofthousandsofdollarseachyearinoperatingexpenses. The VRBESS provides clean power on demand for maximum periods of six hours or 3.6 megawatt hours of capacity, equivalent to the high afternoon time of use (TOU) hours in Southern California Edisons service area. In return for a share of the energy savings resulting from the project, Prudent Energy and its investors built, own, and will operate the VRBESS. Those energy savings are calculated as the avoided charges, costs, and fees that would otherwise be paid by Gills to the local utility. In the past, these charges have been very high, giventhefacilitysenergyintensive,aroundtheclockoperations. We are extremely pleased to host a VRB system at Gills as an expansion of our advanced energyrecoverysystem,saidSteveGill,thecompanyspresident.Energystoragehasbecome an absolutely essential part of integrating renewables into the electricity grid reliably and efficiently, and Prudent Energys system does this very well. Prudent has also shown it will

stand behind its product and share the financial risk of putting these projects into the field, so their commercial and environmental benefits can be realized as quickly as possible. With a showcaseinstallationinCalifornia,PrudentEnergynowhasarobustpipelineofprojectsunder developmentinNorthAmerica,Europe,andAsia,commentedPierson. Weareinvolvedinthreemainmarketsforgridscaleenergystorage,allofwhicharegrowing, Pierson explained. The first is solar and wind power integration. The second is the ancillary power services market using storage to provide an extremely fast and accurate response for grid operators, who must constantly manage voltage and frequency fluctuations. The third market is the industry enduser onsite storage to help large electricity users cut their utility bills.Whataboutthecompetitionthatwillquicklygrowinvanadiumpoweredsystems? At this point, says Pierson, we really dont see ourselves competing against other storage vendors. Our technology has unique benefits to customers, but we are rooting for all storage companies who can get to market with a competitive product that solves a real commercial problemandthusmakessenseasalongterminvestment.Weprobablyarecompetingmostly now with companies selling power generators! Pierson would not reveal Prudent Energys source of vanadium, or the price of recent purchases, saying, We control this activity very closely.Indeed,ascompetitionstartstoheatup,manycompaniesandindividualinvestorsare gettinginontheactionbutquietly.EvenberinvestorWarrenBuffettisrumoredtohaveput some money into BYD Company Ltd., a Shenzhen, Chinabased auto and battery manufacturer thatisdevelopinglithiumphosphatevanadiumbatteriesforitsnextgenerationoffuelefficient electricvehicles.WillGoogleandFacebookbenext? sanjayan.marat@gmail.com