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The obscure metal that could solve solar energy’s conundrum

On the fringes of global stock markets, fascination with materials continues and the latest obscure object of adoration is vanadium, a metal you may have never heard of but which is well known in the steel industry because it does the neat trick of making steel both stronger and lighter. Add a couple of pounds of vanadium to a ton of steel and you double its strength, a formula that excites Largo Resources Ltd., a Toronto-listed miner that is only weeks away from opening a Brazilian mine that could supply almost a 10th of the worldwide vanadium market in two to three years time.

There are few sources of the metal; China is the big producer and consumer of vanadium, taking more than half of global output. South Africa and Russia currently account for the remainder. China's hunger for construction steel laced with vanadium is expected to increase as the government grapples with poor building standards, exposed in recent earthquakes and civil engineering disasters. Aircraft and automobile manufacturers are also falling in love with vanadium's dual attributes of lightness and toughness. Boeing's Dreamliner and the Airbus A380 each contain 100 tonnes of titanium-vanadium; Largo says demand for the alloy is rising by 6.5 per cent annually, despite a global steel glut.

Vanadium-steel alloys have been used industrially since the 19th century. Indeed, traces of vanadium were found in the "Damascus scimitars" used by Saladin's warriors to rout Christian crusaders. More intriguing is an entirely different application that has emerged out of left field – solar energy storage. Batteries made with vanadium dissolved in sulphuric acid are being touted as the solution to a bizarre 21st-century problem: the world is suffering from a glut of renewable energy.

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Overgenerous feed-in tariffs imposed by politicians anxious to promote green energy have created an artificial market for solar energy panels and wind turbines. Nowhere has the artificial stimulus been more acute than in Germany, a nation shadowed by cloud for much of the year but which boasts the title of the world's biggest generator of solar energy. Attracted by the idea of selling sunlight captured on their rooftops to a utility and thus lowering their electricity bills, German households have installed millions of panels, so many that power generation records were being broken weekly during a sunny period in June when 24 gigawatts of power was being produced in the middle of the day, enough, in theory, to satisfy half of Germany's electricity demand.

But it's almost useless because the output surge falls to nil when the sun sets, the moment when millions of German turn the lights on and put their dinner in the oven. Similar problems are occurring in Hawaii and California, places blessed with sunshine and where solar power ought to be a no-brainer. So worried was HECO, the Hawaiian power utility, about electricity surges in local networks caused by a glut of home-generated solar power, that the company has recently refused to hook up new panels.

The solution is power storage and in regions blessed with ample water supplies, solar power can be used to pump water to high ground until sunset when it is released to power turbines at night. That does not help in dry places but another Toronto-listed company, American Vanadium, is promoting CellCube, an energy storage system developed by a German company, Gildemeister. It's a battery consisting of twin tanks filled with a vanadium and sulphuric acid solution separated by a membrane. When an electric current is passed through the tanks, electrons are released or received on either side of the membrane. The advantage of the Vanadium Redox system, says Gildemeister, is it can be recharged almost infinitely; the batteries have a design life of 20 years and the units, the size of a shipping container, can be stacked, making the system scalable.

American Vanadium has its own feedstock, a vanadium mine project in Nevada whose output will be used to supply electrolyte for the CellCube batteries it supplies under licence. These are new technologies, not yet properly tested by the marketplace, which will only truly take off when demand creates the economies of scale needed to reduce cost. What makes them interesting is that they appear to provide simple solutions to the disjuncture between the timing of power supply and demand.

There is certainly potential demand for a cheap power storage system. Utility companies in Europe are being crippled by the burden of buying expensive renewable power while at the same time being forced to run fossil-fuel generators at huge expense to cope with the intermittent power supplied by the windmills and solar panels. Cracking this problem might save the utilities money, or it might sound their death knell with big power grids replaced by local networks. What is certain is that there will be a lot of money made and lost before we arrive in renewable heaven.

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About the Author

Carl Mortished is a Canadian financial journalist and freelance consultant based in the U.K. With a career spanning investment banking, journalism and consulting for global companies, he was for many years a financial writer and columnist for The Times of London. More


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