Bushveld Energy, launched in 2016, is focused on developing and promoting the role of vanadium in the growing energy storage market through the application of VRFBs. Bushveld Energy is building an energy storage supply chain in South Africa by leveraging the Company’s South African-mined and beneficiated vanadium.
Bushveld Energy’s business model embraces several activities along the VRFB value chain, including electrolyte production, investment in VRFB manufacturing, and energy storage project development across Africa.
Bushveld Energy’s business model focuses on five types of revenue-generating activities in the mid- and downstream segments of the vanadium value chain. These activities have comparatively low capital requirements compared with the mining business. These five activities broadly are:
1. Electrolyte manufacturing, which includes: – designing a conversion process for vanadium feedstock from Vametco’s existing mining and processing operations; – building and operating a chemicals plant to purify vanadium feedstock and mix it into a liquid vanadium electrolyte product; and – marketing the electrolyte to VRFB companies or direct users/buyers of VRFB systems;
2. Renting (or leasing) vanadium electrolyte, a new product under development. Whereas historically VRFBs have been purchased with the vanadium electrolyte, rental/ leasing would allow Bushveld Energy, or a special purpose company, to retain ownership of electrolyte and rent it to the VRFB users or buyers. VRFB technology is unique because of the non-degradation of the electrolyte chemistry and the relative ease of extracting vanadium from the electrolyte at the end of the VRFB’s operating life. In addition to smoothing vanadium price peaks, electrolyte rental permits a long-term pricing model that reduces the upfront capital cost of a VRFB to make it one of the most commercially competitive energy storage technologies available;
3. Assembly of VRFBs through an investment in the construction of an assembly plant for a VRFB product. Unlike other battery technologies, VRFB assembly does not require the same production scale to achieve competitive economics. This makes regional assembly of domestic and imported sub-components extremely attractive to reduce manufacturing costs and supply times. Such an activity may involve direct investment into a VRFB company or companies that would own the facility, as well as the technology;
4. Direct selling of VRFBs in African markets as a value-adding local distributor. In addition to identifying opportunities suitable for VRFB energy storage, this activity includes developing local logistics chains covering importation, transport, installation and maintenance of the VRFBs and key components. As electricity markets are heavily regulated, significant activity in this business would require engagement with public and private stakeholders to create an environment that identifies and values the full range of benefits in long-duration energy storage offered by VRFB technology; and
5. Developing and investing in African energy storage projects, an activity that starts with identifying suitable sites and extends to defining the economic business case for VRFB installations. It includes designing the technical and commercial structure of projects that use VRFBs and making direct equity investment into such projects. By creating bankable energy storage projects, either standalone or combined with generation sources such as solar and wind, Bushveld Energy can accelerate the transition to clean energy in Africa while increasing access to quality electricity delivery through distributed mini-grids.
Implementation of these five activities will continue to follow the principles of strategic relationships. Relevant external parties include development agencies, funders, renewable energy developers and energy storage component providers.
Partnering with Vanadium Redox Flow Batteries companies
As part of Bushveld’s strategy of partnering with VRFB Original Equipment Manufacturers, which includes the supply of vanadium and electrolyte, deployments and investment, the Company has made certain strategic equity investments and entered into joint venture agreements across the vanadium and energy storage value chain.
Bushveld Minerals together with a consortium, have acquired Austria-based CellCube. CellCube is a leader among VRFB peers, with more than 20 years development and production history, with over 130 systems / 23MWh deployed.
Also in this space, Bushveld and Invinity Energy Systems (“Invinity”), have formed a special purpose company named Vanadium Electrolyte Rental Limited (“VERL”) to provide a vanadium electrolyte rental option to Invinity’s customers.
Invinity is a manufacturer of vanadium flow batteries for the large-scale energy storage requirements of businesses, industry and electricity networks. Developed specifically for high-utilisation applications, Invinity’s highly scalable, factory-built flow battery products make low-carbon renewable generation reliable and can run continually with no degradation, charging and discharging for over 25 years. Invinity has deployed over 10MWh of systems to date across 40 sites in 14 countries, and is active in all major global energy storage markets, with operations in the UK, Canada, USA, China and South Africa
During the year, VERL signed a contract for electrolyte rental with Pivot Power, part of EDF Renewables under which VERL will hold, and rent to Pivot for a period of 10 years, the electrolyte in Pivot Power’s 5MWH flow battery, supplied by Invinity and to be delivered to Pivot Power’s project at the Energy Superhub Oxford.
In just over a year of investing US$5 million, Bushveld Energy monetised its holding in Invinity and received ~US$13 million, a return of ~260% for Bushveld’s shareholders. Bushveld Energy and Invinity continue to collaborate on the VERL joint venture. Bushveld maintains its right of first refusal to supply vanadium and vanadium electrolyte to systems sold by Invinity up to the 2nd anniversary of the agreement.
CellCube is a vanadium redox flow battery developer and manufacturer. The Company specialises in the planning, development and turnkey construction of Utility Scale projects worldwide. It is one of the world’s first and largest developers, manufacturers and distributors of vanadium redox flow batteries. With more than 136 installations across five continents, CellCube has substantial industry and operational experience. The technology has proven to deliver long lasting energy storage (now rated for 30 years) and infrastructure for deployment in a wide range of applications including: grid storage and micro grids; storage collocated with renewables such as solar and wind; time shift; diesel power replacement; commercial and industrial solutions such as farming; electrical vehicle charging stations; industrial plants; office buildings and emergency power sources.
During the second half of 2020, CellCube secured 13 MWh in signed orders for its systems. Bushveld Energy has an indirect interest in CellCube of 25.25 per cent, through VRFB Holdings Limited, which owns 50% interest in Enerox Holdings Limited “EHL”. EHL holds a 100 per cent interest in CellCube.