SOUTH African technology company, Ukhozi Africa Technologies plans to establish a vanadium electrolyte and vanadium redox flow battery manufacturing plant in the Richards Bay Industrial Development Zone (RBIDZ).
The project’s R1.24 billion investment value was announced at the recent KwaZulu-Natal Investment Conference.
VRFB technology is gaining popularity in China, Europe, Japan, Australia and across the US as a large-scale battery energy storage (BESS) solution for renewable energy sourced from solar PV panels, wind turbines and other electricity generation sources like gas-to-power and nuclear.
Specifically, Vanadium Redox Flow Battery (VRFB) technology is well-suited to South Africa as the country hosts some of the world’s largest high-grade primary deposits of this critical mineral. “We have the rare opportunity to beneficiate local feedstock from our mines along the full value chain to end-use, and this same feedstock is already proven in the international licensed battery electrolyte manufacturing process that Ukhozi will employ,” says Chris Potgieter, Ukhozi Africa Technologies technical director.
Mandla Mhlongo, Ukhozi Africa Technologies operations director, explains the company’s strategic path to full production, outlining three components to the manufacturing process:
- Mining and the extraction of vanadium
- Transformation into a V2O5 electrolyte solution
- Construction of the battery, including tanks for the electrolyte and a casing.
“Initially, we are not going to get involved in the extraction process,” he says. “Our first phase is to build the battery manufacturing and assembly plant because it provides rapid deployment. Thereafter we will construct the electrolyte plant.”
The company has concluded a licensing agreement with Liquid Energy (LE) Systems, headquartered in Tokyo, Japan, as a technical partner. Potgieter says that LE Systems is already using feedstock sourced in South Africa in its VRFBs. “The IP sits in the battery’s membrane and the electrolyte – they have to be matched. The beauty is that our locally-sourced vanadium is already matched with LE’s process. So, we are starting out with proven technology that is already in commercial use.” Ukhozi’s strategy is to use proven technologies and battery systems that are already fully commercialised. This allows for less cumbersome financing, and a more accurate financial model that can be tabled to facilitate access to a portfolio of funders and investors.
Advantages over Li-ion
Demand for energy storage solutions is rocketing in tandem with the global shift to renewable energy. Most of South Africa’s estimated 12 GW of solar and wind generation capacity currently relies on Lithium-ion (Li-ion) technology for energy storage. Finding its way into our pockets in cellphones, powering laptops, and Electric Vehicles (EVs), Li-ion technology has benefited from familiarity and a head-start in market adoption and large-scale production.
The advantages of this dense, solid-state storage solution are obvious – Li-ion has a good size to energy ratio which makes it portable and convenient. But the batteries are also flammable, degrade to replacement over around 3,000 cycles and are designed to discharge over short-burst (two to four hour)applications.
With the smallest VRFB supplying around 250 kW with a footprint the size of a fridge, they are not going to replace Li-ion in EVs and cellphones. But, in large-scale, fixed applications, they have many advantages, outperforming lithium batteries, including a benign chemistry that operates safely in temperatures from -20 to +70oC, are suited to longer use durations (4-12 hours) and last for over 10,000 cycles, the equivalent of more than 20 years. At the end of their lifecycle, the vanadium can be reused to produce electrolyte, a far ‘greener’ outcome than the end of life for a Li-ion battery.
It isn’t straightforward to make direct cost comparisons between the two technologies. Potgieter admits the initial Capex cost for VRFBs is higher, but says financial and funding models that take VRFB’s longer lifecycle and a range of other cost benefits into account are showing definite promise.
Richards Bay energy hub
Ukhozi Africa Technologies has secured a 2-hectare site in the RBIDZ for the electrolyte plant and the battery import warehouse and assembly facility from where local content manufacturing will be driven. The electrolyte plant is designed for an annual output of 10,000 m3, the equivalent of 100 MW or 400 MWh of energy.
Positioning itself as an energy hub, Mhlongo says Richards Bay is the ideal location for Ukhozi’s operations. “We will be setting up an industrial scale VRFB in the RBIDZ in the first quarter of next year,” he says. “That will be used as energy storage for tenants in the zone and also showcase the technology in a commercial application.”
He says the company’s strategy is to start production in three years’ time, with plans to triple capacity to 30,000 m3 a year in the longer term, adding that Richards Bay is also well-positioned for the export market.
Building the book
The company is in the process of securing funding and signing up customers. “We have support from a wide range of sources, including the Industrial Development Corporation, Department of Trade, Industry and Competition, and the Black Empowerment Fund, as well as commercial banks. But a project of this size requires a portfolio of investors. We are very particular about finding the right equity partners,” says Potgieter.
According to Mhlongo, overseas investors have been more receptive than local partners. “We still want the company to remain native South African and so part of our mix is to find investment here.”
Mhlongo explains that the VRFBs are designed for energy augmentation, not to supply baseload. “For example, at a mine or a manufacturing facility, the VRFBs store energy for use when the sun isn’t shining, or the wind isn’t blowing. Or they can be charged from the grid and used for demand shifting during peak times. The batteries are ideal for large-scale peak-shaving and backup power applications.”
The company is also looking at municipalities and micro-grids as potential customers. “One of these customers could approach us for a battery system to power 1,000 houses as an example. The factory will produce the relevant volume of electrolyte, manufacture the casing and dispatch it to site,” says Mhlongo.
The batteries are easily scalable and supplied in 6 m or 12 m containers. “For mid-sized applications, for example, the unit will probably be a 6m container. In GW applications, the batteries can be modularised with 6m and 12m container sizes. It’s very usable and very user-friendly as the electrolyte goes in once every 25 years. Li-ion batteries will be replaced four times by the time the VRFB needs to be restocked,” says Potgieter.
Pointing to Australia’s burgeoning VRFB supply chain, Potgieter points out that South Africa is starting to catch on, citing the technology as one of three BESS options being evaluated by the Carissa Wind Energy Facility commissioned to supply Hive Hydrogen’s mega green ammonia plant planned for Coega.
Eager to get manufacturing underway and move onto the next phase, Mhlongo adds that the company also sees a large potential cost advantage in reclaiming millions of tons of vanadium-rich slag dumped during the heydays of steelmaking in the country. “Not only will we be solving a long-term waste problem, but also reducing the cost of our vanadium input. That is a longer-term plan, in the meantime, we will source feedstock from local mines,” he says.
