Where Vanadium Fits into the Future of Energy

Written by Luke Burgess
Posted June 2, 2021

It doesn't have the flash of gold...

... And it's nowhere near as sexy as silver...

It's not even as well-known as the more boring metals like copper, nickel, and zinc.

But vanadium has long served as a vital industrial metal. And now it's quickly transitioning into a critical energy metal.

Vanadium is a soft white metal (chemical element V and atomic number 23) that's mostly used as a steel hardener.

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High-strength vanadium-alloy steels are used in high-rise buildings, bridges, heavy equipment, industrial tools, medical devices, ship plates, rail lines, and military vehicles.

Henry Ford was so fond of vanadium steel alloys, he used the metal to help sell his cars. A 1909 advertisement for a Model T Coupe proclaims:

Nobody disputes that Vanadium steel is the finest automobile steel obtainable... We defy any man to break a Ford Vanadium steel shaft or spring or axle with any test less than 50% more rigid than would be required to put any other steel in the junk pile.

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But steel alloys aren't the focus for the vanadium market right now.

What's getting investors excited about vanadium is the metal's application as an energy metal for the future.

Specifically, I’m talking about the commercial arrival and proliferation of the vanadium redox flow battery (VRFB).

A vanadium redox flow battery is a type of flow battery that uses vanadium ions in different oxidation states to store chemical potential energy.

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Due to their size and weight, these batteries are expected to be mainly used for grid storage. Currently grid energy storage facilities, like Tesla's Gigafactory, use lithium-ion batteries to store electricity. But lithium-ion batteries have flaws.

Aside from their tendency to catch on fire, lithium-ion batteries lose their ability to recharge over time.

The vanadium redox battery is much safer, can last longer, and can be recharged infinitely. That could be a game changer for grid energy storage.

VRFBs attracted some investor interest back in 2018 with speculative hopes for future development. That helped push vanadium prices to multiyear highs. But now VRFBs are actually being planned and built — at least in China.

Recently the US Department of Energy set up a competitive award process for flow battery system research and development projects with up to $24.5 million of funding available. Back in March U.S. Secretary of Energy Jennifer Granholm tweeted:

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According to QY Research, the VRFB market was valued at $320 million in 2018 and is projected to reach $4.25 billion by 2025, at a CAGR of 38.3%.

Meanwhile, vanadium prices are on the rise. For the year, prices for vanadium pentoxide flakes (used to make steel alloys) are up more than 60% since December 2020.

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The role vanadium will play in the energy storage space remains to be seen. But optimism surrounding VRFBs is rising with new development. And it’s a space investors might want to keep an eye on.

Until next time,
Luke Burgess Signature
Luke Burgess

Luke’s analysis and market research reach hundreds of thousands of investors every day. Through his work with the Outsider Club and Junior Mining Trader, Luke helps investors in leveraging the future supply-demand imbalance that he believes could be key to a cyclical upswing in the hard asset markets. For more on Luke, go to his editor’s page.

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