REALISING AVL'S UTILITY-SCALE VANADIUM FLOW BATTERY STRATEGY
KEY POINTS
• The Company's wholly owned subsidiary, VSUN Energy Pty Ltd (VSUN Energy), has commenced Project Lumina, the development of a modular, scalable, turnkey, utility-scale battery energy storage system (BESS) using vanadium flow battery (VFB) technology, for use in Australian energy markets.
• Analysis completed by VSUN Energy indicates the merits of a 4-hour 100MW VFB BESS with a levelised cost of storage (LCOS) of A$274/MWh (± 30%). Such an LCOS for a VFB BESS would be competitive with the LCOS of similar lithium-ion BESS products currently in the market.
• Project Lumina is an important next step in VSUN Energy's ongoing objective of developing solutions to address Australia's growing requirement for long duration energy storage, while providing AVL with an opportunity for offtake of its planned production of vanadium oxides from the Australian Vanadium Project and Australian-manufactured vanadium electrolyte, as part of the Company's ‘pit to battery' strategy.
• AVL is considering a range of funding options for Project Lumina at either parent company or asset level within the AVL group, which is expected to include debt supported by strategic equity or cornerstone equity funding, including from Australian Government agencies.
Australian Vanadium Limited (ASX: AVL, the Company or AVL) is pleased to announce Project Lumina,1 targeting the development by VSUN Energy of a BESS that is modular, scalable, turnkey and suited for medium to long duration battery storage applications of utility scale, employing well- established VFB technology2 optimised for local conditions.
VSUN Energy has completed Phase 1 of Project Lumina,3 indicating that the LCOS of a 100MW VFB BESS would be competitive with the LCOS of lithium-ion BESS products of similar capacity that are currently available in the market. Figure 1 below compares Project Lumina's LCOS estimated range for a 4-hour and an 8-hour 100MW VFB BESS with that for a similar utility scale lithium-ion BESS.4
This work has given the Company confidence to proceed with Phase 2 of Project Lumina,6 being the detailed design of a VFB BESS solution.
Should this satisfy the Company's gated development process, it would deliver a utility scale energy storage solution for deployment to address Australia's growing requirement for long duration energy storage for the energy transition.7
AVL's Chief Executive Officer, Graham Arvidson comments, “We are pleased to be able to share the significant steps that we have taken to develop the downstream value of our business.
The need for long duration energy storage in Australia is rapidly growing and the work the team is undertaking with Project Lumina is a key enabler to create a platform for us to deliver competitive long duration battery energy storage solutions.
“The scale of the projects VSUN Energy is pursuing aims to provide AVL with the ability to utilise our own manufactured vanadium electrolyte, ultimately unlocking the development pathway and full value of the Australian Vanadium Project.”
(20min delay)