Largo Clean Energy has signed a non-binding memorandum of understanding with Ansaldo Green Tech.

The parties have signed an MOU to establish a collaboration for the purpose of the commercial deployment of the Largo’s VCHARGE Vanadium Redox Flow Battery (VRFB).  The parties have agreed not to engage in discussion with third parties for the purpose of the development or commercialization of flow battery technologies in the agreed markets (Europe, Africa, and Middle East) for a period of 150 days to allow for the negotiation of a definitive agreement.  If successful, a potential JV could address identified needs in the European energy sector.

There is potential for the battery market to become a sizable consumer of vanadium units in the future.  In VRFBs, a vanadium electrolyte is used to store energy and enable wider use of renewable power generation such as wind and solar.   VRFBs were commercialised in the 1980s but have only seen commercial deployment since 2010.  Since then, there have been a number of installations globally, of varying sizes, resulting in irregular bouts of vanadium consumption. 

VRFBs have large and scalable capacity, can withstand being discharged for long periods, are safe and have a long cycle life.   However, capital costs and most centrally the high cost of vanadium as an electrolyte have prevented significant market penetration.  Project Blue expects to see continued commercialisation of vanadium redox batteries in its base case.   Our current projection is for >30%py growth to 2027, with demand to be driven by China.  We think the future of VRFB commercialisation to be a somewhat binary story: it will happen, or it won’t.  Our low case assumes the latter (owing to cost issues with electrolyte and/or lower-than-expected appetite for ESS) with some demand still assumed for R&D and pilot installations.  In our high case, ESS installations occur at a higher-than-expected rate and/or VRFBs gain some market share over “competing” electrochemical technologies such as Li-ion.