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It looks to me, already fully understanding the market for VRFB, that the future for this business looks very good indeed. Energy storage has huge potential:
Industry analysts remain bullish on the global energy storage market growth. Bloomberg New Energy Finance predicts the sector will receive approximately $620 billion in new investment by 2040 with market growth projections at nearly 900 per cent. between 2017 and 2022. Against this background, VRFB is expected to capture around 18 per cent of a total addressable stationary energy storage market by 2027. This positive sentiment is supported by various intergovernmental organisations including the World Energy Council who view energy storage as “instrumental in the grand energy transition” in a recent report. BNEF expects energy storage to play a key role in enabling solar and wind generation to reach 80 per cent. penetration in certain markets across the world. As such, energy storage installations (excluding pumped hydropower) are expected to reach 2,850GWh by 2040 – a 122-fold increase in capacity from 2018 figures.
Following the merger between redT and Avalon, Invinity will be active across all major energy storage markets including the US, UK, Europe, Australia, South Korea and Canada.
The long term vanadium supply is easy through the partnership with Bushveld Minerals and Vanadium Financing Partnership with BMN was confirmed on the 9 March. The company announced it had concluded this agreement with AIM-listed integrated vanadium producer Bushveld Minerals to create a vanadium financing partnership, which the Invinity intends to utilise and provide the vanadium electrolyte for the previously announced ESO project. The Partnership, which will be owned by redT and Bushveld, will take the form of a special-purpose vehicle structured to hold vanadium, then provide the option to rent that material to the company’s current and future commercial pipeline on a project by project basis. Within this framework, Bushveld has made an initial commitment to supply vanadium for approximately 15 MWh of VRFBs. This reduces the capex costs for the VRFB and makes it very competitive compared to Lithium-Ion especially looking at the life of the system.
The upside potential for the long term for Inivinty will bring huge scale and lower costs. redT’s expertise in energy project analysis has enabled the Company to find viable projects even with production costs which were higher than those of Avalon’s VRFBs. Combining Avalon’s product cost advantages and redT’s project analysis expertise, significant new commercial opportunities are easier. A number of projects initially targeted by redT that was not pursued before as they didn’t have sufficient returns, however favourable economics when using Avalon’s product costing. Add the breadth of geographic coverage (adding North American and Asian markets to redT’s current focus areas of UK, Europe, Africa and Australia) by the merger, it looks very exciting.