Key facts
- Australian Vanadium (AVL) and Alcoa signed a non-binding MOU for a vanadium battery energy storage system (VBess) study.
- The proposed VBess capacity is 400-640MWh.
- The study will assess financial and technical feasibility for Alcoa's Western Australia alumina operations.
- The system aims to boost renewable energy use and cut peak electricity costs for Alcoa.
- AVL's vanadium electrolyte production capacity may be utilized.
Australian Vanadium (AVL), through its subsidiary VSUN Energy, has entered into a non-binding memorandum of understanding (MoU) with aluminium producer Alcoa. The agreement is to conduct a scoping study for a vanadium battery energy storage system (VBess) at Alcoa's alumina refining operations in Western Australia.
The study will evaluate the financial and technical viability of a 400-640MWh VBess. The system is intended to enhance Alcoa's utilization of renewable energy and decrease its electricity expenses during peak demand periods. AVL also noted that the study will investigate "electrolyte supply considerations," which could involve sourcing from AVL's existing 33 MWh/yr vanadium electrolyte plant in Perth.
AVL is one of four vanadium developers in Western Australia and is currently undertaking a feasibility study for its proposed 11,200 t/yr vanadium pentoxide mine. Previously, AVL partnered with Sumitomo Electric to submit an expression of interest for a 500MWh VBess in Kalgoorlie as part of a WA government tender.
Alcoa is in the process of acquiring South32's bauxite, alumina, and aluminium assets for $4.1 billion, a deal expected to close in the first half of 2027. This acquisition includes the Worsley alumina refinery, which will be added to Alcoa's existing facilities in WA, the Pinjarra and Wagerup refineries. Alcoa currently powers its WA alumina refineries with natural gas and has secured extended supply agreements with Woodside and Chevron.
The Australian government plans to offer A$2 billion in low-emissions aluminium production credits from 2028-29 to support smelters in transitioning to renewable energy by 2035. Alcoa's acquired Worsley refinery, along with its existing Pinjarra and Wagerup refineries, are significant emitters of CO2 equivalent.