Vanadium redox flow batteries and South Africa’s green industrial opportunity

The green transition is accelerating. Between 2010 and 2024, total global electricity generated from renewable sources such as wind, solar and hydropower more than doubled – from 4,189 terawatt hours (TWh) to 9,868TWh, according to research by the Energy Institute. Although renewables still account for a modest share of total electricity generation, that share has grown rapidly from 20% to 32% in that period, and is projected to reach nearly 45% by the end of the decade.

Initially driven by policy interventions such as subsidies and tax incentives, the transition is now powered by economics. Even without support measures, the cost of electricity from renewables has fallen below that of coal, gas and even nuclear power. Data from US investment firm Lazard shows that, as of June 2025, utility-scale solar power costs less than half as much per megawatt hour as coal. As recently as 2009, solar energy was more than three times the cost of coal-generated energy.

Whatever we thought we knew about electricity markets is changing quickly. The growing cost advantage of renewables, combined with the need for grid-scale storage solutions in response to carbon net-zero commitments and policy measures such as the Carbon Border Adjustment Mechanism (CBAM) in the EU and UK – which will impose carbon duties on exported goods to these countries – will continue to drive investment in renewable and low-carbon electricity sources.

The storage challenge

Of course, the sun does not always shine, and the wind does not always blow. So, as renewable energy deployment accelerates, energy storage systems capable of stabilising grids and storing excess power for extended periods are becoming essential. Battery energy storage systems, which have become more affordable and scalable thanks to technological advances, now account for 160GW of global storage capacity. Even in South Africa, which was initially slow to adopt these technologies, battery storage installations have already reached 1.3GW and are growing steadily.

While lithium-based technologies – particularly lithium iron phosphate (LFP) batteries – currently dominate the market, a new wave of storage technologies using other critical minerals is emerging. One such metal is vanadium, which, when used as an electroactive element in redox flow systems, enables vanadium redox flow batteries (VRFBs). These are particularly promising for long-duration energy storage applications, where energy must be deployed gradually over extended periods (typically eight hours or more).

Vanadium’s promise

A study published this week by the Localisation Support Fund (LSF) highlights this technology’s advantages. VRFBs combine performance, safety and sustainability benefits ideally suited for grid and industrial use. They offer exceptionally long lifespans – 25 to 30 years – with no degradation even at full depth of discharge. The technology is inherently safe, thermally stable and nearly 100% recyclable. Advances in manufacturing and materials science are also bringing costs down sharply, with per-unit VRFB costs expected to approach those of LFP systems within the next five years.

These advantages are expected to translate into significant market growth, with global installed VRFB capacity projected to increase tenfold – from 4GWh to 40GWh – by 2030 under a base-case scenario.

A strategic opportunity for South Africa

South Africa, notably, holds one of the world’s richest and highest-quality vanadium reserves and is one of the few countries with established primary production capacity for the mineral. This gives the country a unique strategic advantage.

The anticipated expansion of the VRFB market presents a substantial opportunity for South Africa to advance its mining, refining and downstream processing capabilities. Policymakers recognise this potential: vanadium was recently identified as a critical mineral for focused beneficiation support by the Department of Mineral Resources and Petroleum, while the South African Renewable Energy Masterplan highlights VRFBs as a priority technology for deployment and industrialisation.

However, as our study emphasises, policy intent alone is not enough to establish South Africa as a leader in VRFB production. A more targeted, multilayered policy framework is required – one that leverages the country’s mineral endowment while stimulating local manufacturing, domestic demand and export competitiveness. South Africa has long acknowledged the importance of mineral beneficiation at policy level, but to truly unlock the potential of vanadium, we must make the business and economic case equally compelling.

From policy intent to execution

In 2020, the Industrial Development Corporation and Bushveld Minerals jointly established the Bushveld Electrolyte Company (Belco) in East London, with the aim of producing annually up to eight million litres (about 200MWh) of vanadium electrolyte – the precursor material for VRFBs. But financial pressures have slowed its progress, illustrating the need for policy support to close early-stage commercial gaps. If Belco or similar ventures achieved even these modest goals, they could generate hundreds of millions (if not billions) of rands in annual revenue, supporting thousands of jobs across the value chain.

Maximising domestic value addition from South Africa’s critical minerals is essential for sustainable growth and job creation. Manufacturing-led beneficiation has one of the highest employment multipliers – creating four additional jobs across the value chain for every one created in the factory. With our vast mineral resources, beneficiation should be a cornerstone of economic recovery, supported by a clear and enabling policy framework. The LSF study highlights the need for an integrated framework that aligns incentives, standards, financing, R&D and export support to develop a globally competitive vanadium redox flow battery industry.

We now need to move from policy intent to execution. With global demand for long-duration energy storage rising and with vanadium recognised as a critical mineral, the country has both the rationale and the foundation to act. A coordinated push to support beneficiation, refining and manufacturing could anchor a new wave of green industrialisation, embedding South Africa in the global VRFB supply chain and transforming its mineral wealth into factories, exports and sustainable jobs for a low-carbon future. DM

Irshaad Kathrada is chief executive of the Localisation Support Fund.