Funding and Execution Risks Loom as AVL Pushes Vanadium Battery Expansion
Australian Vanadium Limited reports significant progress in its integrated vanadium supply chain, including government approvals, Project Lumina development, and successful vanadium flow battery deployment.
- EPA approval secured for Gabanintha Vanadium Project
- Phase 1 of Project Lumina shows competitive levelised cost of storage
- Federal government grants support project development and manufacturing
- Successful commissioning of vanadium flow battery for Horizon Power
- Key contractor appointments for utility-scale battery energy storage system
Upstream Progress and Environmental Approvals
Australian Vanadium Limited (ASX: AVL) has marked a pivotal quarter with the Western Australian Minister for Environment granting EPA approval for the Gabanintha Vanadium Project, a core component of its broader Australian Vanadium Project. This milestone clears a significant regulatory hurdle, enabling the company to advance detailed engineering and infrastructure development under its Optimised Feasibility Study (OFS) Phase 2. The project also gained recognition as a Green Energy Major Project by the WA Government, positioning AVL to benefit from streamlined government support and approvals.
Midstream Manufacturing and Government Engagement
AVL continues to develop its vanadium electrolyte manufacturing capabilities, with ongoing product qualification efforts involving global vanadium flow battery (VFB) original equipment manufacturers. The company’s Perth-based electrolyte facility, built with federal grant assistance, recently hosted visits from Prime Minister Anthony Albanese and WA Premier Roger Cook, underscoring government confidence in AVL’s vertically integrated approach from mining to battery production.
Downstream Energy Storage Solutions and Project Lumina
VSUN Energy, AVL’s wholly owned subsidiary, has completed Phase 1 of Project Lumina, demonstrating that a 100MW/400MWh vanadium flow battery energy storage system (VFB BESS) can achieve a levelised cost of storage (LCOS) competitive with lithium-ion alternatives. Phase 2 is underway, focusing on detailed design and delivery strategies for scalable 4- and 8-hour duration systems. Strategic appointments of GenusPlus Group, Sedgman, and CellCube as contractors bring proven expertise to the project, de-risking the pathway to commercial deployment.
Additionally, VSUN Energy successfully commissioned and handed over a 220kWh VFB BESS to Horizon Power in Western Australia, marking the first deployment of AVL-manufactured vanadium electrolyte in a commercial battery system. This pilot project supports Horizon Power’s decarbonisation goals across its extensive regional network.
Financial Position and Corporate Developments
As of 31 December 2024, AVL reported a cash position of $22.6 million, including $13.6 million in federal grant funds earmarked for eligible activities. The company’s cash outflows reflect ongoing investment in project development and operational costs. Notably, Non-Executive Director Anna Sudlow resigned due to other commitments, signaling a minor board change amidst a busy development phase.
CEO Graham Arvidson highlighted the quarter’s achievements as critical steps in AVL’s integrated 'pit-to-battery' strategy, emphasizing the growing demand for long-duration energy storage solutions in Australia and the company’s readiness to deliver competitive, turnkey VFB BESS products.
Bottom Line?
With regulatory approvals secured and Project Lumina advancing, AVL is poised to capitalize on Australia’s expanding energy storage market, though funding and execution risks remain to be managed.
Questions in the middle?
- How will AVL finance the next phases of Project Lumina and broader project development?
- What are the timelines and potential hurdles for final investment decisions on utility-scale VFB BESS deployments?
- How will AVL’s vertically integrated strategy compete against established lithium-ion battery suppliers in the evolving energy storage market?
