Vanadium Supply Chain, Economics and Future

After reading the Vanadium post, I am sure its pretty clear that VRFBs are expensive but they are one of the oldest, most stable, most deployed and proven redox flow battery chemistry yet. So, I feel its worth giving Vanadium another chance before dismissing it fully.

Vanadium Supply Chain

As of 2026, global Vanadium production is 100,000 metric tons, that may sound like a lot, but its tiny, to put that in perspective, we produce 3x more Lithium and we still need to discover and open new lithium mines, and Lithium supply chains are considered to be volatile. 

Since we are talking about supply chain, its obvious to see when you buy Lithium or Vanadium ores, where exactly are they being dug up.

Lithium producing countries- Source



Vanadium producing countries - Source

I'll be honest even I am a little surprised, I imagined Lithium to be produced in China, and its an obvious assumption, if the biggest lithium ion battery makers are Chinese, it would be obvious to think that its produced in China. But China has expertise in processing of lithium into valuable end products (batteries) rather than mining of large quantities of Lithium ore.

Now look at the Vanadium pie chart, its actually shocking, a single country mines 67% of Vanadium, and its the one country that everyone wants independence from after COVID-19. Moreover two of the most controversial countries hold a very tight monopoly on Vanadium supply.

Just to be clear, Russia and China are two countries, which western nations don't want to import from. Countries like US explicitly have import restrictions against these two.

Where is Vanadium Used ?

Unlike Lithium which is exclusively mined and processed for batteries, Vanadium is mined to be used as a steel enhancer. Primarily used to increase strength of steel to build  rockets, jet engines, bridges, skyscrapers, tools (like wrenches), cars, you name it. Almost 90% of it is produced and used for these applications. 
Vanadium is a very valuable metal, that has made a lot of the modern technological innovations possible. Its ironic that we don't produce more of it.

 A Word from Manufacturers 

The largest Vanadium Redox Flow Batteries (VRFBs) manufacturer in the world, is Rongke Power, you guessed it, Chinese manufacturer with giga-factory in China. They have deployed the largest VRFB projects in the world. There are more than 30 VRFB startups and companies working on manufacturing them at large scale.

I have actually been lucky enough to meet one of the leading  Indian manufacturers of VRFBs , at Bharat Electricity Summit (March 2026 ), Delectrik Systems Pvt Ltd. They are based out of Gurgaon, in India. They have deployed over 100 battery systems across 10 different countries and are the pioneers of India's first 3 MWh VRFB installation at NTPC NETRA. I even talked to Mr. Vishal  Mittal, and he said that they import Vanadium in raw form from South Africa and process it in-house into finished electrolyte [source]. So they are also import dependent, on South Africa not on China.

Economics-

In my last post, I wrote about why VRFBs don't work at small scale, let's try to analyze the projects being commissioned for the grid, NTPC released a 100 MWh tender for that is worth Rs. 229.50 crores ($ 23.7 million), that prices the project at Rs 2.29 crore per MWh ($236,000), or Rs 22,950  ($ 236) per kWh.

That is a highly competitive price for grid scale battery storage systems. But dropping lithium ion battery prices have reached Rs 11,000 ($ 108) per kWh, for 4 hours of storage, even if you deploy a lithium ion system twice, it would still cost less than VRFBs right now, upfront. But a lithium ion battery degrades in 7 to 10 years whereas VRFBs don't. The catch is buyers are incredibly short sighted especially for higher CapEx (up-front cost) technologies.

The good news is tenders like the NTPC one have driven VRFB prices to historical lows, the catch is those prices are not lower than LFP batteries.

Future 

Its pretty clear that, LFP batteries are dominating short duration energy storage (up to 4 hours) and VRFBs are dominating the Long Duration Energy Storage (storage beyond 4 hours) market right now, but since Vanadium has a big supply chain constraint and lithium degrades significantly, there is clearly a need for a battery that has prices less than or equal to lithium and infinite life of a VRFB. That's what I am trying to do.

What do you think the future of grid scale energy storage looks like ?


None of this is AI generated, so feel free to fact check me and looking forward to your views and help. 

Mayank Jately

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