LONDON (ShareCast) - (Sharecast News) - Vanadium producer and energy storage company Bushveld Minerals updated the market on the hybrid mini-grid project being developed at the Vametco vanadium mine on Wednesday, reporting the receipt of environmental authorisation from South African authorities.
The AIM-traded firm said the mini-grid project would comprise 3.5 megawatts of solar photovoltaic generation, and four megawatt hours of vanadium redox flow battery (VRFB) energy storage.

It said it had received environmental authorisation following the submission of the environmental basic assessment from the Department of Mineral Resources and Energy, for the project's construction.

The firm also announced the appointment of technology company Abengoa to manage the engineering, procurement and construction of the project, including the integration of the solar and energy storage systems.

It would be Abengoa's fourth project in South Africa using solar plus storage, having previously commissioned 250MW with storage.

Bushveld said it had selected Enero x to supply the 1MW/4MWh VRFB for the project, adding that the Austria-based company had installed more than 136 VRFBs and 23MWh of energy storage capacity, bringing more than a decade of VRFB operational experience to the project.

A memorandum of understanding was also signed with South Africa-based investment management company Thebe Investment Corporation as a strategic equity partner in the development and funding of the hybrid mini-grid project.

Thebe would be active in the development of the project going forward, including assisting Bushveld in finalising the terms of the external debt funding.

Securing the environmental approval, power purchase agreement and the engineering, procurement and construction were described by the board as "crucial" project development steps leading to an application for a generation license.

Recent regulatory changes in South Africa permitted the National Energy Regulator to issue such generation licenses without ministerial dispensation.

Financial close of both debt and equity to fully fund the project was the other key outstanding step, which Bushveld said would occur after receipt of the licence.

Construction of the hybrid mini-grid project would begin after financial close.

"The project demonstrates the commercial viability of solar plus VRFB storage solutions for commercial and industrial scale applications," said chief executive officer Fortune Mojapelo.

"This is occurring at a time when stationary storage deployments are gathering momentum and when in South Africa the government is making concerted efforts to lower regulatory hurdles for self-generation for commercial and industrial applications.

"In showcasing the business case for solar plus long duration VRFB solutions, this project will open up significant opportunities for further VRFB deployments."

Mojapelo said that in addition, there were "several unique facets" to the project that proved the commercial viability of VRFBs for a number of South African, but also international, industrial applications.

"Most importantly, we are building a large-scale solar project with a vanadium-based battery, to store the generated electricity.

"The vanadium comes from our mine and the battery comes from Enerox, one of our VRFB manufacturing investments.

"The project has already attracted both debt and equity funding interest from reputable funding institutions which demonstrates the economics of such solar and VRFB mini-grids, even when compared to grid tariffs."

At 1153 GMT, shares in Bushveld Minerals were up 0.72% at 12.59p.

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