Solar for cobalt sulfate production

From pv magazine USA

EVelution Energy, an electric vehicle battery materials company, has secured the approval of the Yuma County Board of Supervisors to develop a solar-powered cobalt sulfate production facility in Yuma County, Arizona. It will be the first EV battery facility with on-site renewable energy generation in the United States.

The facility expects to produce  7,000 tons of cobalt per year and calls for 28.4 MW of on-site solar power generating arrays to be installed on 105 acres of the company’s 139-acre property in Yuma. The estimated power needs of the cobalt processing facility are expected to be about 6 MW, allowing the company to sell excess power during the day to local electric utility, the Wellton-Mohawk Irrigation District, Gil Michel-Garcia, executive vice president and general counsel of EVelution, told pv magazine USA.

EVelution expects to start construction of the processing facility in 2024. It expects it to be fully operational by 2026, when it will have 360 full-time employees, the company said.

Currently, the primary source of power for the district is hydropower from the Parker Dam, whose water level has been decreasing due to drought conditions, Michel-Garcia said. As a result, the district has expressed an interest in purchasing 6 MW of excess power production, with the possibility of acquiring more in the future, Michel-Garcia said.

“We expect that the surrounding agricultural community will benefit will from having access to our locally generated low cost clean power,” he said, adding that EVelution’s facility is expected to cost about $200 million to build.

The EV battery materials facility uses an atmospheric leaching process, a process which requires a significant amount of peak energy to heat water. In typical leaching facilities, the heating is typically done using natural gas or propone heaters, while EVelution intends to use solar power to heat the water and to store it in large hot water storage tanks, Michel-Garcia explained. The tanks will store heated water to operate its processing facility overnight and thus reduce the overnight power requirement load on the district utility as well, he said.

With excess generating capacity, Michel-Garcia said EVelution plans to install battery storage capacity of about 24 MW (96 MWh) to manage peak power sold to Wellton-Mohawk during the day and to store excess solar to further reduce its overnight power requirements.

To interconnect the cobalt processing facility to the  grid, EVelution will pay the district to build a high-voltage direct current (HVDC) transmission line to interconnect to a local power substation, which will require an interconnection agreement with the district for the purchase and sale of power, Michel-Garcia said.

The company is currently in discussions to reach an offtake agreement for the pricing of excess solar power and the pricing for the supply of electric power during the evening periods, as well as the construction of the 34.5 kV electric transmission line from to interconnect with its processing facility, he said.

As a US company, Michel-Garcia said EVelution will be the first company to build a carbon neutral cobalt sulfate production facility in the United States with on-site generation.  The company’s aim is to combat climate change, boost US manufacturing, and reduce our economic reliance on other countries for EV battery materials.

Currently about 70% of the world’s EV battery-grade cobalt sulfate comes from China, with Finland and Indonesia producing most of the remainder.  EVelution Energy is hoping to contribute to supplying 40% of the EV battery-grade cobalt sulfate required by US-made EVs by 2027, said Michel-Garcia.

“What is interesting about this project are the confluence of the various tax incentives that have recently become available in the U.S. in order to make green infrastructure projects like this possible,” he said.

EVelution Energy stands to recover costs from the solar investment tax credit for its on-site solar facility, as well as the Section 45X of the Inflation Reduction Act.  This Advanced Manufacturing Production Credit (PTC) applies tax credits of up to $31 billion to the production of cathode and anode materials used in lithium-ion batteries and advanced battery minerals sourced in the United States.

According to a tax presentation by the company, EVelution stands to recover either or both Section 45X or 48C of the IRA, the Qualifying Advanced Energy Project Credit. The energy project credit is a one-time ITC equal to 30% of the amount of invested capital in a mineral processing facility used for EV batteries.

Prior to forming EVelution in October 2021, co-founder and chief executive officer Navaid Alam was president of commodities trading firm Cobham Capital for 21 years, and was also an attorney at Clifford Chance and other firms. Michel-Garcia also spent four years at Cobham Capital after practicing law in various firms for over two decades.

In October 2022, EVelution signed a memorandum of understanding to partner with Trafigura for the supply of raw materials and marketing of cobalt sulphate and nickel sulphate from the Arizona facility.