Resource substitutability path for China’s energy storage between lithium and vanadium

The limited availability of lithium resources is often considered as potential constraints for the wide implementation of lithium-ion battery (LIB) energy storage technology. Alternative storage solutions, such as vanadium redox flow batteries (VRBs), are thus gaining traction as viable substitutes for LIB energy storage. However, how price volatility and cost affect technology substitution and thus scale and dynamics of energy storage market remains hitherto poorly characterized. Here, we construct a binary mineral resource substitution model within the energy storage sector of China, integrating energy storage costs with the prices of lithium carbonate and vanadium pentoxide. We reveal a mutualistic relationship between LIB and VRB, where the substitutability elasticity of vanadium pentoxide prices relative to lithium carbonate prices gradually decreases as prices rise. Through scenario simulations, we explore various price scenarios and strategic development paths, finding that VRBs show potential for market penetration when vanadium prices are low and lithium carbonate prices are high or moderate. The optimal transformation path is to follow the planning path until 2030 and then transition to the radial path until 2060.