1414 Degrees secures $2.2m Modern Manufacturing Initiative Grant for SiBox thermal energy storage technology

1414 Degrees secures $2.2m Modern Manufacturing Initiative Grant for SiBox thermal energy storage technology

​1414 Degrees has been successful in its application for a $2.2 million grant from the Australian Federal Government’s Modern Manufacturing Initiative (MMI) to accelerate the commercialisation of its SiBox thermal energy storage technology.

The grant will be used to support the commercialisation of the SiBox technology through the construction, commissioning and testing of the circa 1 MWh SiBox demonstration module validation project which begins construction in 2022. It will also fund commercialisation activities including market research and technoeconomic evaluation of brown-field integration opportunities for SiBox.

The grant funding complements the agreements with Woodside Energy Technologies Pty Ltd for up to  $2m for the demonstration module, announced in October 2021.

Minister for Industry, Energy and Emissions Reduction Angus Taylor said: “The Government is taking action to reduce Australia’s emissions and secure our economic future, and our investments will help our manufacturers be part of the solution. This funding will help some of our most innovative businesses unlock private investment, drive more opportunities in manufacturing as well as create new local jobs. While helping our businesses embrace new technology and scale up their production, this funding will also help to turn more of our waste into valuable products.”

 1414 Degrees Chief Executive Officer Matt Squire said: “This $2.2million Federal Government MMI grant is further recognition of the importance of long duration, thermal energy storage for any sustainable renewable energy transition. This was also an area of considerable focus in the recent COP26 Climate Conference in Glasgow.The funding will provide us with further support for advancing the technical and commercial development of our SiBox Silicon based energy storage technology. We believe the SiBox is a robust, scalable and flexible design that will enable the use of affordable and abundant renewable energy for the delivery of clean, high temperature heat. This can then be used in a vast array of industrial applications that currently rely on fossil fuels. In addition, SiBox could be utilised by thermal power stations, minerals processors and renewable energy developers as they look to de-carbonise their future operations and design. We are delighted the potential of our SiBox design has been recognised with this grant and look forward to constructing our demonstration module next year. We believe that a successful commercial trial of SiBox could provide us with the opportunity to establish 1414 Degrees as a world-leading advanced manufacturer based locally in Australia.”

September 2021 Quarterly Activity Report

September 2021 Quarterly Activity Report

Highlights:

  • – SiBox Demonstration Module project on schedule with storage media design selected
  • – Agreement executed with Woodside Energy Technologies to fund $2 million towards SiBox Demonstration Module (subsequent to the quarter’s end) 
  • – Aurora Energy Project strategy reviewed and development variation approvals progressed
  • – Appointment of new Chief Executive Officer, Matthew Squire who commenced on 2 August
  • – Cash balance at end of quarter $4.2 million

Clean, scalable renewable energy storage developer 1414 Degrees Limited (“14D” or “the Company”) (ASX: 14D) provides the following activity report and Appendix 4C for the period ending 30 September 2021.

Strategic summary

This has been a constructive quarter for the Company with the establishment of new leadership at Management and Board level as well as a renewed strategic focus on delivering shareholder value. The quarter saw an increasing demand for renewable energy solutions with record levels of capital projects and investments announced globally, coupled with a strong rise in global energy prices. It is expected that larger demands for investment in renewable energy will be recognised at the forthcoming COP 26 UN Climate Change Conference in Glasgow at the end of October. This bodes well for the Company’s strategy as we look to progress our technology, commercialise our assets and position for future projects that will require thermal energy storage solutions.

The technological and commercial development of the SiBox™, our latest Silicon based thermal energy storage technology, has been confirmed as the primary focus for the Company. After further testing of storage media we are moving ahead with the construction of the SiBox Demonstration Module. The purpose of this project is to validate the technology as a robust system for the storage of renewable energy and its re-delivery in the form of high temperature heat. This will ensure that abundant, affordable, yet intermittent renewable energy can be transformed into clean, reliable heat for a larger array of energy users such as minerals processing industries, thermal power stations and those needing a combined heat and power solution. Our vision is to position the Company’s SiBox technology as a core component of a broad range of future renewable energy projects, providing a runway of investment opportunities for shareholders.

The Aurora Energy Project north of Port Augusta is an important opportunity for the Company and we have continued to invest in its progression and development. The approvals that underpin the project have been maintained and are being amended to suit the change in scope. We are now looking to accelerate the AEP including bringing in a partner to participate in the final development activities (such as equipment selection and transmission studies) as well as share the future capital costs. At this stage we anticipate a final investment decision for the project to be in late 2022.

Technology update

The core component of the SiBox thermal energy storage technology is the storage media. It consists of a silicon-based Phase Change Material (PCM) and a means of containing the PCM. The key breakthrough of SiBox is the combination of a unique PCM and a containment design which harnesses the latent heat properties of silicon for thermal energy storage, while solving key challenges such as preventing oxidation, managing volume change during melting and solidification, and managing inter-reaction with containment materials. 14D have tested and evaluated in detail multiple storage media options and have now selected the preferred option for the SiBox Demonstration Module. This selection feeds into the final detailed design work prior to procurement of materials later this year.

The purpose of the SiBox Demonstration Module is to advance the Technology Readiness Level (TRL) of the SiBox technology and demonstrate the performance of the engineering system. This will de-risk the technology allowing it to be scaled up for larger capital investment in the future. During the quarter the Company was involved in negotiations with Woodside Energy Technologies for a potential funding agreement that included details of the project concept, schedule and scope. An agreement was entered into subsequent to the quarter’s end. This is a strong endorsement of the approach being undertaken by 1414 Degrees to advance the SiBox technology.

Investment in the SiBox concept is now set to commence with construction and commissioning expected to be completed by early 2023 and a further performance testing program thereafter.

Aurora Energy Project (AEP) – Port Augusta

A detailed review of the Aurora project’s concept and economics was undertaken during the quarter whereby it was re-confirmed that an initial 140 MW / 140 MWh Battery Energy Storage System (BESS) installation and associated works for connection to the immediately adjacent ElectraNet / OzMinerals 275kV transmission line is the optimum approach for Stage 1 of the project. The project footprint will be considerably smaller than the original solar thermal project however the plan to provide dispatchable renewable energy in future remains. An initial BESS will unlock the potential for future solar installation as well as providing further system security and support to the electricity network surrounding Port Augusta.

A Development Approval variation was submitted to the SA Department for Infrastructure and Transport in June. This variation includes provision for battery energy storage, solar photo-voltaic generation as well as thermal energy storage and the original solar thermal project. Approval will allow for the optimum use of the AEP site, which remains an excellent location for the development of large-scale renewable energy. At this stage it is expected that the Development Approval variation will be received in the December quarter facilitating the next phase of activity including ongoing engagement with all stakeholders to ensure the AEP regains development momentum.

Corporate

Matthew Squire joined the Company as Chief Executive Officer on 2 August 2021. Since joining he has met with several stakeholders and undertaken reviews of company resourcing and governance procedures to ensure the Company is focussed on achieving commercial outcomes and progressing the development of its technology.

The Company was also very pleased to recruit two employees, Callum Phelps and Sam Ovens-York who will join the R&D and SiBox Demonstration Module teams fulltime from December following their completion of undergraduate studies at the University of Adelaide’s School of Mechanical Engineering.

All staff worked remotely during the July seven day lockdown in South Australia due to Covid-19.  There was no material interruption to the Company’s operation or business from the pandemic during the quarter.

Financial

At quarter end the Company held $4.179 million in cash and continues to focus on cashflow management to maintain liquidity and ensure the timely delivery of its projects. $1.520 million of net cash outflow was used in the Company’s quarterly activities which included approximately $380,000 of one-off legal fees and relocation costs.

As required by ASX Listing Rule 4.7C3, the Company notes that $147,000 was paid to related parties during the quarter. These payments were salaries, fees and superannuation paid to Directors.

Events subsequent to 30 September 2021

On 13 October 2021 the Company executed agreements with Woodside Energy Technologies Pty Ltd (Woodside), a subsidiary of Woodside Energy Ltd, to support further development and potential partnership in the future commercialisation of 14D’s SiBox technology. Woodside will contribute up to $2m to the circa 1 MWh demonstration module. These contributions will be made on the completion of specific project milestones by 14D. The first milestone is due for completion in November with construction and commissioning anticipated to be completed in January 2023. This will be followed by a rigorous testing and performance monitoring schedule throughout the year.

Following completion of the prescribed program Woodside will make a decision whether to participate further in the direct investment of the technology. Should Woodside choose to do so, 1414 Degrees and Woodside will create a Special Purpose Vehicle (SPV) to hold the SiBox intellectual property (IP) for its future development. Negotiations around the structure of the SPV will not occur until after Woodside have made a decision to participate further. 1414 Degrees’ interest in the SPV will not be less than 51% with Woodside’s interest being dependent upon it’s investment as a proportion to an agreed fair value of the technology. Further details of the arrangement with Woodside were provided in the Company’s ASX announcement on 13 October.

Partnership with Woodside to Progress the Development of SiBox™

Partnership with Woodside to Progress the Development of SiBox™

1414 Degrees (ASX: 14D) is pleased to announce it has signed agreements with Woodside Energy Technologies Pty Ltd (Woodside), a subsidiary of Woodside Energy Ltd, to support further development and potential partnership in the future commercialisation of 14D’s SiBox™ technology.

1414 Degrees have been working with Woodside to establish a suitable validation project that will assess the commercial potential of 14D’s thermal energy storage technology, SiBox. An agreement has been executed for Woodside to contribute up to $2m to the circa 1 MWh SiBox demonstration module. Contributions by Woodside will be made on the completion of specific project milestones by 14D.

The validation project was previously announced to the market in May this year. It is now scheduled to be commissioned in early 2023 upon which a series of operational tests will be performed into 2024. Following review of results in the testing program, Woodside will then have the opportunity to notify 14D if they wish to proceed to jointly develop and commercialise the SiBox technology. In this instance a special purpose vehicle (SiBox SPV) will be created to which the SiBox™ Intellectual Property (IP) will be transferred for future development and commercialisation. Woodside’s ownership of the SPV will be in proportion to its investment and the assessed fair value of the SPV after the completion of the validation project. 14D will have an ownership interest in the SPV of not less than 51%.

The precise commercial arrangements for the SiBox SPV will be the subject of negotiation between the parties as the validation project continues. If Woodside decide against jointly participating in the direct ownership of the SiBox technology or the parties cannot conclude definitive agreements concerning the SiBox SPV within an agreed negotiation period, 14D will supply a quantity of commercial product to Woodside on favourable terms if requested. In addition, Woodside will have a right of first refusal (ROFR) for a period to undertake further investment in the development and commercialisation of SiBox, and to acquire the SiBox IP.

If the SiBox SPV is not established and relevant IP transferred within a specified period following Woodside’s notice to proceed, or supply of commercial products to Woodside has not otherwise commenced by 30 June 2025, Woodside will have the right to directly develop and use the SiBox IP in its own projects. If the development agreement is terminated as a result of 14D’s material breach, or if 14D suffers an insolvency event, the licence granted to Woodside will expand to allow it to develop, use and commercialise the SiBox IP for any purpose.

The validation project is an important step towards advancing the Technology Readiness Level (TRL) of the SiBox technology. It will aid in demonstrating and de-risking the technology for potential future integration into Woodside’s operations, and provide confidence to other large scale industrial and utility customers. This will accelerate the potential commercialisation of the technology as a robust and flexible solution to replace heat generated by fossil fuels with heat from renewable sources.

Matt Squire, Chief Executive Officer of 14D said, “Woodside is Australia’s leading natural gas producer and we are delighted they have chosen to participate in the funding of the construction and testing of our SiBox demonstration module. 1414 Degrees is committed to demonstrating how our SiBox technology can contribute to the global energy transition. We believe that our technology has the potential to be a major component of future renewable energy projects due to its flexibility and capability in delivering high temperature heat. Having a partner with the technical and financial capability of Woodside will only accelerate the potential commercialisation of SiBox as a competitive clean energy storage solution. We very much look forward to working with Woodside as the world continues to transition towards a cleaner energy future”.

Further updates of 1414 Degrees’ strategy will be provided to shareholders prior to the Annual General Meeting in November.

 

September 2021 Quarterly Activity Report

June 2021 Quarterly Activity Report

  • – SiBox™ technology on track for Demonstration Module
  • – Matthew Squire appointed as Chief Executive Officer
  • – Tony Sacre appointed as a Director and the Chair of the Board
  • – Cash position improved to $5.7m on receipt of the $1.9m R&D Tax Rebate

  • 1414 Degrees’ core focus continues to be the technical and commercial development of our silicon based thermal energy storage technology. To meet the challenges of successfully commercialising a new technology in a dynamic market the Company’s strategies, structure and people are always evolving. This has recently resulted in:

    • – The development of SiBox™, the latest generation of our thermal energy storage technology, to efficiently and robustly harness the exceptionally high latent heat capacity of molten silicon to store energy from intermittent renewable energy. The research and development behind SiBox™ is led by our core technical team and supported by strong relationships with our strategic partner
    • – New leadership at Management and Board level, with the appointment of Matthew Squire as Chief Executive Officer and Tony Sacre as Chair of the Board. These appointments significantly enhance the commercial, strategic and governance capabilities of the Company.
    • – Relocation into new premises, uniting all staff, particularly the technical and commercial teams, for the first time.
    • – Renewed technical, commercial, and business development focus on heat and combined heat and power applications, as informed by prospective customers and where SiBox™ is able to demonstrate its unique, competitive advantages.
    • – An updated development plan for the Aurora Energy Project that will ensure we gain the maximum return on investment from this site, financially and strategically, to support the development and demonstration of the SiBox™ technology.

     

    The Company acknowledges the significant contribution of Dr Kevin Moriarty, who ably led 1414 Degrees through its formative years. We look forward to the next exciting growth phase in which we are well positioned to capitalise on the global transition to a clean energy future.

    Technology update

    The Company’s Research & Development team has focussed its development efforts on three thermal storage media options for SiBox™ which are radically different in design and superior to our previous generation of storage media. During the last quarter samples of each option completed six months of testing under anticipated real-life conditions. Two storage media options show negligible degradation, i.e. the chemical composition and energy storage density show minimal change and the structural integrity is maintained. This is a significant milestone in our long-term testing program.

    As described in the SiBox™ Commercialisation Pathway (ASX release 28/05/2021), we are on-track to build our 1 MWh SiBox™ Demonstration Module by September 2022. Full-system design, optimisation activities and selection of the most robust, energy dense and lowest cost storage media option have been progressed in this quarter. The final storage media selection for the SiBox™ Demonstration Module is anticipated to be completed by September 2021. The Demonstration Module will be a full-scale single module of our new SiBox™ design, which will accelerate the commercialisation of SiBox™ as a competitive and scalable clean energy product, advance the Technical Readiness Level and provide confidence to large scale industrial and utility customers.

    The Company continues to actively manage, document and protect all its intellectual property covering SiBox™storage media materials and design, heat store design and arrangement, heating systems, energy recovery systems and applications. As part of this, the Company resolved a dispute with Climate Change Technologies (CCT), concerning a very early patent, on satisfactory commercial terms, as per ASX release dated 11 June 2021.

    Technology Collaborations

    Our R&D project with the University of Adelaide, funded through the Innovation Connect program, has completed its first stage of theoretical analysis. The study is aimed at developing new low-cost silicon-based alloys to further improve the competitiveness of the SiBox™ storage media for different high-temperature applications. The next stage will experimentally evaluate the shortlisted alloys.

    The Heavy Industries Low-carbon Transition Cooperative Research Centre (HILT CRC), of which 1414 Degrees is an Affiliate Partner, has been awarded $39 million in cash support over 10 years from the Australian Government. HILT CRC aims to transform the Australian heavy industry sector to compete in the low-carbon global economy for carbon-neutral materials such as ‘green’ steel, alumina, cement and other processed minerals. HILT-CRC is an opportunity for 1414 Degrees to contribute to research and engage with prospective customers in heavy industries seeking to cost-effectively decarbonise and hence aligns well with our vision.

    GAS-TESS

    The GAS-TESS operated in the last quarter for a three week period to maintain plant operability and increase runtime. Going forward the Company plans to operate the GAS-TESS on a similar periodic basis for specific tests and to maintain plant integrity.

    The GAS-TESS technology and commercialisation pathway has been mapped out, particularly focussing on hybrid approaches with other generating assets. We continue to look for and work with partners interested in how the GAS-TESS can add value to their operations, including many water utilities and other applications where there is waste gas or variable/ intermittent gas with calorific value that can be better used.

    Aurora Project

    Detailed financial modelling of the business case for the first stage of the Aurora Energy Project (AEP), a 140MW/140MWhr battery, has confirmed its high revenue potential and profitability which has led to strong interest in financing the project. Further financial modelling is underway taking into account the effect of different future market scenarios to ensure a robust, bankable business case and secure investment. To complement this, the off-take strategy is being reviewed to firm up revenue projections, in particular merchant/spot-market sales versus contracted power purchase/capacity agreements.

    The preferred National Electricity Market (NEM) connection point for the Project is the 275kV transmission line immediately adjacent to the Aurora project site.  The process for connecting to this line was assisted by the Australian Energy Market Commission (AEMC) implementing a rule change on July 8th relating to Dedicated Connection Assets. By providing clarity on the requirements for connection, the Company can now progress commercial discussions with the relevant parties, OZ Minerals and ElectraNet, and the technical studies required for the transmission connection agreement.

    Strong responses were received from top-tier vendors to an updated Expression of Interest for supply of batteries and construction of the first stage of the AEP. Negotiations are continuing with preferred parties.

    Relevant approvals for the project have been obtained, including Crown Sponsorship and Office of the Technical Regulator Certificate. The Development Approval variation has been lodged and is under assessment by the South Australian Department of Planning, Transport and Infrastructure.

    Corporate

    The quarter saw changes to the Company’s executive team and overall Board governance structures. The former Company Secretary and Director, Richard Willson resigned, whilst the former Managing Director, Jamie Summons, finished with the Company. More recently, the Company bade farewell to its longstanding Executive Chairman, Dr Kevin Moriarty, who has resigned as both an executive and director.

    1414 Degrees has appointed Matthew Squire as Chief Executive Officer and he will start his role on August 2nd. Matthew joins the Company with over 20 years’ experience in the oil and energy sectors, many in senior leadership roles, and has been directly involved in some of the largest energy transactions in Australia. The Board believes the executive team of Matthew Squire and Dr Jordan Parham, Chief Operating Officer, will provide strong leadership, outstanding technical capability and drive further commercial initiatives and developments.

    During the quarter Tony Sacre was appointed as a Director and the Chair of the Board and Tania Sargent was appointed as Company Secretary.

    All people and equipment have now been moved to our new Daws Rd premises. In particular, all research and development facilities have been safely moved and all testing has resumed.

    Financial

    The June quarter closing cash position improved to $5.7m on receipt of the $1.9m R&D Tax Rebate lodged with the ATO in April this year.  The Company’s continued focus on cashflow management will ensure the timely delivery of key projects.  

    As required by ASX Listing Rule 4.7C3, the Company notes that $106,000 was paid to related parties during the quarter. These payments were salaries, fees and superannuation paid to Directors.

New Chief Executive Officer Appointed

New Chief Executive Officer Appointed

​The Board of 1414 Degrees has appointed oil and gas executive Matthew Squire as its Chief Executive Officer.

Mr Squire has extensive experience in the oil and gas, power generation and broader energy sector working for Australian and international publicly-listed companies including Beach Energy, QGC, BG Group, Santos and Origin Energy.

Most recently he was General Manager – Corporate Development and Strategy for Beach Energy with responsibility for business growth and development.

With over 20 years’ experience in the energy sector and many in senior leadership roles, Mr Squire has been directly involved in some of the largest energy transactions in Australia.

Most notably, these include commercial leadership of Beach Energy’s $1.5 billion acquisition of Lattice Energy and a core part of the business development team that established BG Group’s circa $20 billion QCLNG project in Queensland.

Mr Squire’s areas of expertise include commercial negotiations of long-term joint venture relationships and energy sales agreements as well as being highly experienced in M&A and business development having led many corporate and asset transactions.

1414 Degrees Chair Tony Sacre (previously Interim Chair) said Mr Squire’s appointment added further strength to the company’s growth plans.

“Matt is ideally placed to lead the future direction of 1414 Degrees as we strive to make clean energy affordable and available to all,” Mr Sacre said.

“He is highly experienced in growing shareholder value via sustainable profitable investments, with a proven track record of successful business development outcomes for some of Australia’s largest companies in our sector.

“The Board of 1414 Degrees is pleased to welcome Matt to this role.”

Mr Squire said he was looking forward to developing and expanding 1414 Degrees’ technology and position in the clean energy market.

“1414 Degrees has a unique product combining energy storage with renewable generation at a time when the market is transitioning,” Mr Squire said.

“There is a growing need for innovative energy storage solutions and 1414 Degrees is well placed to meet this demand.

“I look forward to working with the 1414 Degrees Board and team to create energy solutions that are clean, affordable and build shareholder value.”

Mr Squire holds a Bachelor of Mechanical Engineering (Hons), a Bachelor of Economics and a Graduate Diploma of Applied Finance and Investment.

He will be based in Adelaide and starts with 1414 Degrees in August.

Market update – Management and Directors

Market update – Management and Directors

1414 Degrees wishes to inform the market that its Executive Chair, Dr Kevin Moriarty, has provided the Company with 3 months’ notice of his intended resignation from executive duties, in accordance with the terms of his employment contract. Dr Moriarty will step down from his role as Chair but will remain a non-executive Director of the Company. 

The Board wishes to thank Dr Moriarty for his significant contribution to the Company over the past 5 years. Whilst Dr Moriarty will not be required to attend work or to perform his executive duties during the period of his notice, the Company will continue to benefit from Dr Moriarty’s extensive experience and knowledge in his role as non-executive Director.

The Board is also pleased to advise that it has resolved to appoint Mr Tony Sacre as an independent, non-executive Director and as interim Chair of the Board of Directors. 

Mr Sacre brings to 1414 Degrees a wealth of experience in corporate management and governance. He is currently Chief Executive Officer of the Bentleys Network, an international network of advisory and accounting firms with offices throughout Australia, New Zealand and China. In addition to his role at the Bentleys Network, Mr Sacre is a Board member of Allinial Global – Asia Pacific. Allinial Global is the second largest association of accounting and consulting firms in the world. Prior to joining the Bentleys Network, Mr Sacre was Chief Executive Officer of the Sydney Stock Exchange.

Mr Sacre holds a Bachelor of Business (Accounting), a Master of Business Administration (MBA), is a qualified CPA and CA, and a graduate of the Australian Institute of Company Directors.

Mr Sacre commented “I am excited to be joining 1414 Degrees Limited as a non-executive Director and interim Chair. I have a deep interest in energy markets and am passionate about creating strong governance structures which enable firms to work collaboratively to achieve their goals. I look forward to working very closely with our other Board members and the executive team to ensure a significant and positive contribution is made to the future success of 1414 Degrees for our shareholders and the broader community.”  The interim nature of Mr Sacre’s appointment as Chair will be reviewed by the Board as the Company addresses its ongoing governance and management structures.

The Board would also like to announce that in light of Dr Moriarty’s resignation and in the absence of the Managing Director, Mr Jamie Summons, the Board has appointed the Company’s Chief Operations Officer, Dr Jordan Parham, to the role of Acting Chief Executive Officer.