June 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.

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.

SiBox Commercialisation Path

SiBox Commercialisation Path

1414 Degrees (ASX:14D) is pleased to report that it has identified the pathway to commercialise its modular SiBox technology and will build a demonstration module. This follows twelve months of testing of SiBox storage media under a variety of operating conditions in laboratory furnaces.

SiBox is the latest generation of 1414 Degrees proprietary silicon based thermal energy storage technology. The demonstration module will accelerate the commercialisation of SiBox as a competitive clean energy product; advance the Technical Readiness Level (TRL); and provide confidence to large scale industrial and utility customers. The module is designed to be replicable to build any scale of energy storage device.

The $2m 1 MWh demonstration module is scheduled to be commissioned in September 2022. A comprehensive test program will enable the Company to build a multi-module 75 MWh commercial pilot, scheduled to be commissioned in 2025, as previously announced. The Company is progressing partnerships and grants for the full commercialisation process.

Successful delivery of the project will initiate a cost-effective pathway to future integration into industrial applications as shown in the SiBox cost reduction pathway below.

About the technology

14D’s SiBox technology harnesses the exceptionally high latent heat of molten silicon to store energy in the form of high temperature heat. SiBox presents a paradigm-shift in how thermal energy is stored and recovered. The heart of the SiBox technology is a robust storage media solution that protects the silicon-based phase change material from degrading, while storing and transferring heat efficiently and cost-effectively. SiBox consists of modular sections of the new storage media, heating elements and a heat exchanger to recover the stored thermal energy in the form of hot air in a closed loop.

14D SiBox: how it works

Single product

The SiBox module is designed to be tailored for specific applications with minimal design or operational changes, providing the potential to fast-track commercialisation with a single product capable of servicing multiple heat and/or electricity applications.

 

Decarbonising

SiBox offers a unique solution to the challenge of decarbonising heat: it can use intermittent renewable energy sources to produce the high temperature heat needed by industry, with the temperature able to be customised for different applications.

SiBox’s operating temperature of more than 1000°C far exceeds the capabilities of current commercial TES alternatives, such as molten salts (<600°C). Most high temperature process heat >800°C in Australia (730 PJ/y) is provided by fossil fuels such as natural gas, coal and diesel. SiBox is the only close-to-commercialisation technology capable of decarbonising this industrial sector.

In addition to ultra-high temperature heat, the output from SiBox also facilitates long duration renewable electricity storage to enable the clean energy electricity networks of the future.

 

Competitive

Globally energy suppliers and users are grappling with how to adjust to and manage the energy transition with least cost and least risk. Validating the technical and commercial advantages of SiBox with the demonstration module will give manufacturers and networks the confidence to innovate and adopt a new technology. Reliable energy in the form of heat or electricity is crucial for their successful operation in competitive markets, being able to view, monitor and test a SiBox module at actual scale and operating conditions, will enable them to invest in subsequent large-scale deployments and enable 14D to progress commercialisation of SiBox as a clean energy product.

Crown Sponsorship extended to 280MWh battery storage on Aurora

Crown Sponsorship extended to 280MWh battery storage on Aurora

South Australian Government Crown Sponsorship for the Aurora Energy Project has been extended to support an increase of the battery storage component.  It has previously been extended to support construction of the battery and the Company’s thermal energy storage system (TESS-GRID).

Crown Sponsorship indicates that the project is sponsored by a State Government agency, in this case the Department of Energy and Mining as a development of essential infrastructure’ under section 131(2)(c) of the Planning, Development and Infrastructure Act 2016.

Crown Sponsorship was provided for the original project scope of 150MW concentrated solar power and 70MW solar and was extended in February 2021 to include 70MW of battery storage and 2MW thermal energy storage. Crown Sponsorship has now been approved to increase the battery storage component from 70MW/70MWh to 140MW/140MWh in the initial stage, increasing to 140MW/ 280MWh in later stages. 1414 Degrees acquired the project through its purchase of SolarReserve Australia II Pty Ltd now renamed SiliconAurora Pty Ltd.