Aurora Energy Project update

Aurora Energy Project update

16 June 2022

Yesterday we executed agreements with Vast Solar to create a joint venture at our Aurora Energy Project by way of a sale of 50% of our ownership of the shares in Silicon Aurora Pty Ltd for $2.5 million. The shares will be purchased by a wholly-owned subsidiary of Vast Solar. You can read the ASX announcement here.

This transaction is an extremely positive step forward for the project as we continue to bring it towards potential commercialisation and a final investment decision next year.

Vast Solar is a highly complementary partner for 1414 Degrees who shares our vision for the development of Aurora as a long-term renewable energy project in Port Augusta. Silicon Aurora Pty Ltd will bring together two highly innovative Australian companies and the Aurora project will not only remain focused on the initial Stage 1, 140MW battery project, it will also optimise the site for the potential to showcase our respective renewable energy technologies.

Entities associated with the owners of Vast Solar will also be granted call Options in up to 9.9% of the shares in 1414 degrees with a strike price of $0.16/sh. The granting of these options is conditional upon the execution of a connection agreement for Stage 1 of the Aurora project and only if this occurs within 18 months. The expiry of those options is 3 months after being granted.

What’s next?

We continue to accelerate the connection approval process for Stage 1 of Aurora as announced to shareholders on 11 May, the costs of which will now be shared with Vast Solar.

We receive payment in two stages from Vast Solar with the initial $1 million payment expected by the end of July. The second $1.5 million payment will be determined by the timing and outcome of the connection approvals process.

Silicon Aurora Pty Ltd will act as a joint venture with 1414 Degrees continuing to manage the current development activities.

1414 Degrees will continue with the development of our core technology, our Sibox demonstration module in conjunction with Woodside. This is entirely separate from Silicon Aurora Pty Ltd and will showcase our Silicon based Thermal Energy Storage System in Adelaide early next year.

1414 Degrees as 50% owner of Silicon Aurora Pty Ltd will retain the right to construct a pilot of the Sibox energy storage technology at Aurora in the future if we wish.

Who are Vast Solar?

Vast Solar is developing modular based concentrated solar plant (CSP) technology and was recently announced in the Federal Government’s commitment to boost regional South Australian industry, through the adoption of major new low emissions technology projects.

The Federal Government agreed to negotiate the terms of a loan of up to $110 million to support the development by Vast Solar of a 20MW concentrated solar thermal power (CSP) plant. Vast Solar is also backed by Johnny Kahlbetzer as a major shareholder. Mr Kahlbetzer is a high net worth Australian who is a significant investor in environmentally sustainable projects through Twynam Group.

For more information

Please refer the 14D ASX announcement, learn more abou the  Aurora Energy Project and see Vast Solar’s website.

Aurora Energy Project update

Commencement of Connection Approval Process for Aurora

22 May 2022

Following confirmation of primary technical inputs, 1414 Degrees (ASX: 14D) has today executed a work order with ElectraNet (the South Australian transmission network service provider) to commence the Generator Performance Standard (GPS) study for the Aurora Energy Project.

The GPS study is the primary activity remaining in order to be approved by the Australian Energy Market Operator (AEMO) to connect to the National Electricity Market (NEM) and negotiate a Transmission Connection Agreement with ElectraNet.

“The GPS process is one of the primary outstanding activities required to enable Stage 1 of Aurora to achieve financial close”.
Matt Squire, CEO

Click here to read the ASX Announcement >

March 2022 Quarterly Activity Report

March 2022 Quarterly Activity Report

Highlights:

  • Successful completion of SiBox demonstration module design and external validation modelling
  • All major equipment specifications finalised and site preparation milestone approvals received from funding partner Woodside to now proceed with next phase of activities
  • Further recognition for 1414 Degrees’ long duration energy storage technology when announced as recipient of the SA Innovation Award at the 2022 CORE Innovation Hot 30 Awards
  • Aurora Energy Project tenure refreshed following execution of amended Tripartite agreement with pastoral leaseholder and SA State Government Ministers
  • Extensive work to update the Aurora project design and reconfirm the Battery Energy Storage System (BESS) following receipt of renewed pricing and scope from vendors
  • External third party economic modelling of Aurora reviewed and confirms robust business case for Stage 1, 140 MW BESS project
  • Preparations for selection of preferred vendor and technology completed for Aurora
  • First instalment of Australian Federal Government’s Modern Manufacturing Initiative grant received
  • Maintaining disciplined funding position with $4.5 million cash (zero debt) as at March 31st

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 31 March 2022.

Comments by Matt Squire, Chief Executive Officer of 1414 Degrees

“The quarter has seen significant progression in both of our core renewable energy projects.
The successful completion of the site preparation activities for the SiBox demonstration module and subsequent confirmation by our funding partner Woodside Energy Technologies is a significant achievement. Testing of the phase change material (PCM) containment system in our furnaces has also confirmed our selection of materials and configuration. We are now moving ahead with final procurement of equipment and commencement of construction later in the year. It is a great credit to our technical team that the project has reached this milestone and I am proud of their hard work for shareholders.

High energy prices and geopolitical events have continued to reinforce our view that the world is in desperate need for an energy storage solution with the performance objectives of our SiBox design. Our focus remains on proving we have a system that can deliver reliable, high temperature renewable heat through the utilisation of the storage properties of molten Silicon. It was pleasing to receive further acknowledgement of our technology when the company was announced as the recipient of the SA Innovation Award, presented by the South Australian Department for Energy & Mining, at the 2022 CORE Innovation Hot 30 Awards. These awards recognise innovation across Australia’s most important industries: mining, energy, resources, oil & gas, space and defence. Further background for shareholders can be found here: https://www.coreinnovationhot30.com.au/about

The Aurora Energy Project near Port Augusta was also advanced significantly in the quarter. The development team worked closely with Ovida to update the project’s work packages and renew engagement with vendors. Economic modelling commissioned by Ovida has also assisted in determining the optimal technical configuration of the project and confirmed our belief that Aurora is on track to be a robust investment opportunity. Our focus remains on selection of a preferred technical provider for the Stage 1 140MW/280 MWh BESS however the next stages of the project, Stage 2 (70 MW Solar) and 3 (150 MW Concentrated Solar), will also provide us with excellent future renewable investment opportunity.

Subsequent to the end of the quarter (and as announced to the ASX on April 5th) Ovida advised us that they were withdrawing from the exclusivity arrangement due to a strategic decision by their shareholders to no longer invest in unregulated electricity projects. Whilst this was disappointing the project has benefited from Ovida’s involvement and the funds they provided will be put to use as we continue with the final approvals processes. In parallel we will consider the introduction of a new partner to the project and initial engagement with prospective participants has commenced with initial feedback being extremely positive.

The company remains in an excellent financial position with our cash balance increasing to $4.5 million. We will continue to look at ways to minimise non-project expenditure and are committed to an ongoing disciplined approach towards the utilisation of shareholder funds.”

Silicon based Renewable Energy Storage technology / SiBox Demonstration Module project

Substantial activity in the quarter has seen the continued progression of the SiBox project which is on track for construction later this year. Engineering design has now been finalised and major equipment specification is complete.

The first delivery of phase change material (PCM) has been received. The silicon based alloy is contained within the 14D storage media to provide high energy density thermal storage from latent heat. This delivery marks the first major component of the SiBox Demonstration Module. Additional PCM is in production along with the containment solution and are expected to arrive from overseas suppliers in Q3 2022. Testing and thermal cycling of our PCM containment system has continued throughout the quarter in our furnaces on-site. Results continue to support our selection of materials and optimised configuration for the SiBox.

Computational fluid dynamics (CFD) modelling of the SiBox performance was commissioned and completed by Royal Melbourne Institute of Technology (RMIT). This has successfully validated our internally developed design model with results providing further confidence in the SiBox design. These activities now provide us with detailed targeted performance parameters and will also be a key comparator when we assess our actual test data during future operation of the project.

The completion of our equipment specification and selection is also a major project milestone under our agreement with Woodside Energy Technologies. The satisfaction of this milestone will allow the next phase of activities to commence and associated funding to be provided. At the end of the quarter $500,000 had been received to date from Woodside out of the total $2 million under our funding agreement.

Subsequent to the quarter’s end, the tender has been awarded for the SiBox furnace, a core component of SiBox consisting of high-grade insulation to contain the storage media at 1400°C and integrate to the Energy Recovery System (ERS). Additionally, orders have been placed for other major equipment including the ERS heat exchanger.

Aurora Energy Project (AEP) – Port Augusta

Work continued on further advancement of the Aurora Energy Project (AEP) located approximately 30km north of Port Augusta in South Australia. The AEP has approvals for the development of: 140MW/280MWh battery energy storage system (BESS), 70MW Solar Photo-Voltaic (PV), 150MW Concentrated Solar Power (CSP) as well as a pilot for own thermal energy storage. The project is staged with our initial focus on Stage 1 being the development and connection of the 140 MW BESS to the adjacent 275kV transmission system.

During the quarter the AEP project tenure was restated following the execution of an amended Tripartite agreement between 1414 Degrees’ subsidiary Silicon Aurora Pty Ltd, the pastoral leaseholders Buckleboo Nominees and requisite SA Government authority. This included the SA Minister for Environment and Water as well as the Minister for Primary Industries and Regional Development. The restated agreement replaces the 2019 document and provides for a 40 year project life from a start date that is more closely aligned with the current project timeframes.

Significant development activities were undertaken in conjunction with Ovida Infrastructure Pty Ltd (Ovida) under an exclusivity MoU executed between the parties on 20th December. These included:

  • The updating of all project basic concept and design
  • Reconfirmation of BESS suppliers and receipt of updated pricing and technical scope
  • Commissioning (by Ovida) of independent economic modelling to assess the optimised economics of the Stage 1, 140 MW BESS in the NEM
  • Review and confirmation of all technical inputs required for commencement of GPS modelling In addition a submission was prepared in response to the ARENA advanced inverter (large-scale battery fund) Expression of Interest for future potential funding support.

Subsequent to the end of the quarter, Ovida advised on 5th April they were withdrawing from the exclusivity MoU due to a change in strategy of their shareholders. 1414 Degrees will receive a $100,000 termination payment and retain all intellectual property generated since execution of the MoU. All past payments made by Ovida (including the initial payment of $300,000 on signing the MoU) are retained by 1414 Degrees. The Ovida MoU was solely in relation to the development of the AEP and completely separate from 14D’s Thermal Energy Storage System technology that is being developed with support from Woodside.

The AEP is held by 1414 Degrees through its 100% owned subsidiary Silicon Aurora Pty Ltd. The Company intends to continue to progress the development of the AEP which is a world class renewable energy opportunity. A Stage 1 FID decision for the BESS is targeted for early 2023 following completion of final approvals and agreements.

Corporate

As of March 31st 2022 1414 Degrees had the following capital structure:

  • Shares on issue: 201,485,458
  • Unlisted Employee Performance Rights: 2,150,000

The company has 11 employees with several of these working part-time.

Financial

At quarter end the Company held $4.535million in cash and has no debt. The increase in cash balance of $0.717million included payments received from Woodside Energy Technologies of $0.3million, Ovida of $0.3million and the receipt of $0.880million being the initial instalment of the $2.2 million grant awarded to 1414 Degrees under the Australian Federal Government’s Modern Manufacturing Initiative in November 2021.

As required by ASX Listing Rule 4.7C3, the Company notes that $24,000 was paid to related parties during the quarter. These payments were Directors Fees.

This announcement was authorised by the Board of 1414 Degrees Limited.

    Aurora Energy Project update

    Termination of Exclusivity MOU with Ovida

    5 April 2022

      • Ovida Infrastructure Pty Ltd (Ovida) has terminated its exclusivity MOU with Aurora. Jemena Pty Ltd (of which Ovida is a 100% owned subsidiary), has made the decision to focus on investing in its existing assets as opposed to the unregulated electricity market.
      • 1414 Degrees will receive a termination payment and will retain all intellectual property generated from the work with Ovida. 1414 Degrees will also retain all previous payments.
      • Work to date has confirmed a robust project and 1414 Degrees is continuing with its development.

    “The joint work has only reinforced our belief that Aurora is a world class renewable energy site”.
    Matt Squire, CEO

    Click here to read the ASX Announcement >

    Half Year Results Announcement

    Half Year Results Announcement

    24 Feb 2022

      • 1414 Degrees (the Company) today released its Half Year Results and Directors report for the half year period ended December 2021. The Company recorded a net loss for the period of $3,256,210.

        This figure included a non-cash impairment of $997,516 for the past construction of thermal storage systems in 2019 that will not be incorporated in the design and construction of the SiBox system in the future. In addition, a provision of $500,000 was made for potential remediation activities at the Glenelg project which is presently not used for commercial purposes.

        At the end of this period the Company held $3,817,955 in cash and has no debt.

        During the period the Company announced a $2 million funding partnership with Woodside Energy Technologies to develop the SiBox demonstration module for commissioning in early 2023. In addition the Company was announced as a successful grant recipient of a future $2.2 million under the Australian Federal Government Modern Manufacturing Initiative (MMI) initiative. This will ensure we are well funded to progress the SiBox demonstration module and start to engage with potential industrial energy customers.

        In November the Company was granted a variation to its approvals for the Aurora Energy Project which allows for the addition of a 140MW/280MWh battery energy storage system (BESS), thermal energy storage and 33kV transmission line grid connection. Also included is a modified site layout plan and project staging. This is in addition to the 150MW Concentrated Solar Power (CSP), 70MW Solar Photo- Voltaic (PV) and 275kV connection to the network already approved. Subsequently on 20th December 14D executed an MoU with Ovida Infrastructure Pty Ltd (Ovida) to explore partnering with 14D on the development of the AEP. Ovida is a 100% owned subsidiary of Jemena Ltd (Jemena), one of Australia’s largest owners and operators of energy infrastructure with over $11 billion of assets under management and approximately 2,500 employees. The MoU provides Ovida with an exclusivity period to work with 14D before entering into a definitive sale and purchase agreement in mid 2022.

    Comments by Matt Squire, Chief Executive Officer of 1414 Degrees

    “The company is in an excellent position to progress its two exciting renewable energy activities being our SiBox Silicon based Thermal Energy Storage technology and the Aurora Energy Project at Port Augusta. We now look forward to providing further updates as we progress our activities during the year on these material opportunities for shareholders.”

    March 2022 Quarterly Activity Report

    December 2021 Quarterly Activity Report

    Highlights:

      • – Strategic partnership announced with Woodside Energy Technologies to develop the SiBox demonstration module and provide $2 million of funding
      • – Awarded up to $2.2 million Australian Federal Government Modern Manufacturing Initiative (MMI) grant for future SiBox commercialisation activities
      • – Aurora Energy Project Development Approval Variation granted by South Australian Minister for Planning and Local Government
      • – Exclusivity MoU entered into with Ovida (a 100% owned subsidiary of Jemena) to potentially own an interest in the Aurora Energy Project
      • – Stabilised funding position with $3.8 million cash (zero debt) as at December 31st

    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 31 December 2021.

    Comments by Matt Squire, Chief Executive Officer of 1414 Degrees

    “The quarter has been a period of significant renewal and transformation for 1414 Degrees as we continue to progress our Silicon based, renewable energy storage technology (SiBox) and the development of the Aurora Energy Project. Both of our core renewable energy projects were bolstered by the execution of agreements with major energy companies that could see them as future long term partners.”

    “In October we were delighted to execute agreements with Woodside Energy Technologies who have chosen to participate in the construction and testing of our SiBox demonstration module by way of up to $2 million in funding. Procurement activities for the SiBox have now commenced in earnest. Further support for the transformational potential of our long duration renewable energy storage technology was clear when we were announced in November as successful applicants for a $2.2 million grant from the Australian Federal Government’s Modern Manufacturing Initiative (MMI) to accelerate the commercialisation of SiBox. This will allow us to start to engage further with potential industrial energy customers for our technology.”

    “Similarly we were also very pleased in December to enter into an exclusivity MoU with Ovida, a fully owned subsidiary of Jemena, to potentially partner in the development of our Aurora Energy Project near Port Augusta which received necessary South Australian Government development approvals in November.”

    “The agreements with Woodside Energy Technologies and Ovida, as well as the award of the Australian Government MMI grant will not only provide significant sources of funding over the next period of the company’s activities, they are also evidence of the large potential that exists in our business as the world looks for solutions to rapidly decarbonise its future energy needs. Our development activities pathway is now clearly mapped out and we believe that we offer shareholders a compelling renewable energy investment opportunity.”

    Silicon based Renewable Energy Storage technology / SiBox Demonstration Module project

    The quarter saw the introduction of Australia’s largest energy company, Woodside, through their 100% owned subsidiary Woodside Energy Technologies, into the SiBox demonstration module project. The agreements executed with Woodside Energy Technologies will see them contribute up to $2million to the circa 1 MWh SiBox demonstration module on the completion of specific project milestones by 1414 Degrees. $200,000 of contributions were received in the quarter with the balance of the milestone completion payments expected to be paid across the next 18-24 months.

    The SiBox is expected to be commissioned in early 2023 after which it will undergo an extended period of performance tests and validation operations. Following this, Woodside Energy Technologies will then notify 1414 degrees if they wish to proceed to jointly develop and commercialise the SiBox technology through a jointly owned Special Purpose Vehicle (SPV) which would contain the SiBox intellectual property rights. Woodside’s ownership of that SPV will be in proportion to its investment and the assessed fair value of the technology at the time. 1414 Degrees will have an ownership of at least 51% of that SPV.

    Further details of the agreement between 1414 Degrees and Woodside Energy Technologies is provided in the ASX release on 13 October 2021.

    During the quarter the concept design was completed, enabling detailed design and engineering to commence. Long lead items for the SiBox demonstration module were also ordered from overseas. In particular materials for the storage media. Testing on storage media options for the module continued successfully progressing towards final selection and assembly, as well as testing of new storage media designs and materials that will further improve the competitiveness of the SiBox technology.

    The $2.2million MMI grant will be used to support the commercialisation of the SiBox technology through the construction of the demonstration module, complementing the agreement with Woodside Energy Technologies. It will also fund commercialisation activities including market research and technoeconomic evaluation of brown-field opportunities for SiBox, such as case studies of SiBox applications and integrating into existing industrial process heat operations or thermal energy power plants.

    Aurora Energy Project (AEP) – Port Augusta

    Work continued on advancement of the Aurora Energy Project (AEP), a world class site for renewable energy located approximately 30km north of Port Augusta in South Australia. The primary activity for the quarter was the successful granting in November of a variation to the AEP Development Approval by the South Australian Minister for Planning and Local Government. The variation allows for the addition of a 140MW/280MWh battery energy storage system (BESS), thermal energy storage and 33kV transmission line grid connection. Also included is a modified site layout plan and project staging. This is in addition to the 150MW Concentrated Solar Power (CSP), 70MW Solar Photo-Voltaic (PV) and 275kV connection to the network already approved.

    On 20 December 14D executed an MoU with Ovida Infrastructure Pty Ltd (Ovida) to explore partnering with 14D on the development of the AEP. Ovida is a 100% owned subsidiary of Jemena Ltd (Jemena), one of Australia’s largest owners and operators of energy infrastructure with over $11 billion of assets under management and approximately 2,500 employees. The MoU provides Ovida with an exclusivity period to work with 14D before entering into a definitive sale and purchase agreement in mid 2022. In executing the MoU an initial payment of $300,000 is to be made by Ovida. This payment is expected to be received in the subsequent quarter following 31 December.

    Corporate

    As of 31 December 2021 1414 Degrees had the following capital structure:

    • – Shares on issue: 200,660,458
    • – Unlisted Employee Performance Rights: 3,275,000

    Financial

    At quarter end the Company held $3.818 million in cash and continues to focus on cashflow management to maintain liquidity and ensure the timely delivery of its projects. $0.361million of net cash outflow was used in the Company’s quarterly activities which included payments received from Woodside Energy Technologies of          $0.2 million and the Australian Taxation Office of $0.830 million for research and development claims.