1414 Degrees scoping a new sustainable power deal with Stone & Wood

1414 Degrees scoping a new sustainable power deal with Stone & Wood

  • – TESS-IND integration study for Stone & Wood brewery in northern New South Wales 
  • – TESS-IND units would successively replace four LPG boilers 
  • – Opportunity introduced under 1414 Degrees MoU with Enova Community Energy 

 

1414 Degrees Ltd (ASX:14D) and Stone & Wood Brewing Company Pty Ltd (Stone & Wood) yesterday agreed to undertake a feasibility study for the integration of 1414 Degrees electrically charged Thermal Energy Storage System (TESS-IND) into the Company’s Murwillumbah brewery in northern New South Wales. 

Stone & Wood is actively scoping innovative and more sustainable energy solutions, and 1414 Degrees TESS-IND can provide reliable heat sourced from renewables on the grid. The brewery has a daily heat demand from processing its beer and is expecting to expand production. Feasibility would identify the potential to sequentially replace or supplement existing gas boilers currently used to generate heat with a TESS-IND 

Stone & Wood is recognised as the most successful brewing start-up in Australia. Its strong commitment to sustainability makes this is an ideal commercial location for our technology to assist in the brewery’s emissions reduction using renewable energy,said Dr Kevin Moriarty, Executive Chairman of 1414 Degrees. 

“The Stone & Wood brewery is a financially attractive site for the 10MWh TESS-IND commercial pilot, particularly when compared to our other proposed customer plants, because the displaced LPG is more valuable, and the carbon-free heat from the TESS-IND solution would significantly reduce emissions.” 

The parties have agreed to collaborate on research and development of the project, including the technology and capabilities of a pilot TESS-IND on site. 1414 Degrees will now undertake a detailed feasibility study for the integration of its energy storage technology, expected to be completed by the end of the year.  

“We are constantly looking for ways to reduce our impact on the environment, including ways to continue our shift towards renewables. We are excited and optimistic about the potential of the new technology that 1414 Degrees can bring, and look forward to some positive findings from the feasibility study,” said Ben Summons, Managing Director of Stone & Wood. 

Enova Community Energy Ltd (Enova) introduced Stone & Wood to 1414 Degrees as an industrial heat customer under the memorandum of understanding (MoU) between the parties to investigate jointly providing energy solutions to Enova and its industrial heat customers. 

“The opportunity to work with Stone & Wood and 1414 Degrees on the feasibility study for the TESS-IND is in keeping with Enova Community Energy’s commitment and vision to innovating in the energy sector. We’re delighted to be involved in this R&D project with 1414 Degrees and Stone & Wood, two organisations that are also expanding the parameters of what sustainability can and will look like, said Felicity Stening, CEO, Enova Energy. 

The joint venture with Enova would include firming renewable electricity supplied under long term power purchase agreements, using 1414 Degrees’ TESS to ensure reliable electricity and heat solutions for sale to consumers. 

“1414 Degrees is excited about its partnership with Enova, which has shown great vision to work with us on developing this opportunity by identifying an ideal industrial customer, said Dr Moriarty. 

We look forward to working closely with Enova across the coming weeks to model the financials and structure a business plan for the joint venture. 

Enova is a community-owned energy retailer operating in regional New South Wales, with plans to shortly expand to metropolitan areas within the state and other states and territories. Enova offers a range of renewable energy plans for households as well as businesses. 

1414 Degrees to progress grid scale tech for SmartFarms

1414 Degrees to progress grid scale tech for SmartFarms

 

  • – MoU signed with Nectar Farms Management Limited 
  • – MoU signed with Ampcontrol SWG Pty Ltd 
  • – MoU signed with BE Power Solutions Pty Ltd 

 

1414 Degrees Limited (ASX:14D), has partnered with heavyweight technical, agribusiness and finance partners to identify and develop SmartFarm projects using its Thermal Energy Storage Solution (TESS).  

Working in collaboration with integrated electrical and electronic technology provider, Ampcontrol SWG Pty Ltd, and renewable energy project developer, BE Power Solutions, 1414 Degrees is examining a range of joint project opportunities across Australia, including at a greenfield site in the Northern Adelaide Plains. That project would see the company integrating its grid scale energy storage solution, TESS-GRID, into a protected cropping farm development by east coast horticulture company, Nectar Farms Management Limited (Nectar Farms) 

“Nectar Farms is in the process of establishing an $80 million advanced protected cropping SmartFarm facility in Victoria, involving 10 hectares of glasshouses and a large nursery. The business is now working with 1414 Degrees on a similar development,” said Dr Kevin Moriarty, Executive Chairman of 1414 Degrees.  

“We see enormous synergy between Nectar Farms – which has a stated aim to protect the environment through clean energy, resource conservation and clever planning – and the entrepreneurial model of 1414 Degrees 

“The integration of our technologies would result in the first SmartFarm development of its kind globally, delivering another opportunity for our state to lead innovation, address energy costs and stability, and support job creation.

On May 1, 2019, 1414 Degrees Limited signed an MoU with Ampcontrol SWG Pty Ltd and BE Power Solutions Pty Ltd to collaborate to undertake feasibility and potential developments of projects including protected cropping renewable powered glasshouse (SmartFarm) developments. 

1414 Degrees Limited signed a Memorandum of Understanding (MoU) with Nectar Farms on July 27, 2019, to undertake feasibility for a protected cropping farm, SmartFarm, using TESS technology. The joint activities to be undertaken include (but are not limited to) obtaining a greater understanding of each business strategies; jointly approaching funding agencies and financial institutions; and engaging in product development activity, including feasibility, development and construction. 

The SmartFarm project follows from the ARUP study that concluded 1414 Degrees’ thermal energy storage system (TESS) would be more economical than concentrated solar power (CSP) as a replacement for fossil fuelled advanced greenhouse farms. 

BE Power is currently developing more than 300MW of renewable energy projects across grid connected solar PV, utility scale batteries, pumped hydro and biogas power disciplines. The company has extensive experience developing, financing and operating renewable energy projects. 

Ampcontrol, which approached 1414 Degrees to assess the TESS technology for inclusion in the Nectar Farms project, is a global business delivering electrical, electronic and control solutions to improve safety and efficiency in mining, renewable, infrastructure and industrial applications. 

Dr Moriarty said early feasibility stages of the northern Adelaide site were expected to progress during the current quarter. The site sits adjacent to a distribution substation at an SA Water site housing a generator embedded on the National Electricity Market (NEM), and the plan is to use the substation for electricity supply and generation from the TESS-GRID while providing heat to Nectar Farms. 

“The Nectar Farms project presents a terrific opportunity for the potential of our technology to revolutionise the approach of Australian and international industry to energy storage and heat generation. Several other development sites in SA and Victoria will be assessed” said Dr Moriarty. 

“We have been modelling the revenues to be expected from operating the TESS-GRID and our smaller TESS-IND technology on the NEM. Scenarios for energy trading range from those based on contracts for supply from an aggregator to direct exposure to wholesale pricing – and combinations of both.” 

Second Quarter 2019 Update

Second Quarter 2019 Update

HIGHLIGHTS:

  • – GAS-TESS commissioned, generating electricity and heat to site 
  • – Enova Energy signs MoU for joint venture on renewable heat and electricity sales 
  • – Nectar Farms signs MoU to collaborate on advanced greenhouse developments  
  • – NSW brewing plant proposed by Enova Energy as TESS-IND pilot site 
  • – TESS-IND commercial model to draw on multiple revenue streams 
  • – TESS-GRID site selection progressing 
  • – Strong cash position $9.7m, outgoings decrease after GAS-TESS completion 

 

1414 Degrees Limited (ASX:14D) is pleased to provide its June 2019 quarterly update. 

The second quarter saw the Company deliver on key objectives in its path to commercialisation while maintaining focus on its core technology development. 

The Company’s cash balance remains strong because monthly outgoings have decreased following the commissioning of the GAS-TESS. The $9.7 million cash balance at the end of the quarter is expected to be boosted by an estimated $2.5 million R&D rebate later in the year. 

 

GAS-TESS Operations  

The first GAS-TESS was successfully commissioned at our first commercial site, with all systems becoming operational surprisingly quickly considering this is completely new technology with no prototype. Commissioning occurred so swiftly that the GAS-TESS was able to export hot water and electricity to the site well before the wastewater treatment site’s integration systems were fully operational. Late in the quarter, the device received interim approval as an embedded generator on the National Electricity Market (NEM). We have now commenced a series of characterisation tests to determine the performance of the technology as installed. It is expected these tests will be followed by modifications to increase performance and improvements to the next model. 

Although the semi-commercial arrangements with SA Water will generate some revenues, the intent is to demonstrate the versatility of the GAS-TESS as a low cost alternative to purchasing gas burning engines. Utility service charges are determined from their asset base, so asset augmentation is their preferred model. Following this test phase, we will design production models for sale to wastewater utilities as an alternative to gas engines whose high maintenance costs reduce net revenues, and do not allow time shifting of electricity and heat output to minimise energy costs. 

 

Technology focus 

1414 Degrees is a technology focused company, working closely with technology partners and suppliers to deliver more compact and robust silicon storage. 

TESS-GRID: our team is designing and testing grid scale storage technologies, the first stage being an electrically charging 40MWh module, followed by 200MWh and 1GWh devices. 

GAS-TESS: our engineers have been testing the functionality of the technology to achieve maximum efficiency within the operating environment at SA Water’s Wastewater Treatment Plant. The maximum operating temperature of the GAS-TESS heat store has now been measured at 1350°C, so the silicon phase change material (PCM) is being configured to melt at less than 1300°C and achieve similar latent energy storage to pure silicon. In addition, the combustion products from burning biogas must be isolated from the silicon PCM. The GAS-TESS is operating well utilising the sensible heat of silicon bricks and a trial quantity of lower melting point silicon PCM. On completion of the characterisation tests, our engineers will be able to assess storage and other design and operating parameters to achieve optimal performance. 

TESS-IND: an important aspect of the GAS-TESS pilot is that silicon storage technology for its challenging environment is expected to benefit future builds of the electrically charged TESS-IND. The TESS-IND team is working to achieve higher electrical efficiency and more compact layout for the next model, due for commissioning in the next quarter. 

 

Grid scale progress 

We are continuing to advance the storage technology and financial modelling for our grid scale storage solution, the TESS-GRID. We intend to use the smaller TESS-IND to test and refine the systems for energy trading and technical control of the larger devices because these systems will scale up. Connection to the National Electricity Market (NEM) will allow us to test the revenue model in the electricity market, buying low and selling high and effectively helping to stabilise electricity supply.  

There is a risk that the TESS-IND will be completed well before it is approved to supply electricity to the NEM. The approval processes by distributors and regulators on the NEM can be very slow, even for smaller synchronous spinning generators like the TESS-IND that provide increasingly important native frequency control and stability services as large coal and gas fired turbines are decommissioned and more solar or wind farms are connected. The current plan is to initially connect the TESS-IND to the NEM at our Southlink facility and to then increase the revenue base using heat sales to the brewery or one of our previously disclosed pilot sites. 

The first 40MWh TESS-GRID module must be built next to a site with substantial heat consumption. Ideally, it will be an existing operational site with visionary management (like SA Water provided for the GAS-TESS development) to ensure fast integration of the TESS heat output. We have assessed several suitable sites within Australia and overseas, the most favourable being next to a refinery and transmission substation. A site visit with technical support from the owner and our team resulted in a positive scoping study, however as was the case with our partnership with SA Waterprogressing the integration of new technology will require high level corporate commitment. 

 

Commercial path for electrically charged TESS 

Our path to revenues from the electrically charged TESS has become clearer during the quarter, driven by changes in renewable energy financing terms. The Renewable Energy Certificate (REC) scheme and favourable finance terms from the Clean Energy Finance Corporation, which have underwritten the expansion of renewable generation for several years, are no longer attractive to industries that require fast payback on capital investment, as the price of RECs have fallen dramatically across the past year 

Businesses want reliable energy supply at a lower cost but they are understandably reluctant to lock up capital for the long term when it could be better deployed to increase production and profits in the near term. However, the fall in price of certificates has been paralleled by massive growth in large-scale solar and wind generation, causing a dramatic fall in the price of Power Purchase Agreements (PPAs) to the point where it can be more economical to draw on a PPA over the network 

Notwithstanding, renewable PPAs are not a preferred solution for industry because the supply is intermittent and variable. Reliable energy supply is essential for maintaining productivity and mitigating risk. 1414 Degrees TESS provides the means to firm renewable electricity generation and concurrently replace fossil fuel sourced heat. Industries and consumers generally prefer to purchase a supply contract not a technology solution, so your Company is working with partners to package energy solutions.  

There are a number of advantages in this approach: it enables multiple revenue streams from electricity and heat sales, trading, and grid stability service fees; it builds a recurrent revenue base; it means your Company retains ownership to protect intellectual property in the TESS technology; it provides time to prove the technology for performance guarantees to drive future sales.  

 

Energy solutions joint venture 

This energy solutions strategy is now a core target.  In the last quarter, we reported an approach from retailer Enova Community Energy Ltd (Enova), a community-owned energy retailer operating in regional New South Wales, with plans to shortly expand to metropolitan areas within the state and other states and territories. Enova offers a range of renewable energy plans for households as well as businesses. We have now agreed a memorandum of understanding (MoU) with Enova to investigate jointly providing energy solutions to Enova and its industrial heat customers. 

The joint venture (JV) would include firming renewable electricity supplied under long term PPAs, using 1414 Degrees TESS to ensure reliable electricity and heat solutions for sale to consumers. Enova has introduced a brewery seeking solutions to reduce their reliance on LPG for process heat. The brewery has a daily heat demand and feasibility has commenced into sequentially replacing their gas boilers with TESS. The site is a financially attractive site for the 10MWh TESS-IND commercial pilot, particularly when compared to our other proposed customer plants because the displaced LPG is more valuable, and the TESS solution would significantly reduce emissions. 

We will be working closely with Enova across the coming weeks to model the financials and structure a business plan for the JV. The model could be extended to other energy networks to deliver lower cost heat and electricity solutions that leverage the benefits from combining electrified heat for industry and household electricity supply. 

 

Agribusiness ventures 

Your Company has been progressing a greenhouse development arising from the SmartFarm study by ARUP. During the quarter, electrical contractor Ampcontrol SWG Pty Ltd and financier BE Power Solutions Pty Ltd executed an MoU with 1414 Degrees to investigate integrating TESS into the energy supply and finance solutions for SmartFarms. 

The project partnership has resulted in an additional MoU with Nectar Farms Management Limited (Nectar Farms) to undertake feasibility for a protected cropping farm on the Northern Adelaide Plains. Nectar Farms is currently developing an $80 million SmartFarm near Stawell in Western Victoria with product offtake to Costa Group. Its protected cropping farms will use a controlled atmosphere and grow lamps to achieve higher production and low water usage. The first site proposed for the study with 1414 Degrees is located in the Northern Adelaide Plains on a high voltage network and adjacent to an SA Water embedded generator on the NEM. The feasibility study would look at a similar development to the Stawell project, with the addition of heat from a 40MWh TESS module as the first stage to a grid scale TESS-GRID. 

 

Recurrent revenue modelling 

Our business development team has been modelling the revenues to be expected from operating the TESS-IND and TESS-GRID on the NEM in conjunction with heat offtake to the SmartFarm or other industries, including the brewery, packaging plant or poultry processor as previously proposed. Scenarios for energy trading range from those based on contracts for supply from an aggregator to direct exposure to wholesale pricing, and combinations of both. We are being assisted by specialist energy trading and renewable energy aggregator companies. Other revenue sources, such as those from Frequency Control Ancillary Services (FCAS) on the NEM may not be significant at the 10MWh scale but would apply to larger devices. We expect to be able to report the results of this financial modelling within the current quarter. 

 

To market 

The business development team attended the Australian Energy Storage conference in Sydney in June, where Chief Operating Officer Dr Jordan Parham presented on our technology. The team was engaged by a range of potential clients and investors across the two days of the conference. Concurrently, senior executives had a full schedule of briefings with investors and potential strategic partners at an investor conference in Hong Kong. There was strong interest in co-investing in our energy solutions strategy. 

 

I look forward to reporting further progress on our path to revenues in the coming months. 

 

Dr Kevin Moriarty 

Executive Chairman

GAS-TESS now an embedded generator on NEM

GAS-TESS now an embedded generator on NEM

  • – 1414 Degrees’ GAS-TESS is operating as an embedded generator on the National Electricity Market (NEM)
  • – Electrical energy can now be exported and sold to SA Water
  • – Heat energy continues to be supplied to SA Water site

 

SA Power Networks (SAPN) has officially recognised the 1414 Degrees GAS-TESS as an embedded generator, allowing it to connect into the distribution grid supplying SA Water’s Glenelg Wastewater Treatment Plant. The electricity will be sold to power the site until SA Water obtains an export licence.

The GAS-TESS has been returning heat energy in the form of hot water to the Glenelg Wastewater Treatment Plant since 25 May. The pilot project has also been exporting electricity to the site for test purposes, allowing our team to refine operational processes and procedures in the lead up to approval of the SAPN connection.

Financial settlements under the commercial arrangement with SA Water will commence once SA Water has commissioned metering equipment measuring the gas supplied to heat the GAS-TESS. This will initiate first revenues for the 1414 Degrees storage solution.

Approval as an embedded generator on the NEM is important for 1414 Degrees’ plan to connect its electrically charged TESS-IND to the NEM, storing and regenerating renewable electricity on the network in preparation for earning revenue from grid scale operation.

GAS-TESS commissioning complete

GAS-TESS commissioning complete

1414 Degrees is pleased to report progress with the GAS-TESS implementation at the Glenelg Wastewater Treatment Plant.

The full suite of ten biogas burners are commissioned and performing above expectations. The silicon storage reached operating temperature and the turbine started generating electricity on Saturday 25th May. It is supplying hot water from the turbine exhaust to the treatment plant, augmenting the continuous hot water supply from the biogas burners exhaust. Electricity is being delivered to our load bank pending SA Water completing the approval processes to connect to the National Electricity Market.

Commercial Testing Scheme for the GAS-TESS

Commercial Testing Scheme for the GAS-TESS

Image: It might look like a white dot but this is the best picture we can get of the white hot heat inside the GAS-TESS.

 

Following the South Australian Minister for Energy and Mining initiating the biogas flows into the 1414 Degrees GAS-TESS at Glenelg on May 1, the device is heating up. The first stage of heating must be gradual to ensure the containment is thoroughly dry. Once this pilot project is at operating temperatures it will recover stored energy as hot air at 850°C to run the gas turbine. 

 

This is the first time such a device has been built and operated. It is already evident that the burners are very effective and biogas flows will need to be carefully managed to ensure temperatures don’t rise too quickly. When operating temperatures are reached the device will be used to generate electricity for sale to the SA Water plant and the National Electricity Market (NEM). Since the wastewater biogas must be burnt as it is produced, the GAS-TESS must be able to operate continuously, with the ability to both charge the heat store and discharge at the same time. It will therefore provide a continuous supply of hot water from the burners and a second, intermittent, supply when the turbine is operated. 

 

SA Water and 1414 Degrees have partnered to test the commercial model for the GAS-TESS. To do this 1414 Degrees will buy the gas at the market price of methane and sell the electricity at the actual NEM price.  

 

The ability of the GAS-TESS to time shift energy means that 1414 Degrees will operate the turbine to earn the highest NEM price on a daily basis. NEM prices vary daily and seasonally therefore the financial picture will take some time to emerge. The value of the heat in the form of hot water will be assessed using time-dependent gas prices. 

 

The company will report actual revenues and modelled heat value on a quarterly basis.

 

SA Water plans to compare the value of the GAS-TESS with its current electricity generating engines, which do not allow time shifting to take advantage of peak demand pricing. Even more crucially, SA Water and other utilities will be able to compare operating costs for the two solutions. The GAS-TESS is expected to have much lower operating costs than the current engines which require expensive maintenance and pre-cleaning to counteract the harmful components in the biogas. 1414 Degrees is aiming to prove the commercial case by the end of 2019. Several GAS-TESS units would be needed to replace all current engines and provide redundancy to ensure continuous gas disposal. 

 

Executive Chairman of 1414 Degrees, Dr Kevin Moriarty said that the device had attracted a lot of commercial interest from wastewater treatment utilities looking for a lower treatment cost and time shifting of electricity generation. He added, There is a huge market in water utilities that are already generating electricity from their biogas and there is an even greater untapped global biogas resource. Although the Glenelg pilot will be earning the first operating revenues for 1414 Degrees, its main value is proving its unique functionality to drive fast growth of sales and services in 2020 and beyond.