Aurora Energy Project Development Approval Variation granted

Aurora Energy Project Development Approval Variation granted

Nov 25, 2021

1414 Degrees is pleased to advise its Aurora Energy Project has been granted a variation to its existing Development Approval by the South Australian Minister for Planning and Local Government.

The variation allows for the addition of a 140MW/280MWhr 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.

The Aurora Energy Project is intended to be constructed in a series of stages. 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. The exact sequence of stages after Stage 1 is subject to change, and contingent on financial and engineering outcomes:

  1. 140MW/140MWh BESS (140MW with 1 hr capacity storage), including 275kV connection to the national electricity network
  2. 70MW Solar PV generation
  3. 150MW CSP generation
  4. SiBox Thermal Energy Storage pilot including 33kV connection to electricity network
  5. Expansion of BESS to 140MW/280MWh (i.e. increase to 2 hour capacity)
  6. SiBox Thermal Energy Storage expansion

The development approval is a key milestone in the advancement of the long-term large-scale renewable energy project. 1414 Degrees will continue to work with all regional stakeholders including the Barngala Determination Aboriginal Corporation, pastoral leaseholders and council to unlock the renewable energy potential in the area. We are now looking to accelerate the Aurora Energy Project including potentially bringing in a partner to participate in and co-invest in the final development activities such as equipment selection and transmission studies. We anticipate a final investment decision for Stage 1 of the project to be in late 2022 with construction expected to commence in early 2023.

 

2021 Annual General Meeting Addresses from the Chairman and Chief Executive Officer

Nov 25, 2021

25 November 2021

Chairman’s Address

Good morning, ladies and gentlemen, my name is Tony Sacre, and I am 1414 Degrees’ Chairman. I am delighted to welcome you all to 1414 Degrees’ Annual General Meeting of Shareholders for 2021. Thank you all for joining us, albeit in a ‘virtual’ format. The Covid 19 pandemic has presented many challenges across the world, and it has led to us having to host 1414 Degrees’ AGM ‘virtually’, for only the second time in our history. I sincerely look forward to a world where business and economic activity returns to ‘normal’, and we can all gather together, in person, at future AGMs. That said, this technology will continue to allow us to host ‘hybrid’ sessions in the future, allowing those who cannot join us in the room at future AGMs to at least join virtually.

The year of 2021 was certainly a year of change for 1414 Degrees and this change has already started to reap positive steps forward from an organisational, transactional, and reputational perspective.

Organisationally, we’ve had some changes at a senior executive and Board level. I’ve been pleased to see these changes having been successfully bedded down during the second half of the year and believe that there is a solid foundation of leadership at both Board and Executive level to take 1414 Degrees on our path towards the successful delivery, prioritisation and execution of our key strategies. These strategies have most recently been outlined by our Chief Executive Officer in an investor presentation released to the ASX. More on that shortly.

From a transactional and reputational perspective, I was delighted to see our Chief Executive Officer sign off on our agreement with Woodside to further the development of our SiBox technology. That agreement is testament to the quality of work our technical team of engineers perform on a daily basis. Our engineers, admirably led by our Chief Operating Officer, Dr Jordan Parham, are committed to their work and we are starting to see the fruits of their labour.

Reputationally, of course, partnering with such a highly reputable firm as Woodside has allowed 1414 Degrees a sense of gravitas within the industry as we continue to promote both our SiBox technology and work on our other key projects which will be discussed by our Chief Executive Officer shortly. Further to this, many of you would have seen our recent announcement about 1414 Degrees being successful in our application for a $2.2 million grant from the Australian Federal Government’s Modern Manufacturing Initiative (MMI) to accelerate the commercialisation of our SiBox thermal energy storage technology. Whilst this is good news from a financial perspective, it is, to me, further ratification of the path we are on, commercialising the SiBox technology.

The conclusion of COP 26 has again raised the awareness of the need to act quickly on controlling global warming. The need for clean energy technology to support a global drive towards decarbonisation could not be any clearer. It is my opinion that our company is on the right path at absolutely the right time in history. I believe that our renewable high temperature heat technology will provide a solution to one of the greatest engineering and commercial challenges the world has faced, moving towards a low-carbon future. The Federal Government’s clear support for our work and our partnership with Woodside are evidence that we are on the right path.

 

To that very end, 2021 has seen our team focus on the development and refinement of the SiBox technology, and our work with Woodside on this front has already commenced. We believe that Sibox offers unique and competitive advantages in the provision of heat solutions for industrial and combined heat and power applications. Clearly, the demand for this type of capability will only increase in the future and our successes over the past six months have meant that 1414 Degrees is now in a great position to capitalise on this.

Leading our charge on this front is our new Chief Executive Officer, Matt Squire. Matt has only been in the role for four months but has already risen to the challenges of executing a major contract, refining our strategic objectives, and has brought a very commercial focus to our activities and, thus, delivering real shareholder value to you all. You will all have the pleasure of hearing from Matt shortly.

In closing, I would say that the past six months have certainly had their challenges, but in overcoming these challenges and moving 1414 Degrees to its next chapter has been one of the most rewarding periods of my career. I personally am looking forward to the ensuing twelve months where we will see further development of our technological capabilities, progress on the commercialisation of our strategic objectives, and an advancement in our approach to the Aurora Energy Project. Many of these elements have recently been articulated by Matt in the Strategic document prepared by Matt and the team and released to the ASX earlier in the week. If you haven’t viewed that document yet, I encourage you to do so.

I would like to thank everyone involved, both past and present, in supporting the growth and development of 1414 Degrees. Principally I’d like to thank our shareholders for your continued support, I’d also like to thank my fellow Board members for their professionalism and strategic support, and I’d like to thank the 1414 Degrees Leadership team and all staff at 1414 Degrees for your continued passion, energy and professionalism. I would of course like to acknowledge and pass on my thanks and appreciation to our strategic partner Woodside, and also our broader ecosystem of suppliers and business partners who contribute to the success of 1414 Degrees.

Again, thank you all for joining us here today. The year ahead looks to be an extremely exciting and pivotal one for the company, and I do hope that you will all continue to share the journey of helping build a sustainable future through clean energy technology.

I will now ask our Chief Executive Officer, Matt Squire, to provide an operational update on our projects before we move onto the formal part of the meeting.

Tony Sacre

Chairman and Non-Executive director 

 

 

Chief Executive Officer’s Address

Thanks Tony and good morning, ladies and gentlemen.

I’d also like to acknowledge the Traditional Owners of the land on which 1414 Degrees operates, being the Kaurna People of the Adelaide Plains, where we are meeting today, and the Barngarla People of the Upper Spencer Gulf where our Aurora Energy Project site is located. We pay our respect to their Elders including those past, present and emerging. We acknowledge and respect their beliefs and cultural heritage, in particular the spiritual relationship the Kaurna and Barngarla have with the land and the importance of that relationship in the past, present and future.

Introduction

It gives me great pleasure to speak with you today as the Chief Executive Officer of 1414 Degrees in what is a very exciting time for our company. After nearly 25 years working in the energy industry, I have never seen a period like the one we are in, and about to experience from the demands of the planet to decarbonise. The world has finally woken up, and whether or not there is specific legislated outcomes at gatherings like COP 26 in Glasgow, it is clear that there is now a general consensus that we all need to cut emissions if we are to leave behind a habitable planet for the children of the future. The world’s largest energy companies and capital providers are also clearly of this opinion.

Already technology is playing a massive part in providing climate friendly energy solutions. The advances in solar and wind have now led to them becoming what I believe will be the primary energy sources of the future. This is already leading to significant changes to many energy delivery systems in modern economies. An example of this is the recent graph which I put in our investor presentation this week from the California systems operator showing the changes in system demand over the last 5 years – the duck curve. Just last weekend we saw more extreme evidence of this with the South Australian electricity grid actually going into negative demand as a consequence of the penetration of rooftop solar. The focus is now turning towards energy storage of what looks like an abundance of future renewable electricity. The need for electricity storage and in particular long duration energy storage will become acute.

While decarbonisation of electricity networks is well underway, more energy is used globally in the form of heat than electricityi. Hence if carbon emissions are to be limited to meet targets, fossil fuels-based heat sources must also be replaced with cost-effective zero carbon energy sources.

 

1414 Degrees technology

The need for long-duration energy storage and renewable heat was recognised by our company’s founding shareholders. The benefits of utilising the latent heat properties and high melting temperature of Silicon for this purpose were understood, however the practical application of it in a usable energy storage system had not been undertaken before. 1414 Degrees pioneered the concept through its technology development and initial demonstration projects – it is the most advanced company in the world commercialising silicon-based thermal energy storage technology; most others are still at R&D level or recently spun out.

Our initial projects have provided the foundation of knowledge that has led to our intellectual property and our understanding of how to optimise a silicon-based thermal energy storage system through our new design which we are calling – SiBox.

SiBox leverages 1414 Degrees’ extensive expertise and experience of silicon-based thermal energy storage that it has built since inception, from commissioning our first prototype and subsequently progressively scaled up and more sophisticated units. The key lessons learnt from these projects that are embodied in SiBox are:

– SiBox storage media is more robust – the combination of a unique silicon-based alloy and containment design, harnesses the advantages of silicon-based alloys, while solving the challenges of preventing oxidation, managing volume change during melting and solidification in a design that is more scalable and can operate in air

– SiBox module design is more efficient – the combination of SiBox storage media and module arrangement enables a flexible geometry that can be optimised for heat transfer, reduced losses and readily customisable for cost reduction

– SiBox is our focus – 1414 Degrees’ technical resources need to focus on our core technology, complemented by strategic partnerships with organisations to access specialised skills and experience in areas outside this, such as energy recovery system design if required

We believe the SiBox has the potential to set a new benchmark for energy storage and offers a unique product that will enable a far greater penetration of renewable energy. The differentiating factor of our SiBox technology is in its simplicity, scalability and prospective durability that will enable it to be used in many different industrial applications. SiBox has the potential to provide energy customers with a clean source of renewable heat. And not just heat, but heat at high temperature in the form of low pressure air at over 1,000° Celsius. The importance of high temperature cannot be overstated. This means that energy is being released in a very concentrated manner and could be applied to a larger array of industrial applications where fossil fuels such as natural gas or LPG are being used.

Utilising silicon’s combined benefits of high latent heat capacity and melt temperature means a much higher relative energy storage density can be achieved compared to other materials, providing for more efficient energy storage and consistent delivery of heat at the required temperature. The SiBox concept could also see industrial energy users install thermal energy storage systems in “behind the meter” applications that provide them with greater flexibility in managing their electricity and gas purchasing arrangements. This could in turn increase the efficient utilisation of energy supply infrastructure and potentially reduce their wholesale purchase costs of energy. Technology such as SiBox will be needed if we are to substantially decarbonise manufacturing in the future and maximise the utilisation of our vast renewable energy potential.

 

1414 Degrees is an Affiliate Partner of The Heavy Industries Low-carbon Transition Cooperative Research Centre (HILT CRC), which aims to transform the Australian heavy industry sector to compete in the low- carbon global economy. 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 for developing and commercialising the SiBox technology.

1414 Degrees was also recently announced as a successful applicant for a $2.2 million grant by the Australian Federal Government’s Modern Manufacturing Initiative which will provide us with much needed financial support and recognition to accelerate the commercialisation of SiBox. We are extremely grateful for this support and acknowledge those who supported us in our grant application.

The best form of validation we could have achieved for the potential of our SiBox concept was the execution of a Development Agreement with Woodside Energy Technologies (Woodside) in October. This agreement not only provides us with a further $2 million towards our clearly defined SiBox validation project, it sets up the potential to create a longer term partnership with Australia’s largest energy company who is embracing the energy transition and is going to be a major developer of decarbonisation projects and exporter of cleaner energy in the future.

Our agreement with Woodside is a compelling opportunity for us. 1414 Degrees will receive up to $2 million funding for specific project milestones that culminate in a full testing program to demonstrate the SiBox performance. Following review of the results of the testing program, Woodside will then have the exclusive opportunity to notify us if they wish to proceed to jointly develop and commercialise the SiBox technology. In this instance a jointly owned Special Purpose Vehicle would be created into which the SiBox Intellectual Property would be transferred. The ownership interests of Woodside would be determined at that point in time as a proportion of Woodside’s investment and the assessed fair value of the SPV. 1414 Degrees will have an ownership interest not less than 51%. Just to clarify as there has been some confusion, Woodside does not yet own any direct interest in our Intellectual Property. This is a decision for Woodside following completion of the Validation Project.

Following successful completion of our SiBox validation project, the technology will require significant further investment in the future. This is to develop commercial pilots and build up manufacturing scale in order to generate unit cost benefits. We believe Woodside would be an ideal partner for 1414 Degrees to make these potential future investments and we certainly hope to have them as a partner for the longer term.

So, the strategy for advancing the company’s Silicon-based thermal storage technology over the next 12- 18 months is now on an excellent pathway and is very clear. We have commenced procurement activities and look forward to updating shareholders on construction progress of the demonstration module throughout 2022. We will also be looking to engage with potential energy users interested in applying the SiBox technology for future commercialisation pilot opportunities in the future.

 

It has taken a lot of effort by our core technical team to continue the progress of our technology and drive us further forward on our commercialisation pathway. Jordan, Mahesh, Josh, Will and Nathan I thank you for your dedication and commitment. We are also excited that this team will be increasing in size when Callum and Sam join us next week on a permanent basis after completing their final year undergraduate studies in Mechanical Engineering at the University of Adelaide.

Before I leave discussing our storage technology, I also want to highlight the importance of the Glenelg project in getting us to where we are today. Following its commissioning in 2019 and testing through 2020, the commercial decision was made by SA Water not to proceed with procurement of the GAS-TESS unit. Hence, we made the decision to impair the project in our 2021 accounts, however the project is available for future reinvestment and demonstration. I would sincerely like to thank SA Water and the South Australian Government for their assistance in developing the Glenelg project and allowing us to showcase how renewable energy sources can be successfully time-shifted. It is an innovative project and again demonstrates how South Australia continues to embrace the renewable energy transition.

Aurora Energy Project update of status and next steps

This then leads me into updating you on our other primary asset, the Aurora Energy Project (Aurora) north of Port Augusta in a world class solar zone. Since acquiring in 2019, 1414 Degrees has continued its investment in the project and remains steadily focussed on securing its ultimate development.

Aurora is an excellent site upon which a long term renewable energy development can be established. It is directly adjacent to the ElectraNet 275kV transmission line that serves a globally significant minerals province further north in the state where Oz Minerals operate their Prominent Hill and Carrapateena mines. These mines produce significant volumes of copper which is a core metal required for the worlds decarbonised future. Our vision remains that large volumes of solar energy will be supplied from Aurora onto the transmission line that connects these mines to the National Electricity Market.

However, presently our focus is on the development of an initial 140 MW Battery Energy Storage System (BESS) with 1 hour of full rate discharge (or 140 MWhr storage). This Stage 1 of the Aurora project would then underpin electrical connection of the site and facilitate future renewable energy development where we have sought variations to our existing approvals to accommodate 70 MW of solar PV generation and 150 MW of Concentrated Solar Power. We have also sought in our approvals the opportunity to install a pilot plant for our thermal energy storage technology.

The variations to our Development Approvals have all been lodged and we hope to be able to update shareholders on this progress in the near future.

Following receipt of this variation to our Development Approval, we still have a lot of work to do at Aurora. In particular we will look to finalise preferred equipment with suppliers that will then facilitate the technical work required for the electrical connection process. We are targeting the second half of next year before we will able to conclude connection agreements with ElectraNet that will enable us to make a Final Investment Decision (FID) and commence construction. We remain hopeful that we could have the Battery project commencing operation in the first half of 2024.

Currently we are also considering the potential introduction of a partner to participate in and co-invest in the next development phase of the project. This would reduce the overall funding requirement for 1414 Degrees and allow us to secure more competitive financing at FID which would increase returns for our shareholders.

The Aurora Energy Project is an important opportunity not just for 1414 Degrees, but also for other stakeholders including pastoral leaseholders, the Barngarla Determination Aboriginal Corporation and the Port Augusta council and community. We gratefully acknowledge their future support and look forward to further engagement with them as we seek to further unlock what is emerging as a world class renewable energy region.

Concluding remarks

I believe that 1414 Degrees is now set for a very exciting period ahead. We have two well defined areas of activity being:

  1. The progression of our technology through the successful construction of our SiBox Demonstration Module in conjunction with Woodside and,
  2. Accelerating the Aurora Energy Project to a Final Investment Decision

Our work activities to achieve this are clearly mapped out and understood. Both of our projects are material opportunities to generate future value, however this value will not be created by simply looking at the short-term share price each day. We need to ensure we deliver tangible progress and generate sustainable, longer-term growth. I want to assure shareholders that we will remain focussed on achieving this and I’m sure the share price will follow.

In conclusion I would like to thank the team at 1414 Degrees and the board. In the relatively short time that I have been here I have felt nothing but welcome from you all and I appreciate and value your support. We are a small company with a lot ahead of us however I believe we are back on track and offer investors a compelling renewable energy investment opportunity.

Matthew Squire
Chief Executive Officer 

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

Nov 18, 2021

​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

Oct 28, 2021

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™

Oct 13, 2021

​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.