• – Encouraging results for revenues from a hybrid power plant on the Aurora Project
• – GAS-TESS recommissioned to prepare for electricity export to grid
• – More than 90% efficiency predicted from SiBox for long duration storage on grid

CHAIRMAN’S LETTER

The quarter saw a number of internal and external developments that will contribute to realising the technical and commercial success of your company’s technology. The need for long duration energy storage to firm intermittent renewable energy was recognised by the Australian Government as one of its technology priorities in its first Low Emissions Technology Statement. This was demonstrated shortly thereafter when, in a world first, the South Australian portion of the National Electricity Market (NEM) ran on 100% solar energy for one hour in October, with the aid of significant dispatchable power resources to manage the stability and reliability of the grid.

In internal developments, your Company has built on the results of its technology review by focusing its technical team on perfecting our thermal energy storage and partnering with expert technology companies to deliver the energy recovery systems for our TESS products. The goal is to ensure the most robust, cost-effective and efficient thermal storage technology is developed and demonstrated as quickly as possible.

The technical team have continued testing and modelling the new SiBox thermal energy storage technology. Technical analysis indicated that our SiBox design can achieve efficiencies of 90% or better from storing renewably sourced electricity and delivering heat to conventional turbines or to process industry. As the cost of solar PV is now competitive with conventional fuels, and its cost is reducing further, a TESS-GRID based on our SiBox technology can be a cost-effective dispatchable power station using PV generated electricity and electricity regenerated from turbines, as in fossil fuel plants. As with most thermal technology, larger scale drives higher efficiency and lower unit cost, so the plan is to develop and demonstrate the technology in stages at Aurora.

Late in the quarter, SA Water requested 1414 Degrees to have the GAS-TESS operational by the end of October to prepare for electricity export to the grid as an embedded generator on the National Electricity Market. The Glenelg Wastewater Treatment Plant can generate electricity from gas engines, solar PV and the GAS-TESS but has not been able to export to the grid pending SA Power Networks approval. The connection will drive development opportunities for commercialisation of the GAS-TESS, pending improvements to the external heat exchanger and storage capacity upgrades.

During the quarter we reported encouraging revenue indicators from the modelling of a hybrid PV-battery on our Aurora project. When the modelling was extended to include our TESS, it predicted an uplift of revenue potential through the complementary short and long-term capacities of the technologies, thereby servicing larger segments of the NEM. The modelling confirmed previous predictions that the TESS can earn revenue from the FCAS market by switching its charging load on or off. Its ability to absorb high current for long periods has advantages over batteries which degrade quickly in such conditions.

The revenue modelling of the hybrid PV-battery-TESS has driven the business case for the Aurora project. The first stage will comprise a hybrid plant combining photovoltaic generation to the grid and a large battery selling energy and frequency support to the National Electricity Market. A second stage will incorporate 1414 Degrees TESS. In another possible development, 1414 Degrees and Vast Solar executed a Memorandum of Understanding (MOU) to investigate the commercial feasibility of incorporating Vast Solar’s modular Concentrated Solar Thermal Power (CSP) technology in a dispatchable renewable energy park on the Aurora project. The parties will assess the mutual benefits of increased utilisation of the transmission assets, reduction of potential spilled energy and maximisation of revenue stacks to demonstrate competitive levelised cost of energy (LCOE) and levelised cost of storage (LCOS).

The Aurora business case requires technical studies for the transmission connection, system integration and engineering. The first requirement is to determine which of the two high voltage lines will be used for the project. This will be followed by detailed engineering analysis for a transmission connection and generator performance study. Your board decided to launch a share purchase plan to finance these objectives. It attracted strong shareholder support, closing above target at $3.175 million in the current quarter, and the board has authorised immediate action to advance the Aurora project.

1414 Degrees had $3.6m in cash at quarter end, subsequently augmented by $3.175m from the SPP. An R&D tax rebate is pending. The payroll continued to be supported by JobKeeper receipts and this is expected to continue until the end of December. With economic uncertainties from the Covid 19 response, your Company continues to maintain stringent fiscal controls over cash flow, while progressing core priorities of the Aurora project and energy storage technology development.

Workplace productivity remained high, with 95% of team members working from the corporate office and our research facility.

Your company continued its corporate restructure to meet key strategic goals of revenue generation and technology development. These included the appointment of Richard Willson to the board to meet a casual vacancy and the appointment of Dr Jordan Parham as interim CEO. Several redundancies were affected to align the team with our objectives. Further key appointments are under consideration.

The quarter was productive, laying the groundwork for major growth and results for shareholders.

1414 Degrees is pleased to report that its GAS-TESS has been successfully recommissioned in preparation for power export to the grid.

It was heated to operating temperature and the turbine was run ready for verification testing and witnessing by SA Power Networks (SAPN). This is expected to occur in late November when the Glenelg Wastewater Treatment Plant is scheduled to begin generating electricity from its gas engines, solar PV and the GAS-TESS to enable export to the National Electricity Market (NEM).

In preparation for the SAPN testing and verification SA Water required all generation devices to be integrated into an upgraded plant control system.

14D will continue to provide progress updates to the market as the connection proceeds.

• – SPP has closed over target with approximate total of $3.1 million 
• – Approximately 26m new shares will be issued on Wednesday, 21st of October 

1414 Degrees is pleased to advise that the Company’s Share Purchase Plan (SPP) has closed with an approximate total of $3.1 million, exceeding the target amount by over $100,000. The board has decided to accept the oversubscription amount.  

The SPP provided an opportunity for all eligible shareholders to subscribe for up to $30,000 at 12 cents a share, a 12.6% discount to the volume weighted average price of shares on the ASX during the 5 trading days immediately prior to the announcement of the SPP Offer on 3 September 2020. Approximately 26,000,000 new shares will be issued on Wednesday, 21st of October 2020. 

Executive Chairman, Dr Kevin Moriarty commented “We are heartened by the strong support of our shareholders at a pivotal time. Their investment will enable us to prepare the Aurora project for revenue generation from a hybrid power plant with our patented thermal energy storage.” 

1414 Degrees wishes to advise that the closing date for its Share Purchase Plan (SPP) has been extended to 5pm (ACST) Monday 12 October 2020. 

The Company has received a number of enquiries from shareholders interested in participating in the SPP who have not yet received their SPP Offer Document or have experienced delays in the receipt of their SPP Offer Document. The board has resolved to extend the closing date from today, Wednesday 30 September 2020 to allow all eligible shareholders the opportunity to participate.  

The SPP is seeking to raise approximately $3.0 million to accelerate development on its Aurora Solar Energy Project in Port Augusta, South Australia after modelling of a hybrid renewable energy plant showed encouraging revenue potential. Funds raised will also be put towards further development of 14D’s technology to allow integration into the Aurora project. 

Further details are outlined in the Offer Document which was released on 10 September 2020, and which should be read in full before determining whether to take up your entitlement under the SPP.  

More information, including relevant announcements, is available at www.1414degrees.com.au/spp  

Revised dates for the SPP Offer: 

*These dates are indicative only. The Company may vary the dates and times of the SPP Offer without notice by lodging a revised notice with ASX. Eligible shareholders are encouraged to submit their applications early as the Directors reserve the right to close the SPP Offer early if oversubscribed. 

Applications and payment must now be received by 5pm (ACST) on Monday 12 October 2020. 

SA Water has requested 1414 Degrees to have the GAS-TESS operational by the end of October to prepare for electricity export to the grid as an embedded generator on the National Electricity Market.

The Glenelg Wastewater Treatment Plant can generate electricity from gas engines, solar PV and the GAS-TESS but has not been able to export to the grid pending SA Power Networks’approval.

SA Power Networks intends to conduct verification testing and witnessing in November, and in preparation, SA Water requires all generation devices to be integrated into an upgraded plant control system, which will be implemented prior to SA Power Networks testing.

14D will commence recommissioning its GAS-TESS from Thursday,1 October, and will provide progress updates to the market as it proceeds.

1414 Degrees is pleased to provide an update on the Aurora Solar Energy Project, a transformative initiative aimed at delivering large-scale renewable energy solutions to South Australia. Located in the Upper Spencer Gulf region, the project is designed to integrate solar photovoltaic (PV) generation with advanced energy storage technologies, including battery energy storage systems (BESS) and the company’s proprietary Thermal Energy Storage System (TESS).

This hybrid model supports the transition to a low-carbon energy future by enabling reliable, dispatchable renewable power and industrial heat solutions.

The first stage of the Aurora Solar Energy Project includes a 70MW solar PV array paired with a 70MW/70MWh BESS. These assets will provide fast-response capabilities to support grid stability, frequency control, and energy arbitrage on the National Electricity Market (NEM). Engineering and regulatory development work is well underway, with connection approvals, site assessments, and early infrastructure design progressing steadily.

Looking ahead, the next stage will see the deployment of a TESS pilot system using the innovative SiBox® technology, a silicon-based thermal energy storage solution capable of delivering high-temperature, decarbonised industrial heat.

As outlined in the Aurora Solar Energy Project Development Update:

Historical modelling shows revenue potential

ITP Renewables modelled a hybrid solar power plant on the Aurora Project to maximise National Electricity Market (NEM) wholesale and ancillary services (FCAS) revenue. Their simulation of the past five years showed annual revenues ranging from $44m to $80m based on full share of FCAS market. Future revenue depends on capturing a proportion of this growth market, sales of energy on the NEM and through retailers. The regulatory market is adjusting and is expected to create further revenues for energy supply security.

Historical modelling confirms revenue potential for TESS + BESS

ITP Renewables modelled a TESS and BESS hybrid solar power plant on the Aurora Project to maximise National Electricity Market (NEM) wholesale and ancillary services (FCAS) revenue. Their simulation of the past five years showed that a combination of TESS and BESS storage increases potential revenue generation from the site through more flexibility of frequency response. Future revenue depends on capturing a proportion of this growth market, sales of energy on the NEM and through retailers. The regulatory market is adjusting and is expected to create further revenues for energy supply security.

These findings reinforce the commercial viability of Aurora’s integrated energy storage model and validate the company’s strategic direction.

Click here to view: The Aurora Solar Energy Project Development Update