• GAS-TESS mechanical installation complete 

• GAS-TESS electrical installation due to complete next week 

• Commissioning due to conclude in May 

1414 Degrees has completed the mechanical installation of the world first, biogas powered, thermal energy storage system. Electrical installation has been delayed by a week, once complete the GAS-TESS will be ready to take on biogas from the SA Water Glenelg Wastewater Treatment plant. This will mark the start of our first commissioning process on a commercial site. 

Following the completion of electrical installation the engineering team will begin testing, modifying and verifying aspects as part of the commissioning process. This will include release of biogas from SA Water for firing burners and connection approvals from South Australian Power Network (SAPN). 

Once systems and sub-systems, including gas input to burning and heat output, energy reclaim to the turbine, and the electrical control interface are operating at optimal capacity the turbine will be started for the final phase of commissioning, due in May.

Recent news articles have been successful in shining a spotlight on 1414 Degrees (14D)’s exciting project, including Stockhead’s feature ‘Energy: 1414 installs world’s first biogas powered thermal energy storage system’.

This article has been written by 1414 Degrees’ Business Development and Marketing Manager – Maretta Layton

In the past 2 years working for this incredibly exciting energy storage start-up I’ve had the opportunity to take in and understand many new concepts around energy, storage, water and so much more.  A key part of my role is to take these incredibly complex ideas, developed by very brainy people, and translate them into something a little more digestible for the lay person.

So, for those of you without a PhD in engineering, water, bioenergy or similar here is my attempt to explain why 1414 Degrees are so excited about our commercial trial at SA Water’s Glenelg Wastewater Treatment Plant.

Wastewater treatment: Turning waste into clean energy

With the announcement of SA Water’s decision to trial 1414 Degrees’ GAS-TESS to burn and store biogas at its Glenelg Wastewater Treatment Plant, an exciting new chapter in Australia’s renewable energy story began. This is the first technology in the world to solve the issue of effectively storing biogas as thermal energy to produce heat and electricity on demand.

As the first wastewater treatment plant to use this unique thermal energy storage system, SA Water will help to showcase the GAS-TESS’ significant environmental and financial benefits.

What is biogas – and why does it matter?

Biogas is produced when organic waste, including human waste, agriculture waste, manure, plant material or food processing waste, is broken down in an anaerobic (oxygen free) environment with the help of bacteria. The process is energy-efficient and environmentally friendly. It’s also versatile: biogas can be used instead of conventional fuels for heat and power, and even for running vehicles.

Globally, biogas is an increasingly important source of energy. Germany is a pioneer in this area, thanks to the large number of agricultural biogas plants on farms. In Germany, more than 8,000 plants produced 7.4million TOE (tonnes of oil equivalent) of biogas in 2014. The US produced 6.3million TOE and China 7.8million TOE that same year – while in contrast, Australia produced just over 300,000 TOE[1].

This seems to be a missed opportunity for Australia. We have significant agriculture and food processing industries, producing organic waste from factories, livestock farms (particularly dairies), wineries, grain and vegetable producers and the potential to generate significant quantities of biogas. Meanwhile, natural gas is in short supply and can be subject to high spot price surges.

Biogas is a highly economical source of renewable energy, and it’s also a fantastic source of heat. Given up to 50% of EU annual energy consumption is for heating, naturally occurring biogas has the potential to reduce the demand of fossils fuels and hence reduce emissions. Even in Australia we use more energy for heat (primarily for industrial processing) than electricity.

This may come as a surprise if you’re used to thinking of energy as the poles and wires that allow you to flick a switch at home or work. In reality, around 27% of Australia’s total energy use was for electricity in 2014-15. This compares with 33.5% for heating and 39.4% for transportation – partly due to the vast distances our trucking industry handles.

Time-shifting energy use

So, why has biogas received so little attention to date? One of the biggest issues has been storing the gas so it has to be used as it’s generated.

This is one of the challenges SA Water were facing when they approached us about using our storage to help them time-shift their energy use.

Currently, they must use their biogas as it is produced, which is not necessarily when it is most advantageous for them to do so. Before being burnt the gas must be scrubbed to reduce wear and tear on the engines. Heat is also an integral part of the sewerage digestion process.

What wastewater treatment plants want is a stable, consistent source of heat, less maintenance and electricity when it’s needed – not simply when it’s produced – and that’s where 1414 Degrees’ GAS-TESS comes in. It burns the biogas and stores the energy – so it doesn’t need to be flared and wasted or immediately used in gas engines to generate electricity.

Because TESS has a high level of combustion, it’s also easier to manage biogas toxins – the residue that typically creates maintenance issues with generators. SA Water won’t need to ‘scrub’ the gas, saving significant time and operational costs.

Other energy storage technologies, such as batteries or pumped hydro, could store the electrical energy generated from the reciprocating engines, but not also produce the heat energy SA Water needs. And with the added benefits of being low cost – silicon is abundant and cheap – and compact – silicon’s high energy density allows us to pack energy in, 10MWh of storage is contained in a space roughly the size of a 40 foot shipping container.

And that’s the type of energy so many other Australian industries need as well. In 2012-13, around 70% of the energy used by Australia’s manufacturing was natural gas used to produce thermal energy[2]. From district heating to food processing, and any type of production and manufacturing, every process uses electricity or burns fossil fuels like natural gas and liquified petroleum gas (LPG) to make heat.

With 1414 Degrees GAS-TESS, SA Water will be able to store its biogas as latent heat in molten silicon at 1414° Celsius, providing maximum energy efficiency. This heat can then pass through an energy recovery system, converting it into heat and electricity on demand.

Wastewater treatment as a clean, efficient energy solution

SA Water is trialling our technology to time-shift the combustion of biogas to help it meet a target of zero net cost energy from 2020 – which will lead to significant cost savings. The data we produce from this project will help us better quantify the potential of biogas as a reliable and stable source of energy, and thermal energy storage’s ability to make renewables more cost-effective across many different industrial applications.

Ultimately, it will also help us put our vast sources of biowaste to more productive and sustainable use.

For more information on the SA Water Wastewater Treatment project, visit our article ‘World Leading Energy Storage Pilot Breaks Ground At Glenelg’

HIGHLIGHTS 

•  TESS can operate as baseload power station 
•  GAS-TESS competitive on functionality and operational costs 
•  Power generators seeking efficiency, lower costs and emissions reduction 
•  R&D focus on further cost reduction from increased scale 
•  TESS unit cost of energy decreases with scale 
•  Strong cash position 
•  Five new team members, including COO 

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

Our first full quarter since the IPO and ASX listing has been very productive for the company. The funds from the IPO capital raising have enabled us to fast track the GAS-TESS commercial pilot at SA Water’s Glenelg facility. This is our first installation in a working industrial plant where reliability and functionality are the key requirements. It is also our first opportunity to operate the TESS where both electricity and heat outputs can be used and measured. This is a further step up from the commissioning of the control systems for the TESS-IND and turbine that we reported recently. That was a very important step as it showed the systems could run for many hours with continuous electricity generation.

BASELOAD POWER

It is probably not fully appreciated that the TESS will be configured to run remotely and automatically. The TESS has the ability to store energy, then generate synchronous electricity with a turbine and heat for long periods. The GAS-TESS will burn biogas and qualifies as a baseload renewable power station while providing low cost grid scale storage.

There will be a staged process for commissioning and testing the GAS-TESS since this is the first time biogas burning in an oxygenated atmosphere has been used to charge the silicon-based heat store. It will begin with optimising the operation of the biogas burners as they charge the thermal store and power the turbine using sensible heat. Following this, the heat store will be charged in the latent heat range, making the metal molten. Both stages will provide commercial heat and power for the SA Water facility, the only difference being the density of the energy storage.

GAS-TESS EFFICIENCY VS FUNCTIONALITY AND OPERATIONAL COSTS

The GAS-TESS will be fully insulated and have all systems operational, including heat supply and integrated controls to the SA Water facility, so our engineers will be able to determine its effectiveness and efficiency under the site conditions. It should be noted that efficiency is not a prime requirement for the site or most of the industrial sites we have assessed. In many cases it is the functionality and low operational cost that is the primary consideration.

For example, the current alternative to the GAS-TESS is a reciprocating engine that is expensive to maintain, less efficient for the destruction of toxic components in the biogas and does not have built-in energy storage. Our expectation is that GAS-TESS will provide a unique and very competitive solution for waste management facilities including sewerage, landfill dumps and animal farming. This global market potential supports a high growth outlook for this product into the long term.

There are numerous articles that have drawn attention to this 1414 Degrees (14D) GAS-TESS project. Among them is World-leading energy storage pilot breaks ground at Glenelg from Australian Engineering OnLine.

PROJECTS

During the quarter our engineers assessed the Abbe plant in Victoria and presented a pre-feasibility study fort the consideration of management and we are awaiting their advice.

Pepe’s Ducks has advised that they wish to proceed with the project after the Chinese New Year peak production period.

We continue to receive approaches from large industrial users of heat and electricity both in Australia and overseas. Power generation facilities are seeking ways to run their plants more efficiently so that they can lower costs and emissions. We have been working with them on solutions involving large grid-scale TESS delivering heat as hot air or steam, and electricity. In most cases a GWh scale TESS-GRID is required to meet site specifications.

Large consumers of gas have approached us, seeking to reduce consumption and therefore cost. It is perhaps not commonly appreciated that the refining of petroleum products, including gas, involves large amounts of heat. The CEO of Santos Ltd was recently quoted saying that their refining facilities in South Australia consume the equivalent of 5% of the gas supplied to the eastern seaboard. The continuing fall in the price of renewable generation creates an opportunity for TESS teamed with renewable generation to displace this gas, thereby significantly increasing gas availability without increasing emissions, while improving profits and preserving jobs that might otherwise be lost as industry relocates production to lower cost jurisdictions.

GRID SCALE – COST PER KWH OF STORAGE DIMINISHES WITH SCALE

The ability to scale silicon storage to large dimensions is one of the key attributes of 1414 Degrees’ technology, making it highly competitive for network scale energy storage. The TESS’ intrinsic design features result in increasingly lower unit costs as it scales up to GWh capacity, unlike batteries whose storage unit cost remains fairly constant with scale.

Put simply, the 1414 Degrees TESS products’ cost per kWh of storage diminishes with scale.

Our plan is to build the first 40 MWh cell, charging and discharging from the electricity grid, to demonstrate its advantages while providing stability services to the National Electricity Market (‘NEM’). A contract with a power wholesaler will allow us to arbitrage on the NEM, buying electricity at a low price and selling when prices are high. The device would also earn revenue from NEM fees for grid stability because its turbine has spinning inertia like a gas or coal power plant, and it could provide fast frequency response (‘FFR’) to grid variations by near instantaneous switching of its charging connection.

RESEARCH AND DEVELOPMENT

As we prepare to scale up our storage we are monitoring promising developments in the efficiency of gas turbines. Up to now, engineering companies have focused efficiency gains on very large turbines used in power stations. As the demand for these is falling precipitously, they are becoming more interested in producing smaller turbines that could be used in devices such as the TESS. At the same time, we are working to develop higher temperature heat exchangers to get more from our current turbines.

Our team continues to develop the technology to deliver even lower cost solutions. Once our workshop tests are complete, we intend to trial a small TESS at the Pepes Ducks hatchery focusing on heat output only. We are also designing and testing components for the much larger 40 MWh device to realise even lower build costs.

FINANCE

Our cash position remains strong. The actual expenditure on research and development was significantly less than forecast, and our cash was boosted by over $2.5m in R&D tax refunds. We expect an increased spend in the next quarter to buy a new turbine and heat exchanger for the next TESS-IND and advance our key projects.

CORPORATE DEVELOPMENT

We have continued to strengthen the team, appointing five new staff this quarter in the areas of research, engineering and marketing. There have been some internal changes including the creation of a research group to focus the efforts of some talented engineers.

In particular, we welcome the appointment of Dr Jordan Parham as Chief Operating Officer. This is part of the strategy we announced in late 2017 to ensure a succession plan for Executive Chairman, Dr Kevin Moriarty to retire from executive management. The company now has several senior executives who are fast gaining corporate experience and becoming familiar with our innovative technology and its potential commercial applications. This strategy, to build a leadership team that understands the business, will ensure that your Company can build shareholder value from actual technological and marketing success, and decrease corporate risk.

Dr Jordan Parham (L) and Dr Kevin Moriarty (R). If you missed the video introducing Jordan, you can view it here.

Capital markets have been very subdued or negative during the quarter and this has affected your company along with many others. Notwithstanding, we have gained over a 1,000 new shareholders and most large original shareholdings are intact.

We welcome our new shareholders and also thank existing shareholders for their support during this critical time for the company, as we build and install our first devices in sites where their full potential can be measured and realised. We expect we will make significant advances in the coming year and justify the continuing support of our shareholders.