- Successful completion of SiBox demonstration module design and external validation modelling
- All major equipment specifications finalised and site preparation milestone approvals received from funding partner Woodside to now proceed with next phase of activities
- Further recognition for 1414 Degrees’ long duration energy storage technology when announced as recipient of the SA Innovation Award at the 2022 CORE Innovation Hot 30 Awards
- Aurora Energy Project tenure refreshed following execution of amended Tripartite agreement with pastoral leaseholder and SA State Government Ministers
- Extensive work to update the Aurora project design and reconfirm the Battery Energy Storage System (BESS) following receipt of renewed pricing and scope from vendors
- External third party economic modelling of Aurora reviewed and confirms robust business case for Stage 1, 140 MW BESS project
- Preparations for selection of preferred vendor and technology completed for Aurora
- First instalment of Australian Federal Government’s Modern Manufacturing Initiative grant received
- Maintaining disciplined funding position with $4.5 million cash (zero debt) as at March 31st
Clean, scalable renewable energy storage developer 1414 Degrees Limited (“14D” or “the Company”) (ASX: 14D) provides the following activity report and Appendix 4C for the period ending 31 March 2022.
Comments by Matt Squire, Chief Executive Officer of 1414 Degrees
“The quarter has seen significant progression in both of our core renewable energy projects.
The successful completion of the site preparation activities for the SiBox demonstration module and subsequent confirmation by our funding partner Woodside Energy Technologies is a significant achievement. Testing of the phase change material (PCM) containment system in our furnaces has also confirmed our selection of materials and configuration. We are now moving ahead with final procurement of equipment and commencement of construction later in the year. It is a great credit to our technical team that the project has reached this milestone and I am proud of their hard work for shareholders.
High energy prices and geopolitical events have continued to reinforce our view that the world is in desperate need for an energy storage solution with the performance objectives of our SiBox design. Our focus remains on proving we have a system that can deliver reliable, high temperature renewable heat through the utilisation of the storage properties of molten Silicon. It was pleasing to receive further acknowledgement of our technology when the company was announced as the recipient of the SA Innovation Award, presented by the South Australian Department for Energy & Mining, at the 2022 CORE Innovation Hot 30 Awards. These awards recognise innovation across Australia’s most important industries: mining, energy, resources, oil & gas, space and defence. Further background for shareholders can be found here: https://www.coreinnovationhot30.com.au/about
The Aurora Energy Project near Port Augusta was also advanced significantly in the quarter. The development team worked closely with Ovida to update the project’s work packages and renew engagement with vendors. Economic modelling commissioned by Ovida has also assisted in determining the optimal technical configuration of the project and confirmed our belief that Aurora is on track to be a robust investment opportunity. Our focus remains on selection of a preferred technical provider for the Stage 1 140MW/280 MWh BESS however the next stages of the project, Stage 2 (70 MW Solar) and 3 (150 MW Concentrated Solar), will also provide us with excellent future renewable investment opportunity.
Subsequent to the end of the quarter (and as announced to the ASX on April 5th) Ovida advised us that they were withdrawing from the exclusivity arrangement due to a strategic decision by their shareholders to no longer invest in unregulated electricity projects. Whilst this was disappointing the project has benefited from Ovida’s involvement and the funds they provided will be put to use as we continue with the final approvals processes. In parallel we will consider the introduction of a new partner to the project and initial engagement with prospective participants has commenced with initial feedback being extremely positive.
The company remains in an excellent financial position with our cash balance increasing to $4.5 million. We will continue to look at ways to minimise non-project expenditure and are committed to an ongoing disciplined approach towards the utilisation of shareholder funds.”
Substantial activity in the quarter has seen the continued progression of the SiBox project which is on track for construction later this year. Engineering design has now been finalised and major equipment specification is complete.
The first delivery of phase change material (PCM) has been received. The silicon based alloy is contained within the 14D storage media to provide high energy density thermal storage from latent heat. This delivery marks the first major component of the SiBox Demonstration Module. Additional PCM is in production along with the containment solution and are expected to arrive from overseas suppliers in Q3 2022. Testing and thermal cycling of our PCM containment system has continued throughout the quarter in our furnaces on-site. Results continue to support our selection of materials and optimised configuration for the SiBox.
Computational fluid dynamics (CFD) modelling of the SiBox performance was commissioned and completed by Royal Melbourne Institute of Technology (RMIT). This has successfully validated our internally developed design model with results providing further confidence in the SiBox design. These activities now provide us with detailed targeted performance parameters and will also be a key comparator when we assess our actual test data during future operation of the project.
The completion of our equipment specification and selection is also a major project milestone under our agreement with Woodside Energy Technologies. The satisfaction of this milestone will allow the next phase of activities to commence and associated funding to be provided. At the end of the quarter $500,000 had been received to date from Woodside out of the total $2 million under our funding agreement.
Subsequent to the quarter’s end, the tender has been awarded for the SiBox furnace, a core component of SiBox consisting of high-grade insulation to contain the storage media at 1400°C and integrate to the Energy Recovery System (ERS). Additionally, orders have been placed for other major equipment including the ERS heat exchanger.
Work continued on further advancement of the Aurora Energy Project (AEP) located approximately 30km north of Port Augusta in South Australia. The AEP has approvals for the development of: 140MW/280MWh battery energy storage system (BESS), 70MW Solar Photo-Voltaic (PV), 150MW Concentrated Solar Power (CSP) as well as a pilot for own thermal energy storage. The project is staged with our initial focus on Stage 1 being the development and connection of the 140 MW BESS to the adjacent 275kV transmission system.
During the quarter the AEP project tenure was restated following the execution of an amended Tripartite agreement between 1414 Degrees’ subsidiary Silicon Aurora Pty Ltd, the pastoral leaseholders Buckleboo Nominees and requisite SA Government authority. This included the SA Minister for Environment and Water as well as the Minister for Primary Industries and Regional Development. The restated agreement replaces the 2019 document and provides for a 40 year project life from a start date that is more closely aligned with the current project timeframes.
Significant development activities were undertaken in conjunction with Ovida Infrastructure Pty Ltd (Ovida) under an exclusivity MoU executed between the parties on 20th December. These included:
- The updating of all project basic concept and design
- Reconfirmation of BESS suppliers and receipt of updated pricing and technical scope
- Commissioning (by Ovida) of independent economic modelling to assess the optimised economics of the Stage 1, 140 MW BESS in the NEM
- Review and confirmation of all technical inputs required for commencement of GPS modelling In addition a submission was prepared in response to the ARENA advanced inverter (large-scale battery fund) Expression of Interest for future potential funding support.
Subsequent to the end of the quarter, Ovida advised on 5th April they were withdrawing from the exclusivity MoU due to a change in strategy of their shareholders. 1414 Degrees will receive a $100,000 termination payment and retain all intellectual property generated since execution of the MoU. All past payments made by Ovida (including the initial payment of $300,000 on signing the MoU) are retained by 1414 Degrees. The Ovida MoU was solely in relation to the development of the AEP and completely separate from 14D’s Thermal Energy Storage System technology that is being developed with support from Woodside.
The AEP is held by 1414 Degrees through its 100% owned subsidiary Silicon Aurora Pty Ltd. The Company intends to continue to progress the development of the AEP which is a world class renewable energy opportunity. A Stage 1 FID decision for the BESS is targeted for early 2023 following completion of final approvals and agreements.
As of March 31st 2022 1414 Degrees had the following capital structure:
- Shares on issue: 201,485,458
- Unlisted Employee Performance Rights: 2,150,000
The company has 11 employees with several of these working part-time.
At quarter end the Company held $4.535million in cash and has no debt. The increase in cash balance of $0.717million included payments received from Woodside Energy Technologies of $0.3million, Ovida of $0.3million and the receipt of $0.880million being the initial instalment of the $2.2 million grant awarded to 1414 Degrees under the Australian Federal Government’s Modern Manufacturing Initiative in November 2021.
As required by ASX Listing Rule 4.7C3, the Company notes that $24,000 was paid to related parties during the quarter. These payments were Directors Fees.
This announcement was authorised by the Board of 1414 Degrees Limited.