There has been an extraordinary amount of activity over the last quarter and below we highlight key developments and Executive Chairman Dr Kevin Moriarty provides his review.
- New project sites with significant advantages, including lower cost
- Regulatory changes are creating strong interest in 1414 Degrees TESS from Australia and Asia
- IPO postponed to accommodate significant project proposals
- New energy recovery device purchased for testing in next quarter
- Key equipment, heating, refractory and energy recovery partners selected
- 10MWh module design nearing completion for first install at end of 2017
- 200MWh module pre-feasibility options study complete
- Off-grid town power proposal to add several 10MWh modules in 2018
- Feasibility study underway for waste gas burning TESS for large utility company
- TESS in demand as regulators in Australia and Asia require new projects to provide for network reliability
- 1GWh/50MW project progressing – site selection underway
- New patent application for recent commercial prototype development
- Patents now confirmed in New Zealand, China, US and Australia, pending in two more jurisdictions
This quarter saw 1414 Degrees evaluating some very significant proposals for installations in Australia and globally. The projects range from single 10MWh units to 1GWh units comprised of multiple 200MWh modules of our TESS-GRID. The companies behind the projects are interested in joint ventures with project finance and some have offered direct investment in 1414 Degrees to assist it in the product development.
Previously we announced that we intended to build and install the first commercial 10MWh module at a hydroponic farm, along with several wind turbines, however, as the quarter progressed, we received proposals that did not require us to install our own renewable generation, which means a substantial reduction in our project costs. These projects require further feasibility studies leading to contracts, so we are now building the first module in-house for testing before transportation to site. We still expect to complete the first module by year end.
At the same time, a major utility asked 1414 Degrees to conduct feasibility studies for large capacity modules that could burn waste gas for power and heat output. To meet this request our engineers have been designing a modified silicon heat store. The market for this variation on our technology is substantial.
We have been asked if the battery announced by the South Australian Government will have an effect on the market for our storage technology. In fact, 1414 Degrees has welcomed the announcement that the government is subsidising the installation of a 129MWh battery paired with the Hornsdale wind farm.
This “big” battery will provide short-term power if the grid supply falters, but it will store only a portion of the wind farm’s 315MW capacity output. Servicing peak power demand in South Australia will require solutions capable of at least 4GWh of storage with 300MW or more of peaking output, which is preferably synchronous such as that produced by large scale base load turbines. Even more storage paired with fast frequency and synchronous inertial response will be required as renewable generation increases.
1414 Degrees is building a low cost and reliable solution and the excitement we’re seeing from investors both large and small serves to highlight the market opportunity that is opening up for these services. It’s an exciting time for energy storage.
We are negotiating with large energy market participants for access to several sites in South Australia that could accommodate our proposed power network stabilising 1GWh/50MW units. These units will be able to burn gas or other fuel if renewables supply is unavailable for an extended period, so we are evaluating sites with both electricity grid and gas infrastructure connections. Our operational plan is to build a 1/15th size cell of the first 200MWh module to fine tune the requirements before the full scale build out in mid 2018.
Image: Impression of a 1GWh Thermal Energy Storage System comprised of five 200MWh modules with 50MW turbine
The 200MWh module will have a 10MW turbine connected to the grid. Successive modules can be added to increase the storage to 1GWh producing peaking power of 50MW and discharging over 8 hours or load following the demand. We are aiming to conclude a commercial agreement in the near future.
The market is large and the need is urgent, so our engineers are accelerating development of both the 200MWh TESS-GRID and the 10MWh TESS-IND module. The designs for these have been progressing to the point where we will soon be ready to start building. In parallel, the research and development team has been working with suppliers to ensure a long life for these modules.
We have also been receiving new enquiries from Asia and Europe, providing further encouragement for us to accelerate the development schedule. Interestingly, the largest single enquiry is 200 modules for a country where the government has mandated reliable “base-load” power supply from renewables. The indications are that Australia is moving in that direction. Renewable energy developers here are assessing our technology to meet revised regulatory requirements for approval of renewable generation projects.
Our estimates of the potential global market will need to be revised upwards.
Global markets are many orders of magnitude larger than that of Australia and so is their requirement for heat, which is a unique cogeneration output of the TESS products. For manageable growth, we are looking to enter into partnerships for assembly and marketing the technology under licence. We are currently exploring proposals from potential strategic partners in these markets. The proposals are subject to commercial confidentiality at this stage but we are confident that we will soon be able to announce the major specifications and sites that will underpin a strong IPO.
We have received expressions of interest from a number of large corporations to participate in the IPO as cornerstone investors. Our plan is to favour investment combined with strategic partnerships that bring potential sites for installations, for example, property and renewable energy developers. Negotiations on these commercially important matters are well underway and we need to complete them before issuing the prospectus.
I expect to be able to continue to report major developments and thank you for your continuing support in our fast changing venture.
Dr Kevin Moriarty
Research and Development
The quarter saw important developments for the TESS energy recovery system, including the purchase of a turbine based recovery system. The benefit of a turbine based recovery system is that they are scalable with units available for the 10MWh TESS-IND through to a 1GWh TESS-GRID. A unit for the current demonstrator unit has been purchased and will be commissioned early in the 3rd quarter.
The design of the 10MWh TESS-IND module is nearing completion, with the installation targeted by the end of 2017. To ensure this is achieved, alliances have been entered into with key equipment suppliers for the heating, refractory and energy recovery. This has benefitted us in ensuring our IP is maintained while expediting the delivery schedule.
Image: Impression of the TESS-IND 10MWh module
Advancements to the design of the 200MWh TESS-GRID have also progressed in the last quarter with the completion of a pre-feasibility options study. The report has helped to identify the key opportunities as well as confirming the deliverables for the project going forward. The development will commence with construction of a cell holding 27 tonnes of silicon to enable engineers to confirm heat exchange design. 15 of these cells will then be assembled into a 200MWh module. Commencement of this project is scheduled for early Q3 2017.
Image: Impression of a 200MWh/10MW TESS module