Altech Batteries (ASX: ATC) is challenging the status quo in energy storage with two new technologies: a lithium-free CERENERGY GridPack product and a patented silicon anode material.
The GridPack comes in the form of a 60KWh for commercial applications and 1MWh for grid-level storage, while the silicon-based anodes have been proven to hold more energy, achieve longer driving range, and charge more quickly than traditional lithium-ion batteries.
Earlier this week, Altech successfully raised $15.8 million to progress key studies and pilot plants for both the CERENERGY and Silumina Anodes battery projects.
McKinsey says battery energy storage system capacity is likely to quintuple between now and 2030, with the market growing from $44-55bn in 2023 to $120-150bn by 2030. To talk more about the opportunity at hand, I spoke to Martin Stein, the Chief Financial Officer at Altech.
The 60KWh battery packs can be assembled together into a sea container-size 1MWh pack for grid-level storage and industrial power. For context, 1MWh can power a typical home for about 1.2 months.
What’s the primary purpose of the CERENERGY battery project and the opportunity that will drive its success?
“The scale up of renewable energy has happened at such a pace that the grids haven’t been able to keep up with production. We’re seeing countries like Germany put $2 billion worth of renewable energy back into the ground in the first half of 2022 because they had nowhere to store it. It’s the same story in the state of California, where $3 billion per annum is wasted,” said Stein.
“The CERENERGY battery stores surplus energy and returns it to the grid at a later time. A bit like a residential house battery for solar panels but on an industrial scale.”
Could you provide a specific use case for either the 60KWh or 1MWh battery pack?
“We’re targeting the industrial grid storage market and have spoken to energy providers in Germany. One example is a provider that’s transitioning from coal electricity to renewable electricity,” he says.
Stein also shares some interesting inquiries his team has received from customers thinking creatively about potential GridPack applications.
“I’ve had a dairy farmer call me asking for one for his farm … I had an architect come in with residential plans for an apartment building, where he has already allowed space in the basement for a grid pack battery. So, the uses are endless but we’re targeting industrial grid storage.”
When it comes to early-stage companies, investors typically pay close attention to the timeline and upcoming milestones. What can we expect from the CERENERGY battery project in the near-term?
For perspective, Altech has achieved a number of milestones for CERENERGY in recent months, including:
Nov 2022: Launched 60KWh Gridpack design
Mar 2023: Launched 1.0MWh Gridpack design
May 2023: Sent two 60KWh battery prototypes into production
Jun 2023: Released preliminary battery specifications
Jul 2023: Confirmed CERENERGY battery project suppliers
Jul 2023: Independent studies cite 50% less greenhouse gas emissions for CERENERGY vs. lithium-ion batteries
“We’re currently progressing a Definitive Feasibility Study (DFS) for a 100MWh plant. Our DFS is scheduled to be completed by the end of this year. As are the 60KWh prototypes, which will be sent to potential customers for testing,” Stein says, adding that “we’ve already started discussion with energy providers and different parties over in Europe about getting offtake.”
“The timeline is to finish the DFS and prototypes this year, look to raise finance early next year and get into construction as soon as finances are raised.”
Preliminary designs and specifications suggest that the GridPack product is “in the region of 40% cheaper than lithium-ion batteries” as it eliminates exposure to critical metals.
In April 2022, Altech completed a Preliminary Feasibility Study for the development of a 10,000tpa plant to produce silicon/graphite alumina battery anode materials – Otherwise known as ‘Silumina Anodes’.
The PFS demonstrated robust project economics including:
Revenue of US$185 million per annum
Pre-tax NPV of US$507 million
Project capex of US$95 million
Payback period of 3.1 years
Silicon-rich anodes is a relatively new technology, so how does it compare with lithium/graphite anodes?
According to the PFS, silicon anodes have a theoretical capacity of more than 8 times graphite anodes at a volumetric capacity of only 2 times – In layman's terms, the mass and volume of anode material required to build an equivalent kWh battery pack is significantly lower, along with reduced battery weight and extended vehicle range.
One of the shortcomings for silicon is that the particles expand by up to 300% in volume during charging, which leads to particle swelling and ultimately battery failure. The industry has been in a race to crack the silicon code and Altech achieved this breakthrough back in late 2021.
“What we’re doing with our patented technology is placing a very thin nanometer layer of high purity alumina around the silicon and that’s encapsulating the silicon, enabling the lithium to do what it needs to do but stops the swelling,” explains Stein.
What’s next for the Silumina battery project?
“We’re just about finished with the construction of a pilot plant in Germany. When that’s commissioned this year, it’ll produce 120 kilograms per day of Silumina anodes, which will be sent to potential customers for testing,” he says.
“We’ve already got NDAs in place with a major German automaker and other parties. They’ll test the Silumina product in their own vehicles and batteries and hopefully out of that, an offtake agreement can be executed. In conjunction with that, we’re also undertaking a Definitive Feasibility Study for a full-scale plant.”
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