Altech Batteries Limited (ASX: ATC) CFO Martin Stein discusses the company’s GridPack batteries for the renewable energy storage market and progress with the CERENERGY project.
Tim McGowen: Today we’re talking to Altech Batteries (ASX:ATC). It’s got a market cap of around $140m. Altech is developing battery material products, and game-changing solid-state sodium alumina batteries for grid storage. We have with us the Chief Financial Officer, Martin Stein. Martin, welcome back to the network.
Martin Stein: Thanks very much for having me, Tim. It’s a pleasure.
Tim McGowen: And Martin, Altech recently announced that it’s launched a design for the 1 MWh GridPack. What’s the significance of this announcement?
Martin Stein: The industry’s got some challenges and problems at the moment for grid storage with regards to the extensive time it’s taking to install the batteries as well as the complex configuration of the batteries. So, at Altech, what we’ve done is we’ve designed a 1 MWh GridPack, and we’ve taken up to twenty 60 KWh battery packs and we’ll be reinstalling them into a standard C container. The C container can then be shipped or transported via road directly to the customer’s premises. It can be dropped on the deck at the customer’s premises. It’s a plug-and-play design. So, within a few minutes, the customer can have up to 1 MWh hour of battery capacity installed at their premises.
Tim McGowen: And, Martin, your GridPack, what are some of the key features?
Martin Stein: So, one of the key features is the design being made to IP65 standards, which means that it’s completely weatherproof, it’s dustproof and it can be dropped in any weather conditions, and it’s going to be a working battery. We also use the solid-state sodium chloride technology. So, we’re not using the lithium, copper, cobalt and graphite. We’re predominantly using readily available and cheap salt water. And, as we know with this technology, there’s no liquid electrolyte. So, these batteries are completely fire- and explosion-proof, which is… We’re finding there’s a lot of interest in the fact that these batteries are very, very safe.
Tim McGowen: Certainly sounds fascinating. What are the potential customers? Who’s your target market and how big is this market for grid storage?
Martin Stein: That’s a really good question. And, to answer that one, I think we need to have an appreciation of what’s happening with the world when it comes to transitioning from a fossil fuel economy to a renewable energy economy. So, we’re all aware that there’s the requirement to build the energy production facilities themselves, but that in itself is only part of the solution, Tim. There’s also the requirement for these facilities to be able to back up their energy supply to be able to store it in batteries so that it can be returned to the grid for when the grid requires it. An example is a solar park, which is producing energy at times of the day when there’s sun available, but at night-time it can’t produce any energy, but the grid still requires that energy for electric vehicle charging and whatnot. So, the market needs a solution for grid storage batteries, and that’s what we’re trying to provide. We think it’s a very lucrative niche market, but in saying that it’s going to be a huge market globally. For example, LG Chemical Solutions, a company out of South Korea, has just recently announced a US$5.5bn battery facility that they’re going construct in Arizona in the United States. So, we’re seeing quite a lot of investment coming into this industry. As far as potential customers go, look, we think the demand will be there in the form of energy providers, governments, solar parks and wind parks that need storage solutions for their energy.
Tim McGowen: And, Martin, looking more generally at your CERENERGY project, how is the DFS progressing?
Martin Stein: So, we entered the joint venture with Fraunhofer in September last year, and we fired up the DFS straightaway. And we’re really pleased with the progression that we’ve made. We’re having regular workshops in Germany with our joint venture partner Fraunhofer, also our lead engineering firm Kuettner, and other key suppliers. So, we’re moving ahead with that. We’ll look at the economics and the financials involved with the project as well, as part of this process. And, without trying to stick to a embedded timeline, look, we think we’ll be able to have the DFS finalised by the end of this year, which is pretty exciting.
Tim McGowen: And so when does that mean the facility could be expected to be operational?
Martin Stein: Well, subject to the positive DFS, we’ll then be looking to raise finance. And, as you’re aware, that can be a very quick process or it can be a longer process. Now, depending on how long the finance takes to obtain, we’ll start constructing the 100 MWh hour plant to be built on our land in Germany. It’s hard to put a definitive timeline on it, but if the finance goes to plan and the plant is constructed, we think the plant could be finalised in a couple of years’ time.
Tim McGowen: And, just finally, the next 12 months, what are some of those milestones? I mean, you probably touched on the DFS and your facility being operational. What else can you look forward to?
Martin Stein: Well, look, I think that sums it up, Tim. I think you’ve nailed it. We’ll be doing the DFS, we’ll be finalising the DFS, and then we’ll be looking to obtain the finance to construct the plant. So, the next 12 months we’ll encapsulate that, and then hopefully we’ll be in a position where we can start construction of the plant.
Tim McGowen: Martin, thanks for your time.
Martin Stein: Thanks very much, Tim.
