Redflow zinc bromide batteries ready for commercial sales

(MENAFN- ProactiveInvestors)

Redflow’s (ASX:RFX) market leading zinc-bromide flow batteries are now available in commercial quantities following completion of the transition of manufacturing to Flextronics.

Supply chain transition had been completed and Flextronics (NASDAQ:FLEX) – a US$6.8 billion market cap. – has provided competitive turnkey pricing with effect from 1st March 2015 which the company has accepted.

It is now able to confidently move forward with their product offering knowing that quality consistency and professionalism in manufacturing has been established to proven international standards and is cost competitive.

Commercial quantities are now available and volumes will continue to increase over coming months.

The company will also introduce two new products from late April 2015.

The energy storage and delivery cost over the useful life of these two new products decreases very significantly from the current ZBM.

Chief executive officer Stuart Smith said:

“This is an important step forward for us and our cost of ownership is fast approaching grid tariffs in some European countries before subsidies.

“We believe we have a disruptive scalable technology whose applications are continually expanding.

“The future where the grid progressively becomes a backup rather than the primary source of energy is fast approaching by integrating our products with renewables such as solar and wind at a residential and commercial level."


Expanded Product Offering

After consultation with customers the company’s battery performance measures now focus upon the maintenance free cost per kWh and lifetime energy throughput rather than battery cycle count.

These are important metrics for the actual working life of a battery that are verifiable and reliable measures against which to benchmark different energy storage products and technologies in the market.

Lifetime cycle counts can be misleading due to large practical differences in depth-of-discharge required operating temperatures and other factors which vary between differing energy storage products and technologies.

Wholesale pricing is available on completion of supply agreements and is dependent on amongst other things sales volumes.

Programs intended to lower production cost both internally and in conjunction with Flextronics are about to commence and are expected to become effective progressively over the next 12-24 months.

The standard 3kW/8kWh ZBM produces 48V with 10MWh warranted energy throughput over its maintenance free operating life.

The new ZBM2 battery is a 5kW/10kWh product also producing 48V that offers twice the total warranted energy throughput at 20MWh along with a 25% increase in energy storage capacity per cycle (10kWh vs 8kWh).

These increases in total throughput and storage per cycle are available at only a 35% increase in base cost compared to the ZBM.

Due to these increases in capability the nominal energy delivery cost for the ZBM2 over its operating lifetime is 31% lower than the ZBM at only US$0.48 (€0.42) per kWh.

The new ZBM3 is a 5kW/11kWh product producing 53V and a 220% increase in energy throughput capacity. Total energy throughput is warranted at 22MWh at a cost only 39% above the base price of the ZBM.

The difference in voltages between ZBM2 and ZBM3 provides flexibility in terms of the choice of inverter used by system integrators to support their customers application.

The effective energy delivery cost per kWh for ZBM3 is 37% better than the ZBM with an effective cost per kWh of US$0.44 (€0.38).

The ZBM3 will also be used in the Redflow Large Scale Battery containerised solution which has been rerated to 660kWh per 20 foot shipping container for approximately US$665000 (€585000).

With 22000 kWh energy throughput for each battery (there are 60 batteries in each container) the fully containerised cost per kWh reduces to US$0.50 (€0.44).

These cost reductions make Redflow’s product cost competitive in initial markets targeted and also opens other markets such as residential and mining which it now intends entering earlier than previously planned.

The company’s belief in the flexible modularity of its products is also being borne out with systems integrators across several continents planning to incorporate our batteries into systems for their customers ranging from one to sixty batteries for various end use applications


Markets and Sales

This pricing and product offering allows Redflow to not only continue pursuing the telco channel which has been its initial focus but also for the integration of our products with solar and other renewable sources of energy.

The containerised Large Battery System built using ZBM3 modules extends the application of Redflow battery technology up to truly “grid scale” applications.

The company believes it has a market leading position as its product is now being manufactured by Flextronics and is immediately available in commercial quantities.

The number of trials underway are increasing and are in progress in South Central and North America Europe Australia New Zealand Philippines and Africa.

However sales in commercial quantities are currently slower than expected as the sales cycle for new technology and capital goods is longer than anticipated.

The first small commercial orders have been received by one of our system integrator partners but no further details are available due to confidentiality requirements.

Despite this the company remains confident that commercial scale sales will commence in the first half of this calendar year.

Analysis

Redflow has hit a key milestone with its zinc bromide batteries now available in commercial quantities from Flextronics.

Importantly the company is introducing two new products that will significantly lower the cost per kWh.

The nominal energy delivery cost for the ZBM2 over its operating lifetime is 31% lower than the ZBM at only US$0.48 per kWh while ZBM3 is 37% better with an effective cost per kWh of US$0.44.

In addition programs to lower production costs both internally and in conjunction with Flextronics are about to commence and are expected to become effective progressively over the next 12-24 months.

Commercial sales are expected to begin in the first half of this calendar year.


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