Perth, Mar 20, 2024 AEST (ABN Newswire) - Altech Batteries Limited (
ASX:ATC) (A3Y:FRA) (ALTHF:OTCMKTS) is pleased to announce the excellent results from a Definitive Feasibility Study (DFS) conducted for a CERENERGY(R) project with an annual capacity of 120 1MWh GridPacks each year, planned for construction on Altech's land in Saxony, Germany.
Highlights
- Highly positive Definitive Feasibility Study (DFS) - 120 GridPacks (1MWh) pa
- Capital cost estimated at EUR156 million with excellent project economics
- Pre-tax Net Present Value (NPV) of EUR169 million
- Attractive Internal Rate of Return (IRR) of 19%
- Steady state payback period is 3.7 years, with Annual Revenue of EUR106 million per annum
- EBITDA of EUR51 million or margin of around 47%
- Altech Board Decision to Proceed to Funding Phase
- Low lifetime levelised cost of storage EUR0.06/kWh vs lithium-ion batteries at EUR0.149/kWh
- Grid energy storage market projected to grow by 28% CAGR
- Grant funding applications underway
- Equity and mezzanine financing discussions in progress
- Offtake for 5 years production in progress
The project is being developed by Altech Batteries GmbH (ABG) (75%) and joint venture partner Fraunhofer IKTS ("Fraunhofer") (25%), an incorporated society affiliated with the German government and partially financed by the German federal government. Altech Batteries GmbH (ABG) is owned 75% by Altech Batteries Limited (listed on ASX:ATC) and Altech Advanced Materials AG (AMA:FRA).
EXCELLENT PROJECT ECONOMICS
With a conservative investment estimate of EUR156 million, Altech's DFS not only demonstrates an excellent net present value (NPV) of EUR169 million (NPV9) but also generates a significant net cash flow of EUR51 million annually from operations. The estimated internal rate of return is 19%, ensuring a capital steady state payback in just 3.7 years. At full production capacity of 120 1MWh GridPacks, the anticipated annual revenue is EUR106 million. With an EBITDA of EUR51 million (margin of 47%), the project economics is compelling, even at this relatively small first production line capacity. With the anticipated growth of the grid storage market at 28% CAGR, Altech's Board and joint venture partners have enthusiastically given the green light to proceed to the funding phase (Final Investment Decision) for this exciting project.
PROJECT OWNERSHIP STRUCTURE
In September 2022, comprehensive joint venture agreements were executed, marking the commencement of design works. Notably, a fully joint and several joint venture (JV) was established, consolidating all rights and know-how between the Fraunhofer-Gesellschaft, represented by the Institute for Ceramic Technologies and Systems (IKTS), and Altech Energy Holdings GmbH (AEH). This collaborative effort led to the creation of Altech Batteries GmbH (ABG) with 75% ownership by AEH and 25% by Fraunhofer Gesellschaft. AEH, in turn, is 75% owned by Altech Batteries Limited (ASX:ATC) in Perth, Australia, and 25% by Altech Advanced Materials AG (AMA:FRA) in Heidelberg, Germany - both publicly listed companies contributing to project funding.
FRAUNHOFER IKTS BACKGROUND
Fraunhofer, based in Germany, is the world's leading applied research organisation. Prioritising key futurerelevant technologies and commercialising its technology in business and industry, it plays a major role in the innovation process. Founded in 1949, Fraunhofer currently operates 76 institutes and research units with over 30,000 employees throughout Germany. Fraunhofer Institute for Ceramic Technologies and Systems (IKTS) is one of the 76 institutes that conducts applied research on high-performance ceramics.
The Institute's three sites in Dresden and Hermsdorf (Thuringia), Germany, collectively represent Europe's largest R&D institute dedicated to the study of ceramics. The annual budget of IKTS is EUR83 million and it has 800 employees. As a research and technology service provider, Fraunhofer IKTS develops advanced high-performance ceramic materials, industrial manufacturing processes as well as prototype components and systems in complete production lines up to the pilot-plant scale. The electrolyte within the CERENERGY(R) battery is a ceramic product manufactured from alumina.
PROJECT BACKGROUND AND TECHNOLOGY
CERENERGY(R) Sodium Chloride Solid State (SCSS) batteries (also known historically as sodium nickel chloride batteries) is the grid battery storage of the future. This battery technology, although not novel, has been in existence since the 1990s, finding applications in mobility, telecommunications, and UPS systems.
Presently, batteries are manufactured, but typically with cells one-third the size, suited mainly for smallscale power needs. Over the past eight years, Fraunhofer IKTS has pioneered the CERENERGY(R) technology, featuring cells three times larger, specifically tailored for grid storage applications. This innovation has transformed previous technologies by enabling greater energy capacity and reduced production expenses.
The world's largest SCSS-type batteries in terms of capacity have already been successfully tested in stationary battery modules. Fraunhofer IKTS has spent approximately EUR35 million in research & development on SCSS batteries and operates a EUR25 million pilot plant in Hermsdorf, Germany. Fraunhofer IKTS had been looking for an entrepreneurial partner, that possesses the know-how and expertise required for industrial and commercial development, has an industrial site in German available, has access to funding, has a battery background, and has expert technology background in the alumina used in ceramics.
Altech fitted the criteria, and the joint venture was formed in September 2022. Altech group will own 75% of the project with Fraunhofer Society 25% free carried. The intellectual property is licensed exclusively to the joint venture.
FRAUNHOFER'S PILOT MANUFACTURING PLANT IN HERMSDORF
Fraunhofer IKTS established a EUR25 million manual battery cell production facility at its research center in Hermsdorf, Thuringia, as part of advancing the CERENERGY(R) battery. This move allowed Fraunhofer IKTS to produce cells at a cost-effective level, crucial for further development and testing. Optimisation and validation of the technology ensued, leading to the creation in 2018 of the first CERENERGY(R) modules with 5 kWh storage capacity. By 2021, Fraunhofer IKTS completed a pilot production line, facilitating increased capacity and the introduction of a 10 kWh prototype battery module in 2022. The Hermsdorf facility boasts comprehensive cell manufacturing capabilities, serving as a cornerstone for industrial commercialisation, with processes refined for scalability and cost efficiency.
*To view the full release and DFS Announcement video, please visit:
https://abnnewswire.net/lnk/69TZXYE7
About Altech Batteries Ltd
Altech Batteries Limited (ASX:ATC) (FRA:A3Y) is a specialty battery technology company that has a joint venture agreement with world leading German battery institute Fraunhofer IKTS ("Fraunhofer") to commercialise the revolutionary CERENERGY(R) Sodium Alumina Solid State (SAS) Battery. CERENERGY(R) batteries are the game-changing alternative to lithium-ion batteries. CERENERGY(R) batteries are fire and explosion-proof; have a life span of more than 15 years and operate in extreme cold and desert climates. The battery technology uses table salt and is lithium-free; cobalt-free; graphite-free; and copper-free, eliminating exposure to critical metal price rises and supply chain concerns.
The joint venture is commercialising its CERENERGY(R) battery, with plans to construct a 100MWh production facility on Altech's land in Saxony, Germany. The facility intends to produce CERENERGY(R) battery modules to provide grid storage solutions to the market.
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