Altech Batteries Ltd (ASX:ATC, OTC:ALTHF) has moved to the investment decision stage for the CERENERGY® battery project after releasing a definitive feasibility study (DFS) that outlines the project’s capacity of 120 1MWh GridPacks each year.
The CERENERGY® project — being developed by Altech Batteries GmbH (75%) and its German government affiliated joint venture partner Fraunhofer IKTS (25%) — is planned for construction on Altech’s land in Saxony, Germany.
Altech has revealed that the DFS demonstrates a net present value (NPV9) of €169 million (A$279 million), at a conservative capital cost estimated at €156 million (A$258 million), and generates significant net cash flow of €51 million (A$84 million) annually from operations.
The internal rate of return is estimated at 19%, ensuring a capital steady state payback in just 3.7 years.
Once the project moves to full production capacity of 120 1MWh GridPacks, annual revenue is anticipated at €106 million (A$175 million). With an EBITDA of €51 million (A$84 million) — for a margin of 47% — the project has compelling economics, even at this relatively small first production line capacity.
The target market is specifically focused on the grid (stationary) energy storage market which is anticipated to grow at a 28% CAGR. CERENERGY® batteries can provide high security at low acquisition and operating costs for the stationary energy storage market. As such, Altech and its JV partners have enthusiastically given the green light to proceed to a final investment decision.
About CERENERGY® batteries
CERENERGY® sodium chloride solid state (SCSS) batteries, also known as sodium nickel chloride batteries, is the grid battery storage of the future.
While not novel — it has been in existence since the 1990s — this battery technology is finding applications in mobility, telecommunications, and uninterruptible power supply (UPS) systems.
The CERENERGY® battery stands apart from lithium-ion batteries in that it does not experience sodium ion degradation with each charge and discharge cycle. Notably, there is no first-cycle loss, no detrimental side reactions, no dendrite growth and no breakdown of anode and cathode structures. The substitution of liquid electrolyte with a solid ceramic eliminates virtually any sodium deterioration in the battery.
As a result, the CERENERGY® battery boasts a lifespan exceeding 15 years. A recent study by ITP Renewables revealed that the sodium nickel chloride battery technology exhibited no deterioration in the estimated state of health during the initial 700 cycles of testing, in strong contrast to the typical deterioration observed in LFP and NMC lithium-ion batteries.
Further, sodium nickel chloride batteries have demonstrated lifetimes exceeding 2,000 cycles, with full-sized batteries showcasing twenty years of functionality. Cell modules have also exhibited over 4,500 cycles and fifteen years of operational performance, reinforcing the robustness and longevity of the CERENERGY® battery.
Pioneering technology
Over the past eight years, Altech JV partner, Fraunhofer IKTS, has pioneered the CERENERGY® technology, featuring cells three times larger than what are presently produced, specifically tailored for grid storage applications. This innovation has transformed previous technologies by enabling greater energy capacity and reduced production expenses.
Before forming the JV, Fraunhofer IKTS had already spent around €35 million in research and development on SCSS batteries and operated a €25 million pilot plant in Hermsdorf, Germany.
Fraunhofer IKTS was looking for an entrepreneurial partner, one that has 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. It found all of that in Altech, hence the JV was formed.
Pilot Manufacturing Plant Fraunhofer Hermsdorf.
Progress continues
There are now a number of discussions underway in regards to equity and mezzanine financing, while discussions around offtake for five years production are in progress. Altech says grant funding applications are also underway.
For more on the CERENERGY® battery DFS, Altech has released the following video:
