redT Secures 14 Unit Order in SSA
redT energy (LON:RED)#, a developer of vanadium redox flow machines for large-scale energy storage applications, has announced the sale of 14 units in sub-Saharan Africa.
• 14 5kW-40kWh machines sold to a Botswana-based customer for deployment in the country’s critical communications infrastructure sector
• Machines will be hooked up to solar power installations, storing power generated during the day for use in the evening, effectively ‘firming-up’ solar power
VSA Comment
Following on from last week’s announcement of an initial 12 unit order (as part of a 300 unit pipeline), RED has delivered a further sales announcement in a key market. The units will be delivered next year and are expected to generate cUS$850k in revenues for FY 2018 (unit sales + add-on services). We also understand that this single customer has a significant pipeline of additional projects that could eventually require more than 150 RED units.
This multiple-unit sale into the African market highlights RED’s strong networks in the region, which originally stemmed from its legacy carbon project development business.
Aside from the monetary benefit, this deal also explicitly highlights the advantage of flow machines over lithium-ion and lead-acid solutions, which RED notes that in many cases have already failed on these specific project sites.
It also shows that its business model of deploying seed units in certain key markets (two Gen1 machines are deployed in Africa) is beginning to pay off.
We are hopeful that, once operational, the Olde House installation in Cornwall should have a similar stimulating effect for the UK market and lead to significant orders for RED’s bigger and more lucrative units.
We maintain our BUY recommendation and target price of 22p.
Independent Oil & Gas (LON:IOG)#
Independent Oil and Gas (IOG LN) has announced that it has signed an LOI and Consultancy Master Services Agreement with Schlumberger in relation to development of two of its North Sea gas hubs; Blythe and Vulcan Satellites. This provides a framework for a joint team to complete field development plans in the period prior to the final investment decision.
We reiterate our Buy recommendation.