Redflow announces capital raise as it eyes massive US battery market

Australian energy storage company Redflow has announced a fund-raising round targeting just under $23 million, as it works to leverage increasing customer interest in its zinc bromine flow battery technology, including for grid-scale applications.

Redflow says the capital raising will combine a $5 million investment from US-based New Technology Capital Group and a pro rata non-renounceable entitlement offer to raise up to $17.71 million, if fully subscribed.

The company says the funds will be used to capitalise on its growing set of sales opportunities and market momentum, including a “material increase” in market recognition of the role of flow batteries, which can offer longer storage duration, in the energy ecosystem.

Redflow also noted that it would progress strategic growth opportunities, supplier cost reduction discussions and discussions with potential strategic investors and partners in Australia and overseas, including a “strong market opportunity” in the US.

The fund-raising follows a “challenging year” during the pandemic-riven 2019/2020, a financial year that the company described as “a game of two halves”, with strong sales and deployments in the first half helping to balance out being “materially impacted” by Covid in the second.

But the company’s focus on accelerating the development of its “much simpler” and cheaper to manufacture Gen 3 10kWh zinc-bromine flow battery, or ZBM3, provided the impetus for a better financial year to come, as did a capital raise from shareholders in July 2020.

Since then, Redflow says it has achieved a number of important milestones, including signing its largest single global battery sale to Anaergia for 192 batteries to support 2MWh of energy storage in California.

That project, valued at $US1.2 million, served as the launch-pad for Redflow’s new Energy Pod Z, the company’s core multi battery module for large scale systems and has piqued interest elsewhere in the potentially huge US market.

Earlier this year, Redflow received an order for an initial 56 battery systems for 56 sites from Optus integrator EnerSys for immediate delivery, with a contract value of A$525,000, and with further orders to come. And in Europe, Redflow announced a collaboration with tech company TRUMPF to deliver scalable high-voltage grid-level energy storage deployments.

But the major new focus for international growth for the Brisbane-based company is the US, where 3.5GWh of new energy storage went online in 2020 and where the new Biden administration is expected to accelerate the transition to renewables.

“Redflow believes that the US energy storage market provides a substantial opportunity that warrants significant further focus and investment,” the company said.

“This will be a key focus of Redflow’s activity and expenditure over the next 12 months. Planned initiatives include business development resourcing and activities, battery certification (including UL certification for Gen3), operational support and opportunities for local sourcing of materials.”

See RenewEconomy’s new map of large scale storage in Australia: Big Battery Storage Map of Australia

Have you completed RenewEconomy’s short reader survey yet? With feedback from readers like yourself, we can keep improving and growing. Please click here to start the survey.