ASX-listed battery storage company Redflow has flagged plans to take its home-grown zinc-bromine flow battery technology to the megawatt-hour scale, as it works towards kicking off production of its third generation of 10kWh ZBM batteries in the second half of 2021.
Redflow on Friday reported a loss of $2.9 million for the first half of FY21, a result the company said was at odds with progress made over the six-month period, including deployment of its largest single battery energy storage system in Australia.
The Brisbane-based company said it had delivered revenue of $431,000 for the half-year, down from $1.4 million for the same time period last year, a performance affected by delays in the conversion of sales opportunities due to Covid-19.
But in a tele-conference on Friday morning, CFO Trudy Walsh said the H1 FY2021 results “did not actually reflect all the progress made over the last six months,” including eleventh-hour battery orders that just missed being included on the H1 balance sheet.
“Revenue has been impacted by Covid and the inability to travel due to significant lockdowns in Australia and some of its target markets,” Walsh told investors and media.
“Despite these challenges, we can still recognise revenue of $431,000, and on December 31, we also had orders on hand of nine ZBM batteries. Delivery and revenue for these orders is expected to be before the end of this financial year.”
In a statement accompanying its results on Friday, Redflow said it had achieved significant progress against several key milestones, including the development of its Gen 3 ZBM batteries, which last year advanced to a first customer trial.
Redflow announced in May of last year that it planned to use Covid-19 “downtime” to focus on advancing Gen 3 of the ZMB battery – including a new stack design, new electronics board and updated tank design – with the aim of delivering a 30% reduction in production cost compared to the current model.
In comments to the investor call on Friday, Redflow CEO and managing director said the customer trial of the ZBM3 system was progressing well and providing important feedback, ahead of plans to scale up manufacturing of the new batteries.
“We currently anticipate commencing production in Thailand of ZBM3 in the second half of this year,” Harris said.
In the meantime, the company has been working to reduce its overall costs through “disciplined expense management,” which it said this week had resulted in a 78% improvement to operating cash outflow.
But perhaps the company’s biggest win for the reporting period had by the order for 60 ZBM2 batteries from Western Australia stockfeed supply company Semini Custom Feeds – Redflow’s biggest yet domestic order.
“The Semini Grains project we think is a major milestone for Redflow,” Harris told the teleconference.
“It’s very exciting because we believe that it advances our credentials in the agricultural space… but critically it also provides the groundwork and the capability for designing, installing and deploying large-scale, high-voltage battery systems to end customers.
“We’re currently working with [our project partners] on the final design of the system and we’ll be targeting its rollout in the coming months. But clearly, we’re aiming to use this design for other customers that we see in our pipeline that we are currently engaged with,” Harris said.
Looking forward, Harris said Redflow had “an exciting set of sales opportunities and business development activities” in its pipeline that the company was looking to progress over the remainder of 2021, including taking its battery energy storage systems to the next level, in terms of scale.
“We now believe that based on some of the work we’re doing with Semini Grains, we can now explore and progress into larger-scale megawatt-hour type systems,” Harris said.
“In 2021, Gen 3 is clearly part of our focus. It’s going along well and we’re focused on continuing that work for target production in the second half of this calendar year.
“And at the same time we know and understand that we still need to manage our costs, prudently, while also positioning ourselves for growth,” he said.
Earlier this month, Redflow secured a deal to supply at least 56 zinc-bromine flow batteries for installation at remote and regional Optus mobile base stations around Australia, in an initiative backed by the federal government’s bushfire relief package.
The rolllout, which has already installed one system at a “black spot” in Victoria’s Lexton, is being funded under the Morrison government’s $13.2 million Strengthening Telecommunications Against Natural Disasters (STAND) program.
Redflow has already had considerable success with telco companies abroad, including a 2019 order for 68 ZBM2 zinc-bromine flow batteries for at least 20 mobile phone tower sites in South Africa owned by one of Africa’s leading telecommunication companies.
