Redflow says on track to cut flow battery production costs by one-third

ASX-listed energy storage company Redflow says it is on track to turn out 30 megawatt hours a year of its zinc bromine flow batteries, and to cut the cost of production by one-third by the end of 2019.

In its half-year results announcement this week, the Brisbane-based company said it had ramped up battery production at its Thailand plant over the six months to the end of 2018, and built up its sales pipeline to drive long- term commercial success.

The company posted a first half loss after income tax of $4.9 million (down $3.9m from previous corresponding period), and a reported revenue of $0.5 million (down 58% on pcp).

Redflow CEO and managing director Tim Harris described the past six months as “significant” for the company, as it re-engaged with the market after establishing its manufacturing capabilities in Thailand.

“As we ramped up production from our Thai factory, we’ve re-established relationships with our partners and end customers which have resulted in some exciting initial orders in target markets along with a number of other promising opportunities,” Harris said.

The company notes in its results announcement that, within 12 months of making its first battery stack in Thailand, it went on to produce 150 batteries during December 2018 alone.

It says that as demand increases, the plant is expected to be able to “rapidly expand to 250 batteries per month,” the equivalent production capacity of 30MWh per annum.

“This stable production facility equips Redflow to confidently execute on a number of key engineering projects and incremental productivity improvements that will add yield and reduce the cost of manufacturing its zinc-bromine flow batteries by 30 per cent by the end of 2019,” the company says.

The cuts to cost and success of the Thai plant mark significant progress for Redflow, which in 2017 underwent a major strategic review, after conceding it was unable to compete with lithium-based batteries in the mass consumer market.

That review also resulted in the shift of the company’s manufacturing base away from Mexico and to south-east Asia, and a shift in its major market to the industrial, off-grid and telecommunications.

This strategy appears to be working thus far, with the company noting increased orders across various of these key “verticals,” including the deployment of six ZBM2 batteries at Optus’ Cape Tribulation site in the Daintree rainforest.

In South Africa, an initial order for five batteries for remote mobile phone towers used by a leading South African telco was followed by a second order for 32 batteries; and in July 2018 the company shipped what was its largest ever order of between five and 60 ZBM2 batteries to be installed at more than 10 sites in Fiji, as part of the Pacific Island nation’s digital TV roll-out.

In commercial and industrial in Australia, Redflow says demand has been driven over the half-year by increasing adoption of solar and storage by business seeking to hedge against rising and volatile energy prices and boost their sustainability.

In November 2018 the company was contracted to supply storage for two childcare centres in Melbourne’s outer suburbs – a deal that resulted in the sale 360kWh of Redflow’s ZBM2 batteries.

And as we reported here earlier this month, the company has also successfully deployed a 10-battery, 100kWh ZBM2 energy storage system to supply power to an isolated Thai village, “showcasing the inherent advantages of flow batteries over traditional battery solutions in the global mini-grid market.”