Redflow seeks $18 million to scale up flow battery production

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Redflow seeks new funds to scale up production and target markets in Australia and overseas. It is also contemplating move into China.

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Australian battery storage company Redflow has announced a planned $18.1 million equity fund raising to help it scale up production of its zinc bromine “flow” batteries, and also grow sales in Australia and overseas.

The fund-raising will be made through a combination of a private placement to new investors, and a fully underwritten rights issue to current shareholders. Simon Hackett, currently the biggest shareholder, will take up his full $1.8 million allocation, and new CEO Tim Harris will also invest.

The company recently opened its new manufacturing facility in Thailand, and now aims to produce as many as 90 batteries a month by June, and scale this up to 250 batteries a month by December, subject to demand.

Redflow Chairman Brett Johnson said the company now intended to use the new funds to target the international energy storage market.

It is targeting Asia, Africa and Australasia for its ZBM2 and ZCell zinc-bromine flow batteries and telecommunications, commercial & industrial and high-value and off-grid residential energy storage applications.

“This growth strategy will include the identification of potential sales, marketing and manufacturing joint venture partners,” he said in a statement. “We are also focused on continued reduction in the manufacturing cost of the Redflow battery.”

The equity raising includes $7.5 million through a placement to new investors and a further $10.6 million through a fully underwritten non-renounceable entitlement offer to all current shareholders.

“To date, shareholders have invested in development of the Redflow battery and in the creation of a manufacturing facility,” Johnson said.

“We believe we are positioned now to transition from a research & development company into a fully operational manufacturing, sales, marketing and product support organisation.”

Johnson said Redflow is also considering the Chinese market, after being approach by several Chinese entities.

“China is forecast to be one of the largest single markets for energy storage, accounting for as much as 70 per cent of the Asia-Pacific market,” he said. “We will continue to engage with selected parties to assess potential partnership options.”

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17 Comments
  1. Chris Fraser 2 years ago

    Go well Redflow … after this week we could use some competition down here …

  2. john 2 years ago

    It seems the company has a product that is competitive.
    They need capital to produce more product.
    I hope they get the capital injection to enable this.

  3. Stephen 2 years ago

    I’m not quite sure how this is supposed to work as a business in the long run. My understanding is that these batteries now cost significantly more than lithium ion ones. I know these offer less capacity loss over time and can cycle more often. Is the intention that this benefit will be worth the extra cost? Are they really predicting that will continue to be the case as lithium ion prices drop?

    I’m a big fan of the technology, especially being Australian, but I’m not sure how the economics are supposed to stack up.

    • palmz 2 years ago

      They are looking at a different market segment. Red flow is more suitable when you need power for hours. (my understanding)

      so they are more suitable lower peak power KW and more usable power KWH.

      The best cost comparison I can find
      https://www.solarquotes.com.au/battery-storage/comparison-table/

      They are also less flammable and that is always nice.

    • Rich Dobbs 2 years ago

      I think the challenge is that prices of lithium ion batteries are below costs of manufacturing them. I suspect that the manufacturers are selling below costs to keep market share, in case that the learning curve model keeps up. The current size of the market is small enough that companies like Panasonic can lose money for years, continually losing money as they drop down prices. Companies with less deep pockets drop off. Seems likely that eventually reality will assert itself, but given the experience with diamonds, it might take a really long time.

      • Eric 2 years ago

        Tesla Gigafactory is currently producing 40 cells per second and a 75kwh battery pack every 75 seconds and the plant is only a third built.

        But most of the packs will end up in Tesla vehicles not storage.

        At this stage there is still time and space for Redflow to establish itself and refine its product and find a niche market. But it will have to move aggressively and expand quickly.

        There is no room for twiddling thumbs and humming and aaaahing in this space. You will just get squashed like an ant by a herd of elephants.

        Has Redflow got what it takes? I’m not sure. They should find a big partner Imo.

        • Rich Dobbs 2 years ago

          If that is the rate of production, then Lithium-Ion will technology will never have a meaningful impact on grid storage. But the pockets are deep enough to bankrupt a hundred Redflows, regardless of how aggressive they move.

          • Eric 2 years ago

            Redflow has a lot more than Tesla to worry about. Others are moving into this flow battery space in the US using low cost components.
            If the Redflow tech is good enough and the patents solid enough it will survive in some form I guess.
            The other sleeper is the constantly improving battery tech. The whole world is working on building a better battery now.

          • Eric 2 years ago

            Re. Lithium ion not having an impact on grid storage?
            We can’t say that yet. Because atm there are about 10 giga factories worth of capacity in the process of being built on top of current production.
            We don’t know what Impact that will have on prices. And we don’t know what break throughs are coming in Lithium ion tech.

            Very difficult to predict but economies of scale go a long way to dominating markets even if they don’t have the best technology.

    • Jolly Roger 2 years ago

      My take on this issue is that the smaller lithium battery producers will be the ones that cant compete with the Tesla gigfactories (and of course the bigger Chinese producers) and they will be the ones to fall by the wayside. If Redflow can stay out of the way by finding a niche market segment (which they say they have in telecommunications and other industrial applications) they should get through.

    • Dave 2 years ago

      Not more expensive than a lot of the lithium units, according to the solarquotes comparison listed by palmz. Neither the most expensive single unit, nor the most per kWh. The Redflow batteries can also tolerate a good temperature range inherently, rather than with an active cooling system. Also can be full discharged and kept discharged without degradation, unlike Li.

      They are competing with Tesla, which has economy of size on it’s side; and also the publicity coup of Hornsdale.

      My biggest worry for Redflow (apart from rumors of graphene supercapacitors) is the recent announcement from Lockheed Martin about their planned new chemistry flow batteries:

      >”Fiebig claims that the Sun Catalytix technology relies on “an engineered
      molecule” that is a platform for combinations of transition metal ions
      and ligands. Rather than the acids used in many flow batteries, Lockheed
      Martin uses an aqueous electrolyte with a “mild pH (like soapy water)”
      that allows the use of conventional materials in the balance-of-system
      components, such as PVC tubing, while still providing a “good energy
      density” that’s “better than vanadium.”

      He called it a “fundamentally new flow-battery chemistry” that allows
      the use of low-cost materials, adding that competitors using traditional
      flow-battery chemistries “can’t scrub cost from the system.”<
      https://www.greentechmedia.com/articles/read/Lockheed-Martin-Joins-Energy-Storage-Fray-With-Lithium-Ion-and-Flow-Batteri#gs.dohxBDM

  4. Ian 2 years ago

    Here is a word of advice for redflow: storage capacity sells. Nobody cares if the output is 3kW or 30kW in the home setting, there just needs to be enough output to run a house seemlessly. People want storage, plenty of it. Enough for 3 to 5 days standby. This is something redflow could do with larger storage tanks of electrolyte and with the same sized reactor unit. They could thus increase storage capacity to a greater extent than increase the cost to produce their Zcell unit.

    • Rod 2 years ago

      I think the low continuous power rating could be a problem for some houses.
      Most ovens are about 3kW? The peak of 5kW should be fine for most.

      For myself, in Adelaide, (low use) 10kWh would be fine except for July.

      Lots of pros, 100% DoD, long life, but the cost is a killer and the fact that some sort of standby storage for the maintenance cycle is required if considering going off grid.

      • Jolly Roger 2 years ago

        All of the off grid examples they have publicised have at least 2 batteries.

        • Rod 2 years ago

          Which puts them out of the running for low energy use households on the economics alone.

          • Eric 2 years ago

            I don’t think big vats of chemicals are going to wash in a household environment, its cumbersome. But these units may
            work for bigger scale storage. It all comes down to cost per kWh and usability

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