Bradda Head Lithium exceeds targets, secures US$3 million royalty and moves closer to production. Watch the video here.
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I think the Matt Harper's comments about the UK projects question (post 2) are of particular importance. They give insight into what is really happening under the surface for Invinity in the wider energy storage market.
These then need to be tied into the comments made by Jonathan Marren (c. 24mins) about customers no longer asking about VRFB tech but price and delivery.
Investors including myself are clamouring for new projects to be announced and that is of course very important but Invinity are telling us that the true breakthrough is the acceptance of vanadium and VRFBs. That potential clients are no longer asking what is vanadium or a VRFB but what is the price? When can you deliver? And these questions are coming from clients who are seeking long-duration solutions for GWh scale problems.
Each stone still need to be stepped across. Mistral has to reach launch but the door to 100s if not 1,000s of MWh of work per annum is now open wider than it has ever been and with the recent fundraising and capacity expansion Invinity is a big step closer to stepping through it.
It is not often that such a small company has the opportunity to land deals that individually can be many multiples of its current MC.
3/3
Sorry, there are 3 posts, not 2.
Mistral Launch
Mistral currently running at a simulation level for the customer and that takes time. Need to find any weaknesses and put them right.
"Still saying end of year. There are risks attached. We have to get it right. It has to be right. That means proven to perform well under a series of escalating stages. The product is designed now it is a matter of really pushing hard on it in the simulation of what the customer will see. So that we can find any areas of weakness."
"We are already building Mistral at pilot level."
"That is going to take through the end of the year and there are risks that it could move beyond that but I am not aware of anything that will cause it to be delayed beyond the end of the year."
"The time to build a Mistral is relatively fast."
Round trip efficiency "In the 70s."
Labour government
○ Invinity has engaged with both parties.
○ Spoke with Alan Whitehead the shadow minister for energy security.
○ Pointed towards GB Energy (labour policy) which is very much focused on energy security and not relying on dictators and so lithium from China. I would add VRFBs from China.
○ Said there could be a lot more support for businesses like Invinity but not guaranteed.
2/3
Gamesa launch to come with Gamesa projects? The launch is an open authorisation to sell and "talking completely openly about how they are going to be delivered. When they are going to be delivered and how." etc.
Main driver for UK projects now? Consultation not held up by the election. Daily conversations with the UK government team. Stand inundated with customers when cap and floor announced (46mins) SUPER IMPORTANT. Working capital was important also.
No indications to suggest that the consultation is being held up by the general election. "We are still having almost daily calls behind the scenes with DESNZ (Department of Energy...)."
"Main drivers for UK projects? It certainly was our capital position. So that has unlocked a lot of discussions. But also cap and floor I was there at an energy summit in London just as it was announced and our stand was inundated with developers, utilities and financiers wanting to come and talk to us and very much a 50MW 6-hour system is a 300MWh system and without giving any pricing away its probably north of 100-120m pounds of revenue for one single project to us. So those are enormous opportunities and the regime is focused very much seemingly exactly the technology that we have."
Matt Harper added
"While yes one of the near-term drivers for UK projects is some of those near-term regulatory developments like cap and floor. But without giving away too much we look at the companies with whom we are in the advanced stages of commercial discussions. The majority of them are global players. We just announced our second deal with EDF Renewables (Rincon project in California)...They are the parent of Pivot Power. Organisations like theirs are starting to see that there is a global need for non-lithium long-duration storage for electric grids worldwide. Now cap and floor might be the thing that will get those projects done in the UK in the next 3-4 years. But it's the global perspective around needing to understand these projects at a GWh scale and then being able to deploy those projects all over the world that those kinds of organisations are very much focused on. And we think that it makes great sense to have some of those primary projects in the UK and are looking forward to engaging and building some of those."
THE CUSTOMERS INVOLVED IN THE UK PROJECTS ARE GOING TO BE IMPORTANT BECAUSE OF WHAT THEY CAN THEN TRIGGER IN THE FUTURE:
1/2
Here now is a list of the best quotes along that I picked up on from the meeting along with my notes which you should find interesting, Read between the lines. Breathe in the detail.
US manufacturing
"We are very conscious of the fact that our DOE projects require a degree of US content. We intend to meet that content requirement and we are working closely with the purchasers of those Mistral deals that we meet those requirements and meet their timing. It's still something we're not ready to announce yet but we are making progress."
Deal closure question. One of the significant hurdles we had up until the last couple of weeks was around our capitalisation.
"Customers were looking at the multi-million or even 10s of millions of dollar deals they were trying to get done with us and were very nervous about our financial position. That has changed significantly. That was a big reason why we were able to get the 4MWh deal with Rincon contracted and announced a few days ago and we think that momentum is going to carry forward now that we are operating from that far more stable financial position."
No intention to compete with lithium on cost but on LCOS.
"We don't compete on price and don't intend to."
"We are today significantly less expensive than lithium per MW of energy delivered."
"It is that cost of actually generating power that ultimately is going to drive our success. We are today ahead of lithium in that regards."
US DOE see us as "the most clear line of sight towards the kind of costs of delivered energy that they know that the electric grid is going to need 5 to 10 years out."
"Because the cost of delivery is so low we are going to be very, very competitive and significantly out compete lithium in those years that we are talking about."
More partnerships coming along but they cannot be mentioned yet. Won't mention them until their partners are happy to say so. Hint being regions where energy storage is big. (44mins) I think he mentioned Australia.
"We won't mention them until our partners (emphasised this word) are happy for us to go and announcement those publicly."
"If you live around the world there are some very exciting regions for energy storage where we do not yet have announced partnerships. The Middle East would be one of them and some of the largest renewable projects in the world are being built in that region."
"We have some very active and interesting discussions there. It is not a region where we would want to enter ourselves but it is a region that has tremendously capable partners and tremendously capable organisations that could take our product and really make it a meaningful part of the energy mix in that part of the world."
This is very interesting. Could this be the Saudis who already have an interest in vanadium and VRFBs with recoveries from ash? Again this is something that Invinity has touched upon before. Vanadium recovery from secondary sources.
Agreed HarChris. The Global strategy allows Invinity to reinforce success. They are de-risking by granting manufacturing licenses whilst retaining the patents and critical component supply. Australia looks really promising (nationally secured Vanadium electrolyte supply is a big plus) as does USA (Government buy in) and Taiwan (energy security). As an aside, I love the concept of the CFO doubling up as head of development. Will try and sell that novel concept!
Afternoon all,
Having now watched the presentation several times it was clearly a case of hands being tied on most subject matter due to ongoing discussions or 3rd party drivers. So I would expect multiple avenues of newsflow from supply chain, partnering and project wins.
They are clearly very confident about Mistral and the 46% cost reduction vs. the VS3 is a significantly improved starting position for their new product.
Aiming for a 20-30% gross margin is certainly above my expectations although I accept that there is still much work to do to reach the upper echelons of this target. But semi-automated production lines in Bathgate will certainly help when they come.
102MWh average project size currently in the project pipeline indicates c. 64 projects are being considered.
The near-term goal of unlocking the advanced category projects means we can look forward to up to 500MWh of project announcements over the coming months. The larger the come the bigger the effect on the SP.
Plenty is going on and whilst Mistral itself may come late in the year what's key is that it working as planned and it is on its way to launch because it is an absolute game-changer for Invinity.
It is not unfair to expect the SP to now rise into that endpoint (helped by the above ongoing news flow) which I now feel will be a pivotal moment for the valuation of the company.
True re the UK but what’s amazing here is the sheer geographical reach of Invinity at what is still a fairly nascent stage of development. We’re talking major business across East Asia, Europe and North America.
Going to be a fun watch over the next six to twelve months.
Toneman, since I am in Scotland, most of the sites I was looking at will be determined by the Consents Unit in Edinburgh rather than locally, as the BESS output is added to the on-site Renewables output in determining whether it exceeds the threshold for local decision. Add in the fact that BESS is favoured within the National Planning Framework (and rightly so), there is very little opportunity for any meaningful local input. It seems that the Planners hands are also tied by the lack of clear guidance from the Chief Fire Officers and SEPA don't (or won't) cover "what-if" risks in their assessment of environmental risks from applications.
Lutra, I suspect in each case the local opposition will do a lot of the heavy lifting for us. Mostly it seems people just object to anything new going into their area anyway, but in this case they typically use the fire risk as their trump card because they have all heard of the fire risk with Lithium. Once the planners realise they can counter that one by proposing IES vanadium flow batteries instead we could find a lot of momentum swinging our way. Then of course the local opposition will simply go back to standard arguments over eye-sores and badger habitat.
Not before time they're situated at renewable energy sites. It's criminal there's currently no way to optimise their outputs by storage and instead the owners are paid to switch them off in times of over capacity. At last some joined up thinking....
Hopefully, this should move pretty quickly back to 23p - just need some momentum and maybe the investor meet yesterday along with the Capital Markets Event on 23 July might just push this even higher than 23!
I was looking at our local planning portal this morning and was stunned by the number of BESS schemes that are currently going through the planning system. Essentially there is one for each windfarm and a few where it is just convenient for a grid connection. There is a pretty big market out there in UK alone. It's a pity we can't get the environmental impact assessments to place a greater significance on fire risks and clean-up risks for Lithium based BESS schemes!
And perhaps a new partner in and funding from the US, and more orders.
A very promising outlook driven by a rapidly growing need to time shift energy.
Potential new partners in the Middle East
Sales from the Base pipeline
What other news can we expect in the meantime?
Presentation up. Judge for yourselves whether it comes across as credible. As a previous poster mentioned, he does look a bit like Biden's younger brother 😊https://m.youtube.com/watch?v=86V4hQbWn9U
Larry actually said that he is standing by the lanch of Mistral this year and although there is always a possibility of delays he is not aware of any atm
Mistral expect end of year launch. Not guaranteed and there is possibility for delay...
Starting at 3pm today
Gamesa approached Invinity because they needed a tech that could handle wind power projects and lithium doesn't cut it.
They wanted a battery that could last as long as their kit so minimum of 20 years and handle multiple cycles per day without too much degradation. Mistral fits that requirement which is why it is so damn exciting for those that have studied the industry.
It's a development JV effectively paid for by Gamesa with wind projects in mind.
Each party is able to sell Mistral through their own sales channels. Invinity has retained certain IP which means they have to be contracted to supply those elements of the battery for any Gamesa sale. Invinity sales are completely independent of Gamesa.
Well I’m not privvy to their commercial contract but I assume you could ask Larry at this afternoon’s meeting.
Thanks for the info @LAMP
If jointly developed with Gamesa Electric, does that mean they have royalty or cut in the sales of Mistral? What's the deal between them
I would suggest tuning in for the Invinity investor meet presentation later today. It is always an informative session that dives into the tech front end.
I have a load of questions I would like answered.
Invinity is the only non-lithium tier 1 energy storage provider on BNEF Bloombergs 2024 list. Plus, Mistral is set to be the lowest-cost, long-duration battery on the market. Just as governments and the customer base seek non-lithium long duration battery options due to changing application demand and fears over thermal runway especially in built up areas.
Mistral is being launched at just the right time.
Presentation starts at 3pm UK time I believe.
https://www.energy-storage.news/bloombergnef-notes-uptick-in-china-based-bess-providers-as-it-launches-tier-1-list/