In the global shift from fossil fuels to electric power and mass adoption of electric vehicles, power utilities will have to not only generate more power, but they’ll also need significantly larger transmission lines to carry it all. Witness the success of NIKOLA (NASDAQ:NKLA) motors, which makes battery-electric and hydrogen energy trucks, after its reverse takeover. After launching on June 4th its stock at one point exceeded that of Ford’s at US $29.9 billion—now that is confirmation of a sea-change—and something is going to need to charge of those vehicles and that of the growing number Tesla’s, Toyota Priuses, Chevy Volts, Nisson Leafs and the list goes on and on.
The US Dept of Energy estimates by 2050 globally there will be about $11.5 trillion invested for just building those bigger pipelines to put more electrons through it. This is where Zinc8 Energy Solutions (CSE:ZAIR), a small company out of Vancouver, Canada is about to make a huge impact by deferring these cost through the decades of transition, by storing power locally. Earlier this year, Zinc8 signed a US$2.55 million contract with the largest state public power authority in North America; https://www.nypa.gov/news/press-releases/2020/20200117-zinc. The company’s Zinc-Air Energy Storage System was selected through a competitive process to develop a demonstration project for back-up power for a municipal building or a building on a college campus.
As put plainly in a March 6th Bloomberg story: “Less than four months after Governor Andrew Cuomo vowed to produce 100% of New York’s electricity from clean sources by 2040, the state power authority launched an innovation challenge involving 60 companies in a quest to reach that goal. The winner: A Canada-based startup whose pitch can be wrapped up in two words: ‘Think zinc.’
After 13 years in development and more than $80 million dollars investment in its technology, Zinc8 Zinc-Air batteries are opening up a brand-new market and that is the utility-scale, low-cost long duration energy storage market. One of the key economic advantages to the Zinc8 Energy Storage system, is the abundantly available low-cost zinc. Cost-wise it crushes rivals cobalt, vanadium and lithium technologies, and that is what developers and utilities want to hear.
“Utilities are looking at ways to avoid big capital deployment in infrastructure buildout and we can play a role in that,” says MacDonald. “The key metal used in our system is zinc which is abundant and inexpensive. The zinc itself is not consumed and constitutes less than 10% of the total cost of the battery. So, the cost differentials are huge and that allows for a number of different applications on the economics of renewable energy as well as transmission.”
I first followed this story nearly a year ago when it launched on the CSE under a former name at $0.13 in July 2019. ZAIR.C now trades double that after touching a mid-February high of $0.48, before the COVID-19 crash came into full swing and the company is currently trading below $20 million market capitalization. During this time the company has developed a solid pipeline with three pilot projects: Prior to winning the NYPA’s Innovation Challenge in January 2020, Zinc8 arranged in October 2019 to deploy its zinc-air energy storage system at an innovative, low-energy-footprint estate in Surrey, BC with a 40kW/160kWh (4-hours duration) test pilot at the innovative “75.9 House project” . In March of this year the company secured its first private sector deployment agreement signed with Digital Energy Corporation to install a 100kW/1.5MWh zinc-air energy storage system in Brooklyn, NY. The pipeline continues to build. Targets include the 7 other US states (beyond New York) committed to 100% renewables between 2032-50 and the 4 committed to 50-75% renewable in the same period.
But in the green energy revolution there are much broader opportunities says MacDonald. “Wind is intermittent, it’s disruptive on the grid, most wind farms are only about 30% efficient. We can work with these wind farms to grab some of these electrons that they’re losing and not monetizing, holding it to be released on the grid when it’s required, and change the economics of some of those wind farms, and ditto for solar.”
The company has identified opportunities in three colossal market segments to pursue. One is the aforementioned multi-megawatt upgrades to transmission and development {T&D} deferrals to the support the transition a carbon-free cities and states, a $11.4 trillion globally opportunity by 2050.
In the smaller kilowatt to megawatt range there is commercial and industrial peak demand and backup power deployment to the tune $350 Billion in the U.S. alone (US Dept. of Energy 2017). Also in this range are remote microgrids providing support for renewable energy baseloads, such as a wind or solar generation, where $42 Billion is to be spent globally by 2030, according to Bloomberg New Energy Finance.
With all the talk of the “green revolution”, energy storage is mission critical: long duration low cost energy storage batteries, allow for better integration of renewables into the grid and provides an opportunity for economic gain for renewable energy producers to provide power when it is most needed and at the best price.
As for the technology, this graphic from Zinc8 describes it best:
1. Power from the grid or renewable source is used to generate zinc particles in the Zinc Regenerator. Oxygen is released to the atmosphere as a by-product.
2. The zinc particles are flowed to the Storage Tank and maintained in potassium hydroxide (KOH) electrolyte until required.
3. Whenever power is needed, the zinc particles are delivered to the Power Stack, recombining them with oxygen to generate electricity. The zinc oxide (ZnO) by-product is returned to the storage tank for later regeneration.
“One of the big advantages in our system is that we’ve decoupled the energy and power,” says MacDonald. “If you purchase a lithium-ion battery and you want to go from 1 megawatt storage to 2 megawatts, you have to double the entire unit. Our system has the advantage of only increasing the size of the storage tank thus delivering lower cost. Zinc is everywhere, it’s not expensive at all and actually, we don’t really use a lot of zinc, because the zinc keeps regenerating itself according to how our processes have been developed.”
“So were in a really good spot, we know there are others that are chasing this market as well, there’s some really good technologies out there.” With 20 patents on its Zinc-air energy storage system technology and pilot projects in place, MacDonald feels Zinc8 has some first mover advantage.
This brings up the issue of duration. The chart below shows the exceptional cost advantage of the Zinc8 airflow battery over longer duration, something essential to utilities and localized green power providers.
After completing a $3 million financing in February, Zinc8 has been developing its pilot projects to great success. According to MacDonald, with their recent announcements they are seeing more interest in the company as it pursues other utilities that want to defer those immense capital costs towards making their longer-term green power commitments. “That’s why most of our inquiries over the last six months have been from large utilities and renewable developers who have been waiting for economic long duration energy storage to be commercially available” says MacDonald, who intends to deliver a product that fulfills their needs.
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Previous Rockstone Coverage
Report #10: “Zinc8 accepted into the ACRE Cleantech Incubator Program at Urban Future Lab“
Report #9: “The Empire State is accelerating renewable energy development as part of its COVID-19 recovery efforts“
Report #8: “Supporting the Clean Energy Industry Through the COVID-19 Response“
Report #7: “Renewable energy stocks could be the first to recover, says JPMorgan“
Report #6: “DEATH OF AN ILL-FATED BULL MARKET AND BIRTH OF A CLEAN ENERGY INFRASTRUCTURE OF RESILIENCE“
Report #5: “First Private Sector Energy Storage Deployment Contract for Zinc8 Energy Solutions: Second Commercial Agreement in New York City“
Report #4: “Visiting the Zinc8 Energy Storage Development and Production Facility: The Dawn of the Utility-Scale Battery Era“
Report #3: “The Largest State-Owned Power Utility in the USA Announces Collaboration with Zinc8 Energy Solutions“
Report #2: “MGX Renewables becomes Zinc8 Energy Solutions“
Report #1: “Bridging the Renewable Energy Infrastructure Gap“
Company Details
Zinc8 Energy Solutions Inc.
#1 – 8765 Ash Street
Vancouver, BC, Canada V6P 6T3
Phone: +1 604 558 1406
investors@zinc8energy.com (Patrick)
www.zinc8energy.com
ISIN: CA98959U1084 / CUSIP: 98959U108
Shares Issued & Outstanding: 75,711,374
Canada Symbol (CSE): ZAIR
Current Price: $0.18 CAD (06/12/2020)
Market Capitalization: $14 Million CAD
Germany Symbol / WKN (Tradegate): 0E9 / A2P15E
Current Price: €0.1145 EUR (06/12/2020)
Market Capitalization: €9 Million EUR
Contact:
Rockstone Research
Stephan Bogner (Dipl. Kfm.)
8260 Stein am Rhein, Switzerland
Phone: +41-44-5862323
Email: info@rockstone-research.com
www.rockstone-research.com
Disclaimer: Rockstone Research reports contain forward-looking information or forward-looking statements (collectively "forward-looking information") within the meaning of applicable securities laws. Forward-looking information is typically identified by words such as: "believe", "expect", "anticipate", "intend", "estimate", "potentially" and similar expressions, or are those, which, by their nature, refer to future events. Rockstone Research, Zinc8 Energy Solutions Inc. and Zimtu Capital Corp. caution investors that any forward-looking information provided herein is not a guarantee of future results or performance, and that actual results may differ materially from those in forward-looking information as a result of various factors. The reader is referred to the Zinc8 Energy Solutions Inc.´s public filings for a more complete discussion of such risk factors and their potential effects which may be accessed through their profiles on SEDAR at www.sedar.com. Please read the full disclaimer within the full research report as a PDF (here) as fundamental risks and conflicts of interest exist. Zinc8 Energy Solutions Inc. pays Zimtu Capital Corp. to provide this report and other investor awareness services.The author, Stephan Bogner, holds a long position in Zinc8 Energy Solutions Inc. and is being paid by Zimtu Capital Corp. for the preparation and distribution of this report, whereas Zimtu Capital Corp. also holds a long position in Zinc8 Energy Solutions Inc.
