Altech (ASX:ATC) unveils profitable DFS for grid-storage battery production

Altech (ASX:ATC) unveils profitable DFS for grid-storage battery production

March 20, 2024 Off By Jack Baker

Altech Batteries’ definitive feasibility study has modelled profitable operations from production of 120 one-megawatt-hour GridPacks a year out from planned production start at a manufacturing base earmarked in the German state of Saxony.

At a conservative $259.5 million capital cost estimate, the definitive study shows a net present value for GridPack production of $281 million at a 9% discount rate.

The multi-listed group’s DFS calculations produced a 19 per cent internal rate of return from revenues of $176 million a year for a payback period of 3.7 years.

The Altech board has decided to commit to a funding phase for the project, and the group’s team has already got cracking, starting grant funding applications, and financing and offtake discussions for five years of production.

Sodium chloride solid state battery technology has been around since the 1990s for smaller scale use but, since Fraunhofer’s pioneering work on Cerenegy technology over the past eight years, some camps see it as the future of grid battery storage.

Fraunhofer’s innovations in the technology has remoulded it into the grid-storage-specific use seen in GridPack by enabling greater energy capacity and reduced production costs – all while the market is tipped to rise at a 28% compound annual growth rate.

The salt-based batteries have no moving parts, cooling fans, heating, ventilation or air-conditioning systems and are produced without the fire risks or other cost, geopolitical or ethical quandaries that typically come with the commodity requirements of lithium-ion equivalents.

GridPacks also boast a significantly longer 15-year lifespan.

Altech’s GridPack project life is expected to be an industry-typical 20 years, but with regular maintenance and sustaining capital, could likely be pushed beyond 30.

But for now, Altech is looking at financing and making sales for first production from the DFS-validated venture.

Previously producing battery backs with lower capabilities, Altech’s joint venture partner Fraunhofer IKTS has comprehensively redesigned a pilot facility to produce 60 kilowatt-hour prototypes for performance testing and customer qualification.

Altech said potential buyers have shown a keen interest in the prototypes and the company intends to give select entities access to show off the pack’s practical benefits for various industries, and ink offtake deals.

Watch: Altech’s DFS announcement

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