TIDMIES
RNS Number : 4734N
Invinity Energy Systems PLC
23 January 2023
The information contained within this Announcement is deemed by
Invinity Energy Systems plc to constitute inside information as
stipulated under the Market Abuse Regulation (EU) No. 596/2014 as
it forms part of UK law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR").
23 January 2023
Invinity Energy Systems plc
("Invinity" or the "Company")
Operational and Trading Update
Invinity Energy Systems plc (AIM: IES) (AQSE: IES) (OTCQX:
IESVF), a leading global manufacturer of utility-grade energy
storage , is pleased to provide an update on current trading in
early 2023 and other recent progress across the Company.
Revenue and Backlog
Further to the announcement of 30 December 2022, Invinity
confirms that it expects 2022 revenue to be in line with market
expectations.
As a result of the significant number of contract wins and the
remaining revenue to be recognised from the 8.4 MWh project in
Canada and the 8 MWh project in South Australia, the Company has a
current order book backlog for 2023 of GBP22.0m which underpins the
majority of the Company's current revenue expectations for the
year. In addition, the Company has an order book backlog for 2024
of GBP7.4m which Invinity would expect to significantly increase
during the year, particularly if the Company is successful in the
Longer Duration Energy Storage Demonstration ("LODES") competition
Phase 2 application which was announced on 18 January 2023.
Commercial
Since it last reported on its global pipeline in September 2022,
the Company is pleased to note it has closed sales for more than 31
MWh of vanadium flow batteries ("VFBs") including sales to
strategic customers such as Dawsongroup in the UK, Equans in
Belgium and Hyosung in Korea, a first contract with new Taiwanese
partner Everdura, and a major project with Indian Energy LLC
("Indian Energy") supported by the California Energy Commission
("CEC"), among others.
Sales Pipeline
This significant increase in closed sales over previous periods
reflects the growing global demand for non-lithium, longer-duration
energy storage solutions from proven suppliers. Invinity's large
and growing fleet of operational VFBs has been a key factor in
bolstering customer confidence.
This growth in demand is illustrated by Invinity's latest
commercial opportunity pipeline for its vanadium flow batteries as
at 20 January 2023 (all figures in MWh):
Date Closed Base Advanced Qualified Qualified
(Near Term(2) (Further Term(2)
) )
==================== ======== ===== ======== ============== =================
22 September 2022
(HY22 Results) 28.0 22.8 63.5 405.8 - (1)
20 January 2023
(Current Trading) 59.8 15.6 129.4 766.4 1,190
-------------------- -------- ----- -------- -------------- -----------------
% Change + 114 % -32% +104% +89 % -
(1) Not reported in HY22 Results
(2) Near term dates in the Qualified categories are where estimated
delivery is within the next 24 months. Further Term reflects estimated
deliveries that are beyond the next 24 months.
Note: Full definitions of categories can be found in the Company's
2021 Annual Report. Base are deals negotiated and close to signing,
Advanced deals are where negotiation and project development are
in process, and Qualified deals represent significant engagement
with the customer and the Company's belief in the viability of
the opportunity. Closed deals represent those the Company is in
the process of delivering or have already delivered.
==================================================================================
The decrease in the Base category reflects certain of the 31 MWh
of sales that moved from Base to Closed since September 2022
partially offset as others had moved in from the Advanced
category.
An increasing number of national and regional programmes across
Invinity's core markets seek to accelerate adoption of
longer-duration storage. Many Invinity projects have already been
supported by the UK Department for Business, Energy and Industrial
Strategy ("BEIS"), the Australian Renewable Energy Agency, the CEC
and Emissions Reduction Alberta.
Finally, Invinity is pleased to note that programs funded by the
U.S. government's $1.2 trillion Bipartisan Infrastructure Act have
begun to be announced by the U.S. Department of Energy including a
$349m call for proposals for projects featuring long-duration
non-lithium energy storage. Invinity has engaged a broad range of
partners to advance projects funded by these programmes and has
submitted several expressions of interest with them. The Company
will provide updates in due course.
Next-Generation Product Development Progress
Invinity continues to make significant progress in the programme
to design and develop its next-generation vanadium flow battery.
The ongoing achievement of developmental and engineering milestones
has continued to validate the commercial and technical targets set
by the programme. Invinity continues to expect contracts for a
limited number of initial pilot projects to be announced in
mid-2023, with publication of full product details, product
certification and unrestricted sale of the product expected from H1
2024.
Bankability Report Completed
An independent bankability review of the Company's VS3 vanadium
flow battery was recently carried out by DNV, the leading
independent assurance and risk management company for the energy
value chain. This report confirmed the VS3 to be suitable for
grid-scale battery projects, especially those requiring multiple
back-to-back cycles, long discharge durations or a combination of
the two, and that Invinity is leading among flow battery suppliers
and comparable with Li-ion battery suppliers for applications at a
range of scales. This is an important achievement for Invinity,
offering credible 3(rd) party validation to prospective customers
and project partners in respect of Invinity's technology. The
Company provides the report to qualified prospective customers on a
confidential basis.
Operational
The last six months have seen a significant expansion of
Invinity's production capabilities to meet demand.
Invinity is pleased to announce that its new Vancouver factory
shipped the first 23 VS3s destined for Elemental Energy's project
at Chappice Lake, Alberta. This facility represents a significant
expansion to the Company's previous manufacturing capabilities, and
at its full complement of staff and equipment is expected to be
capable of delivering over 200 MWh of VFBs per year.
Further, Invinity has successfully completed the previously
announced transition to new manufacturing partner Baojia, who are
currently delivering components to Invinity's factories in North
America and the United Kingdom and completed VS3 products to
customers across the Asia-Pacific region.
Finally, the Company is closely watching developments in the
United States regarding domestic content requirements that could
benefit Invinity's customers through the Investment Tax Credit
introduced under the U.S. Inflation Reduction Act. Invinity is
developing plans for domestic production with an expanding network
of partners, including localised VS3 production.
Corporate
On 14 December the Company announced a $10m convertible loan
note funding facility of which $2.5m was drawn immediately with the
balance subject to the agreement of noteholders. The Company
continues to manage its cash position carefully and as at 31
December 2022 had cash resources of GBP5.1m.
The cash resources, together with expected near-term customer
receipts and the above facility if drawn, will provide additional
support for Invinity's short-term working capital requirements as
the Company looks to deliver on its order book, whilst continuing
to close further deals and develop its commercial pipeline. As
previously stated, Invinity also continues to actively manage its
cost base as the Company progresses towards becoming operationally
profitable.
Gamesa Electric S.A.U. ("Gamesa") continues to support
Invinity's corporate development by reinforcing shared commercial
interests with key Invinity stakeholders. In consideration of
Gamesa's ongoing support, Invinity have agreed to extend the term
of exercise of Gamesa's option to purchase Invinity shares to take
account of those Options' exercise price. Those Options, granted by
Invinity to Gamesa following execution of the Joint Development and
Commercialisation Agreement ("JDCA") between the parties, will now
expire 48 months from the date of signing of the Option Agreement,
a 12-month extension over the initial term.
Strategic Relationships
Invinity continues to progress a number of strategic partnership
and corporate growth opportunities with a range of potential
partners. Invinity's strategy to enter new markets without
incurring the expenses associated with a full corporate presence
has led to successful relationships with distribution partners with
significant local presence in Korea and Taiwan. These relationships
have, in turn, already led to closed sales opportunities, with many
more reflected in the sales pipeline.
The Company has opened up new opportunities through strategic
relationships in Invinity's core markets, too, working with
Dawsongroup plc to access the equipment rental market in the UK and
with Indian Energy to access Defence and Tribal Nations projects in
the North America. The Company has also been progressing toward
higher U.S. domestic content through its relationship with U.S.
Vanadium.
Market Outlook
Regulators around the world recognise that renewable energy
without energy storage leads to grid instability. They have
instituted policies designed to accelerate the adoption of energy
storage. Mirroring the U.S. Inflation Reduction Act, which is now
in effect as of 1 January 2023, Canada recently proposed a
refundable tax credit equivalent to 30% of the cost of capital
investment into stationary electricity storage systems. In Europe,
the REPowerEU plan will see accelerated permitting for renewable
projects that include standalone energy storage. The Scottish
Government recently published its draft Energy Strategy and Just
Transition Plan which included a case study on Invinity's
activities and proposed broad reaching support for the further
development of energy storage in the UK. In Australia, the
government recently agreed to launch tenders for a mix of renewable
energy and energy storage as part of their transition to net
zero.
Corporations also recognise the need for energy storage
alongside renewable energy. As VFBs are more widely deployed, the
risk from being a new and rapidly developing technology recedes and
the benefits unique to VFBs emerge: safety, longevity, robustness
and more. We expect corporate opportunities to increase in number
and scale, building on each successful deployment.
Larry Zulch, Chief Executive Officer at Invinity said:
"We believe Invinity provides the best, most proven
alternative-to-lithium batteries for large-scale grid-connected
energy storage and increasingly our customers share this belief as
they see our growing fleet of successful deployments. We're proud
of our growth in sales, our increase in manufacturing capacity, and
largely unsung but highly significant advances in our technology
and electrochemistry. We acknowledge the challenges from supply
chain disruptions that we had underestimated and sales processes
that took longer than we anticipated. But we are entering 2023 with
the best technology we've ever deployed, the largest order book
we've ever had, and the most sales prospects by far. At the same
time, we have made great strides toward the development of our
next-generation VFB which promises both improved performance and
significantly increased margins. It is hard to contain our
eagerness to make it available."
Enquiries :
Invinity Energy Systems plc +44 (0)20 4551 0361
Jonathan Marren, Chief Development Officer and
Interim CFO
Joe Worthington, Director of Communications
Canaccord Genuity (Nominated Adviser and Joint +44 (0) 20 7523
Broker) 8000
Henry Fitzgerald-O'Connor / Harry Pardoe / Gordon
Hamilton
VSA Capital (Financial Adviser and Joint Broker) +44 (0)20 3005 5000
Andrew Monk / Simon Barton
EAS Advisors LLC (US Corporate Advisor) +1 (646) 495 2225
Matthew Bonner / Chris Chesworth
Notes to Editors
Invinity Energy Systems plc (AIM: IES) (AQSE: IES) (OTCQX:
IESVF) manufactures vanadium flow batteries for large-scale,
high-throughput energy storage requirements of business, industry
and electrical networks.
Invinity's factory-built flow batteries run continually with no
degradation for over 25 years, making them suitable for the most
demanding applications in renewable energy production. Energy
storage systems based on Invinity's batteries are safe, reliable,
and economical, and range in size from less than 250 kilowatt-hours
to tens of megawatt-hours.
Invinity was created in April 2020 through the merger of two
flow battery industry leaders: redT energy plc and Avalon Battery
Corporation. With over 33 MWh of systems deployed to date across
more than 50 sites in 15 countries, Invinity is active in all major
global energy storage markets and has operations in the UK, Canada,
USA, China and Australia. Invinity Energy Systems plc is listed on
the AIM Market of the London Stock Exchange and on the Aquis Stock
Exchange (AQSE). The Company trades in the USA on OTCQX Best Market
under the symbol "IESVF".
To find out more, visit invinity.com or call Investor Relations
on +44 (0)204 551 0361.
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END
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