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SA thermal energy stocks crash after review

Business

The value of Adelaide-based thermal energy storage company 1414 Degrees has nose-dived following a review, which showed its technology was less efficient and reliable than previously forecast.

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The company’s lunchtime announcement to the ASX yesterday prompted shareholders to offload 2.3 million shares in a selling spree that saw the 1414 Degrees share price plummet 39 per cent from $0.14 to $0.085 in the final three hours of afternoon trade.

The share price continued to tank this morning following a second unfavourable announcement resulting in more than two million more shares being offloaded, reducing the stocks a further 27 per cent to $0.062 at 11.30am.

1414 Degrees’ technology stores energy generated from electricity or gas as thermal energy by heating and melting containers full of silicon. Energy can then be supplied as heat and electricity in the proportions required by consumers.

However, the technical and commercial status review ordered by executive chairman Dr Kevin Moriarty found its prototype silicon storage technology could not sustain many cycles without degrading.

It also found that its third-party energy recovery system (ERS) could not perform to the required efficiency specifications.

1414 Degrees listed on the ASX in September 2018 after raising $16.3 million as part of its IPO. Its opening share price was $0.30.

But a key finding of yesterday’s review was that early expectations for product sales were optimistic.

Following the successful development of its electrically charged Thermal Energy Storage System (TESS) demonstrator, and commissioning of its pilot GAS-TESS at SA Water’s Glenelg Wastewater Treatment Plant, the company is now in an early stage of product development and commercialisation.

“Although the larger pilot TESS systems performed well in generating power for up to 8 hours and very efficiently charging from gas or electricity, key components of both the storage and energy recovery subsystems require significant development to deliver reliable performance,” the company’s statement to the ASX said.

“The commercial review found that a fully developed electric charging TESS is not currently competitive with fossil fuel heating in most customer sites due to the higher input cost of electricity with transmission charges, even when the TESS is configured in its most efficient mode of storing electricity and supplying heat only.

“With the experience gained from the pilot installations, our now highly qualified technical team has mapped out a path to make the 1414 Degrees TESS technology competitive in the expanding long duration energy storage market with comparable technologies such as pumped hydro and molten salt.”

In a further blow, the company announced this morning that SA Water had completed its business case evaluation of 1414 Degrees’ biogas-powered thermal energy storage system at the Glenelg Wastewater Treatment Plant and advised the company it had been unsuccessful with the current evaluation process.

The company’s first commercial pilot had been operating at SA Water’s Glenelg North site since May last year.

In November, 1414 Degrees announced it would buy SolarReserve’s ill-fated Aurora site in Port Augusta to build a 400MW solar farm and grid-scale storage system.

In its announcement yesterday the company said its new storage technology and ERS improvements could be proved in the GAS-TESS pilot device and followed at larger scale in the first stage of the company’s Aurora Project.

“The 1-2 year revenue potential for the company is to commence electricity sales from the first stage Aurora 70MW solar farm,” the commercial review found.

“The 2-5 year potential is expansion of the Aurora Project to generate 400MW from PV with TESS (Silicon Power Plant) to sell firmed power and grid strength services, and sales of improved GASTESS to global utilities.”

Meantime, fellow SA company Codan Limited had a much better day yesterday as its share price rose 13.6 per cent to $7.82 on the back of a positive sales announcement.

The Mawson Lakes-based metal detector maker and communications company reported a return to record sales in May following a 20 per cent dip in April.

“Although we continue to operate in very uncertain times, Codan will deliver a record profit this year in the order of $63 million net profit after tax,” its market update to the ASX said yesterday.

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