Altech’s rapid progress in commercialising its two battery technology projects has Pitt Street Research noting that Altech has a tremendous opportunity to capitalise on the rapidly growing grid energy storage market.

Altech is moving rapidly to construct the 100 megawatt hour CERENERGY® battery plant on its land in Germany, to produce its unique solid-state sodium chloride batteries that are ideally suited for grid energy storage use, requiring just common table salt and nickel, rather than critical metals like lithium, cobalt, copper, graphite, and manganese.

As an added bonus, this also lowers the life cycle emissions of CERENERGY® batteries by about 50% compared to lithium-ion batteries.

Fabrication is also underway on two ABS 60 kilowatt hour battery prototypes at the Fraunhofer IKTS facility in Hermsdorf, Germany.

Altech Batteries (ASX:ATC) is also nearing commissioning on its Silumina AnodesTM pilot plant that will produce its proprietary high purity alumina-coated silicon-graphite anode material that can increase the energy capacity of lithium-ion batteries for electric vehicles.

 

Battery technology

CERENERGY® batteries are designed for a lifespan of more than 15 years, are fire and explosion-proof whilst being capable of operating in extreme cold and desert climates, making them a promising alternative to lithium-ion batteries.

CERENERGY® batteries are also expected to be significantly cheaper to manufacture due to not using major battery metals, which is fundamental to their commercial proposition.

Highlighting their suitability for grid use, the company has designed a 1MWh GridPack, which is equipped with up to 18 ABS60 60 KWh battery packs connected to a pack power management system.

These battery packs provide a source of backup power during periods of high demand or when renewable energy sources are not producing at capacity and are expected to have lower set up and ongoing costs compared to existing products on the market.

Meanwhile, the company’s Silumina AnodesTM technology utilises Altech’s proprietary HPA coating technology to solve the dilemma of replacing graphite with silicon.

While silicon has higher energy density than graphite, previous attempts to use it have run into issues with continuous swelling and shrinking of the anodes during charging and discharging.

Altech’s technology has solved this dilemma, allowing its silicon anodes to deliver a 30% higher energy retention capacity, better durability in individual cycles and higher overall life compared to a conventional graphite-only anode.

 

What the broker says

Pitt Street believes the major grid energy storage opportunity targeted by Altech and its road towards commercialisation warrant a valuation of between 25c and 35c, well above its current share price of 7.3c.

It noted that while the global grid energy storage market is still in its infancy, it is expected to grow at a CAGR of 28%, from US$4.4bn in 2022 to US$15.1bn in 2027.

With Lithium-ion batteries controlling about 90% of the global grid-market and demand for them expected to grow over 30% annually up to 2030, by which time it would be over US$400bn, there is a substantial market opportunity for both Silumina AnodesTM and CERENERGY®.

The research firm noted that two reasons for the undervaluation of Altech were a lack of funding clarity for its Silumina AnodesTM project, for which a Definitive Feasibility Study is pending, and a lack of awareness about its CERENERGY® batteries.

However, it expects that the company could be re-rated on the announcement of a successful offtake agreement for CERENERGY® batteries, which will increase confidence in the economics of the project as well as funding prospects, and successfully closing a favourable funding plan within expected timelines.

Other catalysts are the successful completion of the DFS and timely commencement of production of both product lines.

 

 

This article was developed in collaboration with Altech Batteries, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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