Ron MacDonald, president, CEO & director
Zinc8 Energy Solutions has developed innovative battery technology that uses zinc and air as fuel. Their technology is here to solve the intermittent and unpredictable nature of renewable energy sources such as wind and solar. With both environmental and efficiency factors in mind, Zinc8 strives to meet the growing need for secure and reliable power.
How did Zinc8 get to where it is today? Where did this idea originate from?
The zinc-air storage technology was originally developed and marketed by Metallic Power Inc. (MPI) of Carlsbad, California during the period 1997 – 2004. Prototypes were constructed and demonstrated to potential customers. MPI ceased operations in 2004 and the intellectual property was acquired by Teck Resources Limited (Teck). With the backing of Teck, ZincNyx (former name of Zinc8) commenced operations in 2012 to redevelop and commercialize this technology.
The system was redeveloped to the prototype stage, and a cathode manufacturing facility was constructed. In December 2017, all the assets of ZincNyx were purchased from Teck by MGX Minerals Inc., and in November 2018, the company was rebranded as MGX Renewables Inc.
In the summer of 2019, ”MGX Renewables” completed an Initial Public Offering (IPO) in the Canadian Stock Exchange (CSE), and further rebranded to Zinc8 Energy Solutions Inc. at the end of 2019.
What is your current status? How far are you from producing zinc-air batteries for the open market?
We are currently putting together the first batteries for demonstration with the support of funding and co-development partners in British Columbia and New York State. We expect to fully commission our three demonstration projects by 2022-2023. Deploying these initial zinc-air energy storage systems will accelerate the alignment of the required resources and supply chains to start operations of our first production line in 2023.
What are the next steps? What do you see as the biggest obstacles at the moment?
The immediate next steps are to meet the timelines for the production of the three installations we have contracts for. Concurrently we will be finalizing the location and final design for our commercial-scale fabrication and manufacturing facilities and contracting with preferred suppliers. The biggest challenges will be to keep up with the market interest in the United States and to select the right global partners who have significant product pipelines to benefit from our increased production and unmatched price points.
Can you give us a very brief description of how and why the technology works? Is there any limitation to where it can be used?
Our technology works with the reaction of zinc and oxygen in a reversible process: 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 in this process. The zinc particles are flowed to the storage tank and maintained in a potassium hydroxide (KOH) electrolyte until required. Whenever power is needed, the stored zinc particles are delivered to the power stack, where they are recombined with oxygen to generate electricity. The dissolved zinc oxide (ZnO) by-product is returned to the storage tank in the form of potassium zincate for later regeneration.
Our battery is a multi-megawatt eight-plus hours capacity targeted to utility-scale, behind-the-meter, and larger microgrid applications. It is a stackable containerized system, so an adequate footprint needs to be available for its installation. We are not a solution for electric vehicles or for under the 4-hour duration batteries market.
What is the estimated lifetime of zinc-air batteries? What kind of warranty do you offer?
With the right operation, maintenance, and component replacement procedures in place, our battery has a lifetime of 20 years. We will be providing a warranty option customized to the end-users’ specifications.
How does the zinc-air battery work in extreme weather conditions?
Our system can be configured to function indoors or outdoors, specific to the requirement of each project. Although our system is resistant to temperature changes, in the case of extreme weather conditions, our system can be equipped with additional heating and air conditioning systems to avoid damage of single components that might be more vulnerable to extreme temperatures.
How does this technology have the potential to overtake other rival battery technologies?
We are combining the best of two worlds: low-cost zinc-air chemistry and flow-battery technology, which gives you the capability of delivering the lowest-cost for long-duration storage.
To date, lithium-ion has been the dominant technology for energy storage, but it has strictly been used for dispatch applications no longer than four hours in duration. The modular cost structure of lithium-ion technology makes longer duration projects (>4hrs) not economically viable. Flow batteries with varied chemistries have tried to fill this market gap with limited success. Flow-battery chemistries like Vanadium Redox and Zinc-Bromide have the inherent limitation of high material costs, and like Lithium-ion, also have intrinsic safety issues. The Zinc8 Energy Storage System will truly disrupt the long-duration energy storage space by providing a battery that is safe, low-cost, scalable, and reliable.
What markets are you aiming for in the first place? Does your plan involve any electric vehicle manufacturers? Where are the growth areas for battery technologies like this?
There will be a tremendous growth of renewable energy (mainly solar and wind) penetration in the grid due to population growth and electrification in the next 30 years. This will cause a dramatic shift in how prices of the wholesale electricity market behave: highly volatile and unpredictable prices will drive the need for long-duration energy storage at different points of the electricity grid. The markets where the need will be more tangible are within behind-the-meter commercial and industrial customers, utilities, and utility-scale renewable energy developers.
There are entire remote communities and mining sites disconnected from the main electric grids that rely mainly on diesel generators to power their communities and businesses. Long-duration energy storage can play a key role in fully offsetting diesel gensets and completely decarbonizing remote microgrids, by providing renewable energy baseload through the night and even for full days or weeks.
As part of our go-to-market strategy, we are following a top-down market approach by pursuing partnerships with large utilities to validate the value of our technology by providing services like congestion relief, transmission, and distribution upgrades deferral, and increase renewable energy penetration. As mentioned earlier, we are not in the electric vehicle market, but our long-duration low-cost system can provide stability and certainty to remote electric vehicle charging stations fueled by renewable energy such as wind and solar.
Considering the global pandemic, how is this affecting your business at the moment? Do you think this is going to raise further awareness about sustainability and environmental issues?
Every individual and company, both big and small, are being impacted by this current pandemic. Our number one priority is the health and safety of our workers, and we took action early to make our workplace safe for everyone.
We initiated a work from home protocol and developed communication systems for teams to be able to continue to advance their projects. In situations where team members need to be on-site or in the labs, we have put in place a scheduling app so that everyone knows who has booked time at the facility and a hard cap on how many can be there at any one time.
As a public company, we are of course impacted by the volatility of the financial markets in these trying times. Our stock has performed well against the markets’ ups and downs, and we have cash reserves to keep progressing towards our developmental and contract milestones.
One of the reasons for this is the recognition made by many financial observers that one of the business’ that is not impacted by short- or long-term instability are utilities, and also that we recently were selected by the New York State Power Authority to partner with them for the installation of our first 100kW/1MWh long-duration storage system in New York State.
Previous Rockstone Coverage
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“
Zinc8 Energy Solutions Inc.
#1 – 8765 Ash Street
Vancouver, BC, Canada V6P 6T3
Phone: +1 604 558 1406
ISIN: CA98959U1084 / CUSIP: 98959U108
Shares Issued & Outstanding: 75,711,374
Canada Symbol (CSE): ZAIR
Current Price: $0.30 CAD (04/08/2020)
Market Capitalization: $23 Million CAD
Germany Symbol / WKN (Tradegate): 0E9 / A2P15E
Current Price: €0.204 EUR (04/08/2020)
Market Capitalization: €15 Million EUR
Stephan Bogner (Dipl. Kfm.)
8260 Stein am Rhein, Switzerland
Disclaimer: This report contains 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.