Altech Batteries Limited (Altech/the Company) (ASX: ATC and FRA: A3Y) is pleased to announce the excellent results from a Definitive Feasibility Study (DFS) conducted for a CERENERGY project with an annual capacity of 120 1MWh GridPacks each year, planned for construction on Altech's land in Saxony, Germany.
The project is being developed by Altech Batteries GmbH (ABG) (75%) and joint venture partner Fraunhofer IKTS ('Fraunhofer') (25%), an incorporated society affiliated with the German government and partially financed by the German federal government. Altech Batteries GmbH (ABG) is owned 75% by Altech Batteries Limited (listed on ASX:ATC) and Altech Advanced Materials AG (listed on FSE:AMA).
EXCELLENT PROJECT ECONOMICS
With a conservative investment estimate of EUR156 million, Altech's DFS not only demonstrates an excellent net present value (NPV) of EUR169 million (NPV9) but also generates a significant net cash flow of EUR51 million annually from operations. The estimated internal rate of return is 19%, ensuring a capital steady state payback in just 3.7 years. At full production capacity of 120 1MWh GridPacks, the anticipated annual revenue is EUR106 million. With an EBITDA of EUR51 million (margin of 47%), the project economics is
compelling, even at this relatively small first production line capacity. With the anticipated growth of the grid storage market at 28% CAGR, Altech's Board and joint venture partners have enthusiastically given the green light to proceed to the funding phase (Final Investment Decision) for this exciting project.
PROJECT OWNERSHIP STRUCTURE
In September 2022, comprehensive joint venture agreements were executed, marking the commencement of design works. Notably, a fully joint and several joint venture (JV) was established, consolidating all rights and know-how between the Fraunhofer-Gesellschaft, represented by the Institute for Ceramic Technologies and Systems (IKTS), and Altech Energy Holdings GmbH (AEH). This collaborative effort led to the creation of Altech Batteries GmbH (ABG) with 75% ownership by AEH and 25% by Fraunhofer Gesellschaft. AEH, in turn, is 75% owned by Altech Batteries Limited (ASX:ATC) in Perth, Australia, and 25% by Altech Advanced Materials AG (AMA) in Heidelberg, Germany - both publicly listed companies contributing to project funding.
FRAUNHOFER IKTS BACKGROUND
Fraunhofer, based in Germany, is the world's leading applied research organisation. Prioritising key futurerelevant technologies and commercialising its technology in business and industry, it plays a major role in the innovation process. Founded in 1949, Fraunhofer currently operates 76 institutes and research units with over 30,000 employees throughout Germany. Fraunhofer Institute for Ceramic Technologies and Systems (IKTS) is one of the 76 institutes that conducts applied research on high-performance ceramics. The Institute's three sites in Dresden and Hermsdorf (Thuringia), Germany, collectively represent Europe's largest R&D institute dedicated to the study of ceramics. The annual budget of IKTS is EUR83 million and it has 800 employees. As a research and technology service provider, Fraunhofer IKTS develops advanced high-performance ceramic materials, industrial manufacturing processes as well as prototype components and systems in complete production lines up to the pilot-plant scale. The electrolyte within the CERENERGY battery is a ceramic product manufactured from alumina.
PROJECT BACKGROUND AND TECHNOLOGY CERENERGY
Sodium Chloride Solid State (SCSS) batteries (also known historically as sodium nickel chloride batteries) is the grid battery storage of the future. This battery technology, although not novel, has been in existence since the 1990s, finding applications in mobility, telecommunications, and UPS systems. Presently, batteries are manufactured, but typically with cells one-third the size, suited mainly for smallscale power needs. Over the past eight years, Fraunhofer IKTS has pioneered the CERENERGY technology, featuring cells three times larger, specifically tailored for grid storage applications. This innovation has transformed previous technologies by enabling greater energy capacity and reduced production expenses. The world's largest SCSS-type batteries in terms of capacity have already been successfully tested in stationary battery modules. Fraunhofer IKTS has spent approximately EUR35 million in research & development on SCSS batteries and operates a EUR25 million pilot plant in Hermsdorf, Germany. Fraunhofer IKTS had been looking for an entrepreneurial partner, that possesses the know-how and expertise required for industrial and commercial development, has an industrial site in German available, has access to funding, has a battery background, and has expert technology background in the alumina used in ceramics. Altech fitted the criteria, and the joint venture was formed in September 2022. Altech group will own 75% of the project with Fraunhofer Society 25% free carried. The intellectual property is licensed exclusively to the joint venture.
FRAUNHOFER'S PILOT MANUFACTURING PLANT IN HERMSDORF
Fraunhofer IKTS established a EUR25 million manual battery cell production facility at its research center in Hermsdorf, Thuringia, as part of advancing the CERENERGY battery. This move allowed Fraunhofer IKTS to produce cells at a cost-effective level, crucial for further development and testing. Optimisation and validation of the technology ensued, leading to the creation in 2018 of the first CERENERGY modules with 5 kWh storage capacity. By 2021, Fraunhofer IKTS completed a pilot production line, facilitating increased capacity and the introduction of a 10 kWh prototype battery module in 2022. The Hermsdorf facility boasts comprehensive cell manufacturing capabilities, serving as a cornerstone for industrial commercialisation, with processes refined for scalability and cost efficiency.
Graphite Geo-political Risk
Graphite is a crucial element in driving the global transition toward electric vehicles, representing the largest component in lithium-ion batteries by weight, accounting for 20-30% of each battery. However, due to losses incurred in the manufacturing process, it takes 30 times more graphite than lithium to produce these batteries. The emerging graphite deficit is a consequence of the soaring demand for electric vehicle battery anode ingredients outpacing the available supply, leading to price escalations. Presently, China dominates the world graphite anode material production, contributing to 90% of the global output. This concentration raises concerns about potential geopolitical risks to the industry due to its dependence on a single major producer.
Copper Crunch
Copper serves a primary role as the current collector on the anode part of a lithium-ion battery, and its availability is emerging as a major concern, particularly fuelled by the green energy transition and heightened demand for electric vehicles (EVs). A recent report, titled 'Future of Copper,' highlights that achieving the 2050 climate objectives will necessitate a substantial increase in copper production in the near and medium term, a challenge in itself. Notably, a battery electric vehicle requires 2.5 times more copper than a standard internal combustion engine (ICE) vehicle. The imminent issue is the inadequate development or expansion of copper mines to meet the demand projected by S&P Global, estimating the sale of 27 million EVs annually by 2030. Consequently, copper scarcity could potentially rival oil as a national energy security concern for certain countries.
Energy Density
Offering the ability to discharge 80% of their capacity over 4 hours, these batteries are optimal for efficient 'energy shifting.' Moreover, with a remarkable power capability, they can discharge by power pulsing 25% of their energy in just 15 minutes, when cells are fully charged. This provides an ideal use case for rapid power surges and contributing to grid stabilisation. Contrary to electric vehicle applications, batteries for stationary storage do not suffer from mass or volume constraints. However, due to the large amounts of energy and power required, the cost per power or energy unit is crucial. The relevant metrics to assess the interest of technology for grid-scale storage is the $/Wh (or $/W) rather than the Wh/kg (or W/kg). The joint venture believes that the CERENERGY battery is ideally suited for grid storage or long-duration energy sector where very high power in a short time (like high power EV) is not required. The battery can be configured to meet greater than 600 V which is required in grid storage. Due to modular structure the voltage can be adapted to customers' requirements
BASIC BATTERY CELLS
CERENERGY cells exhibit a distinct internal structure, featuring a ceramic solid-state tube at the core, filled with sodium chloride and nickel metal powder granules. The central element is the positive nickel electrode, surrounded by molten chloroaluminate. These cells boast extended lifetimes exceeding 15 years without capacity loss. With a nominal energy capacity of 250 Wh and a voltage ranging from 1.7 to 2.8 volts, the basic CERENERGY cell undergoes pressure-sealed welding during manufacturing, ensuring no active material loss and promoting enduring performance. The proposed battery plant aims to produce 518,400 cells annually, at a remarkable rate of one cell every 45 seconds.
60 KWH (AB60) BATTERY PRODUCT
The base unit intended for production by Altech is the 60 kWh (ABS60) battery pack. Within each ABS60 pack, there are five battery modules, each housing 48 cells, resulting in a total of 240 individual cells. The annual production target is set at 2,160 of these 60 kWh battery packs or 120 GridPacks. The battery's design showcases a sleek stainless-steel exterior adorned with the prominent CERENERGY logo on top and 'ALTECH Batteries' engraved at the bottom. This stainless-steel finish ensures durability in extreme temperature conditions, whether in snowy or desert environments while maintaining an impeccable appearance. The casing of the battery is equipped with a vacuumsealed, double-sided enclosure, ensuring optimal insulation and minimising heat transfer loss. Importantly, the exterior is safe for human contact. To facilitate a rapid and flawless connection of busbars to each cell, a large-scale connection system is incorporated within the battery. The base of the battery is reinforced to accommodate high-temperature-resistant electrical cables and connectors, effectively minimizing heat loss to the external environment.
The open style high cube sea container frame is specially designed for easy transport and simple site installation. The GridPacks will be assembled on the Altech site and then undergo a complete charge and discharge cycle before shipping to customers. These frames are being accredited for use. The Altech GridPacks have been specifically engineered to adhere to the Ingress Protection (IP) 65 standard (relating to a high level of electrical enclosure sealing), ensuring complete protection from both dust and inclement weather. This means that there is no need for any additional shelters or buildings to house the Altech GridPack batteries, and they can be safely installed outdoors in any weather conditions. The Altech GridPacks will be constructed using a sea container design, which facilitates their easy transportation by sea or road to the installation site, as well as ensuring simple installation. The 'plug and play' feature of the site installation for the GridPacks ensures that they can be easily installed in remote locations. Additionally, the containers have been designed to be stackable, which minimises the battery footprint. Unlike other mega battery pack designs on the market, these GridPacks can be stacked on top of each other. This stackable feature, coupled with the 'plug and play' design, makes the GridPacks easily scalable and adaptable to meet future energy storage requirements of the site. Furthermore, the Altech GridPacks are designed without the requirement for any moving parts such as cooling fans, which are typically found in lithium-ion battery mega packs. This is a notable advantage as end-use customers have concerns about the noise generated by lithium-ion batteries, preventing them from being placed near residential areas. With the absence of any moving parts, the Altech GridPacks are completely noise-free operation, making them an ideal solution for noise-sensitive environments. Finally, GridPacks are extremely low in maintenance costs over the battery life. Altech's 1 MWh GridPacks are designed to operate in any climate, without the need for thermal management. The battery's internal temperature remains relatively constant throughout the charging and discharging cycles, due to its endothermic and exothermic properties. These 1 MWh GridPacks will offer significant benefits for the fast-growing renewable energy and grid storage sectors. These larger battery packs are capable of storing more energy, resulting in more efficient utilisation of renewable energy sources such as wind and solar power. Altech believes that the proposed GridPacks are an excellent means of stabilising the grid by providing a source of backup power during periods of high demand or when renewable energy sources are not producing at capacity. They are also a cost-effective solution for storing and distributing renewable energy across a variety of applications, including grid-scale storage, microgrids, and electric vehicle charging. Moreover, they are non-flammable and pose zero fire and explosion hazards. With a projected lifespan of over 15 years with unlimited cycling and can operate in extreme cold and hot climates. Altech believes that these GridPacks will be the preferred choice for companies seeking a reliable and long-lasting energy storage solution
EPCM CONTRACTOR
Leadec Automation & Engineering GmbH (Leadec) was chosen as the lead engineer for the Definitive Feasibility Study as well as the EPCM contractor during the build of the CERENERGY 120 MWh Battery project. Leadec is a leading global service specialist for factories across the entire life cycle and related infrastructure. For 60 years, the German company has been supporting customers in the manufacturing industries; from planning, installation, and automation of the factories. Entrusted with detailed engineering, design, and procurement of major equipment, Leadec will ensure a seamless and continuous approach to plant development. In addition to managing structural and balance of plant activities conducted by Arikon, Leadec will serve as the principal owner's representative. This entails overseeing project administration, design production, construction work breakdown, professional and competitive tender management, progress monitoring, contract compliance, estimating, planning, document control, procurement, cost control, financial analysis support, and project closeout activities, showcasing a comprehensive and integrated project management strategy. The Automation arm of Leadec has been appointed as the contractor to provide advanced electric and automation solutions for the battery plant. This will include intranet-equipped control centres and local operation systems, allowing for centralised monitoring and control of operations. In addition, a SCADA realtime live system, ensuring real-time data acquisition, visualisation, and control will be incorporated. Track and trace functionality along with batch identification will be the key feature of the battery plant.
The next step is the Spray Drying process where the slurry is transformed into ceramic granules, adhering strictly to grain size and residual moisture specifications. The dried ceramic granules are pressed into ceramic tubes at high pressure using an isostatic press to shape the ceramic tubes (green tubes). Frey Systeme GmbH (Frey) has been selected to provide isostatic machines for producing green ceramic tubes at the required production rate. Frey's advanced technology enables high-speed filling of rubber moulds and applies high pressure to produce green tubes. With robotic technology, this will achieve a remarkable production rate of one tube every 45 seconds. The next step of the process is loading the green tubes onto kiln trays, mechanically stabilising them, and covering them with a magnesium spinel protective shell for sintering. Sintering at 1600 degrees celsius is accomplished in a specially designed tunnel kiln, exclusively powered by electricity in contrast to the conventional use of gas in tunnel kilns. In the furnace, the ceramic green body tube undergoes chemical conversion at a precise temperature program, becoming a finished sodium ion-conductive beta-aluminate tube. Altech has contracted Riedhammer GmbH (Riedhammer), a world leading German ceramic kiln plant provider, who will provide the electrically heated tunnel kiln for sintering of ceramic tubes. The use of renewable electricity for heating will dramatically reduce the carbon footprint of the CERENERGY battery. This innovative approach results in substantial environmental benefits, as approximately 480 tons of CO2 emissions can be saved when compared to traditional gas-powered batch kilns.
Upon completion of cell assembly, multiple cells are grouped and stored in a larger thermal box. In this phase, each cell within the thermal boxes undergoes its inaugural full charge and discharge. Throughout the entire initialisation process, individual cell behaviors are meticulously logged. Essential electrical, electrochemical, and spectrometric parameters are automatically recorded and compared against predefined target conditions. For the cell initialisation and subsequent performance testing of completed battery cells, Dresden Elektronik GmbH has been selected to provide automation and robotics around this manufacturing step. The unit is designed to efficiently collect test data and perform charge and full discharge cycles to ensure the proper functioning of the cells. Tracking each individual cell during the manufacturing process is critical to the proposed battery facility. The subsequent step involves assembling cell connectors and welding the bus bars. In the welding process, all bus bars mounted on top of the Cell Connection System (CCS) are individually welded to their associated cells. Subsequently, a resistance weld checking mechanism examines all welding seams. If any failures are identified, cells can be reworked by removing the bus bars from the affected cell. Following successful inspection through the fifth Q-Gate, the modules are buffered until a batch of five is available. This set of five modules is then forwarded to the Battery Pack Assembly station. Altech has selected Hofer Powertrain GmbH (Hofer), a leading German supplier of connector plates used for battery busbar connections and wire connections. Hofer's expertise lies in designing and manufacturing efficient and reliable solutions for battery
FINANCING CONCEPT
The CERENERGY battery development project, positioned as a sought-after global investment, has chosen the European market, particularly Germany, for its initial development. Leveraging German technology, CERENERGY's strategic move aligns with the region's focus on renewable energy, evident in the energy transition, making Germany keen to acquire essential technologies and resources. The project's proposed location in Spreetal, Saxony, aligns with funding opportunities in GRW Zone C, defined by economic power below the European average, a higher unemployment rate, population decline, and proximity to Polish and Czech borders. The funding landscape includes diverse opportunities at the European, German federal, and Saxony state levels. The European Investment Bank (EIB), European Innovation Council (EIC), and federal and regional grants play pivotal roles in supporting the battery sector. Notably, the EU parliament's recent announcement of the zero valley concept designates certain regions as special economic zones, fast-tracking their development and financial support. The grant application process has commenced with these different groups. The financing concept integrates equity, grants, and debt-like venture capital loans, acknowledging the importance of both financial and non-financial support for project success. The concept involves contributions from entities such as the European Investment Bank, the Ministry of Economics and Environment, the European Innovation Council, and various federal and regional initiatives. Engaging supportive partner banks with a track record in the battery industry adds another layer of assurance for successful project implementation. In summary, the CERENERGY' battery production plant aims to secure a robust financial structure through a comprehensive mix of funding sources, ensuring the realisation of this pivotal renewable energy project.
Contact:
Iggy Tan
Managing Director
Altech Batteries Limited
Tel: +61 8 6168 1555
Email: info@altechgroup.com
About Altech Batteries Ltd (ASX:ATC) (FRA:A3Y) CERENERGY Batteries Project
Altech Batteries Ltd is a specialty battery technology company that has a joint venture agreement with world leading German government battery institute Fraunhofer IKTS ('Fraunhofer') to commercialise the revolutionary CERENERGY Sodium Chloride Solid State (SCSS) Battery. CERENERGY batteries are the game-changing alternative to lithium-ion batteries. CERENERGY batteries are fire and explosion-proof; have a life span of more than 15 years and operate in extreme cold and desert climates. The battery technology uses table salt and is lithium-free; cobalt-free; graphite-free and copper-free, eliminating exposure to critical metal price rises and supply chain concerns. The joint venture is commercialising its CERENERGY battery, with plans to construct a 120 MWh production facility on Altech's land in Saxony, Germany. The facility intends to produce CERENERGY battery modules to provide grid storage solutions to the market.
Silumina AnodesTM Battery Materials Project
Altech Batteries has licenced its proprietary high purity alumina coating technology to 75% owned subsidiary Altech Industries Germany GmbH (AIG), which has finalised a Definitive Feasibility Study to commercialise an 8,000tpa silicon alumina coating plant in the state of Saxony, Germany to supply its Silumina AnodesTM product to the burgeoning European electric vehicle market. This Company's game changing technology incorporates high-capacity silicon into lithium-ion batteries. Through in house R&D, the Company has cracked the 'silicon code' and successfully achieved a 30% higher energy battery with improved cyclability or battery life. Higher density batteries result in smaller, lighter batteries and substantially less greenhouse gases, and is the future for the EV market. The Company's proprietary silicon product is registered as Silumina AnodesTM. The Company is in the race to get its patented technology to market, and recently announced the results of a Definitive Feasibility Study for the construction of a 8,000tpa Silumina Anodes TM material plant at AIG's 14-hectare industrial site within the Schwarze Pumpe Industrial Park in Saxony, Germany. The European silicon feedstock supply partner for this plant will be Ferroglobe. The project has also received green accreditation from the independent Norwegian Centre of International Climate and Environmental Research (CICERO). To support the development, AIG has commenced construction of a pilot plant adjacent to the proposed project site to allow the qualification process for its Silumina AnodesTM product. AIG has executed NDAs with German and North American automakers and battery material supply chain companies
ALTECH BATTERIES LIMITED 
