Altech Batteries reveals positive results from Cerenergy project DFS, paves way for sustainable grid storage solution

Altech Batteries (ASX: ATC) has announced positive results from a definitive feasibility study (DFS) for its Cerenergy sodium chloride solid state battery project in Germany.

Planned for construction on Altech’s land at the Schwarze Pumpe Industrial Park in Saxony, the project is expected to set a new standard in sustainable energy solutions, boasting an annual capacity of 120 1MWh grid packs.

With a conservative investment estimate of $260 million and a net present value of $281 million, the DFS demonstrated an anticipated annual net cash flow of $84 million and a 19% internal rate of return underpinning a capital payback period of 3.7 years.

Expected annual revenue at full production capacity is $176 million, with EBITDA (earnings before interest, taxation, depreciation and amortisation) sitting at around $84 million.

The results of the DFS are believed to reinforce the “economic soundness and potential” of the Cerenergy project.

Next stage

Altech said its board had approved the next stage of the project on the strength of the DFS findings.

“With the anticipated growth of the grid storage market, the board and joint venture partners have enthusiastically given the green light to proceed to the funding phase and final investment decision for this exciting project,” the company stated.

Cerenergy joint venture

The Cerenergy project is being developed by the Altech Batteries GmBH joint venture, owned by Altech (75% equity) and German institute Fraunhofer IKTS (25%).

Over the past eight years, Fraunhofer has pioneered the technology which features cells that are three times larger than conventional batteries and tailored for grid storage applications.

Fraunhofer has spent approximately $58 million on Cerenergy research and development activities over that period and operates a $41 million manual battery cell production facility pilot plant in Hermsdorf.

Commercialising Cerenergy

In September 2022, Fraunhofer and Altech joined forces to commercialise the Cerenergy technology.

The partners are targeting the grid storage market, which is expected to experience a 28% compound annual growth rate in the coming decades, from $6.39 billion in 2022 to $21.9 billion by 2027.

This equates to around 20 gigawatts in 2020 to over 3000GW by 2050.