Invinity Energy Systems plc (AIM:IES), manufacturer of vanadium flow batteries for the large-scale energy storage requirements of businesses, industry and electricity networks, is pleased to provide an update on trading in early 2021 below:
The Company continues to build on record 2020 orders of 18.6 MWh, which comprised strategically significant projects including:
o 8 MWh Yadlamalka Energy solar-plus-storage power plant, South Australia
o 1.8 MWh Flow + Hydrogen + Tidal project, Orkney Islands, UK
o 0.8 MWh Scottish Water treatment plant solar-plus-storage, Perth, UK and
o 0.5 MWh Soboba Fire Station, California, USA
The Company's latest commercial opportunity pipeline as at 4 March 2021 is summarised below. Since the pipeline was last stated in November 2020, Invinity's commercial group have successfully closed opportunities from the 'Base' category and focussed on developing 'Pipeline' opportunities into 'Upside' with a view to replacing deals which have 'Closed'.
(change since 24.11.20)
The Company is also pleased to note strong policy movements in the UK which Invinity believes will significantly strengthen domestic opportunities, including:
£68m of funding announced in the 2021 Budget for "longer duration energy storage" projects explicitly excluding lithium-ion or pumped hydro storage.
The introduction of new ancillary service markets in 2021 which are highly appropriate for technologies capable of high energy throughput such as flow batteries.
Rising carbon prices and the introduction of green bonds which are expected to provide support to renewable and energy storage projects.
Invinity's commercial group continues to focus on closing near term deals from the 'Base' and 'Upside' categories noted above, whilst further building out the broader 'Pipeline' category to seed sales and revenue growth in the longer term. Commercial traction is expected to accelerate further as key 'flagship' utility-scale projects such as Energy Superhub Oxford and Yadlamalka Energy, alongside industrial-scale projects in the UK, Asia and USA, come online during 2021.
In line with plans set out in the December 2020 Placing and Open Offer, Invinity's engineering and manufacturing groups have undertaken a rapid scale up of production capacity to meet demand for the Company's products.
A 100% increase in stack manufacturing capacity (vs. December 2020) has been achieved across the Company's facilities in Vancouver, Canada and Bathgate, UK.
A second stack manufacturing expansion is planned in April 2021, delivering a total 200% capacity increase over December 2020 levels.
Achieved and planned stack manufacturing capacity improvements include a combination of capital equipment investment, additional production lines, process improvements and efficiency increases resulting from economies of scale.
A corresponding agreement is now in place with Invinity's strategic manufacturing partner in China giving the Company an option to increase manufacturing capacity up to +80% from Q2 2021.
Organisational capabilities have been significantly enhanced, notably including the appointment of newly-hired senior managers to global roles responsible for Customer Operations, QHSE (Quality, Health, Safety and Environment Management), IT and HR.
Despite global COVID-19 supply chain disruptions affecting Invinity's production and logistics, the Company continues to progress towards delivery of its 2021 projects. Management continues to monitor the issue closely but note the improving situation resulting from the global vaccine roll-out.
The project delivery phase is currently underway for the Company's 5 MWh VFB to be delivered to the Energy Superhub Oxford (ESO).
Manufacturing is underway for the industrial-scale projects announced in 2020 for customers in the UK, USA and Asia.
The procurement phase has been initiated for the 8 MWh Yadlamalka Energy project.
Invinity's purchasing and supply chain teams, working in collaboration with internal engineering, manufacturing and R&D groups, have continued their work on actively scaling up supply chain resilience for all critical input materials. This work has included the hire of a dedicated supply chain manager, located full time in China. In addition to assisting in driving down manufacturing costs through increased supply chain competition, this work to further minimise supply chain risk is especially pertinent in case of further repercussions from the COVID-19 pandemic.
Corporate & Financial
Recent corporate and financial highlights include:
Year-end cash position: £22m (2019 £1.24m) - Invinity is well positioned to deliver on existing sales commitments and expansion plans set out during December placing and open offer.
Strategic partnerships: The Company remains in discussions with a number of interested parties regarding strategic partnerships related to certain core elements of Invinity's business. These partnership discussions remain ongoing and updates will be provided once discussions are at a sufficiently advanced stage.
2020 Financial Results: The Company intends to publish the 2020 annual report and accounts during May 2021 and will give notice to shareholders in due course.
Larry Zulch, Chief Executive Officer at Invinity said:
"I'm pleased with the progress we're making on critical projects, but conscious that our progress isn't always visible until a milestone is achieved. Our team has done an impressive job scaling up Invinity's capabilities to close new business and deliver on existing deals. Our timing is good from a macro perspective; our core markets of the UK, the United States and Australia are all accelerating broad initiatives that will be good for Invinity. Finally, we're seeing a reduction in the interruptions the pandemic has caused in our delivery schedules. I am more optimistic than ever."