Zinc8 making progress on commercialization, says Haywood

Haywood Capital Markets analyst Colin Healey had a closer look at Zinc8 Energy Solutions (Zinc8 Energy Solutions Stock Quote, Chart, News, Analysts, Financials CSE:ZAIR) after the company provided an update regarding the relocation of its engineering teams to its newly upgraded and renovated facility in Richmond, B.C.

Zinc8 came into existence in 2019 after originally being known as MGX Renewables Inc from its initial foundation in 2011. Headquartered in Vancouver, Zinc8 is a pre-commercial stage stationary energy storage technology company that develops and commercializes zinc-air flow batteries. Its modular energy storage system is designed to deliver power in the 20kW – 50MW range, with capacities of eight hours and up. 

According to Healey, the technology itself is based upon unique patented zinc-air battery technology where energy is stored in the form of zinc particles, similar in size to grains of sand, with a key advantage of the rechargeable zinc-air flow battery technology being that the system can be configured to support a wide range of long-duration applications for microgrids and utilities.

“As the company continues to advance towards certification and initial production of a 40-kilowatt zinc-air energy storage systems (“ZESS”), the new facility has enabled the expansion of Zinc8’s team, including key personnel with the experience and qualifications to assist the company in meeting its objective,” Healey said of the company’s announcement.

The new facility marks a significant step forward for Zinc8, as it received a variety of upgrades to facilitate various engineering activities while ensuring continued safety, including upgrades to the facility’s electrical systems that have been optimized to facilitate both engineering verification testing and certification validation testing for multiple ZESS systems, as well as having enough space to house nine subsystem level engineering teams, each of which will be tasked with testing and analyzing a specific subsystem of the ZESS for certification.

The company also noted that the construction of multiple test systems is underway which will support both the UL/CSA battery safety standard certification process, and the multiple announced demonstration projects, with the energy storage systems in various stages of development.

Each of Zinc8’s ZESS models are being built to test various system levels in parallel for certification, which the company expects will allow for a certified product for the transition to production of an initial commercial 40-kilowatt ZESS in the first quarter of 2023.

Healey also notes that the energy storage capacity of the system is determined only by the size of the zinc storage tank, which represents a more cost-effective and scalable solution when compared to the alternative of fixed power/energy ratio of the lithium ion battery. 

The technology could then be applied to grid storage for intermittent renewable sources like solar and wind, as well as ‘peak-shaving’, micro-grid, back-up power storage and many other applications requiring storage durations in excess of eight hours and up to 100 hours, where Zinc8’s battery would have the strongest competitive position.

“We are continuing to advance towards initial production of a certified 40-kilowatt ZESS targeting beachhead markets such as New York State,” stated Ron MacDonald, President and CEO of Zinc8 in the company’s October 21 press release. “These are exciting times as we are actively transitioning the company from research and development into pre-commercialization. We have several core members of our engineering team that have been with Zinc8 from its earliest research and development days. It is understood that developing a new and potentially revolutionary technology requires years of commitment. It is their diligence and innovation that has progressed the technology to the point where we can now present a working product for certification on our path towards commercialization.”

The company’s most recent quarterly financial results were released on August 30, headlined by the company having working capital of $13.5 million as of June 30.

In April, the company had also announced it would deploy the Zinc-Air System at the University of Buffalo, in collaboration with the New York Power Authority (“NYPA”), allowing for the demonstration of a 100kW/1MWh Zinc-Air System to facilitate the wider use of renewable resources.

Healey believes the company’s announcement is a step in the right direction, particularly when paired with Zinc8’s previously announced US$200,000 contract with one of the ‘leading cloud providers’ to demonstrate its ZESS technology moving forward.

“This will provide Zinc8 the opportunity to validate and assess its ZESS in a backup power application with a commercial partner which will generate invaluable data for further development of the system,” Healey said. “Zinc8 looks well positioned to participate in the momentum of the Green/Alternative Energy sector as further news flow will continue to raise Zinc8’s profile with investors.”

Overall, Zinc8’s stock price is down 50 per cent for the year to date, on a steady decline since reaching its high point of $0.84/share on February 9 and bottoming out at $0.21/share on Wednesday.