Redflow locks in $18m battery contract with California Energy Commission

Brisbane-based clean energy storage company Redflow (ASX: RFX) has capped off a series of milestone developments over the past six months with a major supply deal in the US funded by the California Energy Commission (CEC).

Redflow has announced its sustainable flow batteries have been approved for a large-scale solar and storage project to provide power for the Paskenta Band of Nomlaki Indians, a US federally recognised sovereign Native American nation located in Northern California.

The project comprises a 20 megawatt hours (MWh) long-duration energy storage facility and a 5MWh solar installation located near Corning in California.

When commissioned it will be one of the largest zinc-based battery projects in the world with the total project estimated to be worth US$12 million ($18.45 million) to Redflow.

Proceeds of the contract are expected to be recorded on or before the expected completion of the battery delivery in the first quarter of FY25.

Redflow says the contract represents the largest single sale and deployment of its batteries globally to date, and one of the largest flow battery systems to be deployed in the US.

The news pushed Redflow shares 70 per cent higher to 31.5c in early trade, before they settled back to 27c by 11.50am AEST. However, this is just half the trading price of 54c in August. 

The US contract comes on the heels of the company announcing the commissioning this week of a 30kWh battery energy storage system in its home market at the Brisbane City Council Willawong Animal Rehoming Centre.

The site, which has previously suffered from grid outages, has critical loads required to support operations including refrigeration for the storage of vaccines and medications used in the onsite veterinary offices.

Redflow has ramped up deployment of its battery systems this year including the final shipment of batteries to the Southern Ocean Lodge on Kangaroo Island in South Australia, where it now has 56 of its ZBM3 batteries being commissioned.

In the third quarter of FY23, Redflow also secured a memorandum of understanding with Queensland energy providers Energex and Ergon to evaluate Redflow’s battery technology, while the company was also shortlisted as an energy storage technology choice supplier for Electric Mine Consortium.

In offshore developments, Redflow’s zinc-bromine flow battery was approved earlier this year by the California Public Utilities Commission as eligible for the state’s Self-Generation Incentive Program, while the company established a strategic relationship Ameresco to provide advanced non-lithium energy storage solutions to customers across North America and Europe.

Redflow already has operations in the US with the company in January achieving a one-year operational milestone for its 2MWh Anaergia installation in California.

The US state estimates that it needs from 45 to 55 GW of long-duration energy storage by 2045 to support grid reliability and its clean energy transition targets.

The Redflow project announced today is being funded by the CEC’s US$140 million ($215.2 million) long-duration energy storage grant program.

Redflow CEO Tim Harris describes this latest contract as a ‘transformative’ project for the company.

“This 20 MWh project is one of several large-scale opportunities in our pipeline and represents the start of the next phase of our growth strategy, validating our focus on large-scale systems in the US and Australia,” Harris says.

“The market for long-duration energy storage solutions is rapidly accelerating, and this project will firmly establish Redflow's presence in California, which is leading the development and support of non-lithium technologies to achieve its net-zero goals.”

The Californian project will see Redflow’s battery system charge from solar power and discharge throughout the remainder of the day, which Harris says will reduce grid demand and boost the energy security and sovereignty of the Paskenta Racheria.

“We’re proud to be working with our partners in California to deliver our proven zinc-bromine flow battery technology and meet California’s need for longer-duration and scalable, fire-safe energy storage solutions,” he says.

The batteries will be manufactured in Redflow’s factory in Thailand.

The CEC’s energy storage grant program has focused on supporting underserved communities while bolstering California’s grid stability and resiliency in extreme weather conditions.

The Redflow project are seen as part of the Paskenta Tribal community’s efforts to achieve greater ‘energy sovereignty’.

“This project is an important step in California’s clean energy transition,” says Jonah Steinbuck, the CEC’s director of energy research and development.

“It reflects the CEC’s goal to commercialise proven long-duration energy storage solutions and support the energy sovereignty of tribal nations such as the Paskenta Band of Nomlaki Indians. With emerging energy storage technologies such as those developed and deployed by Redflow and Faraday, we will be better positioned to expand and diversify California's energy storage portfolio, reduce reliance on fossil fuels, and enhance the reliability and resilience of our grid."

Faraday Microgrids is a California developer and contractor that has deployed a number of CEC grant-funded microgrid projects. It is the grant recipient and project lead which will purchase the battery system from Redflow.