midwest energy policy series · 2018-12-07 · midwest energy policy series series 3: economic...
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Midwest Energy Policy SeriesSeries 3: Economic Development
ZAF Energy Systems Inc.8165 26th Street
Joplin, Missouri, 64804
12/3/2018 1
12/3/2018 2
Battery demand to see historic growth rates:
• Electric Vehicles – PHEV, EV, start/stop, hybrids
• Utility Infrastructure – distribution, renewables integration, UPS
• Microgrids – distributed power in developing countries
• Consumer Electronics – increasing power/energy demands
• Industrial – data centers, robotics, trucking, UPS, etc.
“Performance Gaps” exposed as technology evolves
• Capacity – longer run times in smaller packages
• Power – more power required for commercial and industrial users
• Life – demand for longer cycle life and shelf life
• Safety – customers in key markets place a premium on safety
• Complexity – operations require advanced electronics (BMS)
• Cost – widespread deployment of storage requires < $200/kWh
Market expected to exceed 1 TWh by 2025
The Energy Storage Dilemma
} Lead-acidshortcomings
}Lithium-ionproblems
Source: Avicenne Energy, 2018
ZAF’s Message
• The way we use energy is changing dramatically and rapidly and electricity storage is enabling this change. Today lead acid dominates and lithium-ion is gaining. Our message is simple; tomorrow nickel-zinc changes the game.
• Our technology is sound, the market is ready, our solution economical, and in an era where we need to really be focused on caring for our planet, we make a positive difference to the environment.
• After thirty plus years in high-reliability/high-quality manufacturing and nearly a decade in the battery business I’m as excited about ZAF’s prospects as I’ve ever been about any product launch with which I’ve ever been involved.
12/3/2018 3Randy A. MoorePresident & CEO
ZAF Energy Systems, Inc.
• Zinc batteries havebeen around a long time.
• NiZn for ~120 years.
• Most chemistries take 20-30 years from feasibility to commercialization.
12/3/2018 4
Nickel-Zinc Batteries
Nickel-Zinc Batteries
• Nickel Zinc Battery patent first awarded in US to Thomas Edison in 1901.
• Zinc-based batteries -> 1900’s for EV’s.
• Railroad locomotion -> 1930’s - 40’s.
• Fell out of favor due to low cycle life.
• Resurrected -> 1970’s - 80’s again EV’s.
• Again fell out of favor, due to cycle life, with the onset of Lithium-Ion popularity.
5
Historic Problems Limiting Cycle Life:Electrolyte Dry Out – Zinc “Shape Change” – Dendrite Growth
ZAF IP: Novel NiZn Battery Technology
• Four methods for Zinc stabilization, leading to long life batteries:• Patent pending bulk additives for stabilizing shape change
• Trade secret nucleation site additives for growing zinc evenly and suppressing zinc dendrites
• Patent pending electrolyte for stabilizing zinc and suppressing morphology (shape) changes
• Trade secret separator for suppressing dendritic shorting
• Recombinant battery technology enabling long cycle life• Patent pending low-cost recombination coil designed to recombine hydrogen and
oxygen generated during charge to prevent dry-out
• Electrodes engineered for best in class manufacturability, power, and capacity
• Multiple trade secret recipes and processes to provide optimal power, capacity and manufacturability
12/3/2018 6
12/3/2018 7
Why Nickel-Zinc Batteries, Why ZAF
Technology: ZAF’s nickel-zinc battery design solves historic problems…
- Electrolyte dry out- Zinc migration- Dendrite growth
BETTER VALUEMore Power
2x Capacity 2-3x Cycle Life
1xLead Acid
+2xNickel Zinc
50% Size Reduction
50% Weight Reduction
SAME Performance
+1xNickel Zinc
1xLead Acid
ZAF NiZn Products Designed for either:
Performance
OR
Cost
NiZn G31 Capacity and Power Comparison
8
Battery DataZAF G31
NiZn CapacityOdyssey
G31 AGMZAF G31
NiZn PowerUnit
Capacity (C/20) 177 100 155 Ah
Capacity (C/3) 170 84 151 Ah
Mass 28 35.3 26 kg
Cycle Life (80% DOD) 700 400 700 Cycles
CCA Current (30s) 850 1150 1200 A
Specific Energy (C/3) 73 27.4 69 Wh/kg
Energy Density 140 70.9 124 Wh/L
Capacity ••• Power
Zinc/Nickel/Copper54%
Plastics15%
Other Recoverable
16%
Non-recoverable
15%
When “Recycling” Isn’t a Good Thing . . . and, When It Is
9
A man in Indonesia uses an axe to break
up old batteries by hand in order to extract
the valuable lead within. In the “breaking”
process toxic lead is spilled everywhereand spills into the water table. (#1)
A child pours lead into an open-air crucible
for smelting. Lead particle emissions drift
into the air where some are breathed in
and some come back down to pollute theground surface. (#3)
Lead-acid batteries are the most recycled commodity in the history ofmankind—about 99% of all lead acid batteries are recycled. Experts say thatthe recycling of lead batteries is the #1 world’s worst pollution problem withthe lead smelting that follows being the #3 world’s worst problem.
ZAF’s nickel-zinc battery.
The world’s greenest battery.TM
• No battery can be successful without a recycling solution—it is one of the largest barriers to commercializing new battery technology.
• The NiZn chemistry starts out environmentally safe and remains so.
• NiZn battery recycling has an economically positive value proposition.
• NiZn systems do not require large decommissioning costs.
• The recycling process does not require smelting.
• The recycled nickel output is “battery-grade” and ready for use in a new battery.
85% Material Recovery Yields40% Reduction in Battery Cost
Source: “2016World’s WorstPollution Problems”
Safety Matters
10
Li-Ion
Ni-Metal Hydride Nickel, KOH
Lead Acid Lead, HSO4
Ni-Cadmium Cadmium, KOH
ZAF NiZn Nickel, Zinc, KOH
ZAF Zinc-Air Zinc, KOH
Ro
HS
Re
stri
cte
d
Sub
stan
ce
• Disruption Opportunity - ZAF’s nickel zinc (“NiZn”) technology targets the $50 billion lead-acid battery market
• Performance - ZAF’s NiZn battery dramatically outperforms lead-acid batteries in every metric including power output, size, weight, environmental friendliness, recyclability, and cycle count
• Market Acceptance - Early adoption from trucking and equipment OEM plus testing by top battery manufacturers indicates market readiness
• Framework - ZAF’s Research and Development facility is located in Bozeman, Montana and ZAF is finalizing construction of its Low Rate Initial Production (“LRIP”) facility in Joplin, Missouri
• Proven Leadership – President, CTO, VP Manufacturing, VP Engineering, and founders represent decades of experience in manufacturing business and transitioning technology introduction
• Proprietary Technology - The company has a robust intellectual property and patent portfolio
12/3/2018 11
Introduction - ZAF Energy Systems
Aircraft
Marine
Automotive
12/3/2018 12
Pro
fita
bili
ty
Market Size
Military
Heavy Trucking
Stationary(Data
Centers/Telecom)
Behind the
Meter ESS
Industrial
Emergency Vehicles
$50B in 2017 – 7% CAGR Predicted
Markets sizes and profitability placements estimates August 2017
Current Targets
Future Targets
Markets: Lead-Acid (Nickel Zinc Replacement)
G31 - Universe
Medical
Trucking
• Over $1.2 billion market billion market in the United States alone
• Commercial trucks make up 12.1% of all registered vehicles
• Regulations forcing change: New anti-idle requirements
• Initial acquisition cost equal: 4 NiZn for $2,400 vs. 8 AGM for $2,400; five year operating cost lead-acid $7,200 vs. NiZn $2,400.
• For the tractors, 4 NiZn batteries replace 8 AGM batteries (GR31) with estimated weight savings of 400 lbs. battery and 50 lbs. structure
• Fully supports 10-hour cycle for mandatory rest periods, regenerative braking, eliminates need for engine driven accessories.
• NiZn has greater than two times the projected life versus AGM reducing operational expenses.
• NiZn is ideal for lift gates, refrigeration and safety lighting applications.
13
Priority Target Market - Trucking
NiZn is a Clear Winner
• Lowest Cost solution over 20 year life• HALF the cost of lead acid• 33% lower cost than new pure lead acid• 20% lower cost than lithium
• Operates at higher temperatures reducing air handling and safety requirements
• Reliable – 10 year warranty
• SAFE – non-toxic, non-combustible, non-explosive, RoHS compliant, fully recyclable
• Highest IRR – Combination of performance, reliability and cost provides the best value
• Increased White Space Revenue
14
Data Centers
Naval Underwater Power
• Naval underwater batteries are a $50M+/yr market• Submarines have particularly astute problem
• Formerly flooded lead acid batteries lasted 7 years• Now VRLA lead acid batteries last 3-4 years• New Columbia-Class submarine’s systems too much load for lead acid• US Navy looking for NiZn replacement for Columbia-Class and the
rest of the fleet• NAVSEA worked with major lead-acid company
• Using competitor’s NiZn technology• Reportedly, not adequate to accomplish mission
• NAVSEA reached out to ZAF – asked regarding performance• ZAF currently meets or exceeds current specifications
Dec-18 16
2016 2017 2018 2019
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1. Identify Opportunity2. Produce Prototype3. Customer Test4. License Supplier5. Orders Placed
1 2 3 4 5
1 2 3 45 5Successful Test
Customer Testing Has Validated Technology
1 2 3 55 5 33
1 2 3 4 5
1 2 3 4 5
Trucking OEM
Contract Mfgr
Battery Mfgr
Battery Distr
Indust Equip OEM
Int’l Battery Mfgr
DOD Major Cmd
Battery Mfgr
Battery Mfgr
Customer n+1
Economics of NiZn Batteries
• Jobs in Missouri @ ZAF ~ 250.
• LRIP Sales of $102.9M and Gross Profit of $42.7M in 2023 on specialty batteries alone.
• EBIT of $162.5M in 2023.
• Approximately 10,000 jobs across JV/Licenses.
• Partner’s revenue of $2.8B – represents approximately 2.1% penetration of projected combined rechargeable battery market.
$M
$B
$-
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$(6)
$44
$94
$144
$194
$244
$294
2018 2019 2020 2021 2022 2023
EBIT
Total Cost
License Partner's Revenue
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