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Stefan Moroney
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Currently, I am a litigation manager at a medium size first party property law firm in Tampa, Florida. I have traveled extensively around the world and speak German and a little bit of Spanglish. Approximately, fifteen (15) years ago, I started researching and investing in micro cap companies.... More
  • Finding A New Investment Opportunity: ZBB Energy Receives ETL Certification To UL 1741 For Enersection Power Control Center 81 comments
    Mar 25, 2012 9:16 PM | about stocks: ZBB, AXPW

    Approximately eleven months ago, I stumbled upon a John Petersen article entitled "Two Stocks for Grid Storage: ZBB Energy and Axion Power," wherein he described the energy storage sector as "an investment mega-trend that will endure for decades." At the time, ZBB Energy and Axion Power were trading at $1.43 and $0.87 respectively, and I had no idea how this article would shape my research interests over the next twelve months.

    My interest piqued, I began looking into ZBB, Axion and Mr. Petersen's copious article archive. Shortly before Mr. Petersen's article, ZBB had successfully completed a three-year test of its flow battery under the tutelage of Australia's Commonwealth Scientific and Industrial Research Organisation (CSIRO). Interestingly however, after listening to my first ZBB conference call, I was less than impressed. As I remember, the call focused primarily on the integration of Tier Electronics, providing backup power for cellular phone towers in third world countries and the company's weak finances. As a consequence, based on Mr. Petersen's recommendation, I added ZBB to my watch list to see how the company would develop, but took no further action.

    On April 13, 2011, ZBB announced a joint development partnership with Honam Petrochemical, a division of the Lotte Group to deliver lowest cost flow batteries. Honam, a $12 billion petrochemical company, had identified energy storage as a priority business and selected ZBB as its partner moving forward. This announcement encouraged me to renew my due diligence efforts in ZBB. By mid-summer, ZBB closed a $2 million financing round at approximately a 12% discount to market with certain directors making an investment at market price and other insiders beginning to buy in earnest again.

    Over the last twelve months, insiders and Marathon Capital, a 10% beneficial holder, have bought close to 2 million shares or approximately 5% of the total shares outstanding at prices between $0.56 and $0.92. ZBB's method of financing has struck me as prudent because management has seemingly only raised what is immediately required to run the company rather than take on a large down round. However, despite this just-in-time financing, ZBB has had no problems raising capital at close to market price and insiders have bought both on the open market and as a part of private transactions. From all angles, it appears management's goals are in line with its investors, they are guarding ZBB's capital structure closely, and if the price materially increases, ZBB will be in a position to capitalize in order to guarantee ZBB's future.

    As each month passes, ZBB has made additional impressive announcements and installations. At the end of August, ZBB, which had been attempting to crack the Chinese market, announced a joint venture company to enter the Chinese market after a year of vetting 75 potential partners. Because of the shenanigans that has been coming out of China over the last year, the market yawned at this announcement. Nevertheless, this joint venture company that will initially assemble and ultimately manufacture ZBB products for sale in the power management industry is moving forward, has been awarded its first contracts, and is building a new state-of-the-art manufacturing center in WuHu City, Anhui Province that will begin operations in early 2012.

    On September 7, 2011, ZBB made two major announcements. The first was the issuance of a patent for the ZBB EnerSection™, a "plug and play" hybrid power conversion system that can support the integration of nearly any combination of onsite generating sources. At the time, I did not really know what this meant. Yes, I read the announcement, but the engineering significance of it was lost on me.

    The same day, ZBB announced a collaboration with Universal Electric Corporation to provide uninterrupted power to DC voltage lighting loads, rack power to servers and other miscellaneous loads at a major data center in a 380vDC trial program. Again, I thought this was another positive announcement, but I did not comprehend its significance at the time.

    Shortly thereafter, ZBB presented at the Renshaw & Rodman investor conference and it was identified that ZBB would not receive their UL certification for grid interconnection for another couple months. Immediately thereafter, there was a strong sell off, but insiders again began buying shares in earnest.

    At that time, I took a closer look at the collaboration with Universal Electric, 380vDC, the EnerSection and the unnamed financial center. In digging into this topic, I found the Emerge Alliance and the efforts that its members such as Intel and other large technology players were taking in implementing the new 380vDC standard in data centers and buildings around the world. It was at that time that I understood why the CEO Eric Apfelbach described ZBB as the Cisco of the power industry. The EnerSection is similar to a router or a computer tower with multiple USB ports. The EnerSection, an energy storage agnostic platform, has the ability to integrate any power generating source whether on AC or DC, along with various types of storage into an overall system.

    Previously, if a building had wind, photovoltaic, grid, gen set, and storage inputs, the architecture would require a separate inverter or converter for each input whether on AC power or DC power. However, the EnerSection would eliminate that requirement and integrate both AC and DC components into a plug and play system whereby each input would have its own "bucket" within the system to connect to, and thus, generate a significant savings for the end user

    At the conclusion of the R&R conference, ZBB, which had less than $1 million in sales last year, had between $5 and $7 million in backlog that was awaiting UL certification before the company could begin shipping and working through its backlog. Realizing that ZBB was much more than a one dimensional battery/storage company, and having witnessed the UL certification process take much longer with three different companies than the three different CEOs had promised and expected, I felt that a delayed UL certification would present a good buying opportunity in ZBB. After the R&R conference and going into the quiet period, the stock price began to retreat and a share supply and demand imbalance began to take shape. At this point, I had climbed my wall of worry, and I started to build a position in ZBB Energy.

    Over the next couple months, ZBB tightened its partnership with Honam, hired an additional 21 people or increased its employee headcount by 38% with the bulk of the hiring coming in sales, marketing and operations. ZBB also increased the depth and experience of its board of directors in financing expertise, signed a joint development, license and a stock purchase agreement with a major unnamed global technology company, received its Chinese joint venture business registration and first Chinese sales, and on January 12, 2012 received the first of three UL certifications for its 25kw inverter.

    In the press release announcing the UL certification, Apfelbach had this to say:

    "The UL certification is a great milestone for our company. The combination of certified grid-tie inverter electronics and our patented DC based ZBB EnerSection offer customers in the distributed grid a turn-key intelligent system. The strategic design wins in our backlog have been driven by the benefits of this offering. ZBB is uniquely positioned to deliver integrated storage solutions in markets where certification is required for grid interconnected systems." "We can now begin shipping product from our backlog to customers who've been waiting for UL grid-tie capabilities."

    At this time, ZBB is the only storage and power control manufacturer that has a UL 1741 grid-tie certification. As such, this certification is expected to be a major competitive advantage in getting new orders and building backlog. Therefore, I expect the sales and marketing team to begin selling in earnest, and over the next couple weeks and months, there will be a string of purchase announcements. At some point later this year, the 60kw and 125kw inverters, which are based on the 25kw platform, will also be certified and move into the sales pipeline.

    Company Basics -

    ZBB is not only a battery storage company, but also a technology agnostic supplier of power control electronics. In power projects, the power control electronics often cost 70% of the total sticker price, whereas in energy projects, the power electronics garner approximately 40% of the total price. As a consequence, the UL certification will allow ZBB to ramp potentially significant sales as a power electronics equipment vendor, while it continues to improve its V3 ZBB flow battery for wide scale implementation. At this time, I do not have the information to dial deeper into what ZBB's potential share of the 70% and 40% cost of the various power control electronics components implemented in a project will be. However, it stands to reason that ZBB's proprietary software will generate a higher margin than third-party hardware also utilized in the power control electronics package.

    Major products:

    - The EnerSection allows an end user to optimize and utilize all of the various power value streams available.

    - The V3 flow battery presents one of the lowest cost storage methods available.

    A combination of the two allows the end user to :

    - Avoid demand charges

    - Avoid turning loads off due to Demand Response

    - Enable higher penetration of renewable

    - Peak shave/time shift to lower rates

    - Manage DC circuits

    At this stage of the game, the price is trading at approximately $0.81 after retreating from a high last year of $1.59. The market cap is approximately $26.3 million and the company has approximately 36.6 million shares outstanding and 44.5 million shares fully diluted. The company has LT debt of $4.5 million structured over a multiple year horizon, a manufacturing space of 85,000 sq ft, and 34% ownership of the Chinese joint venture. Its auditor is Baker Tilly, the eighth largest accountancy in the world, and company counsel is K&L Gates, an international law firm with forty (40) offices around the world.

    Previously, the company has stated on numerous occasions in the past that it could reach cash flow positive at a run rate of approximately $20 million per year. And the company currently has the capacity to support approximately $36 million in annual revenues with very little capital expenditures. However, I believe that with all of the recent hiring the run rate to breakeven has probably risen slightly.

    Target Markets:

    - Microgrids

    - Commercial Buildings

    - Remote Operations

    - Communication Towers

    - Electric Vehicle Charging

    As most people reading this article already know, Pike Research predicts global investment in energy storage products to reach $122 billion by 2021, and China will be the largest market of that demand. ZBB plans to fight for a small piece of many of the subdivisions of this market. By itself, ZBB expects the communications towers market that was discussed in the first conference call that I mentioned to see a total investment of $18 billion by 2015. See, January 2012 ZBB Investor Presentation.

    At this point, I don't know how to quantify the 380vDC application other than to say that Intel has been pushing a conversion to a DC standard since it wrote a white paper on the topic in 2005. Over the last two years, the movement has caught a headwind and appears to be rolling forward with a number of strong advocates and test sites. See, EPRI - slide 8. The initial inertia to a change in standards of this magnitude is monumental. However, if these test sites are successful, ZBB will be on the forefront of a large change in the paradigm of the grid from AC to DC.

    Drawbacks:

    In ZBB's recent January Investor Presentation on the slide discussing the partnership with the large unnamed technology company, ZBB stated that the Partner is targeting lower cost for large scale grid storage. This indicates to me that while ZBB and its partners continue to work furiously towards a reasonable price point for large scale ZBB flow battery deployment, ZBB is still not there yet and a major push in revenues this year will likely come from power control electronics.

    Further, while insiders have shown the wherewithal to fund the company and ability to bring outside investors, there is no guarantee that this will continue or that the hiring of sales people will actually materialize in sales.

    Additionally, since 9/30/09, ZBB has tripled its shares outstanding from 12.4 million shares to 36.6 million shares outstanding, and while I expect that the percentage increase will slow, I also expect that ZBB will continue to fund growth through additional share issuances.

    Notwithstanding the foregoing warnings, it is my humble opinion that the tide has changed at ZBB, the market has under-appreciated the impact of the UL announcement, and in 2012, ZBB will spread its wings as a growth story.

    Disclosure: The author is long shares in both ZBB Energy and Axion Power.

    Stocks: ZBB, AXPW
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Comments (81)
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  • John Petersen
    , contributor
    Comments (29568) | Send Message
     
    Let me be the first to congratulate you on a solid first piece. If ZBB wasn't a sub-$1 stock, there's a good chance the editors would have picked it up for the main pages. If you enjoyed the experience, keep plugging away and you'll get there.
    16 Jan 2012, 12:02 PM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » Thanks, John. Your guidance has been very much appreciated. I am already contemplating a follow-up piece on ZBB and beginning coverage on Cytomedix (CMXI) my small biotech stock.
    16 Jan 2012, 02:49 PM Reply Like
  • John Petersen
    , contributor
    Comments (29568) | Send Message
     
    It can be a lot of fun if you can attract a base of smart readers who like to interact.
    16 Jan 2012, 02:59 PM Reply Like
  • DRich
    , contributor
    Comments (4429) | Send Message
     
    Good article and covers ZBB well. Thanks.

     

    I've wondered about the ties to Eaton that figured so prominently with ZBB early on and whether that relationship is still strong. I understand, right or wrong, the EnerSection controls were the result of the Eaton collaboration. I think ZBB is turning up but I still am more than a little leery of the China connection.

     

    Long ZBB, for the present.
    16 Jan 2012, 12:13 PM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » I understand the trepidation involved with the Chinese deal. However, I think ZBB has set it up in an appropriate fashion and as a consequence it will at least break even if not do very well. The Chinese market is going to be a very large market and this appears to be the only method by which ZBB could attempt to grab a piece.
    16 Jan 2012, 02:58 PM Reply Like
  • LT
    , contributor
    Comments (4600) | Send Message
     
    Stefan...let me be the second to congratulate you on an excellent intro article to ZBB.
    I wish you luck...may invest with you at some point.
    16 Jan 2012, 12:15 PM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » Thank you LT. I plan to continue covering and writing pieces on ZBB.
    16 Jan 2012, 03:00 PM Reply Like
  • siliconhillbilly
    , contributor
    Comments (2100) | Send Message
     
    A very nice article with much information on the evolution of ZBB from a "good idea" into a fledgling flow battery storage company.
    I learned things about ZBB that helped me visualize its path over the next few years.

     

    ZBB and AXPW.OB seem to be the two lowest cost energy storage suppliers ( $/kWh) today. ZBB's flow battery is an Energy type device and Axion's PbC battery is a good Power supplier.
    I would think the two might share a concrete slab in storage applications that need both, tied together with ZBB's Enersection product. Should be interesting to watch and see if this happens. Technically, it makes sense.
    16 Jan 2012, 12:46 PM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » SHB -

     

    I thought I replied to you earlier, but it looks like it did not post.
    ZBB already has a couple of installations combining lead acid batteries with their flow battery and enersection -

     

    http://bit.ly/Ag7tAY
    16 Jan 2012, 10:20 PM Reply Like
  • renim
    , contributor
    Comments (1047) | Send Message
     
    another example of a zinc bromine flow battery -
    http://bit.ly/yk5T2U

     

    these things are basically zinc electroplating units used as a battery. the power and energy are independently variable. the energy costs about $100/kWh, the power costs would also be reasonable except the cost to go from non-flow to flow basically doubles the power cost of a flow battery. Placing useful things like invertors into the package are what makes these expensive.

     

    Axion's current containerized 600 unit PbC demonstrator is running at 100kw. That is not exactly a high power rating per battery.
    18 Jan 2012, 09:40 AM Reply Like
  • John Petersen
    , contributor
    Comments (29568) | Send Message
     
    The PowerCube is a 500 kw system that's designed to provide full plant-level power quality and reliability, along with demand charge management capabilities. In addition, 100 kw of that capacity is being used to provide frequency regulation service on the other side of the meter. The net result is a plant-scale power quality system that costs far less at the outset and generates ancillary revenue to reduce total cost of ownership even further.

     

    It aggregates several values to the owner rather than serving a single purpose.
    18 Jan 2012, 10:39 AM Reply Like
  • wtblanchard
    , contributor
    Comments (2388) | Send Message
     
    Totally stole this capsule summary along with the excellent Beacon 3 minute video on Frequency Regulation you posted on the Axion Concentrator

     

    http://bit.ly/xDw20I

     

    and put it up on my Facebook wall today ... where I also posted stuff on AXPW in early January :-)
    18 Jan 2012, 02:18 PM Reply Like
  • John Petersen
    , contributor
    Comments (29568) | Send Message
     
    When somebody goes to the trouble of putting together a good explanation, it's a shame not to use it.
    18 Jan 2012, 02:23 PM Reply Like
  • renim
    , contributor
    Comments (1047) | Send Message
     
    Axion's Powercobe is a 250-300kWh unit, providing a continuos 100kw resource, with an intended development to scale to a peak 500kw resource. At 100kw, it provides a projected revenue of between $16,000 to $24,000 on a yearly basis (based on historic prices).

     

    right now, Axion's powercube can only handle 100kw of AC, there must be a good reason. my wild guess is that thermals rise with decreasing efficiency as power rises. At 500kw the thing would make a cosy pb melting pot. http://bit.ly/A0IkmF
    25 Jan 2012, 12:54 PM Reply Like
  • D-inv
    , contributor
    Comments (3931) | Send Message
     
    renim, you speak nonsense. The FACT is, Axion Power's PowerCube was designed with modular expansion in mind.

     

    From http://tinyurl.com/86h...
    "At the unveiling ceremony with PJM, we spoke of the scalability of our PowerCube technology; this project will be the first deployment demonstrating the range (from small 10kW residential units, to stacked cube modules providing 20MW) of this application. "
    25 Jan 2012, 01:20 PM Reply Like
  • renim
    , contributor
    Comments (1047) | Send Message
     
    D-inv

     

    the efficiency of an axion PbC in car application, is around 83% (slide 23 http://bit.ly/oIU19K )
    if we were to take 100%-83% we have 17% energy loss (heat generation)

     

    17% of 500kw is 85kw which is comparable to the rating of a pb melting pot. http://bit.ly/A0IkmF

     

    i guess at 100kw the efficiency is greater than 83% and at 500kw the efficiency is less than 83%. Axion was limited to 100kw because it was the practicable limit they could handle
    25 Jan 2012, 01:46 PM Reply Like
  • John Petersen
    , contributor
    Comments (29568) | Send Message
     
    Ignorance may be bliss, but it's still ignorance.
    25 Jan 2012, 02:09 PM Reply Like
  • D-inv
    , contributor
    Comments (3931) | Send Message
     
    renim > "the efficiency of an axion PbC in car application, is around 83% (slide 23 http://bit.ly/oIU19K )
    if we were to take 100%-83% we have 17% energy loss (heat generation)

     

    17% of 500kw is 85kw which is comparable to the rating of a pb melting pot. http://bit.ly/A0IkmF"

     

    Interesting observation. It suggests a physical limit on the rate of charge applied to individual batteries without damaging the batteries. So, management of power flow into, and temperature of, individual batteries (smallest building block in a PowerCube) appears to matter.
    25 Jan 2012, 02:30 PM Reply Like
  • Futurist
    , contributor
    Comments (2128) | Send Message
     
    Now that was funny. Mathematics applied to inaccurate information leads to a bad answer.

     

    I know because in middle school I was the kid that could never get the long winded story problem correct.
    25 Jan 2012, 09:11 PM Reply Like
  • Tim Enright
    , contributor
    Comments (1341) | Send Message
     
    Renim, that's pretty funny. However, if memory serves, the 100 kw of AC was an inverter limitation.
    26 Jan 2012, 09:06 AM Reply Like
  • bangwhiz
    , contributor
    Comments (2235) | Send Message
     
    Really nice article, well written and balanced in viewpoint. Impressive first article. Think I'll take an initial position this coming week. Thanks for the effort. The stock chart looks good as of today, also.
    16 Jan 2012, 04:20 PM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » Thanks BW! I look forward to writing more. After recovering from the sell off, the stock price seems to have built a good base in the low to mid .70s.
    16 Jan 2012, 06:31 PM Reply Like
  • 481086
    , contributor
    Comments (3332) | Send Message
     
    I made the first thumbs up and want to echo the praise. I've held a few -thousand-share position in ZBB for a couple of years and recently doubled that. It too has been a long road, but almost always a climbing one with regard to business progress. May the long awaited UL cert will prove to be a watershed. This one has required patience, but I had a good talk with a company engineer in late 2010. He didn't divulge anything sensitive, but his enthusiasm gave me the confidence to wait. That confidence remains.
    16 Jan 2012, 04:55 PM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » Thanks for the thumbs up. I am also excited by the prospects. I think ZBB has really turned a corner.
    16 Jan 2012, 06:31 PM Reply Like
  • Tim Enright
    , contributor
    Comments (1341) | Send Message
     
    Great article, you may have just pushed me into the buy side. I really like what these folks are doing...
    16 Jan 2012, 05:08 PM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » Thanks Tim. I spoke with a couple people on the yahoo board that attended the annual meeting and they thought they could feel a certain excitement coming from management in the way they spoke about the company.
    16 Jan 2012, 10:23 PM Reply Like
  • D-inv
    , contributor
    Comments (3931) | Send Message
     
    Nice Article, Stefan. Thanks for pulling a good ZBB historical summary together.

     

    Like you and many others, I had ZBB on my watch list for some time after noticing its mention in John Petersen's articles. Started a position at the end of the year assuming the share price was depressed somewhat by tax loss selling and anticipating issuance of UL certification relatively early this year.
    16 Jan 2012, 05:55 PM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » Thanks D-inv. Good foresight, I bet you were able to get an attractive entry point.
    16 Jan 2012, 10:26 PM Reply Like
  • Futurist
    , contributor
    Comments (2128) | Send Message
     
    Very well written and thorough article. I have owned ZBB for several years. Have managed to pick up some shares at opportune times.

     

    I have written a couple of times how I believe that ZBB getting a 1/3rd share of China profits while sharing with Huge China partners is better than ZBB getting nothing at all. Plus all orders will be built in America and shipped to China until the new plant ( which is being built for them for free) can build some of the parts themselves.
    I have stated that the partnership with South Korean's giant gives ZBB a strong defense against other big players.

     

    The real risk with ZBB is whether the flow battery will ever be cheap enough to be a huge product. I don't believe the flow battery will ever obtain billion dollar market capitalization on its own. But I have felt for a long time that the electronic control side can supplement this company to being a very large niche player in the alt energy arena.

     

    Thanks again for the very well written and researched article.

     

    BTW,
    My favorite medical stock is MNKD. If you know of any person who gives themselves insulin shots you will be happy to know that era is almost over. How this company can be so cheap with a world market this big is pretty incredible.
    16 Jan 2012, 08:17 PM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » Hi Futurist -

     

    Thanks for the kind words. I think we have a very similar view on ZBB. This is just my opinion, but I think that ZBB is very well aware of the problems that could have arisen by going into China. Initially, I was actually quite concerned but it is very clear that ZBB did not rush into this and has taken its time in planning and vetting its partners.

     

    If ZBB only had the flow battery and the power control electronics had not taken a giant leap forward over the last year, ZBB would still be on my watch list.

     

    The combination of the two are going to be very interesting to watch develop.
    16 Jan 2012, 10:39 PM Reply Like
  • ESF22
    , contributor
    Comments (5) | Send Message
     
    Nice summary. I think the biggest headwind ZBB faces at this point is the low conversion efficiency of the flow battery. Two important aspects or grid storage batteries are cost per kilowatt hour of storage and conversion efficiency. At this time, ZBB's flow battery seems to be best of class with regards to price at approximately $400/KWH of storage. However, the ever important AC-DC-AC efficiency of the battery is approximately 68%-Ouch. What this means is for every 1000 watts of AC power that you put in, 680 AC watts of power are what you can retrieve. This just sinks the arbitrage argument-i.e., store power when the price is low and use/sell the power when the price is higher. There does seem to be a market for the Enerstore battery, I just don't foresee it being used in any large, multi-megawatt projects at its present efficiency level.
    The battery agnostic Enersection may prove to be the more widely adopted offering.
    17 Jan 2012, 12:09 AM Reply Like
  • Futurist
    , contributor
    Comments (2128) | Send Message
     
    "I think the biggest headwind ZBB faces at this point is the low conversion efficiency of the flow battery."

     

    ESF22,
    This is not a concept I have heard before. Can you cite me to a link that talks about the conversion rate of different energy storage devices? Thanks for any help you might be able to give.
    17 Jan 2012, 05:57 AM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » ESF and Futurist -

     

    Last year JP wrote an article on - “Electrochemical Storage for the Green Grid.”

     

    In which it cited ZBB with the following stats:

     

    ZBB
    - 1.8 - open circuit voltage (v)

     

    - 65 (429) - specific energy (Wh/kg)

     

    - 2-5 – characteristic discharge time, hours

     

    - 12-15 - self-discharge % per month,
    at 20 _C

     

    - 2000 - cycle life
    (cycles)c

     

    - 65-75% - round-trip DC
    energy efficiency - (my understanding is that this currently 75% at the DC terminals of the V3 modules. However there are further losses with the AC/DC conversions).

     

    Unfortunately, I believe your $400 kwh quote may be a bit low at this point.

     

    As I have stated above, I am looking for the growth this year to come from the power electronics and for ZBB to continue to develop its flow battery technology. I do have concerns that are not fully flushed out as how the flow battery will ultimately be implemented.
    17 Jan 2012, 08:49 AM Reply Like
  • D-inv
    , contributor
    Comments (3931) | Send Message
     
    Futurist, on reading ESF's comment I went looking for information on conversion efficiencies in general and stumbled across a summary type review of conversion efficiencies for generic technologies compiled at Virginia Tech. The summary covers a number of topics related to distributed energy generation and storage. Interesting info (to me at least).

     

    http://tinyurl.com/6rv...
    17 Jan 2012, 12:22 PM Reply Like
  • mooselope
    , contributor
    Comments (2) | Send Message
     
    For what its worth I asked the efficiency question at the annual meeting and was told they could pretty easily get it to 80%.
    Mooselope
    17 Jan 2012, 11:31 PM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » Hey Moose -

     

    Good to see you over on this board!
    18 Jan 2012, 09:20 AM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » D-Inv -

     

    Thanks for the link. I will have to take a closer look at it over the weekend.
    18 Jan 2012, 09:27 AM Reply Like
  • Futurist
    , contributor
    Comments (2128) | Send Message
     
    Moose,
    Glad you came aboard with this group. I think you will like the technical expertise that is available as well as a place to make more detailed posts.
    18 Jan 2012, 05:15 PM Reply Like
  • Futurist
    , contributor
    Comments (2128) | Send Message
     
    Thanks D-Inv.
    Long, yet descriptive. I feel that if I am going to be an energy storage investor this is really Primer 101. It will take me awhile.
    18 Jan 2012, 05:36 PM Reply Like
  • wtblanchard
    , contributor
    Comments (2388) | Send Message
     
    Might the 380vDC "application" be something that takes the AC-DC efficiency "problem" off the table in some cases?

     

    What if your primary input was from a Solar Array and or Windmill?

     

    Do gensets or microtubines generate AC or DC (or both?)
    17 Jan 2012, 10:14 AM Reply Like
  • siliconhillbilly
    , contributor
    Comments (2100) | Send Message
     
    WTB: I like the idea of using a flow battery for emergency power of a server farm. Especially if they farm is set up for 380VDC power. No DC>AC converter means lower cost and higher efficiency.
    One of the ZBB features is that it can be fully charged and then the energy cell drained back into the storage tanks. Most of the Zinc is then in the energy cell. The stored liquid is mostly a bromine complex and is very stable. So the system can sit for months (years?) and not self-discharge. Nice feature.
    When you want power again just start the pumps and fill up the energy cell and power comes out. A clever engineer could make it work by gravity so it would "cold start". An ideal emergency power system.
    Of course, it should be combined with a bank of Axion PbC batteries to keep the output impedance low to supply any rapidly varying load(s) ;-)
    21 Jan 2012, 08:56 PM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » WT -

     

    I plan to write a follow-up article which takes a closer look at the 380vDC application.

     

    My understanding is that renewable inputs generate electricity in DC.

     

    Not sure about the type that microturbines generate, but I imagine some of the Capstone experts could tell us in short order.
    17 Jan 2012, 11:20 AM Reply Like
  • wtblanchard
    , contributor
    Comments (2388) | Send Message
     
    Not sure why this came up on Google Alerts today, whether it's an updated document (my guess) or a brand new one:

     

    Princeton Data Systems 100kW Grid Tied Inverter

     

    Note it has some efficiency data on it.

     

    http://bit.ly/z8p1Bi

     

    I believe this is used in the AXPW-PJM PowerCube onsite at Axion, though I don't know that it will be used exclusively in PowerCubes.

     

    Note that it has UL certification ... a small private company managed the feat ... but I don't know how long it took them.
    17 Jan 2012, 01:32 PM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » Princeton Power is an interesting company that seems to be a little bit further along than ZBB. It will be interesting to see if ZBB puts out a similar brochure in short order.
    17 Jan 2012, 11:29 PM Reply Like
  • D-inv
    , contributor
    Comments (3931) | Send Message
     
    Thanks for the link, WTB. A tidbit I found particularly interesting was inverter response times given - 255 ms. That info resolves a question I had about differing response times for Axion's PbC batteries and the response time for the grid-tied PowerCube. The inverter is slower than the battery.
    17 Jan 2012, 02:34 PM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » D-inv - I did not see where response times were talked about. Could you point it out to me? Thanks.
    17 Jan 2012, 11:31 PM Reply Like
  • D-inv
    , contributor
    Comments (3931) | Send Message
     
    Stefan, for the Princeton Power Systems inverter look on page 2 of the Princeton document (http://bit.ly/z8p1Bi). See backup auto transfer times under AC Ouput port specifications. For Axion's PbC battery, I was working from memory and don't have a specific reference handy. I believe the battery response time was given in a TG interview published in the first week -to-10 days of this year.
    18 Jan 2012, 12:55 AM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » Interesting thanks, I have heard TG say .5 and .255, but I think in his most recent interview, he reiterated .255.
    18 Jan 2012, 09:22 AM Reply Like
  • wtblanchard
    , contributor
    Comments (2388) | Send Message
     
    BTW, if I'm reading this correct, there's no DC "output" ...
    just 1) Battery Input, 2) AC output, and 3) GRID Connection.

     

    So if that's true, it's not a candidate for 380vDC stuff.
    17 Jan 2012, 02:46 PM Reply Like
  • D-inv
    , contributor
    Comments (3931) | Send Message
     
    wtb, I'm thinking there must be a DC "output" to enable 'charging' of batteries or the PowerCube would only be able to supply power to the grid with no capability of absorbing excess power.

     

    The spec includes a 95kW charging capability with a 3-stage charging profile (what ever that means). But, that DC "output" would be 12v and not 380v? And, 95kW charging at 12v implies pretty hefty amperage.
    17 Jan 2012, 03:15 PM Reply Like
  • Tim Enright
    , contributor
    Comments (1341) | Send Message
     
    "The spec includes a 95kW charging capability with a 3-stage charging profile (what ever that means)"

     

    A 3-stage charging system provides a more controlled way to charge batteries efficiently and increase life cycle. The stages are bulk, absorb and float. Definitions of the stages are readily available online...
    18 Jan 2012, 11:05 AM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » There is language in the brochure that talks about it being bi-directional, which I believe refers to this capability.
    17 Jan 2012, 11:33 PM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » Interestingly, something I noted previously, and again tonight, is that Princeton Power is seems to also be hiring quite a few people. Currently, PP has 10 open job opportunities available which seems to be a large number for a small private company - maybe also another indicator that the power electronics sector is poised for significant growth.

     

    http://bit.ly/AzvxPV
    17 Jan 2012, 11:53 PM Reply Like
  • wtblanchard
    , contributor
    Comments (2388) | Send Message
     
    Some of the dates on the jobs are quite old .... 2010 old. Not sure what to make of that.
    18 Jan 2012, 01:14 AM Reply Like
  • wtblanchard
    , contributor
    Comments (2388) | Send Message
     
    But this one is new (1/20/11)
    Senior Director of Sales

     

    http://bit.ly/yvJnmS
    21 Jan 2012, 02:27 PM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » Here is the UL announcement for Princeton Power from June 16, 2009 -

     

    http://bit.ly/zb3vTm

     

    It appears this was the result of beginning to take order in December 2006.

     

    http://bit.ly/zb3vTm

     

    "The inverter is currently in development, with prototypes having been tested and the final stages of design for manufacturing and certification to safety standards to take place over the next six months." (took much longer)

     

    These inverters came about as the result of a grant in July 2006 used to develop military technology.

     

    http://bit.ly/A59JqE

     

    So it appears it took Princeton Power approximately 2.5 years making first sales and 3 years from first grant to UL certification.
    18 Jan 2012, 12:13 AM Reply Like
  • 481086
    , contributor
    Comments (3332) | Send Message
     
    Not quite sure, but I think ZBB's Enersection/PECC does more than princeton's inverter. I believe the grid-tied PECC can also automatically "island" its attached system in the event of a grid failure, utilizing attached storage and renewables to maintain service to its loads. In the residential realm, most folks with solar panels still lose power completely when the grid goes down. Their inverters must "see" the grid to work properly...
    18 Jan 2012, 12:34 AM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » Good article on Princeton Power and their growth -

     

    http://bit.ly/A3vynj
    27 Jan 2012, 09:56 AM Reply Like
  • bangwhiz
    , contributor
    Comments (2235) | Send Message
     
    Stefan. I was looking at ZBB and AXPW's stock chart for the past month and they almost look like twins. As you know I own AXPW and I wanted to reread your excellent article and consider buying ZBB.

     

    What I came away with after comparing ZBB to AXPW was that Axion might address a larger potential market. Is that a fair characterization? I'm sure you know what a rough ride AXPW has had and I wasn't sure I would have the patience to handle more than one speculative energy storage stock. What's different about ZBB and where am I off-base?

     

    If a buyer were considering the a purchase between the two what would be the pros and cons for each? I want to particularly commend the balance in your article with the section you provided under drawbacks. I'd give your instablog 5 stars.
    29 Jan 2012, 10:44 PM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » BW - Thank you! Sorry, I took so long to get back to you. I have been out of pocket for the last couple days.

     

    Over the past year, I have spent many hours analyzing both Axion and ZBB, and built what I consider to be relatively large positions in both.

     

    Currently, I believe that Axion has the better "announced" partners and a clearer trajectory to large volume sales. However, over the past six months, the soft indicators i.e. insider buying, adding to the BOD, building out a marketing team and adding manufacturing personnel appeared to be trending in ZBB's favor.

     

    The more I dug, the more I noticed developments that appeared to be more than meets the eye. An important one in my opinion being the 380vDC test site.

     

    The key for my investment thesis was the development of the power control electronics side of the business. The more I studied JP's and other's analysis on power control electronics, the more apparent it became that this sector is potentially involved in every battery management system manufactured - no matter who the maker of the batteries. Additionally, I took a look at a couple other power control electronics manufacturers such as privately held Princeton Power and every one appears to be growing and hiring.

     

    My biggest concern with the ZBB is actually the flow battery side of the company. I don't think the solution is cheap enough yet to make any real inroads with respect to large volume orders and they are more suited to particular projects anyway. Additionally, I think this is part of the reason that they are partnering with Honam and the other undisclosed tech company to collaborate on developing the tech further.

     

    I am very encouraged by the BOD's willingness to support the company with what I described as just-in-time financing. If they expect developments to occur which will materially increase the price of the stock in the short term, then it makes sense to me to avoid a large down round if at all possible. Further, in the event ZBB needs a couple more small infusions before the power control electronics begin moving, I think they will be there to make the needed injection of capital. (As an analog, last year at approximately this time, another small company I am invested in called Cytomedix had insiders stepping-in to provide similar just-in-time financing. After a couple months of sideways movement, it started upwards last September. Yesterday, it closed at 4.5 times what it closed at last March. Of course such success in one company does not guarantee that same success in another company, but after studying these individuals for the last year, I don't think they would be throwing good money after bad).

     

    The current flow battery pricing issues notwithstanding, I wanted to add a small company to my portfolio to play the power control electronics sector and I think that with ZBB, I get an opportunity to play both the flow battery and power control markets.
    31 Jan 2012, 12:18 AM Reply Like
  • siliconhillbilly
    , contributor
    Comments (2100) | Send Message
     
    Stefan: One problem I see with ZBB is that their product doesn't "look like a battery" in any conventional sense. My take is that they are going to have to work hard to prove to the conservative battery storage markets that it actually "works like a battery".
    The good news is that if they really can use their power electronics to effectively merge multiple generators and storage devices into a virtual battery like system, they should have a winning general solution that can be fit into many applications.

     

    Can they develop the power electronics and flow battery simultaneously with the resources they have? We will see.

     

    I also have some of their stock, but just a pinch for flavor. Tiny amount compared to AXPW.
    31 Jan 2012, 12:40 AM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » I think with respect to utility markets you may be correct. However, commercial buildings that have never had such power electronics and UPS or battery systems may be easier to sell.

     

    I became interested in ZBB when it appeared that their power electronics would be able to integrate as you say "multiple generators and storage devices" into virtual power plants.

     

    OT - Interestingly, the biggest issue that I had with the recent swoon in Axion to a low of .25 was that not a single insider bought a share. I wanted to buy a lot more than I did, but it made me very suspicious. However, the pricing of the recent share options given to the new VP spoke volumes for me. If at this point, TG will not give out a relatively small number of shares compared to a potential secondary at this market price. Does that have any implication or predictive power for what he will allow the upcoming secondary to go at?
    31 Jan 2012, 11:38 PM Reply Like
  • 481086
    , contributor
    Comments (3332) | Send Message
     
    As John has said (if I can get this right) insider purchases can be every bit as legally problematic as insider sells in periods when there is a lot of material non-public information in the air. And for such a small company, at a time with so many significant irons in the fire, testing programs underway, deals in the works etc...all currently being held close to the vest---it could be particularly problematic. For this host of reasons large purchases by Axion insiders may not be advisable right now...
    1 Feb 2012, 12:12 AM Reply Like
  • 481086
    , contributor
    Comments (3332) | Send Message
     
    Not to offramp too far into Axion matters, but as far as the options go, somehow I don't see TG giving the new guy any kind of markedly better deal than everyone else has. Nor would he need to. I can imagine the conversation going like this: "This is a unique opportunity. And you're a good fit for us. Now I know these options appear far from overly generous. But if you achieve the success we all hope for and expect in your position, in a reasonably short time, our stock will attain a dramatically higher value, and you will be a millionaire. Along with the rest of us. ...Deal?" ;)
    1 Feb 2012, 12:24 AM Reply Like
  • D-inv
    , contributor
    Comments (3931) | Send Message
     
    bang, II agree with your assessment that AXPW's market for batteries is larger than ZBB's because of the PbC battery has a wider range of uses. ZBB, though, has its' UL approved EnerSection power controller than can integrate multiple devices which opens markets not addressed by AXPW.

     

    ZBB is also NYSE listed.

     

    Disclosure: long AXPW, ZBB
    29 Jan 2012, 11:03 PM Reply Like
  • Ryan Stanton
    , contributor
    Comments (105) | Send Message
     
    Stefan-
    Great post about ZBB. I'm curious to get your take on ZBB's earnings release this morning. The $6.7M backlog sure caught my eye!
    9 Feb 2012, 08:53 AM Reply Like
  • Futurist
    , contributor
    Comments (2128) | Send Message
     
    Ryan,
    Most of the backlog, as I understand it is for the larger (100kw) inverter system. That UL certification should be done this quarter and then the product can be shipped. China production should also be produced and shipped soon. Revenue ramp should look good this year. From that point on its simply up to the products to gain acceptance and grow sales.
    If anyone else has a different version of the backlog, I would love to hear from you.
    9 Feb 2012, 10:29 AM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » Hi Ryan, I was tied up this morning and have not had a chance to listen to the call yet. It doesn't look like they have posted it yet.
    9 Feb 2012, 03:34 PM Reply Like
  • Ryan Stanton
    , contributor
    Comments (105) | Send Message
     
    They were awarded ~$1.2M by the Navy for an energy storage system at San Nicolas Island in August. I wonder if that project has hit the books yet?
    http://bit.ly/zrZwNo
    9 Feb 2012, 10:48 AM Reply Like
  • wtblanchard
    , contributor
    Comments (2388) | Send Message
     
    F- what, given the prior UL experience, gives you confidence that the UL certs will be done this quarter?
    9 Feb 2012, 10:50 AM Reply Like
  • Futurist
    , contributor
    Comments (2128) | Send Message
     
    The answer is the prior UL experience gives me confidence that doing the process a second time with virtually the same product ( only larger) will be accomplished soon. Whether it comes this quarter or next is no concern to me. I simply expect the backlog and new China orders to be filled prior to year end.
    9 Feb 2012, 05:03 PM Reply Like
  • Tim Enright
    , contributor
    Comments (1341) | Send Message
     
    Zoom....
    10 Dec 2012, 03:07 PM Reply Like
  • DRich
    , contributor
    Comments (4429) | Send Message
     
    >Tim Enright ... I'd classify it as Putt-Putt. It's got a long way to go for me to think ZOOM. I am glad that it finally made a sale, good news, and the price didn't tank further. That is progress I like.
    10 Dec 2012, 03:11 PM Reply Like
  • Futurist
    , contributor
    Comments (2128) | Send Message
     
    DR,
    I'm with you. Nice that the product has found a buyer.
    10 Dec 2012, 03:13 PM Reply Like
  • D-inv
    , contributor
    Comments (3931) | Send Message
     
    Maybe announcement of another sale or two will sustain the rise and deliver Christmas presents to all of us. 18% daily gain for the next 10 days would give us $1.57 a share.
    10 Dec 2012, 03:26 PM Reply Like
  • Tim Enright
    , contributor
    Comments (1341) | Send Message
     
    >DRich ... damp rag award for you! hey, after watching AXPW it feels like a zoom to me - didn't even hesitate while passing my PPS (should probably break off a small chunk for the buyers)...
    10 Dec 2012, 04:02 PM Reply Like
  • DRich
    , contributor
    Comments (4429) | Send Message
     
    >Tim Enright ... I thank you. This award makes my day and I'd like to thank my parents, teachers, professional mentors & so many more people that have helped me form my dour view.
    10 Dec 2012, 06:15 PM Reply Like
  • Futurist
    , contributor
    Comments (2128) | Send Message
     
    Actually I was relieved that the China order came through and all looks well for the near future. I thought by now the Korean angle would be paying some sales dividends but not quite yet. If the product really does as its advertised, this stock should work out.

     

    Pretty ironic that I'm hoping a certain Class 8 truck gets great mileage and that a ZBB product passes muster at the same point in time. Might as well pray that the Chinese finish those charging stations and rental garages so a KNDI can deliver its 20,000 EVs this year.
    10 Dec 2012, 03:33 PM Reply Like
  • Stefan Moroney
    , contributor
    Comments (2557) | Send Message
     
    Author’s reply » Whoa Nelly, five comments on the ZBB blog. Must be some movement in the stock price, lol.

     

    I considered buying more at the lows, but didn't b/c I am still concerned at the high cost of the flow battery. Maybe with the demise of most of the US based Li-on companies, ZBB will be able to get some decent revenues.

     

    At this time, I am remain impressed with ZBB's control electronics, i.e. EnerSection, and look forward to some data coming in the form of IEEE papers or updates on the IIT installation.

     

    Additionally, MDB has initiated coverage on ZBB and acted as ZBB's placement agent for the last two secondaries. It appears ZBB will have an aggressive patent game plan moving forward.

     

    http://bit.ly/RE2Qpz

     

    http://bit.ly/T20d1B
    10 Dec 2012, 03:56 PM Reply Like
  • D Lane
    , contributor
    Comments (1206) | Send Message
     
    Stefan, thanks for the MDB link
    10 Dec 2012, 09:50 PM Reply Like
  • D-inv
    , contributor
    Comments (3931) | Send Message
     
    "At this time, I am remain impressed with the ZBB's control electronics, i.e. EnerSection, and look forward to some data coming in the form of IEEE papers or updates on the IIT installation."

     

    ZBB's decision to develop that control electronic expertise is looking like a good one.
    10 Dec 2012, 04:05 PM Reply Like
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