REG - Invinity Energy Sys - Partnership to Deploy up to 2GWh of VFBs in UK

Invinity Energy SystemsAnnouncement

18/02/2025 07:15

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RNS Number : 4275X  Invinity Energy Systems PLC  18 February 2025

The information contained within this Announcement is deemed by Invinity
Energy Systems plc to constitute inside information as stipulated under the
Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK law by virtue
of the European Union (Withdrawal) Act 2018 ("MAR").

 

 

18 February 2025

Invinity Energy Systems plc

 

("Invinity" or the "Company")

 

Strategic Partnership with Frontier Power to Target Deployment of up to 2 GWh
of ENDURIUM™ VFBs

Invinity signs commercial partnership with major UK energy infrastructure
developer initially targeting multiple bids into UK LDES Cap & Floor
scheme

 

Invinity Energy Systems plc (AIM: IES) (AQSE: IES) (OTCQX: IESVF), a leading
global manufacturer of utility-grade energy storage, is pleased to announce
that it has signed a partnership and master supply agreement (the "Agreement")
with Frontier Power Ltd ("Frontier"), a leading UK-based originator and
developer of large energy infrastructure projects. The Agreement initially
targets the deployment of up to 2 GWh (2000 MWh) of Invinity's ENDURIUM
vanadium flow batteries into projects which will bid into the first
application window for Ofgem's UK Long Duration Energy Storage ("LDES") Cap
and Floor
(https://polaris.brighterir.com/public/invinity/news/rns/story/w6gy7lx)
("C&F") scheme, expected to be open between Q2 and Q3 2025.

 

Pursuant to the Agreement, Frontier Power has reserved up to 2 GWh of the
Company's manufacturing capacity, on a right of first refusal basis, to
support multiple project bids it is currently developing for submission into
the C&F procurement process. Frontier will act as lead developer on these
projects, securing overall project financing as well as acquiring land,
connections and planning permission. Invinity will act as Frontier's exclusive
flow battery supplier for LDES C&F projects, with final volumes to be
determined by how much capacity is enabled by Ofgem's 2025 LDES window and how
many (if any) project bids are accepted(1). Upon reaching financial close on
any successful projects, Frontier has agreed to pay Invinity a capacity
reserve fee in order to support the Company's working capital requirements
during the manufacturing process. Additionally, both companies have also
agreed to explore further opportunities for collaboration in other territories
where Frontier Power is active, including, but not limited, to Japan, Korea,
Vietnam, Malaysia, the USA and the EU.

 

Invinity is currently in the process of upgrading its UK manufacturing
capabilities and will continue to scale its capabilities over the coming
months and years. This strategy ensures the Company can meet any contractual
commitments to Frontier under the Agreement whilst also being able to service
other customers in support of the Company's growth plans in the UK and abroad.

 

Since 2009, Frontier Power has originated, developed, acquired or advised on
c.£5bn of assets such as; interconnectors(2) (including the UK-Germany
Neuconnect project) pumped hydro storage and a £1.0bn portfolio of Offshore
Transmission Owner(3) (OFTO) assets which Frontier currently manages. Invinity
was chosen as Frontier's exclusive flow battery technology partner due to
ENDURIUM's numerous advantages over other LDES technologies for large-scale
projects in the UK, the Company's proven track record of delivering battery
projects across three product generations and successfully scaling
manufacturing in line with demand. This strategic partnership marks a
significant step forward in the UK's clean energy transition and aims to boost
domestic manufacturing, create jobs, and position the UK as a global leader in
non-lithium energy storage alternatives.

 

Long duration energy storage is critical to balance the UK's electricity grid
and reduce the significant amount of constraint payments currently required by
storing excess renewable generation. Approximately £3bn is spent each year in
curtailing excess wind generation in the UK and this is likely to continue to
rise as more renewable generation comes online. The widespread deployment of
LDES technology, such as Invinity's ENDURIUM batteries, can help to minimise
renewable curtailment, making the most of the UK's own sovereign energy
sources and providing low-cost, low-carbon, energy on-demand for all,
resulting in improved energy security and reduced electricity bills for
consumers.

 

In response, the Department for Energy Security & Net Zero ("DESNZ")
decided to introduce a cap and floor regime to encourage investment in LDES.
This regime, modelled on Ofgem's interconnector cap and floor regime, ensures
a minimum amount of revenue for LDES operators. Conversely, the cap on revenue
helps lower costs for consumers in return for their support in guaranteeing
the minimum revenue. DESNZ has asked Ofgem to be the regulator for this
regime, using their interconnector cap and floor experience.

 

 

Humza Malik, Chief Executive Officer at Frontier Power said:

 

"Our alliance with Invinity is a statement of our intent to revolutionise the
UK's approach to long-duration energy storage. Frontier Power's track record
in developing critical energy infrastructure, coupled with Invinity's proven
battery technology, creates a formidable force in addressing the UK's energy
transition challenges. This partnership goes beyond deploying batteries; it's
about building a sustainable, secure energy future for the UK while creating
economic opportunities across the country."

 

 

Jonathan Marren, Chief Executive Officer at Invinity said:

 

"Frontier Power combines deep energy and project finance expertise with
significant relevant experience in developing and financing interconnector
projects which operate on the same cap and floor revenue model upon which the
LDES cap and floor scheme is being based. We are delighted to be partnered
with them using their invaluable experience in this area to address the need
for long duration energy storage in the UK and further afield.

 

"Maximising the use of the UK's own energy resources in the form of wind and
solar power is essential to delivering enhanced energy security while also
driving down costs for consumers. By deploying our Made in Britain batteries
in partnership with Frontier Power and others across the UK energy industry,
we are meeting this challenge head on."

 

 

 

(1) Invinity cautions investors that due to the competitive nature of the
bidding process and noting that certain elements of the C&F scheme are
still to be finalised by Ofgem, there is no guarantee that the project bids
will be successful or reach financial close.

 

(2) Interconnectors are high voltage land and subsea cables that connect the
electricity systems of neighbouring countries. Many interconnector projects,
including those between the UK and other countries receive revenue via cap and
floor schemes.

 

(3) OFTO assets are offshore transmission assets which transmit electricity
generated offshore, typically from offshore wind farms, to onshore electricity
networks. They are bought and sold via a competitive tender process where bids
are assessed before transmission licenses are granted, allowing for the sale
and purchase of the assets to complete.

 

 

 

 

Stay up to date with news from Invinity. Join the distribution list for the
Company's monthly investor newsletter here
(https://invinity.com/newsletter/?utm_source=iesrns) .

 

Enquiries:

 

 Invinity Energy Systems plc                                               +44 (0)20 4551 0361
 Jonathan Marren, Chief Executive Officer

 Joe Worthington, Senior Director, Corporate Affairs

 Canaccord Genuity (Nominated Adviser and Joint Broker)                    +44 (0)20 7523 8000
 Henry Fitzgerald-O'Connor / Harry Pardoe / Charlie Hammond

 VSA Capital (AQSE Corporate Advisor, Financial Adviser and Joint Broker)  +44 (0)20 3005 5000
 Andrew Monk / Andrew Raca

 

Notes to Editors

 

Invinity Energy Systems plc (AIM: IES) (AQSE: IES) (OTCQX: IESVF) manufactures
vanadium flow batteries for large-scale, high-throughput energy storage
requirements of business, industry and electrical networks.

 

Invinity's factory-built flow batteries run continually with no degradation
for over 25 years, making them suitable for the most demanding applications in
renewable energy production. Energy storage systems based on Invinity's
batteries are safe, reliable, and economical, and range in size from less than
250 kilowatt-hours to tens of megawatt-hours.

 

Invinity was created in April 2020 through the merger of two flow battery
industry leaders: redT energy plc and Avalon Battery Corporation. With 75 MWh
of systems already deployed or contracted for delivery across 82 sites in 15
countries, Invinity is active in all major global energy storage markets and
has operations in the UK, Canada, USA and China. Invinity Energy Systems plc
is quoted in the UK on AIM and AQSE and trades in the USA on OTCQX.

 

To find out more, visit invinity.com (https://invinity.com/?utm_source=rns) ,
sign up to our monthly Investor Newsletter here
(https://invinity.com/newsletter/?utm_source=iesrns) or contact Investor
Relations on via +44 (0)20 4551 0361 or ir@invinity.com
(mailto:ir@invinity.com) .

 

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