Redflow Limited AGM 2017 Commentary Simon Hackett

Transcription

1 Redflow Limited AGM 2017 Commentary Simon Hackett Dear Shareholders, Redflow Limited has certainly had an interesting year. I want to take a few minutes to address my own contributions to the company during that period. My Involvement with Redflow Some years ago now, I undertook a search for innovative Australian companies doing great work in the energy storage sector, and Redflow was at the top of the list. I was impressed by the technology and I invested in the company. Over the following years I deepened my involvement by becoming a larger investor, by joining the board, by becoming Chairman, and ultimately by taking on the role of interim CEO. Those progressive increases in commitment particularly during this last year in which I was wearing many hats at once have been very costly to me personally in terms of time, travel, stress, and (of course) money. I have made considerable additional investments into Redflow, including (most recently) supporting it with a $4m convertible note on extremely fair terms. This note was converted to Redflow shares in August. However it was not, and is not, a career aspiration of mine be the Chairman or the CEO of Redflow let alone to be both at once! My motivation in taking on those demanding roles was simply that I wanted to do everything I possibly could in order to see the company succeed because I believe in the merits of the technology. I worked with our Board and with external expert consultants to determine and to commence the implementation of some major strategic redirection and realignments of the business, designed to best advantage our ultimate success. Having helped to pivot the company into what I feel to be our best possible operating stance at this time, we commenced a process to divest me of those two roles. My aim was to hand those roles to others who are more competent in those positions than I am and to send myself back to a role within Redflow far better suited to my own personal skills, experience, and passions. I am very pleased with the recruitment of Brett Johnson as our new Chairman and with the promotion of Richard Aird to the position of CEO at Redflow. Both of these people are very hard at work already. They have already freed my mind and lowered my own personal stress level substantially. I am enormously grateful to them both, as a shareholder, for their commitment to the success of the company. I am enjoying working with them both. The role I have returned to and the one where I feel I can make the best contribution to Redflow is technical. By continuing to assist in the advancement of the architecture and implementation of our technology in the real world and also by evangelising the merits of our technology in various ways, I believe that I can do the company, its customers, and its shareholders, the most good. The technical embodiment of those ongoing efforts is the Redflow Battery Management System (BMS). This product enables our integration partners to smoothly install, interface and manage our unique and sophisticated ZBM2 energy storage device in a variety of real world energy systems. This brings me to an update on a specific system installation the LSB at my Adelaide office, Base64.

2 The Base64 Large Scale Battery (LSB) Some time ago I purchased, at full retail price, a Redflow Large Scale Battery (LSB) for use in my office in Adelaide. That battery was delivered, tested and exercised successfully, but it was not put into routine use to support the energy needs of my office. The two barriers to its production deployment were a delay in installing an associated large solar array to use with it (which required a custom built floating solar array to be constructed over the staff carpark), and our selection of a bespoke high voltage AC inverter system. That bespoke AC inverter lacked any of the sophisticated energy system monitoring and control software that comes with systems from vendors such as Victron Energy, and we were not disposed to undertake a custom software development exercise just for Base64. We wanted (and we want) the Base64 LSB to be an exemplar of a system anyone else could easily buy and deploy. On the eve of our large solar array finally being installed, I decided to rebuild the LSB using Victron Energy components, to take advantage of what we had learned and to demonstrate the effectiveness of our integration capabilities with Victron at scale. I had realised that a cluster of Victron hardware was perfectly capable of handling the energy needs of our building. Because it came with an existing energy monitoring system (EMS) product, no software development would be needed and we could build a truly plug-and-play commercial office energy system that would suit our needs and that would also be a great exemplar for others. Base64 engaged an integrator to reconfigure the LSB to work with Victron hardware, and to install a battery wiring arrangement to support a total of 45 batteries (450kWh). This is a system size which is well suited to the requirements of the site, and which left enough room in the LSB container to install the Victron Energy equipment in the same overall footprint (the previous version required a separate inverter installation in a separate area of the site). I am pleased to note that we commenced operation of the new system just a couple of weeks ago, initially using 15 x ZBM2 batteries (150kWh). The balance of the batteries for the system will be installed after we have bedded in the system in at its current size. With the benefit of years of development work on the BMS, and leveraging the advanced capabilities of the Victron Energy CCGX energy controller, we configured and commissioned the entire system in an afternoon and it is running supporting the energy needs of our office campus right now. That sort of smooth installation of a major system with our batteries in it was simply impossible a year ago. The systems being prepared for installation by Hi-Tech Solutions in the Pacific Islands region right now use the same architecture and the same product set, so we expect their site commissioning to be as smooth for them as this system has been for us. There are some photographs of that system included below for your interest. In conclusion I have put my heart and soul and a great deal of money into supporting Redflow, and I am very pleased to have returned to the place in the company where I am the happiest to the battery integration lab to focus on making our unique technology work smoothly in the real world. I am also very pleased to see the Base64 LSB fulfilling its potential.

3 Base64 LSB (450kW when fully populated) installed under 72kWp suspended solar array ZBM2 battery bank and Victron Energy Quattro 72kW inverter/charger cluster

4 Solar array at Base64 above the staff carpark and the LSB Victron Energy CCGX status page during system operation and LSB internal DC wiring detail

5 LSB control system including 4 x BMS cluster and Victron Energy CCGX BMS system status display during initial commissioning of the Base64 LSB