Lithium batteries are the fastest-growing fire risk, says the London Fire Brigade, which reports more and more call-outs to extinguish exploding ebikes and escooters.
Power sources once hailed as revolutionary are showing limitations — and Invinity Energy Systems has a partial solution. Its vanadium flow batteries will not be a replacement for an ebike’s lithium power — their minimum size is a 20ft container — but commercially, they could be vital. Vanadium batteries have a lifespan of more than 25 years, as the electrolyte doesn’t wear out in any significant way, they can tolerate a wide range of temperatures, and can charge and discharge very quickly. They also can’t ignite.
Vanadium flow batteries are also of intense interest to the renewables market; they can store solar and wind energy supplies for hours to deliver constant power to the grid.
Nonetheless, investors in Aim-listed Invinity have been through the mill. The group was formed through a 2020 merger of two troubled flow battery businesses, Avalon and RedT, and in essence it has been an expensive research and development project. The shares, trading at over £3 back in 2018, have spent this year bumbling along around the 40p mark.
But a string of new contracts is positive news, particularly a joint venture with German engineering giant Siemens. This deal, signed in 2021, has now resulted in a new iteration of the battery technology, Mistral, which is set to go on sale next year. It’s likely to be double the cost of a lithium equivalent, but to last more than four times longer — and the market has shown plenty of interest. “If you’re a utility or large commercial user, you’re interested in lifetime cost rather than capital cost,” said Alex Brooks, senior analyst at Canaccord Genuity.
Revenues rose tenfold to £14.8 million in the half-year to July, and are set to rise sharply: analysts have pencilled £25 million in sales for 2023 —and £53 million in 2024. Invinity has a record number of orders, across Australia and Canada as well as major work funded by the UK’s Department for Energy Security and the US Department of Energy.
The firm’s loss-making status, as well as its capital position, offer a red flag. Invinity has told investors it will need further cash in 2024, after a £16 million fundraising this year, and analysts expect it to finish next year with about £20 million of debt. And yet Invinity is set to have positive cashflow by 2025. It’s risky, but the firm’s tech is already on sale and impressing blue-chip buyers. Buy.