Annual report 2020
Around the world, fossil fuels are being replaced by electricity, for example, due to the increased use of electric cars and the fact that more and more people are connected to the grid. To ensure the sustainability of this transition and growth, the grid must utilise renewable sources of energy to an increasing extent. Greater insight into climate threats and declining prices, particularly for photovoltaics, is driving this green transition. When the element of production based on renewable sources increases in the energy mix, the need for energy storage grows simultaneously because these energy sources have intermittent production, which varies with the time of day or weather conditions. A solution that stores energy when production is high and demand is low, and that delivers this at an attractive cost and without emissions when production diminishes and demand stands firm, has a growing role to fill. Azelio’s TES.POD® is such a solution.
Over the past year, countries have raised their climate ambitions at a fast rate. In September 2020, China, the country that accounts for the largest emissions, established a target of climate neutrality by 2060. Meanwhile, California, ranked as the world’s fifth largest economy, decided to only sell electric cars by 2035, and the EU undertook to speed up its energy transition by significantly raising its climate targets for 2030. A total of seven countries, including Sweden, the UK, France and Germany, have made legally binding net-zero emission commitments. Another 21 countries, plus California and the EU, have clearly stated in other ways that they intend to be carbon neutral. Some are aiming to achieve this target as early as 2030, California and Sweden are looking at 2045, while most are aiming for 2050, in line with the Paris Agreement.
Access to reliable and renewable energy at the right price is decisive in achieving sustainable global growth, and is one of the UN’s Sustainable Development Goals for 2030. In many parts of the world, solar and wind energy is in abundance but they have no way of accessing a reliable power grid. Today, nearly a billion people live in off-grid areas, and double that number live in areas with unstable grids. This is inhibiting global growth and is obstructing exposed areas from finding a way out of poverty and creating welfare. The sustainable energy that can be generated here has to be stored and made available at a competitive cost when it is needed.
Azelio has a solution that can provide renewable energy for all – when and wherever it is needed. The solution stores energy from the sun and wind, and subsequently makes it available as electricity and heat around the clock at a very competitive cost.
In providing efficient storage of renewable energy, Azelio is addressing a very large and rapidly growing market. After presenting an industrial demo of its technology in 2018, Azelio received expressions of interest for more than 3.9 GW over the following two years, representing storage capacity of 50 GWh and around SEK 170 billion in potential order value.
The solution is called TES.POD®, an acronym for Thermal Energy Storage Power on Demand, and stores energy as 600-degree Celsius heat in recycled aluminium. Using a Stirling engine, the energy is converted in a controlled manner to electricity and into heat at 55-65 degrees Celsius. The system can achieve a total efficiency of up to 90 percent from stored energy to output electricity and heat. The solution is modular and cost-effective from 0.1 MW to 100 MW, and is capable of supplying, for example, factories, mines, farms and small communities with renewable energy at a low cost 24 hours a day.
Azelio is now following a clear plan: to industrialise and commercialise its innovation globally, thereby laying the foundation for a significant new Swedish industrial company. We are making the move from innovation to industrialisation in collaboration with well-established global partners.
The company has 14 Memorandums of Understanding comprising a total storage capacity of 426 MW from 2021 to 2025, corresponding to 5.4 GWh and potential sales revenue of SEK 18 billion. The first commercial contract for a TES.POD® was signed in December 2020 with ALEC Energy, which will install the energy storage unit in one of the world’s largest solar parks in Dubai.
Azelio secured its first commercial order for its TES.POD® energy storage unit from the Dubai-based project development company ALEC Energy, thereby achieving a major milestone in the industrialisation of its technology.
The energy storage unit will be part of a mini-grid system designed for a visitor centre in the fourth phase at one of the world’s largest solar parks, the Mohammed Bin Rashid Al Maktoum Solar Complex in Dubai. Installation commenced in December 2020.
Azelio signed seven Memorandums of Understanding (MoUs) to deliver energy storage systems with a capacity of a total of 259 MW or 3 GWh, which more than doubled the total volume encompassed by the company’s MoUs. These were signed with partners in the Middle East and North Africa, North and South America and India. All were signed with companies that can continue to develop local markets for Azelio’s technology. The agreements are strategically important since they pave the way for commercial orders and a rapid roll-out of the technology over the next few years.
At the start of 2020, Azelio received approximately SEK 350 million before issue expenses under a new share issue, which added several new private and institutional shareholders to the company. At the end of 2020, more capital was raised, this time through a directed share issue of approximately SEK 270 million before transaction costs.
Restrictions related to COVID-19, for example in relation to travel, meant that Azelio could not work at a full pace or from the planned sites. Project plans were adapted to optimise resources based on the best assessment of the situation, which resulted in the company’s overall timetable being delayed by a quarter.
Fredrik Wäppling was appointed new CFO. He has held senior positions in several industrial companies, including Allgon Group, Mycronic, Bravida and Preem as well as iZettle. He is a member of Azelio’s Executive Team together with CEO Jonas Eklind and Executive Vice President Jonas Wallmander.
Azelio successfully generated data to enable verification of the performance of the company’s energy storage system in accordance with the specification of 13 kW output power with a storage capacity equivalent to 13 hours of electricity production.
Systems have been installed in Sweden, Morocco and Abu Dhabi in order to also verify technology over longer periods. This formal verification of the system started in Sweden together with DNV-GL, a world leader in industrial certifications. This creates a basis that enables customers to finance projects involving Azelio’s technology. The reason for verifying the installation in Abu Dhabi is to enable Azelio’s partner, Masdar, to include it in its offering to customers.
A Life Cycle Assessment carried out by the Swedish research institute RISE showed that the climate impact of Azelio’s energy storage system (TES.POD®), measured as CO2 equivalents, is significantly less, more specifically 29 percent, than that of lithium-ion battery storage and dramatically less than that of diesel generators.
Azelio and the global certification body UL to evaluate TES.POD® with the objective of achieving a field certification of the technology for the North American market, starting with a specific project in California in 2021.
Azelio strengthened its presence in California by joining the California Solar & Storage Association, CALSSA, the state’s largest clean energy business association with over 550 member companies. California is one of the largest and most successful solar markets in the world, and a region where Azelio’s energy storage solution is experiencing strong interest.
Azelio was granted four new patents regarding innovations to efficiently store energy and generate electricity from heat, which is central to being able to store renewable energy and make it available around the clock in an efficient way. Through this, the company has 13 approved patents and an additional 15 patents pending.
Azelio was awarded a grant of SEK 2 million by the Swedish Energy Agency to demonstrate the impact of long-duration storage on energy resiliency as well as to show the benefits of the heat that the system delivers. Additionally, the company was granted SEK 0.5 million by Region Västra Götaland for a research project on product enhancements with Sweden’s independent research institute RISE.
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