The energy storage industry is, in many ways, just coming of age.
According to a recent piece in the Wall Street Journal, the U.S. had less than a gigawatt of large battery installations in 2020, or approximately what you might need to power 350k houses for a few hours. Now, it is on track to add 6 more gigawatts in 2021 and 9 more in 2022 (via S&P Global Market Intelligence).
The idea is relatively simple: giant batteries are paired with renewable energy sources – often solar or wind farms. They charge when the sun is shining or the wind is blowing, and then store power to be sent to the grid when needed. Most such installations use lithium-ion batteries, like those found in electric vehicles and laptops, and they look like rows of boxy shipping containers.
As costs drop (the cost for lithium-ion packs, per kilowatt-hour, has dropped from $1,200 in 2010 to $132 today, according to data from BloombergNEF) and top-down incentives grow, the global electricity grid is blooming with battery storage growth. Naturally, technological advancement is part of that story as well. Cometh the moment, cometh the tech, so to speak.
One of the most interesting dimensions of this new growth theme is the technology around battery safety – after all, lithium-ion batteries tend to suffer from heat propagation feedback risk, leading to terrible combustion potential.
The intersection of these dynamics – the huge growth boom ahead in large battery-based energy storage capacity and the Achilles heel of safety risk inherent in that process – points to a massive opportunity for an interesting small-cap trading on the NYSE American exchange: KULR Technology Group Inc (NYSEAMERICAN:KULR), which develops, manufactures, and licenses next-generation carbon fiber thermal management technologies for batteries and electronic systems.
Movin’ on Up
KULR offers lithium-ion battery thermal runaway shields, fiber thermal interface materials, phase change material heatsinks, HYDRA TRS battery storage bags, internal short circuit devices, and CRUX cathodes.
It also represents a major built-in credibility story, which could help to drive the narrative on the market for investors. The company is rooted in a 30-year history tied to carbon fiber thermal energy management technology for aerospace and defense applications. Its technology is trusted by NASA, with KULR parts on the Mars Rover 2020 Perseverance and the International Space Station.
KULR Technology Group Inc (NYSEAMERICAN:KULR) also just announced a major order for its Passive Propagation Resistant (PPR) solution suite from Volta Energy Products, a subsidiary of Viridi Parente, Inc. The PPR solution will be used for Volta’s stationary lithium-ion battery power systems as well as certain of its mobile lithium-ion battery power systems.
According to the company’s release, the initial deployment order totals approximately $1.6 million for immediate delivery with higher volume shipments expected throughout 2022 for KULR’s PPR solution, which includes the patented thermal runaway shield product.
After more than 18 months of joint design and testing efforts, KULR’s PPR solution will support Volta’s commercialization of proprietary battery architecture for energy storage systems. This order represents KULR’s first PPR order of commercial deployment in a stationary energy storage product.
“Safety is paramount in these applications and by pairing KULR’s space-proven technology with our proprietary architecture, we have designed the safest lithium-ion energy storage solution on the market,” said Viridi Parente CEO Jon M. Williams. “We also plan to incorporate KULR’s technology into other Volta stationary and certain mobile storage systems in order to capitalize on the added safety it will provide our customers.”
Michael Mo, CEO of KULR Technology Group added: “Volta’s depth of technology experience and innovative approach to the market makes them an outstanding partner for us. Our thermal solutions for their products were based on similar designs we provided to customers such as NASA and Lockheed Martin, and therefore provides Volta with space-grade thermal management architecture for stationary and mobile energy storage applications. Our partnership marks only the first step in commercializing KULR’s suite of thermal solutions for the rapidly growing commercial and residential battery storage market.”
The Path Forward
For KULR, this could become a defining deal that positions the company at an entirely new level within the energy storage space.
According to a recent piece published on Utilitydive.com, the three-year partnership with Volta reportedly includes $1.6 million for immediate delivery of batteries. Williams said Volta plans to bring between 750 and 1,000 units to market in 2022, increasing to up to 50,000 units in 2023.
Based on that forecast, market participants need to ponder the situation: If the $1.6 million initial order is for 100% of the 1K unit 2022 forecast (which is the higher limit), then the 50,000-unit order would be worth $80 million for KULR. However, a bigger outcome is possible: If the $1.6 million initial order is for 50% of the 750-unit 2022 forecast (which is the lower limit), then the 50,000-unit order would be worth $213 million.
Given the relatively cheap valuation of KULR shares against this type of growth potential on a forward basis, this could be a huge opportunity for investors as the energy storage industry takes flight over the next 24 months.
This isn’t to say that KULR is the only opportunity in the space. Other interesting tickers include FirstEnergy Corp. (NYSE:FE), Duke Energy Corp. (NYSE:DUK), FREYR Battery (NYSE:FREY), NextEra Energy Inc. (NYSE:NEE), Enphase Energy Inc. (Nasdaq:ENPH), AES Corp. (NYSE:AES), QuantumScape Corp. Cl A (NYSE:QS), Fluence Energy Inc. (Nasdaq:FLNC), ESS Tech Inc (NYSE:GWH), and Eos Energy Enterprises Inc (NASDAQ:EOSE).
But KULR Technology Group Inc (NYSEAMERICAN:KULR) may be the most compelling name given its current valuation, its unmatched credibility, and its special niche in the space as perhaps the only pure play on propagation risks as energy storage capacity booms over coming years to completely redefine the global energy grid.
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