1414 Degrees offers a potentially revolutionary technology, but the market is waiting for evidence they can commercialise it (Credit: 1414 Degrees)
1414 Degrees (ASX: 14D) provides energy storage solutions which enable the delivery of heat and electricity. As those who reside in Adelaide would know, renewable energy solutions might be good for the environment but are nowhere near as reliable as traditional coal-based power. This is because wind energy generation is highly dependant on weather patterns, generating no energy at all at times when there are no air currents. Despite the fact that the Sun will always shine, solar energy generation can still fluctuate with seasonality and cloud cover. After cost, unreliable power generation is the largest problem preventing widespread adoption of renewables.
What this means is that the demand for energy storage solutions to cope with periods of low power generation from renewable energy is set to soar. Traditional energy storage solutions centred around batteries are not price competitive or practical to store large volumes of energy. Some scientists would also argue that the chemicals used in battery production are more harmful to the environment than coal fired power, which increases the need and demand for a new solution.
1414 Degrees has a low-cost solution based on silicon, a material abundant in the Earth’s crust that has a very high energy density. In simple terms, this means that a lot more energy can be stored in silicon than most other energy storage solutions. The potential for this technology to go global and be a major player in the transition to renewable energy excites investors. If successful, the company would have an addressable market of tens of billions of dollars, an attractive proposition for an unassuming $41m Aussie small cap.
This growth story however is not without risks. Elon Musk is trying to develop much better energy storage technology, to help power his electric cars. Musk has far more resources to throw at the development of technology, which means that 1414 Degrees must be very efficient with it’s R&D. Additionally, the company is pre-revenue and is only just doing a pilot project to commercialise their technology, making it a little too early stage for most investors.
This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)
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