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ZBB Energy Is Focused On Bringing To Market
Their Regenerative Fuel Cell Product That Will Store Energy From A Utility
Grid Or Renewable Energy Sources Such As Solar Power, Wind Power Or Biomass
And Then Return It As Needed
Utilities
Electrical Utilities
(ZBB AMEX)
ZBB Energy Corporation
N93 W14475 Whittaker Way
Menomonee, Falls, WI 53051
Phone: 262-253-9800
Robert John Parry
President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
Published – April 18, 2008
BIO:
Robert John Parry – Chief Executive Officer
has been a director and chief executive officer of the company since 1998,
and has held similar positions with ZBB’s subsidiaries since co-founding the
company in 1982. Mr. Parry is also an executive director of the company. He
obtained an accounting degree from The Western Australia Institute of
Technology (Curtin University) in 1973 and he is a Fellow of CPA Australia.
Company Profile:
ZBB Energy Corporation develops and
manufactures distributed energy storage solutions based on the Company’s
proprietary zinc-bromide rechargeable electrical energy storage technology.
The unique, modular construction of the Company’s core 50 kWh product
enables ZBB’s battery to be sized and packaged as a fully customized, large
format, energy storage system. This scaleable, mobile system is ideally
suited for a number of large market applications.
CEOCFO: Mr. Parry, what was your vision
when you became CEO and where are you today?
Mr. Parry: “The vision was simple; I was
involved as a foundation shareholder in a small group of seed investors that
became interested in some electrochemistry research at Murdoch University in
Western Australia. I was the administrator of that investment group and
initially we were hoping that the R&D results may lead to some licensing
opportunities. However as the project developed we saw a chance to broaden
the scope of our program into a complete product, a large scale energy
storage system and it has basically grown from there, so it has been a long
journey but we have always held onto the goal to bring this technology to
market.”
CEOCFO:
What are you providing today and to whom are you providing it?
Mr. Parry: “Our product is an energy
storage product. Sometimes it is referred to as a regenerative fuel cell. It
has elements of both battery technology and fuel cell technology. It is
technically called a flow battery and what it does is simply store energy
from any generating source whether that be a utility grid, or whether that
be a renewable energy source such as solar power or wind power or biomass.
We store the energy that is generated, hold it for a period of time and then
give that energy back when it is required to be used.”
CEOCFO: Who
is using your product today?
Mr. Parry: “Our product is a utility
grade product. Our focus is in large industrial stationery battery sizes for
the transmission and distribution utilities, the poles and wires companies
here in the United States that deliver electricity from the point of
generation to the end consumer. It is also for industrial and commercial
applications for customers seeking to better manage their peak demand and
the security of their energy supply. We also have applications with
renewable energy producers who are seeking to optimize the delivery of
energy from renewable sources to either the main electrical grid or to
specific customers wanting to utilize that renewable energy instead of grid
supplied power.”
CEOCFO: How
else can these companies store energy; what did they use before you came
along and why does your method work so much better?
Mr. Parry: “In the markets where we are
focused, there has not been an adequately successful way of storing energy.
Utilities have used in the past lead acid batteries but they are not a
product that is suitable for constantly charging and discharging energy,
where the energy goes in one day and out the same day and you are recharging
it constantly, thousands of times. Typically, the lead acid battery has been
used as a standby back-up energy source; a redundant system, one that you
would only use in the case of a short term or momentary power outage. Our
systems operate to alleviate the stress that occurs in the utility grid,
typically on the hottest day of the year when everyone has their
air-conditioning on and the utility is struggling to deliver sufficient
power through the network. Congestion in the network occurs at substations
along the transmission and distribution lines. Our storage systems are
therefore located within the network at these congestion points and we
charge our units during off-peak periods, typically during the night, and
discharge that stored energy during the peak demand period, typically during
the hottest periods of the day.”
CEOCFO:
There are quite a number of pluses with the ZBB product; what are the
competitive advantages?
Mr. Parry: “Yes there are and probably
one of the most important is the fact that this is a modular system in the
way we manufacture it. We build it into a basic 50 kilowatt hour stand alone
module and then we build capacity by adding numbers of the same types of
modules and package those in a unique format. We typically configure 10 of
our 50 kilowatt hour modules in a standard 20-ft sea-container. We couple
this 500 kilowatt hour storage system with independent power electronics, an
industrial power conditioning system that converts the ac grid power into dc
stored power and reconverts from dc to ac when discharging the stored power.
The two units, the battery and PCS are trailorized, so we deliver a turnkey
system out of our factory. This product is essentially a plug-and-play
energy storage unit and the owner does not have to incur infrastructure
costs for any additional engineering work on site.”
CEOCFO: Do
utilities know they need this, are they actively looking for it or do you
need to convince them?
Mr. Parry: “The market has become
attuned to the adoption of these technologies over the last few years.
Because of the growing demand for energy and the age of the existing
transmission and distribution network, it is widely recognized now that the
network is really under stress at certain times. In addition, it is going to
take hundreds of billions of dollars to upgrade the entire transmission and
distribution network throughout the United States. Therefore, utilities in a
deregulated environment are looking for better ways to manage their existing
assets and infrastructure. They are very aware now of products such as ZBB
coming into the marketplace.”
CEOCFO: Do
you also work with the Australian government?
Mr. Parry: “We have a contract already
in Australia which is focusing on using our storage systems on existing
buildings that have renewable energy assets, both solar and wind already
installed. This is a multi-million dollar project and we have collaborated
with CSIRO, the Australian research agency for the initial installation. The
importance of the project is it is really the forerunner of what we see
appearing throughout some of the Southeast Asian and Pacific areas and this
current project provides a stepping-stone for us into those markets.”
CEOCFO:
What is the revenue model?
Mr. Parry: “Initially our revenue model
is based around selling the systems or partnering with channel partners,
people who are selling ancillary equipment into the markets that we are
focused on and we would provide them with an energy storage component. We do
see a change around about year three where we will look at becoming a
service provider and deriving a revenue stream from the utilization of our
systems. We will actually provide the systems and run the service.”
CEOCFO:
What is the financial picture like at ZBB today?
Mr. Parry: “We are in a very healthy
situation. We are now six months out from our IPO, so we have cash reserves
on hand and we have no debt. We occupy our own building here in Menomonee
Falls, Wisconsin. The money that we raised is earmarked for the rollout of
our production facility, the expansion of the pilot plant that we already
have installed here, so it is for capital expenditure, increased inventory
levels and we will go through both a manufacturing ISO certification and a
UL product certification and all of that will take place in the next 12to 18
months.”
CEOCFO: You
had a recent announcement with Eaton; is that a typical project for you and
is it the type of project you would like to be involved with going forward?
Mr. Parry: “That is new and the
announcement is all that we can put at this stage. However, we see channel
partners, people who are service providers themselves, maybe they are
systems integrators or alternatively they may be equipment suppliers selling
into the utilities market. They may also be selling to commercial and
industrial type applications and they would typically be partners for us to
get our products into market, rather than us having to go on a
state-by-state basis with a team of local representatives and servicing
agents. It is a much more efficient pathway to market for our ZBB product,
working through channel partners.”
CEOCFO: I
understand that your product is quite environmentally friendly!
Mr. Parry: “Yes, this is a product that
is very environmentally friendly, both from a materials used point and also
from an applications point. The core of our products are the cell stacks
which are made out of high-density polyethylene. Even the electrodes and the
membranes within the cell stacks are plastics based materials. So we use low
cost materials and low energy production techniques in making the cell
stacks and they are totally recyclable when no longer used. The electrolyte
is a zinc-bromide solution that is 75% water based and is a very readily
available commodity. It is also re-usable so no waste or recycling is
required. The system is packaged to operate as a closed, sealed product with
no emissions. Therefore, it is a beautiful, safe and clean environmentally
sustainable fit to couple with renewable energy sources such as wind, solar
and biomass.”
CEOCFO: Why
should the investment community choose ZBB?
Mr. Parry: “The short answer to that is
an understanding of the traction in the uptake of wind and solar that we are
now seeing, particularly as more attention is being paid to climate control
and energy efficiency. Storage is the missing element. What good is energy
generated at three AM from wind turbines, when there is no demand for that
energy. Typically, you want maximum energy late in the afternoon on the
hottest days of the year and generally that is when you don’t have as much
wind as what you really want. If you can transfer three AM energy across
time and deliver it at two PM you have maximized the efficiency of that
renewable energy. Likewise with solar energy, if you can store an element of
what you can generate during the daytime, you do not have to have reliance
on grid power or a supplementary generator for after sunset utilization. The
market now understands that story. In 2007, we saw a growing awareness for
industrial energy storage and the market is moving rapidly to adopt ZBB. We
are well placed to ramp up our production and we are taking our product to
these markets now.”
CEOCFO: In
closing, what might people miss when they first look at ZBB that should be
understood?
Mr. Parry: “It
is a technology company that has come down a lengthy research and
development phase. It has successfully gone through what we would call beta
testing, and over very recent times we have taken a commercial product into
the market place, and we are now starting to make headway with that. We are
a micro-cap and clearly we will fall under the radar for many of the larger
investors. We do have one very significant European based fund that controls
20% of the company and it took up 50% of our recent IPO through its US based
energy funds, and that was certainly a very positive event for us.”
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