RedFlow Limited (RFX) Earnings Call Transcript & Summary

Good morning, everybody, and welcome to RedFlow's strategy update today. With me at Tim Harris, and we've also got Michael Hipwood and Mark Higgins, who will be giving the presentation today. Just some housekeeping. There's a presentation to come from Tim and the team. At the end of that, there will be the option to do a Q&A session. [Operator Instructions] So Tim, I'll turn it over to you.

Thank you very much, Craig. And look, good morning, everyone. Thanks all for joining this session in terms of RedFlow's strategy update. As Craig mentioned, delighted to be joined here by two of my colleagues, Michael Hipwood, our Chief Financial Officer, who's been with us about 2 months now; and also Mark Higgins, who joins us from California in person that's been spending a couple of weeks here with the team here in Brisbane and joining Michael and I in terms of visits to Sydney and Melbourne over the last couple of days. So what we'd like to get during this session is just really provide you with that refresh of our strategy that we've been telling investors that we were going to update the market around over the last kind of couple of months. And I think succinctly, it really, I suppose, demonstrates the progress that we have made over the last sort of 9 months to 12 months, the position that we have, but also, I think, some of the key catalysts that we see that are driving the company forward to its next stage of exciting growth. Looking at a nutshell, for those who might be new to Redflow, we are a designer manufacturer of zinc-bromine flow batteries. Flow batteries are increasingly seen as a key cornerstone to enable the world to meet its renewable energy targets and Paris Agreement targets as well. We operate in the stationary energy storage market. That's a very significant market growing very strongly, and we feel that we are one of the global leaders in terms of that market. And so when you look at the position that we are today, we've successfully announced projects with a number of quality blue chip customers, including the U.S. DoE, Department of Defense; Acciona, Energy Queensland, et cetera. And Mark will talk about that a little bit later on, but it really shows the interest in our battery technology and the pathway that we have to put scale into this business. The second point that we'd like to emphasize is that we're really well positioned now. We've got our Thailand manufacturing that's up and running that we'll be scaling up to about 40-megawatt hours by sort of the third quarter of this year. But also if people on the webinar are aware, we announced our ambition to move towards a 500-megawatt hour plant and doing a feasibility study with the Queensland government to establish that manufacturing right here in Australia. And lastly, look, we think we've got some exciting projects coming down the pipeline. I think this is our position in terms of establishing ourselves as a credible energy storage solution in the multi-megawatt-hour stage, really puts us in a great position to take that growth that we're seeing. We've developed over the last 9 months and then take that forward into more and more projects and more and more revenue and that pathway to profitability. And so if we go on to the next slide, please, Craig. What we have been focused on over the last number of years is a very clear and consistent strategy. Our focus is on energy storage applications in that sort of 8-, 12-, 24-hour plus duration, which is really the sweet spot of flow batteries where we're seeing a lot of that demand starting to come through. And also being able to leverage some of the hibernation mode and the unique characteristics of our battery that I think Mark can talk a little bit before in terms of some of the projects that we've won. Now in terms of our evolution as a company, I think we've been clear to investors that we really see our future in the larger megawatt-hour type deployments. A lot of our legacy is in smaller systems, and we've learned a huge amount from that. But when we start to look at the opportunity in front of us, the scale of the market, the growth and the pull-through from customers in that C&I/utility market we are incredibly excited about, and we think that's the future of the company. As we mentioned before, the key focus for us is in the U.S. and Australian markets, and we're pretty excited about the projects and the opportunities that we see there. We do see other opportunities in other markets, but we sort of react to those when we believe that they're compelling. We still understand that we're a small company. We've got scarce resources and the best thing that we can do is focus those resources on the areas of the highest opportunity. And certainly, there is a number of opportunities in the Australian-U.S. market that we think are extremely exciting for us from where we are today. So if we go to the next slide, and this is a slide that's I think pretty familiar to investors who have seen previous versions, but I think it's really compelling. It shows the journey that RedFlow has been on and the fact that we have now transitioned to that multi-megawatt hour market in some of the world's most exciting long-duration energy storage markets in the world. Investors who have been with us for some time will know we started that journey back in September 2021 when we announced the 2-megawatt hour project with Energia in California, that's now been running for 2 years. And that's allowed us to springboard into these other opportunities all of which are a megawatt hour in terms of opportunity, but also more importantly have a very strong flow-through to bigger, larger and more projects in the future in our target markets. And so what I might do is turn to Mark and go to the next slide and maybe get Mark to just add a few commentaries to some of the specific projects we see in front of us.

Sure, absolutely. So you can see that some of these initial projects have had a material impact on scaling up our own operations significantly, as Tim was saying. But these initial projects by the scale of the customers that we're actually engaging with today are actually quite small. So take a look at the work that we've done for the California Energy commission, as an example. Product that we did for Energia is California Energy Commission funded. We delivered that project on time, on budget, and we've been meeting the customers' expectations and the California Energy Commission's expectation. And as a result, California Energy Commission has gotten confident in our ability to scale up well beyond that and be part of California's journey towards having a robust ecosystem, long-duration energy storage technology providers. So their goal is they funded us for a 2-megawatt hour project that we delivered in 2022. We're delivering a project in 2024 that is scale of magnitude larger than that. And their goal is by 2026, they've got companies that are in this long-duration energy storage program that are capable of delivering 200 to 400-megawatt hour projects for the state. So you can see this journey that California is going on as they try and derisk the energy transition in California because they know that they need more than 10 gigawatt hours of long duration energy storage by that 2030 time frame. They know that lithium is not going to be able to meet that demand by itself, and they really need companies like RedFlow to come in there and help support them in this energy transition. Energy Queensland, another great example of a utility closer to home here in Australia that has lots of different challenges in their own system as they look to navigating the energy transition. They've got neighborhoods and distribution circuits that are filled with rooftop solar. The project that we're delivering for Energy Queensland is actually one of their answers to that. They're trying to solve for that problem by putting batteries at the distribution substation level to basically soak up all that rooftop solar that they have in neighborhoods and deliver it back to customers in the evening without having to do massive lines and poles, upgrades to the transmission distribution system. So this project that we're delivering for them. There are thousands of similar projects throughout Australia and the U.S. and elsewhere in the world that have similar needs. And this is really a lighthouse project for us to be able to show utilities throughout Australia, throughout the world. We can deliver to that kind of solution because we're such a good bit for that. Acciona, great example of a global IPP with gigawatts of renewables assets all around the world in Australia, in the U.S., in the European Union. They are looking for longer issue energy storage solutions to integrate with their global portfolio of renewables assets to turn those into dispatchable resources that can help them make more money for their assets. Department of Defense, a great example of one of the completely unique characteristics that our battery has, hibernation mode, attracting a customer and saying, we think that this is so globally unique that we want to -- that we've selected you amongst -- in a competitive solicitation process for a project that we view as instrumental in demonstrating that we can deploy this technology throughout DoD infrastructure to help support operational resilience in our military installations around the world. There's 450 Department of Defense bases around the world. They are the world's largest buyer through the process of contracting with them going through this competitive solicitation. We've now entered into a master services agreement with DoD that allows us to potentially even sole-source opportunities looking forward because they've identified our technology as globally unique. So great opportunity there. I'm excited about what's come with DoD and similar opportunities for those kind of resilience applications. Lots of other really exciting things going on in the portfolio, our program with the U.S. Department of Energy. It will be our largest project to date. When we deliver that, it is -- also comes with a nice large pool of R&D money that allows us to advance our product development through nondilutive capital sources. We're seeing a lot of similar opportunities of customers and government agencies that are willing to go along with us for the journey to large-scale deployments and being able to meet the extremely large need for energy storage as we move further and further along the energy transition. Back to you, Tim.

Thanks very much, Mark. And I think as we're peaking market, it's just worth reiterating the people on the webinar as well. When we start to look at those California energy projects, we're one of the 4 companies that have been selected at a multi megawatt hour as part of their long-duration industrial program. We're the only Australian company that's been solicited -- we're the only Australian energy storage company that's been selected as part of the U.S. DOE project and the DoD project. And we understand that we're the only flow battery company that's now been tested as part of Acciona. So a really exciting, I think, developments that we have in our pipeline, and we have our team over in Spain at the moment, wiring up that pot. So we're incredibly excited about that opportunity and chance to partner with Acciona now. So just turning to manufacturing. The key reason that we can basically execute on these projects is going to lead to our longer-term success is our Thailand factory. As investors will know, that Thailand factory has been up and running since 2018, it's ISO 9001 accredited. And after some challenges last year, that plant is now scaling up and will probably be at sort of 40-megawatt hours per annum in around about September. I think as we've noted to investors, we do have the ability to scale beyond that. But really, we do want to see that further demand is starting to come through and how that aligns with some of the broader plan that we have in terms of that scale up with the next stage of manufacturing that sits before us. So look, I think we're in great shape around that. It's producing high-quality batteries now. But we need to recognize that at the end of last year was -- we did have some of those challenges with glass field sheets that are used in outside panels and our collectors, and that issue will be well known to investors. I think we want to emphasize that we now have injected molding collectors and side panels that have successfully addressed those issues. But we have seen a few instances in previous Gen2.5 and ZBM3 batteries that use that previous compression molded approach that had started to exhibit a few signs of stretched around that after a few significant -- after a significant amount of cycles in the field. And that's really especially prevalent in sort of single battery type installations where it looks like they are subject to sudden sharp spikes on voltage on a regular basis. And we have a few other instances with early ZBM3 batteries where a particular batch of materials, particularly on our separator didn't quite get the performance that we are expecting or we are winning. But I can say that, that stuff is now behind us. We have addressed those specific issues, and we're producing batteries that are at high quality. And I would also emphasize this is not a specific pattern. But as we noted in the previous results, we're being very conservative on that approach and in terms of the warranty provision that Michael highlighted in our previous results. And I would also emphasize that our strategy is very much devolved to focusing on those larger megawatt hour systems. That's really the forefront of our growth in the projects that we've mentioned to previously. I would emphasize that the company does undertake product testing under laboratory and simulated field conditions that does aim to identify these problems before release. But as with any emerging technology, there's always a risk of something happening in the field that you didn't anticipate. And that's just normal for an emerging technology coming through. But the key in this is that's helped us get better. We've taken those learnings and improvements that are -- we've iterated into the batteries that we're producing now, and that's also highly valued by our customers. So in summary, we're confident around our batteries as we scale and as we start to deliver on these important projects. Next slide, please. So the key thing that we see now is not just projects that we've talked about, but other near-term opportunities that sort of underpin our trajectory and our ambition to operate at the multi megawatt hour level. And we have a number of exciting opportunities that we see in the field at the moment that really underpins that drive and support to build a larger scale facility and also start to iterate our product. Mark, perhaps you can talk to that.

Sure. So one of the things that's been a big advantage RedFlow's positioning in the market is that deep operational experience we have. That more than 270 projects deployed in a diverse range of mine conditions all around the world really starts to give customers confidence that we have a product that we know what to do. We know what we need to evolve on that product to make it a better product going forward. And so we're in a fortunate position of having a lot of customers that are willing to go with us along that journey. And we talked about some of the ones that we've already contracted to tell you a little bit about a couple of categories of customers that we're seeing in the pipeline right now that are really exciting in terms of that journey that we're on. I'll give you one example. We've got a customer that we're working with that is an Australian utility looking to learn from that operational experience that we have and actually work with us on a pilot deployment of our new products. It's a small-scale pilot deployment, but that would be paired with a conditional demand agreement so that when we get that pilot deployment out there into the field for that test facility that we're talking about with them and they can see how it operates in the field, and they can see that we're doing the performance and economic goals they have, that they will then follow on with a much larger procurement in the range of 400 megawatts. Those are the types of customers that we've been really focused on organizationally that really help us firm up that demand to support that increase in manufacturing capacity that is really achieving a number of goals for us as a company. One, it's this is a volume business. It's getting us the volume that we need to bring down the cost of that product and also to support the profitability of the company. So that's really important for us as we go forward. We're also seeing now that we're getting to the point where we have a much clearer plan around our manufacturing expansion and where we're at the point in product development that we've got an idea of what this large form factor product and solution will be, we've got great opportunities to start participating in multi-hundred megawatt hour tenders. We've got a utility in Australia that we're looking at not quite multimegawatt our sizing, but it's a 50-megawatt hour project. There's 1,000 or more megawatt hour behind that potentially additional demand. We see a lot of opportunities for utilities in Australia and the U.S. now where they're actually going out and saying we need a long-duration energy storage solution or specifically excluding lithium from that competitive solicitation. And we're in a very competitive position to be able to win that business, especially now that we've got a plan around the increased manufacturing capacity and new product form factor. In similar case with the Fortune 500 that we've been working on, they're looking at doing a Phase 1 at around the 8-megawatt hour size range with our current product, and we're looking with them about future phase of that project that's supporting a much larger project, but would be with the new form factor products. So it's very exciting. We're seeing these customers that like what we've done. They love the operational data that we bring to the table when we're talking with them. They want to go out and do a smaller Phase 1 projects with us to see how it works for themselves, and then they're willing to come on board for larger projects in the long run.

And Mark, investors will know that we've been working with the Fortune 100 company for a couple of years now, and they've done a a really tight diligence process with our technology. But this is -- for this specific site that we've been working on with the end customer.

Absolutely. And in fact, on the next slide, we don't have a quote from that Fortune 500 company that we've got a sophisticated and understood product that scales to the application that they have, and we're helping them meet their 24/7, carbon-free energy goals. And that 24/7 carbon-free energy goal is a lot of what we're seeing in the commercial industrial space. We've got these great blue chip customers that we're working with now, telling us what their needs are, helping us evolve the product to meet those needs. That's an example of an application that we're seeing a lot of right now in the behind-the-meter space. This idea of 24/7 clean energy microgrids where usually it's powered by solar. So you need to be able to charge quickly during the solar peak window and then taking advantage of our longer-duration discharge. We can discharge over the rest of the day. That curve with hibernation mode gives a really efficient solution for a lot of those companies. This is a great application for corporate campuses. It could be a great application for data centers or a lot of these other areas that you're seeing a lot of new demand within electric power sector for. We're also working a lot with [indiscernible] buyers. Independent power producers and utilities who are giving us a sense of what they're looking for when we scale the multi-hundred megawatt hour level. And what they look for, obviously, they're looking for a market competitive price. But it's not just about the pod itself, it's actually at the project level. And so what we've learned as we look to evolve our product is that things like energy density are actually critical to that because if you can reduce the amount of concrete slabs we're putting in the ground, the amount of steel, the amount of wiring that's going in a new project, you're actually reducing project costs substantially. Project costs are key. So our new form factor product is really looking at how do we reduce cost at the project level, not just at the product level. So that's a big evolution for us, and we're making great progress and getting our customers really excited about that. We want to continue to see a modular solution. They love our fire safety. That really differentiates us from lithium where you're seeing battery fires. They're not an all-the-time thing, but still, it's often enough thing where you're seeing regulations put in place that actually can add a lot of capital costs to lithium ion battery projects, and that helps us become more competitive because we don't have the same restrictions being put on us. So there's a few things that we're thinking about as we look at evolving our product in the future to take advantage of all that learning that we've had both learning from the field and learning working with our customers.

Well, now that we've got here in Australian market, it might be worth asking or maybe providing some observations on what else you're seeing in the market here, particularly in California, your kind of home state of the evolution of energy storage as part of the grid and the role of long-duration storage.

Yes, absolutely. So I think the biggest thing I'm seeing is that the energy transition is -- honestly, it's causing so much new work on the grid that a lot of projects are getting delayed. And so from a behind-the-meter standpoint, all these customers that are looking at putting a new infrastructure are saying, how do I pair that with renewables so avoid having to get grid upgrades it could take years to be done in order for my facility to come online? So the idea of that 24/7 clean power microgrid, it's not just an environmental or sustainability thing. It's also need to do it from a business operation standpoint because otherwise, I won't be able to build my facility. So we see a lot of those kind of opportunities, a lot of people coming to us for those types of facilities. The other big change is in the way the energy transition is affecting how storage is used on the grid. During the early years of the energy transition, batteries were coming online that needed to be very short duration because they were really just doing kind of minute-to-minute balancing of the grid. As you saw clouds go over a solar panel and cause the voltage dip or things like that. As we get further and further in the energy transition, you're actually seeing a real shift in the demand for energy storage moving from shorter duration application to moving to 8-plus hours longer duration energy storage applications because you get this big trough during the middle of the day as a result of all of that solar generation. And that trough is getting deeper and deeper, and it's also getting wider and wider. So you're having to take more and more energy and shift it over a long period of time to the rest of the day. So in places like California and actually places like Australia as well, you're starting to see a lot of utilities come out with procurement opportunities focused on long-duration energy storage applications. Sometimes they are all source solicitations. Sometimes they actually specifically exclude lithium ion. California, in particular, is kind of at the forefront of these solicitations that are carved out specifically for non-lithium technologies like ours because California sees it as being incredibly important from an energy security standpoint to have a diverse range of technologies participating in the grid. And we don't need to have 50% market share to have an enormous business here. We only need to have a reasonable share of that long-duration energy storage space to have more opportunity than we can even handle right now. So we're talking about a huge opportunity for...

Well, I think we're seeing those same drivers in Australia, deeper duck curves, steeper duck curves, challenges with transmission that's kind of holding that renewables penetration, which is all pointing towards a much broader, deeper need for energy storage, including at the edge. So we've taken all of that customer feedback and Mark's done a great work with a number of these customers, as I think Mark said, want to go on a journey with us and started to evolve our thinking around what we call our X10. Now we've been talking about the concept for X10 in the market for a little while, but we've really accelerated that effort going from a concept to actually a design over the last few months. And we've used also third-party consulting companies to come in and just add a lot of rigor to that thinking. So what we wanted to do is take all the knowledge that we have and we've built up over many years in terms of technical operation materials experience, and started to see a product that can evolve to the needs of the customers, particularly in that multi megawatt-hour type level. So this kind of containerized solution of where we've come up is using our existing stack technology, optimizing that and making that very fit for purpose in terms of mass manufacturing, but coming up with a form factor that enables us to get a step change in terms of cost down but also a step change up in terms of energy density. I think as we've talked before about how, at the moment, we can fit 2 of our energy pods into a 20-foot container. This kind of same sort of containerized based solution will take us about -- to about a megawatt hour. So a significant impact in terms of energy density that comes down to cost, but as Mark mentioned, it also comes down to cost to the customers, [indiscernible] led complexity, much more modular in terms of dropping it on to customer sites and deploying. And so this is a design that we are hugely excited about. Again, we have that ambition to launch us in the market in kind of mid-'26, and we're already working on sort of a number of tests and prototypes around that to meet that deadline. But I would emphasize that this is a product that's actually been developed alongside our customers based on all the feedback that we have. And as Mark has highlighted, those customers that want to go on to the journey for us and need -- want to and need to have that meet into long-term energy storage solution at hundreds of megawatt hours. We go on to the next slide, please. So we've got a very clear line of sight to what products -- product kind of feature looks like. The next stage is how do we start to manufacture that at scale. I think as we know with Thailand, we have a fantastic facility up there. But the reason that we're in Thailand is that making that current battery is still reasonably labor-intensive. As we start to move up and we can start to think about scale, that very much lends itself towards automation. And what you see in front of you here is a preliminary design for a 500-megawatt hour stack and battery manufacturing facility in terms of bringing significant amounts of standard automation in terms of our processes. Our stack as it now stands today very much lends itself towards high scale, high volume, automation-based manufacturing. And then we have a very clear sight about what that needs to look like. Our ambition again is to use X10 and use this manufacturing facility and launch us into the market in around mid-2026. The really exciting news that we have around that, and we announced just a couple of weeks ago, is our partnership with the Queensland government to work together around this initial feasibility study to iterate the design of the X10, the factory and the potential to establish that in Queensland. As investors will know, we've been a Queensland headquarter company our whole life. And we're really starting to see the acceleration and desire for long-term -- long-duration solutions to meet the Queensland Energy and Jobs plan. If we just go to the next slide. And so looking at the Queensland picture for a moment, Queensland is responsible for about 30% of the country's emissions. But it's got a number of characteristics that means it's actually at the forefront of the renewable energy transition in Australia. It's got some of the highest rooftop solar penetration in the world. And now that brings a lot of renewables to the grid. But it also brings challenges. And that work that we're doing with Energy Queensland at the substation in Ipswich is acting as really a big solar sponge, taking a lot of that excess solar energy from households that's been generated during today. Storing that at that substation and then just changing that over an extended period when everyone comes home and puts their air conditioning on as you do in Queensland. So that's an example of some of the dynamics where our battery can play. But we would also note that Queensland also has some very specific targets in terms of retirement of all of its coal-based assets by 2035. And so the Queensland government is now actively looking at how they can develop an energy storage industry and capability that's going to meet those needs. And that needs of long-duration energy storage in our sweet spot can be measured in the tens of gigawatt hours. So a huge opportunity for us right on our doorstep. And we've been working quite closely with the Queensland government over the last couple of years, telling them about story, our capability. And the announcement a couple of weeks ago around the $570 million battery industry strategy, I think, underpins a lot of the confidence that we have around our approach and the opportunity for us to establish that manufacturing in Queensland. And I'll draw reader's attention to the quote by Steven Miles, at the launch of the battery strategy that he did, where we attended that a couple of weeks ago that puts flow batteries, of which we are a global leader front and center of that $570 million program. So we're hugely excited about that opportunity. We're hugely excited about our partnership with Queensland government. But more importantly, we're hugely excited about a line of sight to being able to sell significant amounts of energy storage here in Queensland, in Australia and use that as a springboard for the rest of the world. So that's a major development that we see, and we're very excited about how we're going to work through that over the coming months in terms of completion of that feasibility study. And it's worth noting that feasibility study is funded through the $100 million critical minerals and battery technology fund, which is being managed by the Queensland government. So opportunities, again, to kind of tap into other sources of funding. We think this is a major first step. So if we go to the next slide, just really summarizing where we are today. We see a lot of these kind of things in place. But one of the key things I just touched on before is our ability to tap into and execute other sources of nondilutive funding that we see in front of us as we are at the forefront of a lot of these kind of macro trends but also the desire for energy storage. And Michael, I might pass to you in terms of just a very key high-level overview of some of those conversations we had.

Sure. Thanks, Tim. So as Tim mentioned, there is quite a large battery industry funding in Queensland. So we're actively discussing funding from the Queensland government. And also, I'd like to draw the attention to my previous role at Hysata. So Hysata, hydrogen naturalize company, and we're able to secure approximately $30 million from ARENA, which is a federal government agency as a brand. And that was to produce the new product and also equally importantly, to fund the factory. So our aim is to do a similar situation where we have the vast majority, if not all, of the product R&D and the factory CapEx funded by non-dilutive sources primarily from government sources. So to give an idea of the extent, the factory at this stage for the equipment, so we'll be leasing a factory, is approximately $60 million. So just with the funding Queensland being $570 million, we think that we have a very good opportunity to be able to raise that capital from government body agencies.

Thank you very much, Michael. And I think the other thing just to add to that is it's not just Queensland, right? So there's other opportunities at the federal level, I would draw investors' attention to the $15 billion national reconstruction fund, of which Green Energy is a key focus as part of that fund. So when we start to take a step back and look at some of the key drivers and policy directives at both the state level and federal level, big focus on the energy transition, a big recognition that Australia and other countries want energy security and a big emphasis on the ability to reshore manufacturing battery Australia to meet that needs and underpin Australia's drive to be renewable energy superpower. And we see ourselves as really the full front of that. We were delighted to be attending the Asian conference last week in Melbourne is a key example of a green energy technology developed right here in Australia taking on the world. So that's a hugely exciting position for us to be in. So in summary, I think we find ourselves in a great position. And I think it underpins the clear focus and determination that we've had over the last couple of years to get to this point. We now have a set of blue-chip customers that we've announced projects and other customers in the pipeline to recognize the key differentiation and value proposition that we have around our products and have a mandate and a key goal to scale with us into the hundreds of megawatt hours and are looking to us to provide that solution in terms of manufacturing at multi-megawatt hour scale. We have a very clear line of sight to the next stage of our product iteration that's going to dramatically increase the value proposition that we have to our customers but also dramatically reduce the cost while also driving an attractive margin in the business, it's just going to exponentially increase the competitiveness and target market that we can -- that we feel that we can participate in. We have a very clear line of sight in terms of manufacturing and time line and there's a critical path that we'll be updating investors on. And lastly, as per Michael's comments, we have very, very strong support from the Queensland government. But we also see the opportunity for us to also tap into nondilutive sources of funding because we are such in that slipstream of what a lot of institutions and government and Queensland government is looking for. So it's hugely exciting. I think 2024 for us as we start to look forward. We also see some strong catalysts in the coming months as we start to continue to execute on that program. I think we see a couple of opportunities in our pipeline that we would say is [ close ], and we look forward to sharing that with you all. We look forward to sharing our progress in terms of driving up that production numbers in Thailand, and that's on track, and we're delighted with the quality of those batteries to meet those projects. And lastly, just that work that we have with various agencies in terms of our ability to tap into that nondilutive funding as we start to scale. So I feel that the company is in the best spot it's ever been. I think we've successfully made that transition into the multi-megawatt hour market, and it's a market that's accelerating tremendously. A lot of customers are really actively starting to look at those solutions in that sort of 8 to 24 duration space as the world goes through the next stage of the energy transition. So Craig, I'm going to leave it there and perhaps open up the floor to any questions from anyone online.

[Operator Instructions] First one that's coming, Tim, there's a few around this. So I'll just slap them together. Time frame for the prefeasibility study from the Queensland government -- sorry, prefeasibility with the support from the Queensland government. How long do you think that will take until there's something tangible to go to the marketplace?

Well, look, we want to move pretty fast on that. I think as we've said before, that we've already done some thinking -- a lot of thinking around that, that kind of extend and the interaction of that, and we've used a third party to really challenge our thinking and iterate our thinking over the last couple of months, and that's been a hugely valuable exercise. And that's an organization that Michael's worked previously with Hysata. So they've really added a lot of firepower to what we think. So our goal, I suppose, is to be able to go and sort of announce that final investment decision probably in sort of early Q3 of this calendar year. So we know that we want to move fast. We want to make commitments. Our customers are wanting to see that confidence. But we also know in terms of potential support from Queensland government and others, they also want to move fast as well. So we do find this is going to be an accelerated process and it's not one of those kind of government engagements that is still a Stage 1, 2 years. We see some really strong support to move this forward at pace.

Right. Next one is, how do you see manufacturing in Queensland versus California in particular, given the large market that you've got in California in the States at the moment. Is that something that you've thought about?

Yes, look, it is. And I think as Mark and the rest of the U.S. team have just done a tremendous job in allowing us to really accelerate our opportunity there. And we recognize is what California is the 6th, 7th -- 6th large economy in the world, I think -- 4th here we go. So look, we see the opportunity for us to start to evolve our manufacturing thinking as we get this next stage of manufacturing up and running. With the model that we're contemplating, and you can see that in some of the deck that we contained in some of the appendices. We see the opportunity for us to adopt a bit of a hub-and-spoke model as we start to go forward, where you're using a central hub for electrodes or potentially the stack being able to export that stack to other markets and use other third parties for that kind of final assembly and using local materials as well. That means that we can qualify under things like TAA and U.S. inflation requirements. So as we evolve, and we start to see that underpinning and further opportunities of demand that Mark and the team are creating, our ability to evolve that model and start to think about things such as contract manufacturing, which is a very light CapEx approach. But we want to bottom down that initial manufacturing scale-up and automation of the stack to start with. We want to do that ideally close to home. But that's not undermining any of the opportunities that we see in front of us in the U.S. And so we think we can get the best of both worlds essentially short term, but longer term, other opportunities for us to establish manufacturing in the U.S. and tap into things like the U.S. Department of Energy lines, et cetera, absolutely.