25-07-2012

ZBB Energy and Honam Petrochemical complete flow battery joint development milestone

ZBB Energy Corporation a leading developer of intelligent, renewable energy power platforms, announced today that the final milestone in the Joint Development Agreement ("JDA") with Honam Petrochemical has been achieved, resulting in the final JDA payment to ZBB. This first phase of the collaboration spanned from April 2011 to June 2012 and culminated with shipment of a ZBB EnerStore™ to Honam in June 2012. The two companies extended the first phase to September 30th, 2012 and are currently discussing manufacturing ramp and joint marketing entry plans.
 
Honam Petrochemical Company, a multi-billion dollar, diversified producer of petrochemicals and advanced synthetic resins, has identified energy storage as a strategic priority business. Honam's due diligence search for a leader in the field of energy storage led them to ZBB Energy and its zinc-bromide technology, which is recognized as the leading commercially available flow battery.
 
ZBB benefited from the relationship through cost savings and performance achievements in the ZBB EnerStore product, which has been in development since January 2010 and began shipping in early 2012.
 
Specifically, Honam and ZBB worked together to refine the materials and manufacturing process for the ZBB EnerStore battery in module sizes from 50kWh to 500kWh. With Honam's position in the plastics supply chain and their strong research capability, the two companies expect to be able to quickly reach global scale production. During the collaboration, prototype systems were shipped and tested at the Smart Grid test center at Jeju Island, and the Honam development labs in Korea. Jeju Island has been designated as a small-scale test area for a national 2.75 trillion won (USD $2.4 billion) Smart Grid project. In Korea's Smart Grid model, the distribution of electricity from the main power grid gives way to the more efficient management of a micro-grid system where each home would have either a wind turbine, or photovoltaic ("PV") panels installed while being connected to the grid. Honam plans to establish a beta site to demonstrate the ZBB EnerSystem as a critical component of the Korean Smart Grid Project.
 
"Honam Petrochemical has identified energy storage as a priority business, so we looked to ZBB Energy to form a strategic partnership, as they are the leader in zinc-bromide flow battery technology. Together, we are working to establish flow battery technology as the best energy storage solution for Smart Grid applications," said Honam. "We expect the joint development effort with ZBB to play a very significant role in supporting Honam's growth targets in the chemical flow battery ("CFB") business in Korea and Asia."
 
"Our collaboration with Honam will enable global scale production and accelerate market penetration of our zinc-bromide flow battery by giving us access to critical supply chains, strong R&D, and a powerful channel partner," said Eric Apfelbach, CEO of ZBB Energy. "Honam and ZBB share the vision that energy storage is a 'Megatrend' opportunity as solar and wind energy reach grid parity and global scale."
 
Under terms of the agreement, Honam paid ZBB USD $3 million over a four-quarter period and gained non-exclusive rights to sell the ZBB EnerStore product in Japan, Thailand, Taiwan, Malaysia, Vietnam and Singapore. Honam will have exclusive rights to manufacture and sell the ZBB EnerStore product within Korea.