Sunshine Hydro receives questions every day from interested investors and stakeholders. We have compiled this series of questions and answers to provide transparency and to assist in the understanding of the scope and value we provide in our quest to decarbonise our environment. We will update these from time to time as we uncover additional questions.
Directors have direct experience in exiting, and the Board will assess exit strategies and options that represent the optimum value for Shareholders on an ongoing basis. The most likely exit strategy is by way of a trade sale but other exit options cannot be dismissed.
We will be aggressively working to ensure we take advantage of all of the tax breaks and incentives that apply to us and to our customers and partners. We are working intensely with PPM, experts in taxes, grants and rebates, to secure a number of incentives both immediately and in the future. We also have internal staff very familiar with renewables programs including state and federal grants incentivising the development of renewables and hydrogen generation projects.
Carbon Credits are also a topic of discussion that we have a significant interest in. Our ability to offset carbon is significant and we are investigating opportunities to maximise our position in this regard.
We are privately funded. Please refer to our Investors section for current investment opportunities.
We anticipate expanding our team, and focusing in on a select few Superhybrid projects including Djandori Gung-i and Dumaresq.
We are focused on the delivery of the Djandori Gung-i and Dumaresq Superhybrid projects. These projects have land secured or under contract and where pre-feasibility has progressed.
We have 28 projects under investigation with preliminary engineering evaluations completed.
AESOP has been used in the Australian market to model pumped hydro projects in over 20 sites. It is robust and well proven. AESOP has been fully functional using real time data for the past 2½ years modelling the Djandori Gung-i Superhybrid.
As we grow one of our challenges is to maintain the culture of our organisation as we grow. We are fortunate that we have high returns which can support a generous approach to attracting and retaining the very best skills and talent. Managing and balancing the dynamics of our rapidly growing team environments is a challenge we are determined to excel in.
Each project goes through a thorough process of de–risking. Many items including geotechnical, environmental approvals, land access and grid access have associated risks that must be managed. Our engineers and project managers have the experience required to understand and manage these risks.
We focus on pumped hydro as an energy storage system because it is currently the most efficient, bankable, and proven technology. However, we know other technologies will evolve over time. Technologies including long term storage batteries, compressed air, massive weight movement all can play a role in our Superhybrid technology. As these technologies evolve and become proven and efficient, we need to assess the viability for effective use in Superhybrid projects.
Reaching financial close for each project is an important milestone. Typical pumped hydro projects have been known to fail at this point through lack of bankability. Fortunately, our project IRRs are exceptional, greatly increasing our likelihood of achieving financial close.
AESOP originated with our founders trying to find a viable solution to produce firm green energy. Renewable energy is intermittent. The sun does not always shine, and the wind does not always blow. Firm green energy is defined as energy that can be counted on 24/7, 365 days a year.
Generation 1: Pumped Hydro (traditional systems)
Pumped hydro systems typically store the energy when it’s inexpensive and generate when the electricity is needed. A simple supply and demand model.
Generation 2: Pumped Hydro (adding renewable energy to the mix)
Pumped hydro stations typically use renewable energy to generate electricity on a daily cycle. They store the energy when it’s available, during the day for solar, and generate for the peak use periods including dinner and breakfast times.
Generation 3: Pumped Hydro (adding AESOP and generating 24/7 CFE)
With AESOP we optimise all energy streams and create additional revenue streams. We don’t care about the daily cycle, but we do focus in on providing firm green energy to keep the lights on. Our technology improves the financial viability of all pumped hydro systems generating significantly higher project revenues.
Generation 4: The Superhybrid
AESOP still optimises all energy streams. Hydrogen generation is added to providing an essential load and an additional revenue stream. Approximately three times the amount of firm green energy is produced increasing revenues and project returns.
A typical 600MW Superhybrid project produces 250MW of firm green energy, 25,000 tonnes of hydrogen, 1550MW of contingency and essential revenue generating services to the grid.
AESOP is core to Superhybrid operation and has been developed incorporating 33 algorithms. AESOP is the result of 8 years of development by a highly skilled and experienced engineering team.
A superhybrid is a system or process that combines multiple technologies that are not normally connected. Sunshine Hydro’s typical superhybrid model includes wind and solar farms feeding into a pumped hydro project which is linked to a hydrogen generation plant. All components are orchestrated to work seamlessly together using Sunshine Hydro’s AESOP control system.
Key components of a typical superhybrid model include:
All the components of a superhybrid solution make an important contribution and work together in this ecosystem to provide a reliable, contractible, firm green energy output.
Sunshine Hydro’s growth plan is to develop 10 Superhybrid projects by 2030 and 100 Superhybrid projects by 2040. We have identified the first 10 sites in Australia and have already launched our flagship Superhybrid project in May 2022 See Flavian Project.
Additionally, we are selling our AESOP software to public and private project owners internationally and have engaged full time business development resources to spearhead this strategy.
Sunshine Hydro has a policy to actively engage with traditional owners and with the peak body for community natural resource management. Sunshine Hydro will continue to partner with these and other groups as projects evolve in order to deliver local jobs and resource protection to the community, and will also always include community input during design and construction.
Sunshine Hydro is mindful of the community impact its projects will potentially have and is deliberate in its intention that any impact will be significantly positive. Sunshine Hydro considers local community members to be stakeholders who are equal in importance to all other stakeholders.
Community benefits may take many forms, including:
As a policy, all Sunshine Hydro owned projects will contractually deliver royalty from revenues to the local community over an above the benefits documented above.
There are many organisations and groups extremely interested in green technology and who will support our technology and projects. We are a relatively small part of a very large market. And don’t expect significant push back. We will focus on partners who share our vision, mission and values.
Sunshine Hydro has looked at every component of the clean energy and green hydrogen supply chain and concluded that there are no immediate competitors for Superhybrid projects. In fact, Sunshine Hydro believes that because it is pursuing both greenfield and brownfield projects both within Australia and worldwide, most clean energy developers are likely to become collaborators and partners in the dissemination of our technology and know-how. Hydro.
In the green hydrogen market, there are many hundreds of prospective projects that have been announced by developers around the world in the past two years, representing a potential investment of hundreds of billions of dollars when including the renewable energy that will be used. None of these projects are Superhybrid projects using deep energy storage in the form of pumped hydro. Sunshine Hydro, does not consider these projects to be direct competitors. They do not they have the sources of competitive advantage that are found in Superhybrid projects.
Inevitably, there will be proponents and developers – currently unknown to Sunshine Hydro – who will observe what Sunshine Hydro is doing in the marketplace and will seek to emulate its business model.
Sunshine Hydro proposes to address such competition in three ways.
The global hydrogen market in 2020 is approximately 90Mt. The NetZero 2050 Report of July 2021 published by the IEA sees the global hydrogen market growing to 200Mt in 2030 and then to 500Mt by 2050. In order to contribute to the goal of net zero emissions (NZE) by 2050 and keep global temperature rises below the targeted 1.5°C by 2050, the IEA says that 70% of the 2030 estimated global H2 production levels, and 90% of the 2050 production levels, would need to be generated from low carbon sources, principally wind and solar.
Given that, in 2021, only about 0.1 Mt of the global supply of hydrogen comes from low carbon sources, it is easy to see how rapidly the supply and demand for green hydrogen will grow in order to achieve what the IEA sees is necessary by 2030 and 2050 respectively.
The IEA flagship Net Zero by 2050 report, published in May 2021, suggests the world will need 2,600 GW of hydropower capacity by mid-century to have a chance of keeping global temperature rises below 1.5 degrees Celsius. This means that over the next 30 years, we need to build the same amount of capacity that we did in the previous 100 years.
In September 2021, China’s National Energy Administration stated that it aims to double pumped storage capacity within five years, to more than 62GW by 2025. It wants to further expand capacity to 120GW in the following five years and achieve an internationally competitive industry by 2035.
Our AESOP technology can make Superhybrids from all existing pumped hydro projects and all new projects.
Further, we are not limited to pumped hydro. All forms of long term storage can be utilised to create Superhybrid projects.
Pumped storage hydropower projects are very different to on-river reservoir hydropower in a number of ways. Because it is a closed loop and the water is re-used, the water storage is much smaller in size, typically being about a hundred to a thousand times smaller than the volume of water of large hydropower projects. For example Lake Gordon in Tasmania is 12,000 gigalitres in size and our Flavian project is 12 gigalitres. The annual power production from Gordon Power Station is about 1,400 gigawatt hours. The annual production of power for the grid from our Flavian project and the wind farms which provide its power will be about 3,500 gigawatt hours, also delivered in a similar manner as a baseload power station with peaking capacity. A Superhybrid project will produce more renewable energy and use far far less water than a traditional hydro station. In addition to the grid power supplied, the Flavian project will also produce hydrogen enough to operate about 1,000 heavy vehicles.
Clearly, the long-term storage provided by long duration energy storage provides significant security, however, more is needed to guarantee power over the long term. The Superhybrid system uses its ability to simply turn off the hydrogen generation when appropriate to improve energy delivery. Sourcing wind from areas with varying wind patterns reduces the chance that wind energy levels drop.
24/7 Carbon Free Energy is guaranteed under contract. A 600MW Superhybrid provides 250MW of 24/7 CFE. The 250MW is far less than the 600MW the system can provide. This is a level where statistically the system can provide to customers 24 hours per day 365 days a year.
Hydrogen is the lightest element in the universe and is quite difficult to store in a way that can be easily used. On the plus side, hydrogen is very energy-dense. Let’s look at a comparison with diesel: for a typical car, you would need say 60 litres or about 50kg of fuel to travel 1,000km. To travel 1,000km in a hydrogen car, you would need less than 10kg of hydrogen. In addition, that 50kg of diesel would produce about 130kg of carbon dioxide, while 10kg of green hydrogen produces nothing but clean water.
Let’s get back to storing hydrogen: when used in a car, hydrogen will typically be stored in high pressure tanks. A typical small hydrogen car such as the Toyota Mirai or Hyundai Nexo have tanks able to store 5kg to 6kg of hydrogen. These tanks are very high-pressure containers (up to 700 atmospheres) that have a relatively large volume for the amount of hydrogen they hold. (About 140 litres to hold just 5kg of hydrogen)
Hydrogen can also be stored and transported in liquid form. When in liquid form, hydrogen is denser and can be stored at lower pressure. For long distance trucks and trains, it is far more economical to build insulated liquid hydrogen tanks than high-pressure tanks used to store gaseous hydrogen. Our software design takes full advantage of the production of liquid hydrogen in our Superhybrid projects.
Please note that many proposed hydrogen production facilities deal only with gaseous hydrogen. When comparing prices of hydrogen, be alert that Sunshine Hydro’s financial modelling is based on producing liquid hydrogen which has a significantly higher market price.
Liquid hydrogen production, storage and transport is a well-known technology and has been used in the aerospace industry since the 1950s.
Yes, by definition, a Superhybrid incorporates both AESOP and hydrogen generation.
It is counterintuitive to introduce a load and expect to generate more 24/7 CFE as a result. How can we possibly produce hydrogen using electricity and yet generate more electricity as a result? This is in fact the result AESOP achieves. And in doing so, it improves the project revenues significantly.
Current Superhybrid project sizes range from 100Mw to 1400MW with an average size of 430MW.
A typical 600MW superhybrid project produces 250MW of firm green energy, 25,000 tonnes of hydrogen, 1550MW of contingency and essential revenue generating services to the grid.
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