Ann: Realising AVL's Utility-Scale Vanadium Flow Battery Strategy, page-9

ASX: AVL | www.avl..au 4

• The operating life of a conventional VFB BESS has traditionally been estimated at 30+ years.
As part of Phase 2 of Project Lumina, VSUN Energy is proposing to design the VFB BESS to extend this to 40+ years in a ‘deconstructed' form.11
• Non-flammable technology.
• High temperature tolerance, with minimal requirements for heating and cooling infrastructure.
• Potential for positive end-of-life environmental impact, with the likelihood of over 99% of
commercial end-of-life reuse and recyclability.12

3. Phase 1 of Project Lumina
VSUN Energy recently completed Phase 1 of Project Lumina, an internal analysis which has undergone an independent external review, to assess whether a VFB BESS solution is likely to be competitive in the energy storage market.

The outcome of Phase 1 indicates the merits of a modular, scalable, turnkey, utility-scale 100MW VFB BESS solution capable of delivering LCOS of A$274/MWh for a 4-hour VFB BESS and LCOS of A$251/MWh for an 8-hour VFB BESS.13
The LCOS calculations used scoping study level capital and operating cost estimates and inputs to calculate a LCOS at ± 30%.

Phase 1 has determined that a 100MW VFB BESS is likely to be the optimal base unit for deployment. VSUN Energy is developing a modular unit to allow for a VFB BESS solution that could be scaled in terms of power and/or duration to meet specific demand requirements. With growing demand for grid-scale energy storage to support the transition to renewable energy, this storage solution is anticipated to ultimately be scaled and deployable on a gigawatt-hour scale.

VSUN Energy will run parallel work for both a 4-hour (100MW/400MWh) VFB BESS and an 8-hour(100MW/800MWh) VFB BESS based on the Australian Energy Market Operator's (AEMO) Integrated System Plan (ISP) projections that battery discharge requirements will increase to 8 to 12 hours over the next 5 to 10 years.14

4. Phase 1 LCOS calculations
For the technical, capital and operational metrics that support the LCOS calculations, VSUN Energy sought expressions of interest from leading international VFB OEMs and Australian engineering, procurement and construction companies, to deliver initial cost estimates for a fully deployed and grid connected 100MW VFB BESS.

The key technical specifications used for calculating the LCOS in Phase 1 are shown in Table 1.


The outcome of Phase 1 of Project Lumina provided an LCOS calculation of A$274/MWh for a 4- hour VFB BESS and A$251/MWh for an 8-hour VFB BESS to a scoping study level accuracy of ± 30%, based on the modelling approach set out in Appendix A and the core assumptions set out in Appendix B.

VSUN Energy engaged an independent external consultant to undertake a detailed review of the LCOS model, using Project Lumina's base case battery specification, including the basis for the model, the calculation methodology, the key inputs and assumptions, the key output from the model (i.e. the VFB BESS LCOS range for different scenarios) and an assessment of how the VFB BESS LCOS compares to the LCOS for similar competing lithium-ion based BESS, on that the basis the LCOS model uses scoping study level capital and operating cost estimates and inputs to calculate
the LCOS (±30% accuracy). The conclusions of the review support VSUN Energy's analysis of
Phase 1 of Project Lumina, as detailed in Appendix C.

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