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MGX Renewables: The Missing Link for Renewable Electricity and Much More
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February 2, 2024

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PDT

Renewable energy is often misunderstood and can be easy to poke fun at. Case in point: President Donald Trump recently gave a speech at a Shell petrochemicals plant being built outside of Pittsburgh and made the following comments: “When the wind stops blowing, it doesn’t make any difference does it? Unlike those big windmills that destroy everybody’s property values, kill all the birds. One day the environmentalists are going to tell us what’s going on with that. And then all of a sudden it stops. The wind and the televisions go off. And your wives and husbands say ‘Darling, I want to watch Donald Trump on television tonight. But the wind stopped blowing and I can’t watch. There’s no electricity in the house, darling.'” Trump's sarcasm aside, the wind not blowing is a legitimate concern in the minds of many consumers and businesses alike that holds back the potential for wind power to be more widely adopted. However, small cap MGX Renewables (CSE: MGXR)has a solution to address this problem and much more.   INVESTMENT SUMMARY  Renewable energy suppliers face a problem: They must immediately sell all the energy they produce – even if there is no demand for it (e.g. off peak hours). In late July, the MGX Renewables (CSE: MGXR)began trading on the Canadian Securities Exchange after being spun off from MGX Minerals. The Company has developed the MGXR Energy Storage System based upon unique patented zinc-air battery technology where the energy is stored in the form of zinc particles that are similar in size to grains of sand. Zinc-air batteries have distinct advantages over lithium-ion batteries which come with an explosion/fire risk, high costs for long duration energy (e.g. $400 per additional kWh) and are limited by the size and number of electrodes (which store the energy). Zinc-air batteries are also made with zinc, magnesium and potassium hydroxide which are in abundance, have stable prices, are environmentally friendly (non-toxic in case of leak) and have a long life with low degradation in a closed system. Also, no cobalt or lithium is needed to make them. Teck Resources Ltd has invested $13 million in MGX Renewablesfor research and development purposes plus $2 million in government grants have been received to date.  Storage is the Missing Link for Renewables and a Whole Lot More Trump is right about one thing: Wind power is not the most reliable source of energy because its uncontrolled and may only be generating electricity at a time when no additional power is needed. The same can be said about solar power which can vary with the cloud cover, is not particularly useful at higher latitudes and (at best) is only available during daylight hours while demand usually peaks after sunset.   At the moment, renewable energy suppliers must immediately sell all the energy they produce; but if there is no immediate demand  for the energy (e.g. daytime hours), all this energy is wasted. This is a major bottleneck impeding the growth of the market - especially for large-scale wind and solar farms. Storing the excess renewable energy also allows for better grid integration and peak load coverage as the intermittent nature of most forms of renewable power can strain power grids.    In addition, there are many areas of the world where grid connections are tenuous, unreliable or even non-existent (e.g. in developing countries, remote communities and at off-grid work sites). Transporting fuel for diesel generators to power small microgirds can be expensive given that access to remote locations is often limited and the cost of transport is high.  Developing countries also comprise approximately 80% of the world’s population, but consume only 30% of global commercially traded energy supplies. This makes them the top prospective market for remote microgrids and associated energy storage units. Finally, there is storage demand for traditional battery backup applications (e.g. the desire to replace diesel generators). For businesses, the top three motivations to invest in building-sited energy storage systems are energy cost reduction, renewables integration and power quality protection while for campus environments (e.g. universities, corporate campuses, shopping malls and government locations), there is often a single rate negotiated with the local utility. By using tools like demand response, distributed renewables and energy storage, businesses or campus operators can significantly reduce energy costs.  MGX Renewables' Has a Storage Solution In late July, small cap MGX Renewables (CSE: MGXR)began trading on the Canadian Securities Exchange after being spun off from MGX Minerals - a diversified Canadian resource and technology company with interests in global advanced material, energy and water assets. The Company's motto would be:   The sun doesn't shine all the time. The wind doesn't blow all the time. MGX Renewables mass storage batteries for the rest of the time.   What MGX Renewables offers is the MGXR Energy Storage System:A modular Energy Storage System that is designed to deliver power in the range of 20kW - 50MW and energy storage in the range of 120kWh - 1GWh over extended periods of time.  The MGXR ESS is based upon unique patented zinc-air battery technology (based on an intellectual property portfolio of more than 20 granted patents) where the energy is stored in the form of zinc particles that are similar in size to grains of sand. When the system is delivering power, the zinc particles are combined with oxygen drawn from the surrounding air; and when the system is recharging, zinc particles are regenerated with the oxygen returned to the surrounding air. The system is also designed according to a modular architecture that enables a wide variety of system configurations to be created from a small number of common subsystems. This system has synergistic applications that include: Renewables storage (for wind, solar, tidal etc) Grid scale storage and energy trading & arbitrage Industrial, mine and factory on-demand and peak shaving Long duration storage and backup Stationary and portable energy for military and natural disasters Diesel generator replacement and augmentation Motive power (rail or marine)   Zinc-air batteries also have some key advantages (especially over lithium-ion batteries) that include:  Energy is stored in the electrolyte (only limited by the size of the plastic tank and the amount of fuel provided). Cost per additional kWh is $10 versus $400 for lithium-ion batteries. Wide temperature range of 20 – 70°C while lithium-ion batteries must be maintained between 30 - 40°C to avoid irreversible precipitation of solids. In addition, the MGXR ESS system uses raw materials like zinc, magnesium and potassium hydroxide that are abundant, have stable prices, are environmentally friendly (non-toxic in case of leak) and come with a long life and low degradation in a closed system. No cobalt or lithium is needed for the system to work.  On the other hand, other common types of batteries have key disadvantages. For example: Lead-Acid Batteries  High maintenance  Short life  Toxic  Lithium-ion Batteries  Explosion/fire risk  High cost for long duration energy  Limited by the size and number of electrodes (which store the energy) Hybrid Flow Batteries (Zinc-Bromine/Chlorine)  Limited duration  Dangerous fuel  Dendrite susceptibility  Redox Flow Batteries (Vanadium, Iron-Chromium)  Huge and heavy  Expensive fuel  Hydrogen Fuel Cells  Cost  Fuel availability and cost  Fuel storage difficulties  Diesel Generators  Unacceptable emissions  High fuel and logistics costs  With the advantage of rechargeable zinc-air battery technology, the MGXR ESS can be configured to support a wide range of discharge power, recharge power and duty cycle requirements. Since the energy storage capacity of the MGXR ESS is determined only by the size of the zinc storage tank, the system offers a very cost-effective and scalable solution versus the fixed power/energy ratio of  lithium ion batteries.   Teck Resources Ltd has also invested $13 million in MGX Renewables for research and development purposes plus $2 million in government grants have been received to date. In addition, MGX Renewables has assembled an experienced team of professional engineers, scientists and business managers and continues to do so e.g. a director was recently hiredto set up and lead operations in Europe.   So while President Trump may hate wind power and think its a dead end, the Small Cap Network rather likes MGX Renewables and the energy missing link the Company provides.