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Pineapple Power Corp: the cash shell with an alternative energy mission


Pineapple Power is a cash shell, or Special Purpose Acquisition Company (SPAC) as it is more commonly known in the US, which is planning to list in the UK shortly. The company is particularly interested in pursuing acquisition opportunities in the battery storage technology sector.

Vanadium batteries can change the global energy landscape

Vanadium flow batteries are an important building block in the new clean energy landscape that we expect to emerge as governments around the world seek to reduce carbon emissions over the next decade. Known also as redox flow batteries, vanadium flow batteries store electricity in electrolytes rather than the electrode materials of conventional batteries.

Although invented in Australia in the 1980s, vanadium flow batteries are coming to the fore as a solution to the energy storage needs of the global renewables market. While many investors are focused on the clean energy generation capacity of this new economy, they are ignoring the opportunity that also exists in the storage of that energy.

Consider this: solar and wind farms can generate electricity, but what happens when the sun doesn’t shine and the wind does not blow? Bigger consumers of power, like hospitals, factories, schools and small communities need access to electricity on a 24 hour basis. Vanadium flow batteries are big batteries, that can store the energy they need.

Work continues to be done on the development of even bigger batteries – the Rongke Power project in China is aiming to bring online a vanadium battery that is capable of holding 800 MW hours of electricity.

Demand for vanadium batteries is picking up

We have already seen that companies in this space, like Invinity Energy Systems (LSE:IES), are experiencing considerable order flow and are popular with investors. Invinity just recently announced a vanadium electrolyte supply joint venture with Bushveld Minerals which will see Invinity providing electrolyte rental services to customers in the power sector.

This illustrates another important factor when it comes to vanadium’s credentials in next generation electricity storage: vanadium batteries can be recycled, with the vanadium itself being reprocessed for future use. That means miners can lease their vanadium rather than simply sell it downstream.

The growth numbers for the vanadium battery market also look impressive. The flow battery market was valued at $187m in 2017 but is expected to reach $946m by 2023 alone, representing a CAGR of 32.7%.

Vanadium is also used in steel production, and historically, vanadium prices have fluctuated a great deal as steel consumption has grown or ebbed. Establishing more consistent supply networks for vanadium is going to be critical in the years ahead as we see the roll out of this technology.

Cash shells can assist technology companies with getting on-exchange

Pineapple Power is a good example of the sort of SPAC or cash shell that is being used to bring private companies to the stock market. There have been several high profile examples in the US recently, with just the latest being Richard Branson‘s announcement of a New York-listed cash shell listing called VG Acquisition Corp.

There are currently fewer cash shells seeking to list in the UK market than in the US, but they do seem to represent a cost effective alternative path for private companies to go public, and for investors to participate in the growth of sectors that are dominated by private firms. It is no surprise to see the US SPACS aiming at technology opportunities, including electric vehicles and lithium batteries, like the QuantumScape acquisition we saw earlier this month.

In the case of Pineapple Power, the company’s focus is the flow battery space, which still looks to be in its infancy. If Invinity is anything to go by, there is plenty of interest in the sector.

We continue to see pronouncements from governments around the world about how the planet needs to start making big strides towards a zero-carbon future. Those ambitions will require the infrastructure to support them. Vanadium flow batteries are an important component within that strategy.

Shares in Pineapple Power are currently available from Axis Capital Markets and Peterhouse Capital.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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