DYESOL LTD. 
Summary
For the first time in 3 years we are excited to report favourable tailwinds for Australian renewables companies like Dyesol. Mr Turnbull's appointment and the re-election of the Liberal Coalition are hinting at continuity and environmental responsibility, rather than the somewhat confusing dogma preceding it. Finally, we have bipartisanship on issues that few voters have ever really disputed.
Dyesol is systematically focusing on risk mitigation and achieving our long term technical and commercial goals. We are not Tesla, but it is patently wrong to think that we are inferior from a technology perspective. We do not think we are ahead of ourselves and strongly suspect our technology is more robust and promising than anything else on offer in 3rd Generation PV. The emerging PSC technology promises to be cheap and competitive with both fossil fuels and alternative renewable energy. However, we must pursue our goal of technology dominance carefully, rigorously and relentlessly.
FY2016 was remarkable for its continuity and consistency of scientific results and approach. The performance standard, IEC61646 is central to our agenda. In FY2017 we expect to transform that into further gains on our potential competitors - we intend to lead with results and not rhetoric. As our Operations Review clearly demonstrates, we have a singular focus and our plans and collaborations strongly augment this responsibility towards our valued and patient shareholders.
Industry and Market Conditions
CY2015 was a record year for global PV installations with the International Energy Agency (IEA) estimating approximately 50 GW of new installations. This growth of 25% translates into cumulative installed global capacity of 227 GW. This solar PV capacity is still only supplying less than 2% of the world's electricity consumption and the market opportunities are still vast.
China and Japan enjoyed the strongest market growth, making Asia the global driver of demand, but all continental statistics exhibited growth, with the U.K. prominent in Europe. The more mature German and Italian markets contracted in terms of newly installed capacity, as the phasing out of feed-in tariffs impacted. Eastern Europe experienced growth, but is still relatively small.
In North America, the US market continued to grow, and reached 7.3 GW in 2015. Canada (600 MW) and, to a lesser extent, Mexico (103 MW) are also progressing.
At home, is it very pleasing to see the debate on the viability of renewables becoming more intelligent and less driven by the vested interest of the incumbent, fossil-fuel based, energy producers. The federal government has become less hostile as well and policy is increasingly supportive. In particular, after the July election the important roles and future of ARENA and CEFC appear more assured.
Elsewhere, new markets emerged. In the Middle East, Turkey installed 208 MW for the very first time, while Israel remained the very first country in terms of cumulative installed capacity with 200 additional MW installed.
PSC Research and Development
It was a year of significant performance improvement for PSC technology with KRICT and EPFL going head-to-head on increases to conversion efficiency. Record accredited conversion efficiency now stands at 22.1%. In a few short years of development, PSC has converged with CdTe, CIGS and Multi-Crystalline Silicon which are all showing indications of plateauing while PSC retains a steep upwards trajectory. With laboratory cell performance similar across competing technologies, translation to industrial performance and competitive cost becomes critical. As PSC has lower projected material and manufacturing costs, it has positioned itself as a potential major disruptor in the PV industry. Dyesol is leading that industrialisation movement.
During FY2016, Dyesol pushed forwards hard in its scale-up activity, focusing on achieving the various individual tests that make up IEC61646. We announced 1000 hours of light soaking and thermal stability for porous carbon strip cells, as well as high correlations in translation of efficiency to larger modules. This is increasingly our focus, particularly in larger devices as we make preparation for translation of this strip cell and module know-how into panels of commercial scale and relevance.
Further tests that need to be satisfied over FY2017 include thermal cycling and UV testing. In addition, there will be further metals based milestones to be accomplished by Dyesol U.K. in its collaboration with Solliance in Eindhoven, The Netherlands, where establishing an inorganic material set is a prime focus. Stability testing on larger modules is ongoing as we relentlessly continue to scale-up. Technical risk mitigation is an essential step in successful scale-up and commercialisation.
We anticipate further acceleration of scale-up activity with the internal project having the most significance being the development of a 45 x 65 cm prototype, known as mini-Major Area Demonstration (mini-MAD). Mini-MAD is the pen-ultimate development step prior to the development of a full-scale prototype known as MAD, which Dyesol will develop with the assistance of VDL Enabling Technology Group, one of the most advanced manufacturing process and engineering companies in the world. When completed, MAD will be available for a multitude of pre-commercialisation activities, including showcasing, demonstration, testing and accreditation. A number of commercial and academic partners have registered their interest to participate in this exciting development.
Intellectual Property
Dyesol is a pioneer licensee of the EPFL in Switzerland. The licence in perpetuity provides Dyesol with IP rights in relation to all patented technology invented by the EPFL in relation to both Dye Solar Cells and Perovskite Solar Cells. Dyesol commissioned an independent freedom to operate study by the IP consultancy Stratagem which has confirmed our rights to IP necessary to operate in the field of DSC/PSC PV and to progress our business plans to full commercialisation. Dyesol continues to pay royalties to the EPFL in relation to materials produced and sold which are covered by their active patents. The EPFL augmented its portfolio of PSC relevant patents again this year - European application number 15173936.4.
Dyesol also has a suite of its own patents which significantly supplement the IP registered by the EPFL. This year it advanced its patent covering inorganic hole-transport-materials to national phases. In addition to registered IP, Dyesol is increasingly formally registering internal IP to ensure it has strong protection for all its materials, processes and know-how where practicable. This year 3 invention capture documents (ICDs) were registered internally, demonstrating strong invention in both new processes and device architectures, as well as documentation of a range of material specifications, process instructions, and test instructions which form the base of a suite of manufacturing IP for production of PSC technology.
During the year, Dyesol formalised its relationship with Cristal, the Tasnee subsidiary, with the execution of a joint development agreement. In particular, Dyesol works closely with Cristal in the development of zirconia and titania pastes which are fundamental to its Porous Carbon PSC architecture as well as more generally relevant.
One very exciting joint development was the registration of a provisional patent in relation to modified titania where early investigation has discovered a significant uplift in cell performance. Together, we are now undertaking further investigation to fully understand and quantify the benefit in conjunction with EPFL and the University of York in the U.K.
Partnering with Solliance has also given Dyesol access to its IP portfolio (33 patent applications).
Lastly, within the EFACEC programme running with the University of Porto, a new patent has been filed covering key elements of the low-temperature laser-assisted, glass frit sealing technology to which Dyesol has exclusive exploitation rights.
Dyesol Industries & Dyesol Australia
Dyesol Industries is the principal employer in the Dyesol Group. Dyesol Australia currently engages in chemical production and materials scale-up (Faunce Street) and device development and scale-up (Aurora Avenue). Dominion Place, in close proximity to the other two centres of activity, conducts finance, administration and sales. It is currently being scoped to also host the imminent MAD project.
The Chief Technology Officer (CTO), Dr Damion Milliken, has global responsibility for all core R&D activity, including overseeing projects in Portugal, The Netherlands, Singapore and Switzerland. Dr Milliken reports directly to the Managing Director and is responsible for implementation of the Technology Development Plan and its regular review. During the financial year, Dr Hans Desilvestro, the Chief Scientist, was promoted to a more prominent role in that he now works more generally across all Dyesol technology projects, rather than having just a GSA focus, and assists the CTO, particularly in the rapid identification and processing of new ideas and hypotheses.
Chemical production is the responsibility of Dr Yanek Hebting, who has again done a commendable job this year in providing a new range of solid-state chemical products for both Dyesol's web-based sales and sales through our U.S.A. agent, Sigma Aldrich. Japanese agents have also played an increasing role in distribution during the year. Dyesol is currently exporting to 60+ countries and its current customer base of over 600 includes blue-chip institutions such as CSIRO, EPFL, Fraunhofer, KAUST, NREL, Cambridge University and Oxford University. US university purchase activity has also continued to grow.
Mr Sung IL Lee is Global Head of Glass, responsible for the deployment of PSC on glass substrates and Mr Chris Moore, Global Head of Metals, based in Manchester, U.K., is the equivalent for metal or flexible substrates. They have oversight of the MAD/VDL and Solliance relationships, respectively.
Dr Luca Sorbello co-ordinates global sales of materials and equipment from an office in Rome. Sales are expected to grow strongly again during FY2017. The product range of materials has steadily grown and has been further augmented with the addition of equipment, including a very cost effective LED solar simulator, known as Hyperion. Dyesol now confidently considers itself the lead manufacturer of high-quality materials and equipment for the global PSC R&D community.
All R&D activity in Australia includes regular interaction with CSIRO and the Australian National University.
Business and Corporate Development
As a relatively small and disruptive technology company, navigating our way through the market place is sometimes very challenging. We have learnt many lessons since our original listing in 2005 which have generally caused us to be more self-reliant and cautious of the motives and shaky policy of large companies and governments, alike. In many respects the global solar industry has progressed and matured in spite of government in recent years, although some improvement is evident in Australia in the past 12 months.
The other, and somewhat related, wisdom that occurs to us is that we should lead with the technology as this is what creates true and sustainable value for our shareholders. Ostensibly, it may be less exciting, but it is certainly more responsible. Technology claims and headlines can be somewhat difficult to understand and interpret, even for appropriately qualified investors. Our technology, in particular, is very sophisticated and there are many daily reports in the rapidly growing field that can be confusing and dampen the effect of genuinely ground-breaking developments or unduly promote news which is nothing more than noise and distraction. In this respect, academic progress can have little relevance to the commercial world. A starting point for this understanding is the focus of academics institutions on conversion efficiency, often ignoring cost and stability or product life-time considerations. Dyesol attempts to educate and guide its shareholders to understand myriad headlines in these terms.
In that sense, Dyesol has subordinated business development recently until our technology is genuinely commercially ready, especially through its structured prototyping activity. While not expected to delay our commercialisation schedule in any way, it does give us greater opportunity to make good decisions and better price our achievements at the negotiation table. One hang-up from previous collaborations and partners was that exclusivity sometimes comes at great sacrifice and we wish to be able to discuss and promote our prospects widely in the very dynamic market place. Accordingly, investors tracking our progress should pay close attention to mini-MAD and MAD activity.
Dyesol is working steadily towards valuable potential commercial outcomes in Australia, Hungary, Korea, Turkey and the U.K. and will assess each on its merits.
SPECIFIC
The SPECFIC partnership provides Dyesol with access to industrial, governmental and academic institutions enabling a broad range of collaborative and funding opportunities which have already been exploited to broaden Dyesol's U.K. and Europe-wide network. The principal partners of SPECIFIC are BASF, NSG Pilkington, Tata Steel, Swansea University and Cardiff University.
Solliance
Solliance is a partnership of R&D organisations from the Netherlands, Belgium and Germany working in thin film photovoltaic solar energy. Research members include ECN, imec, TNO, Holst Centre, TU/e, Forschungszentrum Jülich, University Hasselt and Delft University of Technology.
Various state-of-the-art laboratories and pilot production lines are jointly used for dedicated research programs which are executed in close cooperation with the solar business community. Dyesol is in a 3 year development program and is utilising this partnership to gain access to first class scaling and process know-how and equipment. In particular, Dyesol is investigating materials, processes and device designs that meet the requirement for integration of PSC technology into flexible substrate based PV systems.
During the year, Dyesol made pleasing progress with novel materials and architectures that addressed the challenges of functionalising metals substrates. A number of internal milestones for FY2017 relate to achieving higher conversion efficiency and stability with a common, inorganic material stack.
VDL Enabling Technology Group
VDL Enabling Technologies Group is a subsidiary of the VDL Group based in Eindhoven, The Netherlands. Dyesol was initially introduced to VDL by Solliance. It is a private commercial group with annual revenues in excess of EUR3 billion. A good example of its high precision engineering solutions capability includes the contract manufacture of Mini cars for the BMW Group. Generally, VDL ETG operates in the business of system integration of mechatronic (sub) systems and modules for OEMs in the high-tech capital equipment industry. Areas of demonstrated expertise include Automotive, Solar PV, Medical and Aerospace.
Dyesol has entered a 3 phase collaboration with VDL ETG structured to deliver a Major Area Demonstration prototype during 2017. This collaboration is stage-gated and requires successful completion of one phase before proceeding to the next phase, enabling Dyesol to examine alternative delivery options - local and international - that increase the cost effectiveness of the scale-up program. In the longer term, success at the prototype stage is intended to translate into further cooperation for the development of a production pilot line and full scale manufacturing lines designed for mass manufacture. The expertise of VDL ETG is particularly suited to fully automated and continuous processes in both sheet-to-sheet and roll-to-roll manufacture, suited to the PV functionalisation of glass and metals substrates, respectively.
Marketing and Promotion
During the last twelve months, Dyesol has strengthened and established its position as a leader in Perovskite Solar Cell Development. PSC is now considered the leading technology in 3rd Generation solar technology, with accredited efficiencies reaching over 22% and competing with traditional PV technologies.
Dyesol's efforts have been recognised as we have been selected as one of the Finalists of The Australian Innovation Challenge awards, in the category Minerals and Energy, and also ranked in the Science Meets Business Top 25 of Australia's technology and commercialisation companies. The Top 25 lists the best in the business - Australian companies that are successfully moving their R&D from lab to marketplace.
Dyesol has reinforced its positioning even further by releasing this year over 30 new products and categories during HOPV16 (Hybrid and Organic Photo Voltaic Conference 2016). Dyesol also participated and sponsored ABXPV (International Conference on Perovskite Thin Film Photovoltaics) and PSCO (Perovskite Solar Cells and Optoelectronics), the two additional, main conferences dedicated largely to Perovskite Solar Cells.
Our sales and distribution channels have been extended further with the introduction of targeted advertising via SciFinder, a research discovery application that provides unlimited access to the world's most comprehensive and authoritative source of references, substances and reactions in chemistry and related science. SciFinder offers a one-stop shop experience with flexible search and discover options based on user input and workflow.
Dyesol also increased its presence in India and subsequently won some tenders there, a must in its closed market structure. In addition, Dyesol continued to reinforce its relationship with existing distribution channels such as TCI (Tokyo Chemical Industry) and Sigma Aldrich.
Continuous improvements have been made regularly to our Marketing Channels: new Materials and Equipment catalogues, updated newsletters, and website optimisation.
IR Highlights:
- Regular posts on the blog and a re-designed Aurora newsletter.
- Regular activity on Dyesol's social media accounts on Twitter @Dyesol (English), @DyesolLtd (German), and LinkedIn.
- Managing Director, Richard Caldwell, completed a U.K. and European Roadshow in May 2016.
- Dr Eva Reuter redesigned and renamed her website to Dr-reuter.eu. She continues publishing articles and dedicated videos in German for Dyesol Shareholders.
HOPV16 Conference Highlights:
- Dyesol's was involved as a main Sponsor of HOPV16
- Luca Sorbello, Dyesol's Global Sales and Marketing Manager promoted Dyesol's new range of materials to existing and prospective customers resulting in increased interest and sales.
- Leading institutions and organisations were represented including EPFL, Nanyang Technical University (NTU), Oxford University, and the University of Toronto, to name a few.
Corporate Structure
Dyesol is a global company and its structure is the result of careful planning to maximise opportunities, particularly in funding, recruitment, partnership and taxation, in the many different countries in which it chooses to operate. Dyesol Automotive Bavaria and Dyesol East Asia Pte Ltd no longer exist. All actions are taken to maximise future opportunities or eliminate cost where ongoing presence is not required. The board and senior management regularly review corporate structure to ensure it meets the Company's strategic needs.
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About Dyesol Ltd:
Dyesol Limited (ASX:DYE) is a global leader in the development and commercialisation of Perovskite Solar Cell (PSC) technology – 3rd Generation photovoltaic technology that can be applied to glass, metal, polymers or cement. Dyesol manufactures and supplies high performance materials and is focussed on the successful commercialisation of PSC photovoltaics. It is a publicly listed company: Australian Securities Exchange ASX (DYE) and German Open Market (D5I). Learn more at www.dyesol.com and subscribe to our mailing list in English and German.
Source:
Dyesol Ltd
Contact:
Dyesol Headquarters: Tracy Benillouz Investor Relations and Marketing Manager T: +61-2-6299-1592 E: tbenillouz@dyesol.com Germany & Europe: Eva Reuter, Dr Reuter Investor Relations T: +49-177-605-8804 E: e.reuter@dr-reuter.eu
