From the CEO

 

Three years ago, on 28 September 2017, Swedish Stirling launched the PWR BLOK 400-F. A new and completely unique solution for recycling energy from industrial residual gases and converting it to 100% carbon-neutral electricity. The decision to develop and launch this product did not come about by chance of course. As early as 2008 when I started the company, my vision was to establish Stirling technology as the best alternative for local and sustainable electricity production. But I do have to confess that luck and circumstances did somewhat align in the process when the company left the solar energy sector to focus on the recycling of energy from residual gases.

In the spring of 2015, I held a talk on the solar hybrid solution we were working on at the time (whereby a Stirling engine used solar energy to produce electricity by day, and natural gases by night) at a conference in Johannesburg. After my talk, one of the audience members came up to me and asked if other combustible gases than natural gas could be used to run the engine. My answer, as it tended to be, was that any type of liquid or gas-based fuels can in principle be used to run a Stirling engine and produce electricity. The audience member, who turned out to have held leading positions in the South African ferrochrome industry for decades, responded to me that if such was the case, he felt that there should be some far more exciting commercial applications for the technology than in a solar energy project.

During the conversation that ensued, I realised three important things: 1) Industrial residual gases are prevalent globally in large quantities. 2) Flaring these gases is very costly to the electricity-intensive metal industry in terms of wasted resources and has a negative impact on the climate. 3) Our Stirling engine may well be the solution to a substantial global problem that the metal industry, as well as other sectors, has been struggling to solve for decades. There and then, the PWR BLOK concept was conceived.

During the three years that have passed since the launch of the PWR BLOK, our primary focus has predominantly been on product development. A clear strength in this area has been the opportunity to carry out much of this work in close collaboration with the metal industry in South Africa. Just three months after the launch, we signed our first sales contract, with South African ferrochrome producer, Afarak Mogale. The contract allowed us to install our first prototype at an early stage at the client’s facility and carry out testing and development work in a live environment. The first version of the PWR BLOK (generation 1) was then shipped and deployed in the spring of 2019. As well as providing us with invaluable data and knowhow whilst running live, it has also given us the opportunity to showcase the technology in its correct environment for future potential customers and investors. The next version, generation 2, was shipped this spring, and is now being deployed at another South African customer, Samancor Chrome. The close collaboration with the South African metal industry has given us, and will continue to give us, advantages that have fully equipped us for the commercial phase that we have now entered.

In the 2020 semi-annual report, I highlighted three areas that would constitute our most important focus areas going forward: 1) Full commercial rollout in South Africa. 2) Launching in new markets. 3) Starting serial production. These areas, along with the installation of the PWR BLOK 2 at TC Smelter, have remained the company’s primary focus in the third quarter. The memorandum of understanding and letters of intent that we signed in the summer with Samancor, Richards Bay Alloys and Glencore for new orders of up to 241 PWR BLOK units clearly show that we are well on our way to a full-scale commercial rollout in South Africa. We have been in continued negotiations with all three parties during the quarter. Based on our experience from previous negotiations, I am well aware that these may take time. So I don’t intend to make any promises in terms of dates when we may get the first contracts signed, but I can tell you that the negotiations are going well.

During the third quarter, we completed, despite the corona pandemic and stringent restrictions in South Africa, the installation of the PWR BLOK 2 at TC Smelter. This would not have been possible without our structured and competent organisation in South Africa, and our local sub-contractors. I’m really proud of the organisation we’ve been able to put together in South Africa in such a short space of time. It bodes very well indeed for future installations. We were thereby able to hold a naming ceremony for the PWR BLOK 2 at the end of the period, together with the af Jochnick family, whose green loan financed the installation. The next phase will be the initial test runs at TC Smelter, and the final commissioning during the autumn.

In the Swedish organization, our main focus during the period has been on developments and improvements in the run-up to the production of the PWR BLOK generation 3, which is the version that will kick off our serial production next year. The first units are planned for delivery to end customers towards the end of 2021. The emphasis of this work is primarily on reducing manufacturing costs. Generation 3 will not only be considerably smaller than previous versions, 40 feet rather than 45 feet, but will also encompass several other changes that both simplify serial production and reduce costs. The development work is on schedule, and we anticipate that the commencement of production of the first PWR BLOK generation 3 units will be possible just after the New Year.

In conclusion, I would just like to mention that the memorandum of understanding and two letters of intent in the summer constituted a very clear interim goal for me personally. When I started Swedish Stirling (previously Ripasso Energy) in 2008 after many years in leading roles in Swedish industry, my dream was to develop a successful commercial application of the Stirling technology. Like many engineers before me, I was fascinated by the Stirling engine’s unparalleled capacity for converting thermal energy to kinetic energy, and by the fact that the technology had nonetheless never seen a commercial breakthrough. PWR BLOK will change this. Improvements in the technology, together with societal development towards efforts being put into energy recycling and producing environmentally-friendly electricity, mean that the Stirling engine will finally attain its commercial breakthrough, and that Swedish Stirling will gain its place in Swedish industrial history.

 

Gunnar Larsson
CEO
Swedish Stirling AB