This ASX battery share just rocketed 49%. Here's why

The US state of California is a leading supporter of non-lithium battery technologies.

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Key points

  • The RedFlow share price is rocketing today
  • The ASX share announced the approval of a battery project in California
  • RedFlow expects to achieve $12 million in revenue from the project

ASX battery share RedFlow Ltd (ASX: RFX) is off to the races today on news out of the United States.

And it has nothing to do with the resolution of the US debt ceiling crisis.

At the time of writing the RedFlow share price is up 43%, trading for 26 cents per share, having earlier posted gains of 49%.

(*Note, that big dip in late November represents a share split.)

Here's what's driving investor interest in this ASX share today.

What's lifting the ASX battery share?

The RedFlow share price is soaring after the company reported its scalable and sustainable flow batteries were approved for use in a large-scale solar and storage project in the United States.

The project will provide power for the Paskenta Band of Nomlaki Indians, located in California. The California Energy Commission (CEC) is providing the funding from part of its US$140 million long-duration energy storage grant program.

The ASX share is getting a big boost from management's expectations of some US$12 million in revenue from the project. This is expected to be paid progressively on commencement, delivery of batteries and completion of various milestones.

According to RedFlow, the 20 MWh long-duration energy storage system will be one of the largest zinc-based battery projects in the world. It's also the largest single sale and deployment of batteries globally RedFlow has achieved to date.

Commenting on the approval sending the ASX share rocketing today, RedFlow CEO Tim Harris said:

This 20 MWh project is one of several large-scale opportunities in our pipeline and represents the start of the next phase of our growth strategy, validating our focus on large-scale systems in the US and Australia.

Harris noted that the state of California "is leading the development and support of non-lithium technologies to achieve its net-zero goals".

Jonah Steinbuck, director of Energy Research and Development at CEC called the project "an important step in California's clean energy transition."

The 2,000 ZBM3 batteries will be manufactured in the company's ISO9001 accredited factory in Thailand.

Practical completion and commissioning of the system is expected in Q1 FY25.

RedFlow share price snapshot

With today's big boost factored in, the ASX share has recouped its 2023 losses to be up 20% year to date.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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