Tantalus Systems Holding Inc T.GRID

Atrium Research , Aug 15, 2023

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Grid Stability & Electrification
As mentioned in our energy storage thematic piece (read here), large sustained electrical outages
are occurring with increased frequency around the world. In 2000, less than 12 major grid
disruptions occurred in the U.S., compared to over 180 in 2020, while the hours of power
interruptions doubled from 2013 to 2020 (source: WSJ). This is mainly due to the old age of the
U.S. grid system, with the transmission system (long-distance) constructed 80 years ago and the
distribution system (short distances) constructed multiple decades ago. The American Society of
Civil Engineers found that 70% of transmission and distribution lines are well into the second half of
their expected 50-year lifespans. Furthermore, with the adoption of renewable energy over the
coming decades, the current grid will not be compatible with the constantly fluctuating supply, and
thus require energy storage solutions and more flexible grid upgrades. This further contributes to
the infrastructure spending trend, with growth capex initiatives adding on top of the already large
maintenance spending. The U.S. infrastructure bill included US$65B in power infrastructure
spending and US$7.5B in EV charging spending.
Figure 6: Investment Gap to Strengthen the U.S. Grid (Source: WSJ, USD




Tantalus Systems (GRID:TSX)
Tantalus is a smart grid technology company that transforms legacy one-way grids into multi-
directional grids that improve the efficiency, reliability, and sustainability of public power and
electric cooperative utilities and the communities they serve. Its solutions are purpose-built to allow
utilities to restore power quickly after major disruptions, adapt to rapidly shifting consumer
expectations and population shifts, innovate new solutions based on the adoption of distributed
energy resources, and evolve their grid infrastructure at their own pace without needless cost or
complexity. GRID has an established customer base of 278 utilities and a 99.4% retention rate.
In its last quarter, GRID posted $15.0M in revenue (+24% YoY), $14.1M in ARR as 25% of revenue
is software & services (+17% YoY), and 56% gross margin. GRID trades at 18.0x 2024E EBITDA.