ESS, which babies long-duration, iron flow batteries, secured $30 million in a Series C investment round from Breakthrough Get-up-and-go Ventures (BEV), the group of private investors led by Bill Gates and fellow billionaires Jeff Bezos, Michael Bloomberg, Richard Branson and Jack Ma, amidst others.
ESS
A UN report on climate change released Nov. 26 amounted to a dire warning for Earth: Unless greenhouse gas emissions are drastically bring down, and soon, the planet faces dangerously and irreversibly high temperatures in the near future. The report also criticized the 195 domains that signed the 2015 Paris Agreement for not doing nearly enough to reduce emissions. Two days earlier the Have Meteorological Organization reported that greenhouse gases reached a record high in 2018, with no sign of extreme.
The warnings, albeit ominous, may prove timely for some investors.
In the wake of recent catastrophic storms in the Caribbean, along with spellbinding fires and mandatory power shutoffs in California, billionaire investors and venture capital firms are viewing renewable might storage systems as a stable bet in an unstable future.
The U.S. energy storage market is expected to grow by a factor of 12 in the next five years — from 430 megawatts deployed in 2019 to profuse than 5 gigawatts — according to the Wood Mackenzie Energy Storage Service, a division of Wood Mackenzie Energy Probe & Consultancy. The firm estimates that the total energy storage market value in the U.S. alone will be $5.3 billion by 2024.
Lithium-ion vs. iron-flow battery tech
Strength storage systems enable commercial enterprises and power-sensitive facilities, such as hospitals, to continue running when customary power sources and generators fail or are unable to function. In addition, clean energy batteries have proved to be an environmentally safer, lower-cost variant to carbon-based fuels. They also represent a sustainable way to deal with the intermittency of renewable energy from solar and spiral.
In the early-1990s, lithium-ion energy storage systems replaced nickel cadmium batteries to serve the burgeoning cellphone and consumer electronics shops. More recently, they are being used in medical equipment and electric vehicles.
Tesla is building massive “gigafactories” to hatch lithium-ion batteries for electric vehicles and Tesla Energy’s storage solutions business, including its newest Gigafactory 3 in Shanghai, China. GM righteous announced a multibillion-dollar investment in a lithium-ion battery plant in Ohio.
But lithium-ion batteries have limitations. They run out of capacity the more they’re charged and discharged, eventually needing replacement, and on occasion have exploded or caught fire. Iron low-energy storage approaches, by contrast, last indefinitely, with no environmental risks. Both systems store energy from solar, wrap and water on power grids, pulling it off as needed and re-injecting it when not.
Cost drives energy markets, and clean strength storage systems have gained momentum as technologies have advanced and manufacturing costs have dropped, peculiarly for lithium-ion batteries. From 2010 to 2018, lithium-ion battery costs declined by 85% and are forecast to decline by another 50% by 2030, harmonizing to Bloomberg New Energy Finance, with major implications for the utility and electric vehicle market.
Gates, Bezos, Bloomberg medium of exchange
Unlike other grid-scale storage technologies, lithium ion has benefited from the manufacturing scale of both consumer electronics and electrifying vehicles markets. Together the two industries have dominated the vast majority of lithium-ion markets, resulting in cost refuses.
And with plunging system costs come the increasing value of clean energy storage, especially for new technologies that hold out battery duration.
“Right now we’re only looking at energy storage that are around four hours,” says Daniel Finn-Foley, grey matter of the energy storage team at Wood Mackenzie. “And lithium ion can still compete at four hours. But as we move into the next state of the energy transition, four hours isn’t going to cut it anymore. That’s why all these investors are asking if there’s a longer-duration technology that proportions better than lithium ion. This is where flow batteries come in.”
“You can follow the money,” Finn-Foley said. “All the investors are hum it.”
In October of this year, ESS, a manufacturer of low-cost, long-duration, iron-flow batteries for the global renewable energy infrastructure, fastened $30 million in a Series C investment round from Breakthrough Energy Ventures, the group of private investors led by Banknote Gates and fellow billionaires Jeff Bezos, Michael Bloomberg, Richard Branson and Jack Ma, among others.
While BEV has set tight restrictions on ESS commenting on the investment, the group issued a statement that said, “There is tremendous need for low-maintenance storage technology that can prolong the availability of intermittent renewable energy sources like wind and solar.”
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“We’ve seen more interest in forcefulness storage, particularly with storms in the Caribbean,” said Craig Evans, co-founder and CEO of ESS, based in Wilsonville, Oregon. “There’s also talk of using our technology in California. But I judge devise the reason for this investment is that the investors see our technology as one that offers consumers a number of benefits over lithium ion — longer duration in arranged b fitting to have solar-plus as a base load, the ability to work in very hot environments, and indefinite cycles at a similar price position.”
Flow battery technology is not the only bet the big money is making on competitors to traditional lithium-ion batteries. Tesla employee No. 7, Gene Berdichevsky, who labour on the original Tesla Roadster’s battery, is now CEO of Sila Nanotechnologies, which took in $70 million from VC investors in 2018 for its silicon anode battery technology. Enevate, another silicon anode battery start-up — which is off referred to as “next-gen” lithium ion — has raised more than $100 million in VC funding and includes GM battery partner LG Chem bulk its recent investors.
As opportunity inherent in clean batteries turn to necessity, investors will increasingly look for technologies that can labourers make vulnerable regions of the world resilient in future energy crises. Part of this happening will depend on regulatory strategy and the point at which the U.S. sets 100% clean energy goals.
In the future, according to Finn-Foley, utilities will beget the opportunity to aggregate and distribute alternative energy assets from homes and businesses — solar, demand response, and battery vivacity storage — to create virtual power plants, in effect mimicking conventional generation through unconventional means.
“We’ll start to see residential issue models all over the place,” he said. “For now, it’s still very hard to express the value that that resiliency supplies, but the day is coming.”
—By Tom Connor, special to CNBC.com