Bill Gates-backed ESS — which makes giant batteries out of iron, salt and water — starts trading

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  • Battery company ESS went public through a SPAC with Akon S2 Investment Corp. and began trading on the New York Stock Exchange on Monday under the ticker symbol GWH.
  • The batteries that make up the ESS are primarily made of iron, salt and water, which are readily available and safe resources.
  • The battery charges between 4 and 12 hours, a time frame that makes it ideally combined with renewable energy sources such as solar and wind.

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ESS Trying to solve an important problem with renewable energy: how to store energy from wind and solar installations when the wind is not blowing and the sun is not shining.

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The company’s proposed solution is a long-duration energy storage battery made of iron, salt and water, which is much cheaper and more readily available than the elements used in today’s batteries such as lithium and cobalt. Its initial momentum attracted $57 million in investments from powerful backers like Bill Gates and SoftBank, CEO Eric Dresselhuis told Businesshala.

On Monday, it hits another milestone, going public via SPAC. Trading on the New York Stock Exchange on Monday Under the ticker symbol GWH. It hopes to raise $308 million through this deal.

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“There have been very few solutions for this long period of time, and this is largely driven by the fact that we do not rely on energy storage as a major solution for system hardening,” Dreselhuis said. , who became CEO of ESS. This year after decades of energy and technology executive experience.

Company launched in co-founders’ garage Craig Evans And Julia Song Portland, Ore., in . In 2011 (they are a married couple, in addition to being business partners), then moved to the Portland State business accelerator before expanding into their current 200,000-square-foot headquarters.

The company is backed by Bill Gates’ clean energy investment firm Breakthrough Energy Ventures, SB Energy (a wholly owned subsidiary of SoftBank) and the multinational chemical company BASF, among others investors. SPAC comes through a reverse merger Akon S2 Acquisition Corp., spun off from private equity firm Akon Investments.

ESS has not recorded any revenue yet, according to financial filing dated September 8, but Dresselhuys says it has shipped the product to customers, including Terrasol Energy in Pennsylvania and Siemens-Gemsa in Denmark; Investor Documents Also claim many other anonymous utilities as customers. In addition, ESS has Order in pipeline from SB Energy and anelli Green Power Espaa.

company Loss of $245.3 million in the first six months of 2021, but had an operating loss of only $18.4 million (the balance was attributable to losses on revaluation of warrants and derivative liabilities). Operating loss for 2021 stood at $17.4 million, and it expects to record its first profit in 2023.

Iron, salt and water: safe, readily available ingredients

Big breakthrough for ESS is a long-duration battery made from readily available materials, explained carmichael roberts, Co-Chairman of the Investment Committee Breakthrough Energy Enterprises in a battery, electrolyte is a liquid medium Which connects the two ends of the battery, the anode and the cathode.

“Flow batteries are cheaper, safer and have a better operating life than conventional lithium-ion storage,” Roberts said.

Making batteries from iron, salt and water means “there’s no toxicity, the technology we make doesn’t ignite or ignite,” Dresselhuis said.

In addition, ESS batteries do not contain lithium or cobalt, two common elements in batteries that are being affected by supply chain constraints.

“Both are in potentially short supply globally and none are produced in the US,” said Jesse Jenkins, an assistant professor at Princeton University specializing in energy grids.

“Lithium is less of a problem in the long run, as long as we recycle lithium-ion batteries, but there could be some small price increases as production ramps up to match battery demand for EVs,” Jenkins said. “

“Cobalt is a bit trickier and has come under fire for some of the supply chains in Africa relying on unquoted ‘artisan mines’, which in some cases employ forced labor, and child labor, people digging cobalt by hand And very, very harsh conditions,” Jenkins said.

Nor does ESS use vanadium, a chemical element used in some flow battery technology. promisingIt’s too expensive to be worthwhile, says Dresselhuys.

“It’s one thing to make something work, and it can be very difficult. But because of the scale we’re talking about, it has to work cost-effectively for it to be viable as a system.”

How the Battery Works: ‘Superb is Simplicity’

Imagine a sandwich, said Hugh McDermott, ESS’s head of business development. ESS battery technology is a stack of carbon plates containing salt water with iron flowing through each layer.

The iron from the saltwater solution precipitates out and sticks to one side of the plates. When the polarity of the plates changes, the iron dissolves back into the water solution.

From the battery management control system, the flow of ions can be switched, allowing the flow of electricity to be switched on and off the grid as well.

Dresselhuis said the idea for the iron flow battery dates back to the 1970s. But there were some technical issues that the scientists had not solved.

For example, early iterations of iron flow battery technology would work for some time, but the electrolyte fluid would become unbalanced, accumulate on the battery, and the battery would become ineffective over time. To fix this, ESS developed a proton pump, which, Dresselhuy says, “allows the system to be in equilibrium during all those charges and discharges so that the electrolyte is completely clean.”

The initial research was funded in part by Nearly $3 Million Dollars in Grants from the Department of Energy ARPA-E Program, as well as individuals and local investment funds.

“Elegance is simplicity,” said Rich Hausfeld, Co-CEO at SB Energy and Board Member at ESS. (SB Energy is not just an investor, but also a customer.)

But it took a lot of research and development to get a simple solution that works. ESS has been working on research and development for over a decade. The proton pump was indeed a significant success for the company, but one of many.

“There is a huge intellectual property gap around the core technology and it will make it very difficult for other competitors to make batteries similar to ESS’s batteries,” Hausfeld told Businesshala.

Another long-duration battery being developed by Farm Energy also uses iron and is also backed by Breakthrough Energy Ventures. However, Form is developing iron-air batteries, which use different technology and are intended to provide energy storage for several days.

ESS batteries can store energy for 4 to 12 hours, while lithium batteries in cars typically last between two and four hours, Dresselhuy said.

Hausfeld told Businesshala that going above four hours of energy storage with a lithium-ion battery requires an increase in the number of lithium-ion cells. The ESS, on the other hand, can simply add more water, iron, and salt to a larger tank of its stack—sandwiches.

Hausfeld told Businesshala, “The way to think about ESS cost-wise is that they have a cost parity with lithium ion at four hours, and about half that cost, which we think is a big advantage for them. “

Another key to ESS Iron-Flow technology is its flexibility.

“Capacity remains the same between year one and year 20,” Hausfeld said. Anyone who has a cellphone knows that this is not the case with lithium-ion batteries. “You open it, it comes out of the case, right now it will give you 10 hours. We all know it doesn’t give you 10 hours a year, right?”

Energy centers are co-located with a wind or solar farm, allowing the battery to charge during the day when the sun is shining and then discharge in the late afternoon when there is usually a surge in energy demand.

Similarly with air. “You can store four, eight, 10-hour wind plants in the middle of the night and then discharge it during the day,” Hausfeld told Businesshala. “We see the ESS as a really good complement to that daily cycling between wind and solar.”

Energy Warehouse, the only ESS product that still exists, is the size of a shipping container, measuring 40 feet long and 8 feet wide.

“That container holds 500 kilowatt-hours of energy. That’s roughly the amount of energy you’d need to power 20 to 30 homes,” McDermott told Businesshala.

ESS is also building a product called Energy Center for utilities and independent power producers – for example, businesses that have large solar farms that sell that electricity to the grid.

For larger customers of this type, the ESS will use similar battery technology, but the battery modules will be contained together in a single building. Customer testing is expected to begin in 2022.

The big challenge: getting iron flow batteries on a large scale

While iron-based batteries are a well-known technology, the major challenge is to obtain them on a large scale.

“Iron-based chemistry for flow batteries has a long and storied history, precisely because in principle they have some of the lowest theoretical costs possible. On paper these systems scale quite well,” explained Dan Steingart, associate professor of chemical metallurgy at Columbia University

But the reality is quite different from this.

Stingart told Businesshala, “We haven’t seen widespread adoption of this class of battery and its cousins ​​due to the engineering challenges of the last mile, which have added to unacceptable capital and operating costs compared to other available technologies.” “

Flow batteries rely on pumps and membranes that are highly technical. “Think a kidney, very large, works 10,000 times harder all the time,” he said. “It has become very difficult, in practice, to operate in a reliable manner without critical auxiliary systems (which make the system more expensive than before) or maintenance calls (which increase running costs).”

That said, Stingart has raised the “substantial capital” ESS has raised to validate solutions to these challenges.

Plus, ESS secured a 10-year battery warranty in September Backed by insurance company Munich Re, that is “a strong sign of a positive result,” Stingart told Businesshala.

Cost is another concern.

“Iron flow battery technology looks very promising because it is safe, environmentally friendly, uses non-toxic materials that can be sourced in the US, and does not degrade over time and over many cycles,” says Jen Paper, CEO peninsula clean energy, told Businesshala.

Peninsula Clean Energy, a community energy buyer and official electricity provider for San Mateo County in California, has not worked directly with ESS, but it is trying to deliver cost-competitive 100% renewable energy on a 24/7 basis by 2025. Used to be. Pepper knows that storing energy will help meet those goals.

“The current challenge with iron flow batteries is cost,” Pepper said. “If companies like ESS can reduce costs for their technology, they and others will be able to make a meaningful impact in decarbonization efforts and help organizations like Peninsula Clean Energy meet our ambitious goals.”

As Stingart told Businesshala, “One goal I use is in my lab for long-term energy storage: The battery costs about the same price per pound of dog food and lasts forever with a little intervention.” lives for.”

That said, if ESS can do what its investors think, “the successful execution of this chemistry will be an important milestone for grid scale energy storage,” Stingart told Businesshala.

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