Following long-duration storage is like rooting for a home team that’s always about to win next year.
Lithium-ion batteries utterly dominate grid storage deployments these days. That’s great for the cost decline narrative, in the way that cheap Chinese photovoltaic cells produced a massive expansion in solar deployments. But cost obsession results in technology lock-in, boxing out other tools that could prove useful or even better if given the time and space to grow.
It also makes for homogeneous storylines: In other news, the latest energy storage plant looks and performs exactly like all the other ones; check back as this story develops.
There are good reasons to root for the scrappy upstarts challenging the conventional wisdom and building alternative technologies to store clean energy for days, as will be needed for renewables-heavy grids. But the last decade has seen the long-duration storage field make outlandish promises and instead deliver bankruptcies or a slow-rolled smattering of small demos.
This year, the remaining entrepreneurs gave us something different: signs of financial sure-footedness and tangible steps toward long-awaited scale. At the same time, the mainstream storage industry reminded the world of the value of different, more fire-resistant technologies.
This is still more windup than pitch, but just wait for next year.
1. Cash like never before
Investment tallies provide an indirect measure of long-duration storage startups’ prospects but a crucial one nonetheless. And this year delivered windfall investment for leading entrants in this space.
Energy Vault made the biggest splash, pulling in $110 million from SoftBank’s Vision Fund this summer. That marked the single largest equity investment in a stationary storage company, according to Wood Mackenzie’s investment database (battery companies targeting electric vehicles have raised bigger rounds).
SoftBank’s judgment took a reputational hit when star investment WeWork imploded this fall, and it doesn't have a track record of storage picks. But the money stands: Energy Vault has gobs of cash to construct its initial pipeline of gravity-based storage plants, which use a futuristic automated crane to stack and lower massive blocks. That’s not a sentence Greentech Media could have written a few years ago, when the litmus test for a promising long-duration storage company was mere survival.
Energy Vault wasn’t the only one feeling the warm embrace of lucre. Form Energy, targeting weeks and months of storage with an undisclosed chemistry, took $40 million from Italian oil major Eni and other investors. The company originally planned to get to market in a decade, but its market analysis showed an opportunity in the next three to five years, so leadership raised additional capital to commercialize faster.
Iron flow battery startup ESS pulled in a $30 million Series C led by SoftBank's SB Energy and Bill Gates-funded Breakthrough Energy Ventures. It hopes to use that money to reach its first utility-scale installations. And Hydrostor, a Canadian compressed-air storage firm, raised $37 million to finish a project in Australia and work through its global development pipeline.
Long-duration storage companies have in the past raised good money and gone nowhere — take saltwater battery company Aquion, which raised $190 million in equity and debt before it collapsed. But earlier ventures, though marketed as long duration, often meant six hours of output. That's only slightly more than lithium-ion typically delivers now, which made the long-duration storage upstarts vulnerable to competition from ever-cheaper battery production.
The current crop targets far more hours, if not days, taking them beyond the realm that conventional batteries are likely to compete in.
2. Battery fires reset the safety conversation
The April fire and explosion at an Arizona Public Service battery plant, following dozens of fires in South Korea, jolted storage developers, customers and regulators alike. The lesson: Even expert lithium-ion integrators and operators can experience combustible events at their plants (though the exact cause has not been determined).
In other words, safety isn’t a matter of lip service; it’s an existential concern for the industry. And that means alternatives to lithium-ion that have been talking up their safety benefits for years have a clearer reason to exist.
Flow batteries don’t spontaneously combust, nor do gravity-based systems, nor compressed air. They carry different concerns of their own — some flow chemistries contain nasty stuff and multi-ton blocks can fall. These won’t be issues if the systems work perfectly, but neither would battery fires.
Still, the renewed emphasis on safe storage facilities creates an opening, which upstart companies can take advantage of if their costs really become as competitive as they promise.
3. Highview Power builds deals for liquid air storage
There are two major camps in long duration: Companies that invent entirely new storage devices, like Form or ESS, and those that repurpose machinery from other industries for new applications in grid storage. The latter includes Energy Vault (cranes), Hydrostor (mining and industrial compression machinery) and Highview Power, which borrows equipment from the power and oil and gas industries to liquefy air and release it to turn a turbine.
The goal in this technological strategy is to minimize technology risk and lower cost by tapping into mature supply chains that are accustomed to delivering at scale. It makes sense on paper, but the real test is when these companies turn their slide decks and “strategic partnerships” into power plants.
Highview took an important step in that direction by securing the first cryogenic storage deal in the U.S., in partnership with Encore Renewable Energy. The project will serve the Vermont grid with at least 50 megawatts/400 megawatt-hours, the companies said earlier this month.
The developers are targeting an online date at the end of 2022 or early 2023, they told GTM, and will target an array of services for Vermont: renewables integration, grid inertia, frequency regulation, transmission constraint relief and more.
The companies are “in discussions” with utility offtakers, according to a statement, so there is more work to do here. Ditto Highview’s 50-megawatt/250-megawatt-hour project in the northern U.K., which the company teased earlier this year although it was still looking for offtakers.
But these preliminary announcements serve a strategic purpose: signaling to the market that real long-duration plants are in development, and have sites and permits secured. They advance the conversation from small pilots, like the ones Highview has operated for years in the U.K., to the mega-scale projects that hold game-changing potential for the grid.
Vermont makes for a compelling entry point, because the state has high renewable energy ambitions and will have to manage renewable transmission constraints earlier than many other jurisdictions. It’s a reminder that state goals of zero-carbon power can accelerate markets for long-duration storage that otherwise remain largely hypothetical.
4. Munich Re vets flow batteries
Flow batteries will have to win the confidence game. As mass-produced lithium-ion batteries win 99 percent of all projects getting built, flow deployments remain small and largely experimental. And potential customers have little reason to trust that flow purveyors will survive to honor performance guarantees for 20-year grid assets.
One way to deal with that credibility gap is to sell flow batteries out of a larger bankable brand, like Lockheed Martin — though even that venerable institution has yet to actually release its flow product into the market after several years of trying.
The other way is to get a bankable brand to stand behind the flow system. ESS achieved that this year when reinsurance giant Munich Re created a performance insurance product, which protects customers from the risk of under-performance or the possibility that ESS disappears sometime during the product life.
A cleantech team within Munich Re spent the time to vet the iron flow design, breaking down all the possible failure modes and assigning dollar amounts to the risk of malfunction. Don’t take ESS’ word for it: Trust one of the biggest names in global finance.
The startup still needs to go out and sell — flow competitor Vionx secured a similar insurance product in 2017, and it didn’t lead to a burst of utility-scale deployments. But a future in which long-duration storage companies brag about credentials from hard-nosed insurance institutions looks brighter than the status quo.
5. Hydrostor completes new-wave compressed air
Hydrostor brought its first megawatt-scale compressed-air storage plant to commercial operation. The company pumps air into caverns and uses water to maintain a static pressure; this approach is supposed to make a broad array of manmade shafts and tunnels useful for storage, as opposed to conventional compressed air, which requires specific geological formations and has totally failed to catch on.
The Ontario, Canada facility can charge at 2.2 megawatts, discharge at 1.75 megawatts and hold more than 10 megawatt-hours. More impressive, it will perform commercial duties for the province’s Independent Electricity System Operator, including peak capacity and ancillary services. The project received funding from various government entities, but it won’t just be sitting around running tests; it’s a proper grid asset.
Completion here gives the company a boost as it pitches around the world. Another project under construction in Australia lends further credibility.
Now the question is who will bite first on the 100-megawatt-scale plants the company promises it can deliver.