Form Energy, the stealthy, Bill Gates-backed startup, has secured its first utility deal for a novel super-long-duration energy storage technology. And its stated capability blows away anything else on the market.

A cadre of storage industry veterans and MIT scientists started Form Energy in late 2017 to tackle one of the hardest problems in clean energy: how to make renewable power available whenever it's needed.

In the early days, founder and former Tesla storage leader Mateo Jaramillo described the deployment as a "decade-long project." But both renewable adoption and Form's lab work moved faster than expected.

Minnesota utility Great River Energy confirmed Thursday that it will pilot Form's technology, identified for the first time as an "aqueous air" battery system. While it's common for lithium-ion batteries on the market today to discharge their full power capacity for up to four hours, Form's 1-megawatt project will do so for up to 150 hours, an unprecedented achievement for the storage industry.

Great River Energy, the second-largest power supplier in Minnesota, announced plans Thursday to phase out coal power, add 1,100 megawatts of new wind capacity and expand market purchases, resulting in a cheaper electricity mix that is 95 percent carbon-free. The generation and transmission cooperative wants to see if long-duration storage works to ride out the lulls in wind generation.

"Long-duration storage will be necessary to maintain grid reliability in the future during extreme conditions, such as a heat wave or polar vortex," President and CEO David Saggau said on a press call.

Form has been working quietly to develop technology for "baseload renewables" or "bidirectional power plants." It attracted more than $50 million from investors including Gates-affiliated Breakthrough Energy Ventures, Macquarie Capital, Italian oil giant Eni and Prelude Ventures.

This is the first announced deal that will take the technology out of the lab and deploy it in a full-scale power plant context. It is due online in late 2023.

Form Energy's first utility deal

It started with a chance encounter.

In the spring of 2018, Form President Ted Wiley gave a talk on long-duration storage unlocking high-renewables power systems. Jon Brekke, vice president and chief power supply officer for Great Rriver Energy, saw it and approached Wiley to discuss how the concept could work for Minnesota. The state has strong wind production, but also periods where the wind disappears, like in a polar vortex. 

That conversation led to collaboration on analyzing what GRE's portfolio would need to safely shut down coal while maintaining reliability.  

GRE's Coal Creek Station in North Dakota produces 1,151 megawatts, approximately half GRE's energy sales, along with most of its carbon emissions. Though it's supplied from a nearby lignite coal mine, reducing transportation costs, the plant struggles to compete in a power market dominated by persistently cheap renewables and natural gas.

"The production costs of that plant are much higher than what the market values it at," Saggau said.

The company has discussed giving it away, he added, but has found no takers, due to the fundamental economic disadvantage. GRE announced Thursday that it will shut down Coal Creek in the second half of 2022.

"When GRE thinks about decarbonizing their portfolio and what’s best for their members in terms of cost, there's a natural alignment with a company like Form that's trying to make wind and solar better able serve all of the needs of the grid," Wiley said. 

The utility sought a resource that would ensure reliable power while achieving a high return on investment and low levelized cost of energy. Form Energy ran what Jaramillo called a "complex co-optimization" analysis using its proprietary Formware, a program designed to model the highly variable power systems of the future.

After comparing cheap lithium-ion storage, different versions of Form's technology and other options, the conclusion reached was 150-hour storage.

Form is not sharing many details on its technology but told GTM that the storage plant will sit inside the utility fence at an existing power plant, taking up about an acre. It will have enclosed, weatherized systems on a concrete pad, but not the containers typical of lithium-ion projects. The system is designed to operate for at least 20 years.

'Ultra-low-cost' competition with lithium-ion batteries

The 1-megawatt format is the replicable block for Form's technology, Jaramillo said. That means scaling it up for future projects won't require redesigning the system. 

The long-term future for Form depends in part on its unit economics versus mass-produced lithium-ion batteries. Several long-duration storage startups have succumbed to unexpectedly rapid price declines for their mainstream battery competitors. 

"We expect to be competitive with lithium-ion on a dollar-per-kilowatt basis," Jaramillo said.

If that happens, it would mean that a customer could pay the same for the discharge capacity, but get 150 hours of that discharge with Form instead of four or six hours with conventional batteries.

Similarly, GRE's Brekke noted on a call with reporters that Form is "ultra-low-cost" on a megawatt-hour basis.

Of course, the technologies defy direct comparison because they perform different functions on the grid. 

"A four-hour lithium-ion battery puts limitations on our ability to serve the reliability needs of the power grid in the Upper Midwest," Brekke said.

The project itself is a few years away from operations. But its details could inject a new variable into grid infrastructure planning conversations elsewhere. Form representatives have already spoken about its product with more than 100 different utilities, Wiley said.

"It's important that the broader industry knows that this kind of thing is coming," Jaramillo said. "If that causes regulators and other planners to pause and evaluate just how fast this stuff is going to show up, then fantastic."

Utilities mulling capital-intensive new gas-plant expansion in the next decade have a new grid resource to consider.