by Julian Spector
May 12, 2020

News broke last Thursday that mysterious but well-funded startup Form Energy had succeeded in landing the first paid utility contract for a novel storage technology that shifts wind power over not hours, but days.

The discussions that ensued, on #energytwitter and offline, made clear that this news raised more questions than I could answer in the initial coverage. There’s more to explain in terms of the technology itself, what the unprecedented power-to-energy ratio means in practice, what the business model would look like and what such a resource means for the future of the grid.

Luckily for you, this week’s Storage Plus can dig into all of those. If you have any further questions, hit me with them on Twitter @JulianSpector.

But first, a note on calibrating skepticism

Unproven, emerging technologies that make big promises deserve to be treated with skepticism. 

We know this at GTM because we’ve tracked all the major bankruptcies and failures of companies that promised to beat lithium-ion and revolutionize energy storage. There’s no greater inspiration for skepticism than the recent history of the cleantech sector, which has almost always rewarded mass-produced, conventional products over more creative, bespoke and expensive challengers.

Form Energy’s claims raise certain flags because they’re so out of line with the capabilities the storage industry has so far demonstrated. A class of long-duration storage startups offers technologies they say outcompete lithium-ion at six hours, eight hours, maybe even 10 or 12 hours. Nobody has come close to a cost-effective battery that maintains megawatt-scale nameplate capacity for 150 hours or six days straight, which is what Form says its product will do.

However, skepticism without facts is simply a bad party trick. I’d like to share a few facts from my years covering this company to help calibrate the evaluation of their claims.

First, though it can be hard to tell given the inherent audacity of their product specifications, the Form Energy team has long modeled how to do long-duration storage without the hype.

In my first interview with them two years ago, founders Mateo Jaramillo and Ted Wiley made no outlandish price claims, as several bankrupt startups had. They cautioned that their development cycle could easily take a decade — not something founders trying to goose a valuation for their next funding round would say on the record. They even walked me through a list of all the ways they could fail, including:

  • The technologies don’t achieve radically lower cost.

  • They can’t last for the 20- to 25-year lifetime expected of infrastructural assets.

  • Power markets don’t allow this type of asset to be compensated.

  • Financiers don’t consider the product bankable.

In the years since, the leadership has always been upfront about what they can’t share and why, while updating me on what they can share in dispassionate terms.

The ultimate proof will be in the effectiveness of their installed systems; it’s important not to assume the hard problems have been solved with this announcement. What I can say is that Form Energy’s track record of carefully calibrated disclosures builds more credibility for its claims than some of the sector’s splashier and more outlandish members.

What do we know about Form Energy’s technology?

Not a ton, because the company is still locking down patents, the founders say.

From the outset, co-founder and MIT professor Yet-Ming Chiang developed an aqueous sulfur flow system, chosen for the cheapness and abundance of sulfur. In parallel, Jaramillo was examining all the possible electrochemical materials and crossing off ones that wouldn’t work for long-duration storage at radically lower prices. 

By the time the company raised its Series B, it had decided to research the sulfur concept with a grant from the Department of Energy, while accelerating the other electrochemical design as the major commercial focus. Jaramillo told me it is not based on lithium, nor zinc, another cheap element that some companies pursued.

Last week, Form called its technology an “aqueous air” battery, placing it in the family of air cathode devices. That technology pulls in oxygen from the air to fuel the reaction needed for charge and discharge. Fluidic, later rebranded as NantEnergy, built a zinc-air cathode battery for long-duration storage, but not many others have made it to market with similar devices.

Form is expected to share more details once it has the IP locked down. Until then, the most we can say is that Great River Energy saw the juicy details and decided to buy one.

How much space will a Form Energy plant take up?

The initial plant will take up about an acre of utility property at an existing power plant. But that doesn’t mean that the square footage will scale linearly for bigger systems — 50 acres for a 50-megawatt plant would not be sustainable. 

Indeed, Jaramillo said, “the pilot would be a worst case from a footprint perspective.” Presumably, this involves higher-rated power electronics that don’t take up much more space and tanks for the aqueous solution that can grow vertically rather than horizontally.

Isn’t this just a slow battery? What’s cool about that?

Some of the skepticism on #energytwitter zeroed in on the ratio of discharge capacity to energy capacity. Form frames its 150-hour duration as an asset, but isn’t that just a really slow rate of discharge?

Professor and energy storage researcher Eric Hittinger put it this way:

Certainly, slow discharge would be a hindrance in many conventional battery applications. If you’re trying to run an island grid off a solar-plus-storage system, and the battery only lets out a trickle of power over several days, that would prevent you from doing certain things when you need to.

The problem with this critique is that Form’s technology does not have a fixed power-to-energy ratio; the company chose the 150-hour duration intentionally, based on the calculated needs of the customer. It could have scaled down the tank size and designed a “faster” battery. But the whole point is to prove the concept of storage that can outlast an extended slack period in Minnesota’s wind, like during a polar vortex. 

You wouldn’t knock an extended-release capsule for not hitting your body right away. That’s literally not the point.

Of course, to be useful, Form will have to build bigger than 1 megawatt, but that fact is baked into the pilot. That said, it's easy to overlook the pilot status due to how massive the energy side is.

"There’s almost a disconnect when you think about a project like this," said Daniel Finn-Foley, energy storage director at Wood Mackenzie. "It’s both a pilot and a crazy huge system at the same time."

After testing at this scale, the company could move to 50 megawatts, 100 megawatts, 300 megawatts  whatever the use case demands. If it can match a power plant’s output but maintain it for six days, that will open up fundamentally new possibilities for highly renewable grids.

“When you have enough power and enough energy behind that power, the calculated rate at which you discharge it becomes meaningless,” Jaramillo told me in a follow-up email. 

Nobody criticizes a gas plant for instantaneously discharging a small amount of power relative to the megawatt-hours it produces in a year. What matters is that it delivers enough power at any given moment to fulfill its job on the grid. 

What’s the business model? How will it operate?

The gas plant analogy is apt because that’s the role that the company sees its product competing in.

Lithium-ion batteries are capable of replacing certain gas peaker plants that run for only a few hours at a time. But they can't touch the contingent of gas plants that run for more than a few hours up to a few days at a time. No other company has produced a product to target that role.

The Form battery could work year-round, not just during the occasional polar vortex, Jaramillo told me. 

"The throughput equivalent cycles for our battery ends up being in the low tens per year for almost all scenarios we model," he noted. "But yes, it is a relatively low capacity factor plant, and cycles are not the game."

This marks a break from the typical lithium-ion business model, which is all about frequent cycling to make money in markets, or daily solar-shifting in vertically integrated territories. Of course, lower utilization poses a challenge to the business model, but that's something peaker plants have figured out how to survive on.

"If you build something that has low utilization but costs you almost nothing on a capital basis, then you have something that could be competitive with thermal generation," said Armond Cohen, who studies low-carbon power systems as the executive director of the Clean Air Task Force.

Lithium-ion will keep falling in price, but its costs don't scale favorably when it's stretched to super-long duration. Buying all the extra battery packs is more expensive than building a bigger tank for an aqueous system. 

"If you want to have a system that is 100 percent wind, solar and storage, trying to do that with lithium-ion is prohibitively expensive, even if you assume [a cost of] $100 per kilowatt-hour," said Princeton professor Jesse Jenkins, who models resource mixes for carbon-free power (Jenkins previously consulted for Form and declined to comment on the company's technology or pricing). 

Alternative carbon-free technologies need to be "as low as you can get [them]," Jenkins added. As in, single-digit or low double-digit dollars per kilowatt-hour.

Form has not confirmed what its pricing is, but it seems to be targeting that super-low range. Jaramillo said that a Form battery at scale will be so cheap relative to energy capacity that a 1-megawatt/150-megawatt-hour system should end up costing the same as a 1-megawatt/4-megawatt-hour lithium-ion system. That's a mind-blowing notion, as it would imply a per-kilowatt-hour price on the order of 1/38th of lithium-ion's. Of course, that only works at very large scale and with some tradeoffs in other specs; Form is not saying it would ever compete in the 4-hour-duration category.

The goal is to have a price buffer that's immune to the most aggressive lithium-ion cost curves. Indeed, Form's competition is likely to be a different set of technologies entirely. Cohen said that other prospective tools for flexible, carbon-free capacity include super-hot geothermal, gas with some form of carbon capture, small modular nuclear reactors, and turbines burning hydrogen or biogas.

All of those are early in their own journey toward market readiness and come with their own set of challenges. 

"It’s great to have a lot of competitors" in this space, Cohen said. "We want more options rather than fewer."

Form's timeline could get it out ahead of modular nuclear getting regulatory approval or carbon capture and storage finding a compelling price point. 2023 is a few years off, but it's early for this crowd.