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Long-duration storage firm Energy Vault pivots to short-term batteries

The startup pulled in millions for its novel gravity-based storage design, but most of its deal flow these days comes from garden-variety lithium-ion batteries.
By Julian Spector

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an artist;s rendering of a very tall tower of cement blocks, some of which are being lowered by cranes
A rendering of Energy Vault's original storage concept (Energy Vault)

One of the buzziest startups attempting to disrupt the clean energy storage sector has an innovative new strategy: selling regular old batteries just like everybody else.

Over the past few years, Energy Vault raised hundreds of millions of dollars from investors on the premise that it could do something that widely available lithium-ion batteries couldn’t: store clean electricity, cheaply, for many hours at a time. Cracking the code on long-duration energy storage” would turn variable wind and solar power into dependable, round-the-clock resources. The Department of Energy considers this crucial to cleaning up the electricity sector and just opened up $350 million to test out emerging long-duration technologies.

Energy Vault quickly established itself as one of the best-funded contenders in this emerging space, and it rode that momentum to a public listing on the New York Stock Exchange in February.

But on a quarterly earnings call earlier this week, Energy Vault’s iconoclastic gravity storage concept — raising and lowering multi-ton monoliths to store and release energy — didn’t take center stage. The company is still vying to disrupt the battery-dominated grid storage market, as promised. But in the meantime, it’s also selling a lot of conventional battery storage. And some green hydrogen served alongside conventional battery storage. But mostly just battery storage.

Investors who handed over hundreds of millions of dollars to create a groundbreaking new technology might be surprised by the company’s swing back to a broadly accepted and widely available alternative. Rather than calling this a pivot to batteries, CEO Robert Piconi framed it as technology diversification across energy storage mediums.”

There is no silver bullet in energy storage — most customers will be deploying multiple forms of short- and long-duration storage supporting different applications,” he said on the call with investors. No energy storage company is providing customers this type of flexibility today, except Energy Vault.”

That last point is undeniable.

The grid storage market is awash in competitors buying batteries and inverters and turning them into power plants to meet soaring demand for clean energy storage. Many of them have done it for years, racking up track records in the field and customer testimonials to bolster their sales pitch. But remarkably, all those worthy competitors have neglected to complement their battery offerings with precommercial steel edifices to raise and lower purpose-built monoliths.

If any market exists at the intersection of these two wildly different products, Energy Vault can own it by default, since no one else is trying.

Long-duration storage breakthrough still forthcoming

When Energy Vault unveiled itself in 2018, Piconi promised to accelerate the pace” of the clean energy revolution by using gravity to store renewable electricity for longer durations than is possible with the lithium-ion batteries on the market today.

The plan was simple: erect AI-guided six-armed cranes to stack 35-ton blocks many stories high, then rapidly lower the monoliths to the ground to release stored energy. At the time, Energy Vault said it would install its first commercial project for Tata Power Company in 2019.

Energy Vault produced artists’ renderings the likes of which storage wonks had never before seen, although conceptually, this approach resembles pumped hydro storage, the old-school but highly effective technique for storing large amounts of electricity by pumping water to an elevated reservoir. Within a year, Energy Vault raised a $110 million investment from SoftBank’s Vision Fund, the largest equity investment in a grid storage hardware company at the time (a record currently held by the recent $450 million raise for Form Energy, which remains focused on commercializing its long-duration storage technology).

Fast-forward to today: Energy Vault is publicly listed on the New York Stock Exchange, holds $275 million in the bank and calls itself the preeminent energy storage company.” It just hasn’t built that first commercial-scale block-stacking super-crane yet, and never will.

Earlier this year, Energy Vault ditched the cranes in favor of highly engineered steel honeycombs many stories tall, which purportedly will use AI to circulate multi-ton blocks internally at high speed while staying upright and not falling down. This massive construction is dubbed EVx,” short for Energy Vault, not to be confused with the ubiquitous abbreviation for electric vehicles.

The company does have a couple of these new-and-improved EVx systems kicking around. It broke ground on a Texas installation with major global developer Enel Green Power, Piconi said. When complete, this system will deliver 18 megawatts/​36 megawatt-hours of storage capacity.

A rendering of the EVx platform (Energy Vault)

Energy Vault advertises the gravity-enabled building-elevator as a long-duration technology that can deliver power for two to 18 hours, the higher end of which would constitute a notable addition to the solution set for storing abundant renewable generation. The Texas project, though, only proves out the lowest end of that range, with just two hours of discharge at full capacity. That’s a use case that lithium-ion batteries have readily fulfilled for years now.

A 25-megawatt/100-megawatt-hour EVx plant in China is further along, with quite a lot of steel in the ground, per photos shared by Energy Vault in the Q3 presentation. When finished, this plant will be able to discharge its full capacity for four hours straight. That’s more impressive than the Texas project, but, again, well within the range that lithium-ion batteries readily achieve in today’s grid storage market, where that mass-produced technology enjoys near-total market domination.

Definitions vary for what constitutes long-duration” storage. But the informal industry consensus reserves that denomination for anything that delivers power, cost-effectively, for longer than lithium-ion batteries can. Grid researchers predict that there will be real value for this kind of resource as renewables grow their market share.

Energy Vault calls its gravity storage long-duration,” but the projects currently under construction aim squarely at the incumbent technology’s sweet spot. Past isn’t always prologue, but any time a startup has tried to start from scratch with a novel storage technology to replicate what lithium-ion is already doing, it’s been clobbered by the incumbent.

a very large construction site with many workers in safety gear
This snapshot from Rudong, China hints at the level of effort required to build a four-hour energy storage plant using Energy Vault’s gravity-based block elevator design. (Energy Vault)

Energy Vault finds that batteries sell, though

While those early, short-duration proof points rise from the earth, Energy Vault’s battery division is delivering the company’s sales momentum.

This team, known as Energy Vault Solutions, launched just a year ago with the hiring of John Jung. Jung previously founded Greensmith Energy, a respected early leader in grid storage integration and software, which Finnish engine maker Wärtsilä acquired in 2017.

Jung and his team swiftly built out a proprietary system design” and Energy Management Software for optimal economic dispatching.” Then they started closing deals. In just the last quarter, they signed two contracts for more than 200 megawatt-hours each with developers Wellhead Electric and Jupiter Power. Those are substantial battery storage contracts with established power producers; Jupiter Power got acquired by financial titan BlackRock just this week.

Both projects are expected online by the end of 2023, a testament to the speed of installation for containerized battery units. Construction consists largely of grading the site and pouring concrete pads for the battery containers to sit on, a fairly easy lift compared to, say, safely erecting a massive amount of load-bearing steel.

Energy Vault has been awarded four other battery projects ranging from 300 to 820 megawatt-hours, including a project combining batteries and green hydrogen for a large Western public utility.”

The numbers really tell the story here,” Piconi said of these business-development wins.

Among the other numbers shared: Energy Vault reiterated to shareholders that it will earn $680 million in combined revenue for 2022 and 2023. Third-quarter revenue brought the company $1.7 million closer to that target. The stock has been trading around $3.80 a share, down from around $10 when Energy Vault first listed on the exchange earlier this year.

Amid the fiery hellscape of Mustafar, Obi-Wan Kenobi castigated a tragically corrupted Anakin Skywalker when it seemed he had become the very thing [he] swore to destroy.” Energy Vault never swore to destroy batteries; it just argued they were inadequate for the task of turning renewables into baseload power.

Now it’s selling the very thing it swore to disrupt.

Julian Spector is a senior reporter at Canary Media. He reports on batteries, long-duration energy storage, low-carbon hydrogen and clean energy breakthroughs around the world.