One of the more iconoclastic ventures tackling how to store energy just raised money from one of the biggest energy incumbents.
Energy Vault, the splashy startup that stores clean electricity by stacking blocks,* revealed Thursday that it garnered an investment from the venture arm of Saudi Aramco. The companies did not reveal how much money Aramco invested or what valuation it assigned the startup. Saudi Aramco Energy Ventures typically invests between $2 million and $20 million at a time.
That level of disclosure and check size differs from Energy Vault's previous funding news, when SoftBank pledged $110 million in 2019. At the time, that funding set a record for equity investment in a company developing grid storage technology (as opposed to vehicle batteries). It was a huge vote of confidence in a startup that had yet to supply a commercial project.
Which leaves the question of what happened to that $110 million.
"We absolutely have not spent all that money," CEO Robert Piconi told Canary Media Thursday. "We continue to utilize it for global development."
The choice to add Aramco as an investor was driven by the strategic value of having the largest energy company in the world bought into Energy Vault's vision, he said.
"We weren’t out looking for money," he explained. "We’re in a space where we can choose our capital."
Energy Vault completed its first commercial-scale project in July 2020, when it connected a 5-megawatt/35-megawatt-hour block-stacking tower to the Swiss grid, the company said. The system's six crane arms use electricity to hoist purpose-built composite* blocks and stack them into a tower; rapidly lowering the blocks discharges electricity.
That project lets customers test out operations and protocols in the real world, so they can decide if the technology makes sense for them.
That's a significantly larger initial project than the norm for novel long-duration technologies, which aim to store more hours of power than is affordable with lithium-ion batteries. The long-duration storage sector is replete with companies that have existed far longer than Energy Vault without breaking into megawatt-scale projects.
However, that timeline means that Energy Vault did not deliver on its original promise of building a commercial project in India for Tata Energy in 2019.
Factors including Covid-19 pushed back completion of the full-scale Swiss project, Piconi noted. But the company remains engaged with Tata, he added, and has signed eight customer agreements.
"This will be our first deployment year," he said.
In the meantime, Energy Vault has been working on research and development. The company used the last two years "to further optimize its energy storage technology platform," according to the announcement. Its EVx product now comes in modular increments of 10 megawatt-hours, and its height was reduced by 40 percent. That smaller form factor still adds up to the height of a 20- to 30-story building.
Most storage startups stress-test batteries in a lab, but Energy Vault stress-tests recipes for block materials to make sure they can hold the weight of blocks stacked one on the other. The company hopes to keep costs down by building blocks from waste materials, like coal ash, decommissioned wind turbines or mine tailings. But those gigantic bricks need to withstand the elements as well as being stacked on top of each other to form a multistory tower.
This is not the first time the Saudi oil and gas giant bet on futuristic grid technologies or long-duration storage in particular. In 2018 it funded Form Energy, which develops electrochemical devices to store power for days in a row. But Aramco did not join Form's subsequent funding round.
The investment comes at a time when previously unfathomable amounts of cash are flowing into clean energy companies. Long-duration storage startups like Eos and ESS have found that going public via special-purpose acquisition companies can raise hundreds of millions of dollars and garner billion-dollar valuations. It's hard to say no to additional investment when competitors are receiving such copious amounts.
(Article image courtesy of Energy Vault)
*A previous version of this story described Energy Vault's blocks as concrete, but the company clarified that it avoids conventional concrete processes because they are carbon intensive. Instead, it makes composite blocks out of soil, water, a specialized polymer and minimal amounts of cement.
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