Investors Gorge on Energy Storage Buffet

Eos Energy Storage attracted a lot of attention this week when it announced it had raised $15 million in Series-B funding from investors including NRG Energy and Fisher Brothers, a real estate firm. The company may be on a roll—it already is planning a Series-C round to fund commercialization of its zinc hybrid cathode batteries, according to its latest announcement.

“Eos’s technology is of strategic interest to NRG as we seek to enhance the value of our generation assets and evaluate novel energy storage business opportunities,” says Denise Wilson, an NRG executive vice president.

But what if the future of energy storage is both more complex and simpler than batteries? Batteries, after all, are notoriously complex, heavy, expensive, slow to charge and quick to lose their recharging capacity, all factors that have slowed their adoption in the world of utility-scale energy storage. That could help explain the spate of recent energy storage deals, as VCs, angel investors and strategics all compete to find and profit from new winning technologies.

Which of these bets has the best potential to pay off?

“It turns out that that grid storage is energetically expensive, and some technologies, like lead-acid batteries, will require more energy to build and maintain than others,” says Charles Barnhart, a researcher at Stanford’s Global Climate and Energy Project and lead author of a recent study comparing different energy storage technologies.

The study finds major impediments blocking the implementation of complex battery technologies, while simpler technologies exploiting forces such as gravity and water pressure may actually deliver grid-scale storage faster. That could speed the implementation of alternative energy sources such as wind and solar, which may require large-scale storage facilities to offset their inherent variability.

The cost and resource limitations associated with lithium ion, vanadium redox and pumped-storage hydroelectricity storage systems place tight limits on their ability to expand to commercial scale, although pumped hydroelectricity and compressed air systems are both 100 times less energy intensive than batteries, the researchers found.

Somewhat surprisingly, the major impediment to commercialization for all of these different technologies is not financial cost. It’s boosting cycle life—the number of times each unit can be recharged. This may be the primary benefit of seemingly simple technologies involving gravel and seabed storage.

“This is somewhat intuitive, because battery technologies are made out of metals, sometimes rare metals, which take a lot of energy to acquire and purify,” Barnhart says, “whereas a pumped hydro facility is made of air, water and dirt. It’s basically a hole in the ground with a reinforced concrete dam.”

Even some of these technologies may pose durability problems, however. Bright Energy Storage Technologies has developed a compressed air-storage system that involves pumping air into a long glass/polymer bag tied to the sea floor, and releasing the air to spin a turbine and produce electricity. The system has one obvious benefit: Cheap materials.

“We design for no moving parts and no metal,” says Brian Von Herzen, the company’s chief technology officer. “Sand at the sea floor is 100 times less expensive than steel. It is free at the bottom of the ocean.”

The company says it minimizes the risk of tearing the bag by limiting air pressure to two pounds per square inch, but some observers remain unconvinced.

Another technology that seems simple, perhaps deceptively so, has been described by Bill Gates as “gravel on ski lifts.” Developed by Energy Cache, the system uses solar power to push gravel uphill, and gravity to drop it and create electricity during times of high demand. Gates is an investor in the project along with Paul Straub, a director at Claremont Creek Ventures.

None of this implies that investors have given up on more obviously high-tech storage solutions. Aquion Energy, which makes hybrid Ion batteries, recently completed a Series-D funding round worth $35 million from backers including Bright Capital, Gentry Venture Partners, Kleiner Perkins, Foundation Capital, and Advanced Technology Ventures, plus Bill Gates. The money will help Aquion ship early pre-production versions of its batteries, and by the end of the year the company expects to begin full-scale production at its Pennsylvania plant.

“Aquion has demonstrated the viability and potential disruptiveness of its novel energy storage technology,” Mikhail Chuchkevich, Managing Director of Bright Capital,” said in a release accompanying the funding round.

Highview Power Storage has raised $18 million and built a demonstration facility to store electricity by cooling air to 190 degrees Fahrenheit, and then warming it back up to expand the air and spin turbines. Another compressed air company, LightSail Energy, has raised a total of $37.2 million in a Series-D round from investors including Khosla Ventures, Peter Thiel, Bill Gates and Innovacorp.

Governments also are working to seed investment in the space. Australia’s Renewable Energy Venture Capital Fund Program funneled $4.5 million into hydrogen energy-storage company Hydrexia. Primus Power, a flow battery company that is developing a tricky zinc bromine system, won $2 million from the Department of Energy’s ARPA-E program plus $11 million in private follow-on funding. And $613,457 came from Ontario’s government to fund an entirely neato-sounding “Soldier Sharepack,” which uses solar power and human movement to supplement the charge of battery-operated devices carried by soldiers in the field.

 

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