Key points:


·ESS, an American liquid battery company, went public through a backdoor listing and began trading on the New York Stock Exchange today under the trading code GWH.

·The company's electrolyte for flow batteries is composed of iron, inorganic salts, and water, all of which are inexpensive and very safe materials.

·This flow battery can charge and discharge for 4 to 12 hours, forming a perfect combination with wind and solar power stations to solve the problem of stable power output.





ESS company is trying to solve a major problem with renewable energy: how to store renewable energy to solve power generation shortages when there is no wind or sunlight. According to Eric Dresselhuys, CEO of ESS, the solution adopted by ESS is a long-term flow battery technology that uses iron, inorganic salts, and water as electrolytes. These are inexpensive and abundant materials, unlike the limited reserves of lithium and cobalt elements used in lithium batteries. The company has received a total of $57 million in financing so far, with investors including well-known institutions such as Bill Gates and SoftBank. This Monday, ESS company will have another leap - a shell listing on the New York Stock Exchange, with the trading code GWH. By going public, the company will receive $308 million in funding.



Dresselhuys has held executive positions in the energy and technology field for decades. He joined ESS as CEO at the beginning of this year and said, "So far, there are not many technologies that can solve long-term energy storage needs. The main reason is that we have not yet focused on energy storage technology to stabilize the power grid system, but rather rely on thermal power generation."



ESS Company was founded in Portland, Oregon in 2011 by co founders Craig Evans and Julia Song, who are both business partners and a married couple. The company later moved into the State Commercial Accelerator in Portland and only established its own independent headquarters a few years later, with an area of nearly 20000 square meters. Among the many investors in this company are Breakthrough Energy, a clean energy investment company founded by Bill Gates, SoftBank Energy, a subsidiary of SoftBank, and BASF, a multinational chemical group. This listing will be achieved through a reverse merger with ACONS2, a shell company under Acon Investment Company.



According to the financial statements submitted by the company on September 8th this year, ESS company has not yet received any sales revenue. However, the CEO mentioned that the company has started exporting products to users, including TerraSol Energy in Pennsylvania and Siemens Gamesa joint venture in Denmark. The company's investment report also mentioned that they have several undisclosed power grid clients. In addition, ESS is currently assembling products for SoftBank Energy and Enel Green Energy. ESS Company recorded a loss of $245.3 million in its annual report for the first half of 2021, of which $18.4 million was an operating loss, while the rest were provisions made after reassessing insurance and derivative product risks. The company incurred an operating loss of $17.4 million in 2020 and is expected to achieve profitability in 2023.



Iron, inorganic salts, and water: safe and abundant energy storage materials



According to Carmichael Roberts, co-chairman of Breakthrough Energy Investment, ESS's biggest breakthrough is the use of low-cost and abundant materials to manufacture long-term energy storage batteries. He affirmed, "Fluid flow batteries are cheaper, safer, and have a longer lifespan than traditional lithium-ion batteries.". The use of iron, inorganic salts, and water to manufacture batteries means that the system does not generate toxicity or risk of explosion.



In addition, ESS batteries do not use lithium or cobalt, which are the two elements used in lithium batteries, and their prices are severely affected by supply chain fluctuations. Professor Jesse Jenkins from Princeton University said, "Lithium and cobalt are both elements with limited reserves, and the United States hardly produces them. In the long run, the problem with lithium is not too serious because we can recycle and extract lithium from discarded batteries. However, with the sharp increase in demand for power batteries, the supply of lithium is bound to form a shortage situation because it causes short-term price increases. The problem with cobalt is more serious because its reserves are limited, and most of it is mined in Africa. The mining environment is very harsh, and it is mostly done directly through the hands of cheap labor. This low-cost model is not sustainable."



ESS batteries also do not use vanadium metal, which is currently the most mature flow battery technology - all vanadium flow batteries. Although all vanadium technology is very mature and promising, the high cost of vanadium is a major obstacle. ESSCEO said, "The all vanadium system is indeed a great technology for energy storage, but to meet the global energy storage demand we face, the all vanadium system is difficult to face alone due to its high cost." This means that other lower cost liquid flow technologies must share this huge market together.



Another well-known long-term energy storage company, Form Energy, also uses iron as the main raw material and is supported by Breakthrough Energy Investment Company founded by Gates. However, Form Energy is not using liquid flow technology, but rather iron air static batteries, and is designed for ultra long periods of energy storage exceeding 100 hours, as the independence of the US power grid determines their demand in this area.



The CEO of ESS introduced that the company's liquid flow battery can support charging and discharging for 4 to 12 hours, while lithium batteries used in electric vehicles can usually only be used for 2 to 4 hours. If lithium batteries are to be used for applications lasting more than 4 hours, it is necessary to increase the number of energy storage cells and related power electronic devices, while ESS flow batteries only require the addition of cheap electrolytes composed of iron, inorganic salts, and water. Another advantage of flow batteries is their long lifespan. He said, "The capacity of liquid flow batteries does not change much from the first year to the 20th year. People who have used smartphones know that lithium-ion batteries will give you 10 hours of usage time at the beginning of use, but after one or two years, they will definitely not be able to last for 10 hours."



A huge challenge: large-scale production of flow batteries



Although iron based flow batteries have become a well-known technology, a major challenge is how to achieve large-scale production. Professor Dan Steingart from Columbia University explained, "Iron based flow batteries also have a long history of research and development, mainly because in theory it would be the lowest cost battery technology, and from a technical perspective, there are not many technical obstacles to large-scale production. However, we have not yet seen the widespread adoption of flow battery technology, mainly because compared to the mature lithium battery industry, the engineering technology of flow batteries still needs to be improved. This is also why its demonstration station performance has not yet reached the expected goals, and the installation cost is still high."



Jan Pepper, CEO of Peninsula Clean Energy Company, said, "The iron-based flow battery technology is very attractive because the system is very safe, the use of non-toxic materials will not pollute the environment, and the service life is long, and the capacity degradation rate is slow. Currently, the biggest market-oriented problem facing this technology is still production costs. If flow battery companies like ESS can reduce product costs through large-scale production, it will be a great help for power grid companies to achieve their carbon reduction and emission reduction goals."





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Reference:

https://www.cnbc.com/2021/10/11/ess-battery-company-backed-by-bill-gates-softbank-opens-on-nyse.html



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Introduction to ZH Energy Storage Company:

Shenzhen ZH Energy Storage Technology Co., Ltd. is committed to the research and development, promotion, and application of energy storage technology, aiming to help achieve China's goal of "carbon neutrality" through the application of electrochemical energy storage technology. In the early stages of development, the company focused on providing technical support and consulting services to the Chinese energy storage market by leveraging its accumulated industry experience and outstanding research and development capabilities in the field of energy storage. At the same time, the company focuses on investigating and analyzing the Chinese energy storage market, developing or introducing the most advanced and effective energy storage technologies for the Chinese market, including but not limited to: liquid flow battery systems, lithium-ion battery materials, fuel cells, and ion exchange membranes.