At the end of January, New York Governor Andrew Cuomo and ultra-low-cost zinc battery developer Eos Energy Storage (Eos) announced a strategic partnership between Eos and Environment One (E/One), a Berkshire Hathaway-backed technology manufacturer located near Albany, New York. Through the partnership, E/One is manufacturing and assembling Eos' outdoor-rated, utility-scale Energy Stack storage modules - on course to hit of volume of 400 MWh per year. The initiative supports Governor Cuomo's push for a cleaner, more reliable grid and aims to establish New York as a global player and leading manufacturer within the renewable energy economy.
REM spoke to Phillippe Bouchard, VP of Business Development at Eos Energy Storage, to discuss the company’s recent product partnerships and their roadmap for 2017.
Can you tell me a bit more about the company and what it does?
Eos Energy Storage is a developer and manufacturer of utility-scale energy storage solutions. Our mission is to provide energy storage products that enable safe, reliable and affordable electricity for utilities and their customers, so our primary focus is on the utility-scale sector. Our product and technology is modular, scalable and cost-efficient and has a strong value proposition for the commercial and industrial market. One of our big differentiators is our technology and Eos is the only company offering our proprietary Zinc Hybrid Cathode Battery – Znyth. This is an aqueous, zinc-based battery technology. We manufacture a sealed static cell sub-module, 1 kW|4 kWh battery, and then we aggregate and simply integrate the sub-modules into a pre-integrated, outdoor-rated, plug-and-play enclosure which we call the Energy Stack. That is the basis of our core product offering, the Eos Aurora 1000|4000. The 1 MWh/4 MWh battery system is designed with and for utilities, which we believe is a real game-changer for the market, based on our pricing and some of the attributes of longevity and safety that are designed into the product.
What is the state of the energy storage sector at the present?
We’re seeing a lot of growth right now and energy storage as a market has seen lots of traction over recent years. I would say from 2014 to 2016, the primary focus was around high power applications, used primarily for frequency regulation and grid balancing. Those are applications that don’t require a lot of energy capacity or extended run-time. However, we’re seeing the market evolve and those applications - the frequency regulation market, are relatively shallow. For instance, frequency regulation in PJM, which is one of the largest grid-territories in the United States, only represents 1 percent of growth, so as more of those assets are built, they are cannibalising the value that’s created. Then it essentially becomes a balance of supply and demand, so we’re seeing growth in two key areas - both of which are energy applications, that are being enabled by lower cost per kWh solutions, such as those offered by Eos. Those two primary markets are what we call locational capacity and solar plus storage. The value proposition is similar for the two:- essentially, you’re charging the battery during times of very low usage, off peak for example, in combination with solar, whenever you have excess, which could be high noon or 1 pm. If you store and shift that energy, you’re essentially creating a dispatchable product that looks a lot like a conventional generation asset. You’re specifically dispatching the battery to reduce demand on the system at times of highest utilisation.
The locational attributes or aspects that I mentioned are actually very important because if you look at the competition on the grid, we’re competing with and complementing existing peaking generation as well as transmission and distribution infrastructure. If you’re able to locate the battery and target them at the most congested grid nodes and load centres, you’re now debottlenecking the transmission and distribution infrastructure in addition to providing this system-level capacity value. We find that this transmission and distribution value is really important to the utilities.
What advantages does your technology, such as the Znyth battery and the Aurora, have over other technologies?
Our advantage is the levelised cost of energy, but that requires a little bit more detail. Our greatest strengths are in upfront capital costs, the longevity and reliability of the battery and also the safety of the technology. All of which translate into the levelised cost of energy or the total cost of ownership of the asset over its useful life. We’re now selling DC battery systems at a price of $160 per kWh and when you add all the power conversion and controls and installation and grid connection, you get to a price-point in the mid-$300 dollars per kWh, which is about 40 percent less expensive than the next best lithium ion battery. Already we’re undercutting lithium by sometimes as much as 50 percent. That exudes some of the fundamental cost advantages of the battery technology and the chemistry itself.
If you look at our Znyth battery, you have a simplistic sub-module design that has about six components, relative to a lithium ion battery that will use upwards of fifty, and we’re using widely available and relatively inexpensive materials. Our batteries consist of injection-moulded plastic, a saltwater electrolyte, a thin titanium electrode current collector - we use a carbon-salt cathode. Essentially the battery acts like a zinc plating bath, so as we charge and discharge the system, you’re plating and dissolving zinc. We’ve been able to eliminate the ion selective membrane in the battery to reduce a common cost, enabling the reliability and longevity of the battery.
You’ll see in flow batteries for instance the membranes are constantly getting clogged up and represent a pretty common failure mode in the system. Not only are we using relatively inexpensive materials to achieve these very low costs, we’re also using highly commoditised manufacturing equipment and processes. We don’t require clean rooms or complex paper deposition processes. We can essentially produce the batteries in a machine shop, which we are doing today, but at much greater scale.
That was mentioned recently in our announcement in early February. We now have a manufacturing partner in place scaling up to deliver multi-hundred MWh per year volume by the end of 2017. Environment One corporation is actually an operating company of Precision Cast Parts Corporation that was recently acquired by Berkshire Hathaway for $32 billion. That platform is now manufacturing our batteries for us, expanding their facilities and in the process creating 80 new high tech jobs.
If you look at the Eos cost trajectory, because of the fundamental differences in the battery and battery chemistry, we’re coming in very inexpensively but we’re also beginning the process of ramping our way down the cost curve with increasing volume. I suspect in the future that the battery will be even more cost efficient than it is today.
Which world markets are you targeting?
Eos has an international opportunity. The US is one of the largest markets. However, we’re going to be shipping a lot of batteries to Canada this year. We’re shipping batteries to South America - and to Europe as well. We haven’t yet entered the Asian market but we suspect that’s next. Based on the demand that we see coming in, we would pinpoint India, Australia and South Africa as being some of the emerging hotspots. That’s just based on the data, but it makes sense too as many of those countries have inadequate grid infrastructure and frequent rolling brownouts, which could be avoided with a four-hour battery such as Eos’s. Other countries like Australia have very high transmission and distribution costs per capita. You have Transmission & Distribution infrastructure that’s stretching out over a very large geography and serving a relatively small kWh load. The per capita cost of that infrastructure is extremely high and it’s reflected in the demand charges - in the tariff itself.
Our ability to serve these markets is highly dependent on our partnerships. We believe in keeping Eos focused on our core competencies. When we look at these international markets, we’re really looking at them through our partners - the system integrators that are taking our DC battery systems, providing the power conversion and installs as well as the EPC installation and O&M services, such that we can deliver a turnkey solution for the customer. The partners also become sales channels for the Eos Aurora. They have much broader capabilities than we could achieve on our own. and further market reach and penetration that we could achieve on our own. Our partners have the ability to reach pretty much every geography on the planet, and that is something that is opening up a lot of opportunities for us.
How do you see the energy storage market growing in the years ahead?
I think we’re going to see a major shift for the longer runtime applications, peak shaving, load shifting and specifically DC coupled solar plus storage. The cost of energy storage is falling drastically. The industry looks a lot like the solar industry did ten years ago, where costs started to fall even more than people had anticipated. That enables the cost effectiveness of the battery in various applications where it wasn’t cost effective before. Eos very much intends to be at the forefront of that. You’re going to see more utilities adopt the technology, especially as they become more comfortable and familiar with it. As costs continue to decrease, you’re going to see them adopt storage as another tool in their toolkit with more ubiquitous deployments across the grid.
Utilities view energy storage very differently than they do solar. For instance, solar is very much an intermittent, unpredictable generator over which they don’t really have any control. Solar is being built out in great proportions in a lot of the regions of the world and is actually causing a lot of problems for the utilities impacting their cost-power quality and their reliability, and they have to keep assets spinning in order to balance the generation that’s coming online. Energy storage looks a lot different. It’s a dispatchable resource and looks and feels a lot more like conventional generators that they’re accustomed to and looks a lot more like a transmission and distribution asset. Utilities can build storage into their substations and can build it on the distribution network and put it exactly where they need it.
When you look at the emerging opportunity to combine solar plus storage, we’re now starting to see numbers where the combined asset is coming in a less than ten cents per kWh, and you’re going to see the excess being dispatched as essentially a peaking asset, which is what the utilities really need. They’re going as far as publishing ‘heatmaps’ which show where they do and do not need additional power and energy. With a cost effective storage solution online you can begin to target the most problematic hours and provide a service of greater value to the utility and ultimately to their ratepayers.
Phillippe Bouchard joined Eos after 5 years of in-depth experience leading emerging technology and regulatory initiatives within the utility energy industry. He has an interdisciplinary background in chemistry and environmental sciences and graduated with a B.A. from Pomona College, California.
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