ESS, Battery Company Backed by Bill Gates, SoftBank, Opens On NYSE

24.02.
2023 19:03 ESS, battery company backed by Bill Gates, SoftBank, opens on NYSE
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24.02.2023 19:03 ESS, battery company backed by Bill Gates, SoftBank, opens on NYSE
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KEY POINTS The battery company ESS went public through a SPAC with Acon S2 Investment Corp. and
starts trading on the New York Stock Exchange on Monday under the ticker symbol GWH.
ESS’ battery is made primarily of iron, salt and water, which are readily available and safe
resources.
The battery stores energy for between four and 12 hours, a time frame that pairs well with
renewable energy sources such as solar and wind.
An ESS Inc battery.

Photo courtesy ESS Inc 
ESS is trying to solve a critical problem with renewable energy: How to store energy from
wind and solar installations when the wind isn’t blowing and the sun isn’t shining.
The company’s proposed solution is long-duration energy-storage batteries made of iron,

salt and water, which are much cheaper and more readily available than the elements used
in batteries today, such as lithium and cobalt.
ESS’ early momentum attracted $57 million in investments from powerful backers
including Bill Gates and Softbank, CEO Eric Dresselhuys told CNBC.
Now it goes public via SPAC to begin trading Monday on the New York Stock Exchange
under the ticker symbol GWH . It hopes to raise $308 million through the deal.
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Improved electric battery technology is a ‘hard problem to solve,’ says

ESS CEO
“There have been very few solutions for this long duration up until now, and it’s largely
driven from the fact that we didn’t rely on energy storage as a major solution for hardening
the system,” said Dresselhuys, who became the CEO of ESS this year after decades of
energy and technology executive experience.
The company launched in 2011 in the Portland, Oregon, garage of co-founders Craig

Evans and Julia Song, who are a married couple as well as business partners. It moved to
the Portland State Business Accelerator before expanding to its current 200,000-square-
foot headquarters.
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The company is backed by Breakthrough Energy Ventures, Gates’ clean energy investment
firm; SB Energy, a wholly owned subsidiary of SoftBank; and multinational chemical
company BASF, among other investors. The SPAC comes through a reverse merger with
ACON S2 Acquisition Corp., run out of private equity firm Acon Investments.
ESS has not recorded any revenue yet, according to financial filings dated Sept. 8.
Dresselhuys said the company has shipped products to two customers, with several more
in the pipeline.
The company lost $245.3 million in the first six months of 2021, but operating losses
were only $18.4 million; the remainder was due to losses on reevaluations of warrant and
derivative liabilities. Operating losses were $17.4 million for 2021, and the company

expects to record its first profit in 2023.
Iron, salt and water: Safe, readily available materials

The big breakthrough for ESS is a long-duration iron flow battery built from readily
available materials, said Carmichael Roberts, a co-chair of the investment committee
at Breakthrough Energy Ventures.
In a battery, the electrolyte is the chemical medium that connects the two ends of a
battery, the anode and the cathode. In ESS’ batteries, the electrolyte is made of iron, salt
and water.
“The flow battery is cheaper, safer and has better operational life than conventional
lithium-ion storage,” Roberts said.
Making a battery out of iron, salt and water means “there’s no toxicity, the technology we
build doesn’t start fires or doesn’t blow up in fire,” said Dresselhuys.
ESS Inc. 
@ESS_info · Follow
With this week’s record-setting temperatures, we hope

everyone stays safe and cool. Our long-duration iron flow
batteries do just fine in extreme weather, as this system
running in the 115-degree heat of Nevada proves. No
need for HVAC cooling and no risk of fire. #EnergyStorage
11:03 PM · Jun 29, 2021

Also, ESS batteries do not have lithium or cobalt, two common elements in batteries that 
are being
34 impacted
Replyby supply chain crunches.
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Read 4 replies
“Both are in potentially short supply globally, and none are produced in the U.S.,” said
Jesse Jenkins, an assistant professor at Princeton University who specializes in the energy
grid.
“Lithium is less of an issue in the long run, as long as we recycle lithium-ion batteries, but
there may be some short-run price increases as production ramps up to match battery
demand for EVs,” Jenkins said.
“Cobalt is a bit trickier and has come under fire for some of the supply chain relying on
[so-called] ‘artisanal mines’ in Africa, which employ forced labor, and child labor in some
cases, with people digging out cobalt by hand and very, very harsh conditions,” Jenkins
said.
ESS also does not use vanadium, a chemical element used in some flow battery
technology. While the element is promising, Dresselhuys says, it’s too expensive to be
meaningful.
“It’s one thing to make something work, and that can be very difficult. But it has to work
cost effectively to be viable as a system because of the scale we’re talking about,” he said.
How the battery works: ‘The elegance is the simplicity’
Visualize a sandwich, said ESS’ business development lead, Hugh McDermott. The ESS 
battery technology is a stack of carbon plates that has salt water with iron flowing through
each layer.
Iron comes out of the salt water solution and sticks to one side of the plates. When the
polarity of the plates is changed, the iron dissolves back into the water solution.
From a battery management control system, the flow of the ions can be switched, thereby
also switching the flow of electricity onto and off the grid.
ESS Inc’s iron flow battery “stack.”

Image courtesy ESS Inc. 
The idea of an iron flow battery has been around since the 1970s, Dresselhuys said. But
there were technical issues that scientists hadn’t solved.
For example, early iterations of the iron flow battery technology would work for a while,
but the electrolyte fluid would become imbalanced, build up on the battery, and the
battery would become ineffective over time. To fix this, ESS developed a proton pump,
which Dresselhuys said “allows the system to keep itself in balance throughout all of those
charges and discharges so that the electrolyte is entirely clean.”
Early research was funded in part by almost $3 million in grant funding from the
Department of Energy’s ARPA-E program, as well as individuals and local investment
funds.
“The elegance is the simplicity,” said Rich Hossfeld, co-CEO at SB Energy and a board
member at ESS. SB Energy is an ESS customer as well as an investor.
But it took a lot of research and development to get a simple solution to work. ESS has
been working on research and development for a decade. The proton pump was a really
key breakthrough for the company, but one of many.
“There’s a very large intellectual property moat around the core technology, and that will
make it very difficult for other competitors to build a battery that is similar to ESS’
battery,” Hossfeld told CNBC.
An ESS Inc battery

Photo courtesy ESS Inc
A long-duration battery being developed by Form Energy also uses iron and also is backed
by Breakthrough Energy Ventures. Form, however, is developing iron-air batteries, which
uses different technology and aims to provide energy storage for multiple days.

ESS batteries can store energy for four to 12 hours, whereas the lithium batteries in cars
are typically capped between two and four hours, Dresselhuys said.
To go above four hours of energy storage with lithium-ion batteries requires increasing the
number of lithium-ion cells, Hossfeld told CNBC. ESS, on the other hand, can just add
more water, iron and salt to a bigger tank of its stack-sandwiches.
“The way to think about ESS cost-wise is they are cost parity with lithium-ion at four hours
and about half the cost above that, which we think creates a big advantage for them,”
Hossfeld told CNBC.
Another key to the ESS iron flow technology is its resilience.
“Capacity stays the same between year one and year 20,” Hossfeld said. Anyone who has
a cellphone knows that is not the case for lithium-ion batteries. “You open it up, it comes
out of the case, right now it will give you 10 hours. We all know it doesn’t give you 10
hours in a year, right?”
Energy centers are co-located with a solar or wind farm. A solar farm allows the batteries
to charge up during the day when the sun is shining and then discharge in the late
afternoon when there is typically a bump in energy demand.
SB Energy’s first installation of ESS Inc batteries in Davis, Calif. SB Energy is an investor in ESS and also a customer. These are batteries SB Energy purchased.
Photo courtesy SB Energy 
It works similarly on a wind farm. “You can store four, eight, 10 hours of wind plants in the
middle of the night and then discharge it during the day as needed,” Hossfeld told CNBC.
“We look at ESS as a really good complement to that daily cycling between wind and
solar.”
The Energy Warehouse, the only ESS product that exists so far, is the size of a shipping
container, 40 feet long and 8 feet wide.
“That container holds 500 kilowatt hours of energy. That’s roughly the energy that you
would need to power 20 to 30 homes, depending on where you are in the country,”
McDermott told CNBC.
Four ESS Inc batteries

photo courtesy ESS Inc 
ESS is also building a product called Energy Centers intended for utilities and
independent power producers — for instance, businesses that own large solar farms who
then sell that power to the grid.
For these kinds of larger customers, ESS will use similar battery technology, but the
battery modules will be contained together in a building. Customer trials are expected to
begin in 2022.
The big challenge: Getting an iron flow battery to scale

While iron-based batteries are a well-known technology, the big challenge has been
getting them to scale.
“Iron-based chemistries for flow batteries have a long and storied history, rightfully so
because in theory they have some of the lowest theoretical costs possible. On paper these
systems scale quite well,” said Dan Steingart, associate professor of chemical metallurgy
at Columbia University.
But the reality has been quite different.
“We have not seen widespread adoption of this class of batteries and its cousins because of
last-mile engineering challenges that have in the past added unacceptable capital and
operating costs when compared to other available technologies,” Steingart told CNBC.
Flow batteries depend on pumps and membranes that are highly technical. “Think a

kidney, writ very large, working 10,000 times harder than it has to, all the time,” he said.
“It has been very difficult to have these, in practice, operate in a reliable manner without
significant ancillary systems (that make the system more expensive upfront) or
maintenance calls (which increase running costs).”
Steingart said, however, that ESS has raised “sufficient capital” to find solutions to these
challenges.
Also, ESS in September secured a 10-year battery warranty backed by the insurance giant
Munich Re, which “is a strong signal of a positive outcome,” Steingart told CNBC.
Cost is another concern.
“The iron flow battery technology looks very promising as it is safe, environmentally
friendly, uses non-toxic materials that can be sourced in the U.S., and doesn’t degrade
over time and over multiple cycles,” Jan Pepper, the CEO of Peninsula Clean Energy, told
CNBC.
Peninsula Clean Energy, a community energy buyer and the official power provider for
San Mateo County in California, has not worked with ESS directly, but it’s trying to deliver
cost-competitive 100% renewable energy on a 24/7 basis by 2025. Pepper said that
energy storage will help meet those goals.
“The current challenge with iron flow batteries is the cost,” Pepper said. “If companies
like ESS can bring the cost down for their technology, then they and others will be able to
make a meaningful impact in decarbonization efforts and help organizations like


Peninsula Clean Energy meet our ambitious goals.”
Steingart told CNBC, “A goal I use is in my lab for long duration energy storage: The
battery has to cost about the same price as dog food per pound and last forever with little
intervention.”
If ESS can do what its investors think it can, “the successful execution of this chemistry
would be a significant milestone for grid-scale energy storage,” Steingart said.
Correction: This story has been updated to remove inaccurate references to customer shipments.
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24.02.

 CREATE FREE ACCOUNT

Bill Gates-backed ESS — which makes giant

Catherine Clifford WATCH LIVE

An ESS Inc battery.

The company’s proposed solution is long-duration energy-storage batteries made of iron,

Improved electric battery technology is a ‘hard problem to solve,’ says

Read more about energy from CNBC Pro

Iron, salt and water: Safe, readily available materials

With this week’s record-setting temperatures, we hope

11:03 PM · Jun 29, 2021

How the battery works: ‘The elegance is the simplicity’

ESS Inc’s iron flow battery “stack.”

An ESS Inc battery

Another key to the ESS iron flow technology is its resilience.

Four ESS Inc batteries

The big challenge: Getting an iron flow battery to scale

But the reality has been quite different.

Cost is another concern.

make a meaningful impact in decarbonization efforts and help organizations like

The rise of wind power in the U.S.

Street Signs WATCH IN THE APP

UP NEXT | Worldwide Exchange 05:00 am ET Listen

Hybrid 60kw 169kwh

I spent 5 years interviewing 233 millionaires—here’s the No. 1

The world’s oldest person lived to 122—3 reasons she lived so

Here’s how much money you’d have if you invested $1,000 in

A child psychologist shares 5 signs you’ve raised a ‘highly spoiled’

Subscribe to CNBC PRO Licensing & Reprints CNBC Councils

Corrections About CNBC Internships

GET IN TOUCH SIGN UP NOW

Privacy Policy | Do Not Sell My Personal Information | CA Notice | Terms of Service

Market Data Terms of Use and Disclaimers

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