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Alex Kimani

Alex Kimani

Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. 

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How Skyscrapers Could Be Our Answer to Energy Storage

  • A little-known company is developing “dry” pumped hydro storage facilities comparable to PSH but using massive blocks instead of water.
  • Further, this esoteric energy storage concept could soon start making American buildings greener.
  • SOM estimates that gravity-storage system could supply more than enough power to cover all operations for buildings 200 meters or taller, with some of the company’s designs expected to see that payback in two to four years.
Wall Street

The U.S. battery storage sector has been growing rapidly since 2021, with storage capacity projected to increase by almost 90% by the end of 2024. According to the U.S. Energy Information Administration (EIA), developers are on track to expand U.S. battery capacity to more than 30 gigawatts (GW) by the end of 2024, surpassing those of petroleum liquids, geothermal, wood and wood waste, or landfill gas. To wit, Calpine’s California battery plant will bring online 620 MW in two phases this year starting in the summer, making it one of the world’s largest battery storage plants. However, as encouraging as these trends are for the clean energy sector, lithium-ion batteries still pale in comparison to a much older technology: Pumped Storage Hydropower or PSH. According to the Department of Energy, the U.S. is home to 43 PSH systems, accounting for 96% of the country’s utility-scale energy storage.

And now one little-known company is developing “dry” pumped hydro storage facilities comparable to PSH but using massive blocks instead of water. Westlake Village, California-based Energy Vault Holdings, Inc. (NYSE:NRGV) has just completed the world’s first GESS (Gravity Energy Storage System) facility near Shanghai. The facility is sited adjacent to a wind farm and has a 25 MW / 100 MWh capacity, meaning it’s capable of supplying 25 MW of electricity to the grid for 4 hours at a time. This maiden facility has been built using Energy Vault’s EVx system which uses excess renewable energy to lift massive composite blocks then lower them when needed to spin generators to supply electricity to the grid. The company says its EVx design can achieve a respectable round-trip efficiency (RTE) of over 80%. According to Energy Vault’s CEO Robert Piconi, the company’s current systems can provide energy for about five to 10 cents a kilowatt-hour, considerably cheaper than lithium-ion batteries, which come in at about 13.5 cents, according to BloombergNEF. Piconi says that the company is aiming for a Levelized Cost of Electricity (LCOE) lower than 5 cents per kWh. Related: Oil Prices Shed Over 3% As Market Digests OPEC+ Move

Instead of buildings being carbon emitters, think about a carbon payback,” Piconi said.

And, more could be on the way. Last year, the company revealed that it has licensed six additional EVx gravity energy storage systems in China. These include a massive 2GWh facility in Inner Mongolia, with the other five ranging in capacity from 100 MWh to 660 MWh—in the provinces of Hebei, Shanxi, Gansu, Jilin, and Xinjiang. Energy Vault could end up doing plenty of business in China thanks to Beijing’s mandate that all renewable energy facilities (i.e., solar and wind farms) must integrate 20% of the nameplate generation capacity’s worth of storage. In contrast, in the U.S., only California has a comparable mandate that requires the state's three major power companies to have electricity storage capacity that can output 200 MW. California is projected to need 52,000 MW of energy storage capacity by 2045 to meet electricity demand.

Energy Vault’s new storage system is garnering more attention. Last month, the company announced that it will deploy two battery energy storage systems totaling 400 MWh in Australia. Energy Vault revealed it will deploy both a 50 MW/100 MWh BESS and a 150 MW/300 MWh BESS at ACEN Australia's 720 MW New England Solar, one of the largest solar projects to participate in Australia's National Electricity Market. Construction on both projects is expected to begin in H2 2024, with commercial operations anticipated in 2025 and 2026. 

Further, this esoteric energy storage concept could soon start making American buildings greener, too. Chicago-based Skidmore, Owings & Merrill--an architecture firm that has designed some of the world’s tallest buildings--has developed a series of prototype designs using Energy Vault’s EVx system that it hopes to incorporate into U.S. buildings. Whereas Energy Vault’s Shanghai project is about 150 meters (490 feet) high, SOM’s skyscraper batteries may be much higher, starting at 300 meters. SOM estimates that gravity-storage system could supply more than enough power to cover all operations for buildings 200 meters or taller, with some of the company’s designs expected to see that payback in two to four years.

That said, only time will tell whether GESS will become an investable space in the future. Energy Vault has faced numerous hurdles since being incorporated in 2017, including being forced to fundamentally redesign its gravity system and also sell chemical battery storage systems to customers to stay afloat before its GESS products gain traction. Energy Vault’s shares have tumbled more than 85% since it went public in 2022 in a deal with a special purpose acquisition company (SPAC), and it will be interesting to see whether its Chinese projects will offer a much-needed lifeline.

By Alex Kimani for Oilprice.com

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  • George Doolittle on June 03 2024 said:
    Don't understand why neither wind nor solar still fails for skyscraper work but certainly improvements in glass are being proved out at the massive Tesla giga factory in Austin, Texas.

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