Jorg Heinemann learned firsthand how hard it is to bring a new battery technology to market.
After years developing large-scale solar and battery plants for SunPower, Heinemann knew the strengths of lithium-ion batteries, which now have near-exclusive command of the grid storage market. But he also knew their limitations: He wanted to find an alternative that wouldn’t risk catching fire and didn’t degrade from regular use. After leaving SunPower in 2016, he spent years scouring the field for a different technology he could build a viable company around.
“I had given up and was about to go back to solar-plus-storage development when they found me,” Heinemann recalled. “I almost didn’t take the call.”
That call was an offer to run the enigmatically named EnerVenue, a newcomer making big claims about supplying the world with cheaper, safer batteries to store clean energy and overcome the temporal limitations and intermittency of renewable energy.
EnerVenue took nickel-hydrogen technology NASA developed to store power on the International Space Station and Hubble Space Telescope, swapped out the uber-expensive platinum catalyst for an unnamed material designed to be radically cheaper, and brought it to market. Since Heinemann joined as CEO in the summer of 2020, the pace of action has been dizzying, especially compared to the slow simmer of most battery hardware startups.
EnerVenue left the incubation stage in August 2020 with a $12 million seed round and chased that a year later with a $100 million Series A funded by Schlumberger New Energy and Saudi Aramco Energy Ventures.
Now it’s investing $264 million for the first phase of a factory in Kentucky slated to begin production by the end of the year. And EnerVenue has already signed 805 megawatt-hours’ worth of firm orders, Heinemann said. That’s a sharp contrast to the motley field of lithium-ion challengers, known to languish for years before achieving modest customer uptake — if they even survive that long.
“We’re 100 percent certain that the market wants what we’re building,” said Heinemann.
There’s still plenty to prove, like whether developers can successfully hook up these funky batteries to form large-scale storage plants that perform as advertised, and whether many risk-averse utilities want to try something so out of the ordinary. If that happens, the rewards are potentially massive: a low-cost, seemingly indestructible way to store clean energy and make wind and solar power available any hour of the day.
NASA-tested battery technology
In eschewing lithium-ion, companies like EnerVenue must square off against a global juggernaut.
Lithium-ion battery manufacturing took decades to get from the lab to commercial production. But demand from consumer electronics and now the electric vehicle industries resulted in massive manufacturing scale, which pushed battery pack prices down 90% over the 2010s. Lithium-ion now has mature global supply chains, warranties and willing financiers.
Newcomers with competing chemistries have to convince customers their technology works, then struggle for economic relevance as they build up manufacturing scale from zero.
EnerVenue’s links to two big names helped it establish credibility. The first is NASA, which honed the nickel-hydrogen concept in the 1980s and ‘90s to store power reliably for decades on the Hubble Space Telescope, the International Space Station and numerous satellites.
“You can’t send a maintenance run up there to go fix stuff very easily,” Heinemann explained. “It’s an ‘install and forget’ play.”
NASA also has the luxury of forgetting about cost, relative to most terrestrial customers. The platinum catalyst kept the tech well beyond cost-competitive territory for grid applications. Then came EnerVenue’s other big name, Stanford materials science professor Yi Cui, a prolific researcher in the sustainability space. Cui’s lab hit on a new catalyst material that Heinemann says produces “a better-performing battery with a radically lower cost.” The team then refined its design to be compatible with large-scale manufacturing.
It helps that this technology doesn’t look anything like a traditional battery, instead resembling a six-foot-tall scuba tank. While charging, an electrode stack inside the low-pressure tank generates hydrogen gas. To discharge, the hydrogen is converted back into water. All of this requires approximately 20 unique components, Heinemann said, making for a relatively easy manufacturing process.
In the in-progress Kentucky plant, automated robots like those that assemble automobiles will fasten anodes and cathodes together inside the pressure tanks, weld the tanks shut, fill them with electrolyte and test for leaks.
The straightforward fabrication process gave EnerVenue a pathway to quickly respond to the domestic manufacturing incentives in the Inflation Reduction Act, which only passed last summer. The batteries are too unwieldy to fit into cars, but power plants that use them can earn an extra 10 percent investment tax credit because they’re made in the U.S.
Before the Kentucky plant, the company operated a manual line for demonstrations and a fully automated pilot line that was capable of manufacturing 100 megawatt-hours’ worth of batteries per year, both in Fremont, California. Pilot projects from there are operating now, Heinemann said.
Advantages over the lithium-ion juggernaut
Many storage startups are trying to simultaneously win trust for novel storage hardware and break open a new market for long-duration storage. EnerVenue isn’t banking on the latter. It’s trying to compete with lithium iron phosphate (LFP), the lithium-ion chemistry that’s ascendant for stationary storage for its good value and fire safety relative to other chemistries.
“We can do everything [LFP] can do in the stationary [storage] world, and then some,” Heinemann said. Nickel hydrogen can charge and discharge quickly or slowly, multiple times a day, at any temperature, he added. The physical cause of thermal runaway, which is the culprit behind lithium-ion fires, simply doesn’t exist in the tank structure of nickel-hydrogen batteries; that means EnerVenue doesn’t need any fire-suppression or HVAC equipment, which adds cost and eats up energy.
That hardiness shows up in cycle life, the metric for how many times a battery can charge and discharge before it wears out. LFP batteries lose some capacity over a few thousand cycles; typical warranties impose limits on how the batteries can operate in order to prolong their life. Grid storage developers typically plan on periodic augmentation with new lithium-ion cells to keep storage plants operating at full capacity, but that undercuts project economics.
EnerVenue warranties 20,000 cycles over 20 years with effectively no restrictions on how to operate. But the product is designed to last 30,000 cycles, Heinemann said; some of the nickel-hydrogen units up in space ran for 100,000 cycles.
“Our technology is much more forgiving,” Heinemann said. “It changes the mindset from ‘A battery is a consumable that has to be babied’ to ‘It lasts as long as the solar panels or wind turbines it’s paired with, maybe longer.’”
As for round-trip efficiency — how much of the power that goes in is able to be withdrawn and used — EnerVenue says it hits 85% to 90%. That’s comparable to lithium ion, and better than some batteries. That’s a metric where non-lithium technologies often suffer.
All of this means customers may pay more upfront for nickel hydrogen than LFP, Heinemann noted, but they’ll come out significantly ahead on a levelized-cost basis because they’ll get so much more throughput over the product’s useful life.
So far, up-and-comers have struggled to beat lithium ion on levelized cost of energy, a metric that tabulates upfront cost, operating expenses and energy throughput, said Jeff Chamberlain, who invests in battery technologies at Volta after years leading commercialization of battery IP from Argonne National Lab.
But based on the fundamentals of nickel hydrogen, it should be competitive with lithium on cost and performance, added Chamberlain, who is not involved in EnerVenue. However, success will require managing risks of nickel scarcity or price spikes. Last year, for instance, nickel commodity prices surged 250% in a couple days, forcing a halt to trading.
However, nickel is abundant on all major continents, and new mining can open up in response to high demand, Heinemann said; “All the supply analysts we’ve met with believe EnerVenue is in a highly favorable commodity cost position relative to our lithium-based competitors.”
A leg up on other competing technologies
The challenge facing EnerVenue and any newcomer to the grid storage market is that utility customers take an inherently cautious approach to technology.
Volta sources venture deals for incumbent energy companies, like Constellation and Equinor; Chamberlain said established power companies typically want to see five years of field data before they’ll begin to trust a technology.
Lithium ion’s rise to prominence is instructive. Exxon scientists invented the core technology amid the 1970s oil crisis, but it didn’t enter commercial production until Sony tapped it for camcorders in 1991. About 20 years later, lithium ion started appearing in grid-scale storage plants in the U.S., but it took another decade for utilities in multiple regions to take it seriously as a core tool for daily grid operations.
Where startups usually want to tout disruptive breakthroughs, EnerVenue stands to benefit from playing up the longevity and familiarity of its core tech.
“If you’re doing a twist on an old technology, it won’t take you decades — it will take you years,” said Chamberlain.
That’s an area where EnerVenue believes it has leverage over other battery challengers.
“We’re drafting off of three decades of real use,” Heinemann said, referring to the NASA deployments.
It’s not obvious that the scale achieved by NASA’s nickel-hydrogen production will impress customers used to lithium ion’s global might. And EnerVenue will have to prove that Cui’s mystery material is as trustworthy as its astronomically expensive forebear.
But that legacy of field use already propelled the company faster than perhaps any of its peers. EnerVenue had a working prototype to show off when it went out for seed round investment. Its Series A brought in more money than other grid-storage startups raised in a decade. And the move from company launch to factory production in three years is unprecedented for the sector.
But owning a factory doesn’t mean anything unless you have customers buying what’s produced there. Cleantech history is littered with companies that have had one but not the other, Solyndra being just the most notorious example. The combination of a U.S. factory and firm contracts makes EnerVenue a contender to watch.
