Bill Gates Makes Big Investments in Batteries
Breakthrough Energy Ventures (BEV), the $1-billion venture capital fund led by Bill Gates, has chosen energy storage for its first investment.
Energy storage, while still a tiny portion of the electric grid, is the hottest technology in the electric power sector and is being hailed as the Holy Grail of renewable energy for its ability to address the intermittency inherent in wind and solar power generation.
“Viable energy storage is a key component of the transition to a cleaner grid,” says Tim Grejtak, an analyst at Lux Research.
For its first investment, BEV chose two companies outside mainstream energy storage, which is dominated by lithium ion batteries that have captured about 90% of the energy storage market, according to GTM Research.
BEV with Evok Innovations committed $6.4 million to Quidnet Energy and, with Prelude Ventures, $9 million to Form Energy.
“Viable energy storage is a key component of the transition to a cleaner grid.”
– Tim Grejtak, Lux Research
Both start-ups are pursuing new takes on existing technologies. Quidnet is developing a variation on pumped hydro storage, one of the oldest energy storage technologies. Instead of pumping water uphill to a holding reservoir until high demand or spiking electricity prices warrant its release, the company pumps water underground into depleted or nearly depleted shale formations where it is stored under pressure until it is released to run a conventional hydro turbine.
Form Energy is developing a sulfur-based flow battery. Flow batteries pump electrolytes between tanks to create an electrical charge. The technology is not new; the challenge is to develop low cost materials for the electrolytes so they can compete against the declining costs of lithium ion batteries.
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The common denominator for both companies is that they are working toward long duration energy storage. Lithium ion batteries can economically discharge energy for only about four hours, and repeated charging and discharging cycles can cause them to degrade. Solving those two problems would help facilitate the wider adoption of renewable resources such as wind and solar power.
Quidnet’s technology appears to be a combination of traditional pumped storage hydro and hydraulic fracturing technologies, says Grejtak. And, like conventional pumped storage, it should be capable of discharging energy for six to 10 hours or even up to 12 or 24 hours. “It is more like a conventional capacity play,” Grejtak says.
Form Energy is aiming for a different market—batteries that can discharge for days or even weeks. Flow batteries have that capability, but most use expensive materials such as vanadium. As those batteries scale up to longer durations, they can get expensive.
Form Energy is trying to bring down costs by using cheap sulfur. The cheaper the material and the longer the duration, the easier it is to amortize the costs, Grejtak says. But, he adds, “you are going after the baseload power market. That is very difficult. That is why we don’t see a lot of market entrants.”
In general, the rapid growth of energy storage has attracted a lot of new entrants, but most of them are in the shorter duration applications that can be served by lithium ion batteries.
In some markets, energy storage is challenging incumbent technologies such as gas-fired peaking plants. But as energy storage grows, companies like Form Energy and Quidnet hope to challenge incumbents within the storage industry.
That is a tough challenge, one that could take decades to pan out, says Grejtak. “The question,” he asks, “is do investors like BEV have the patience to get there?”
