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11 January 2023

Energy Vault partners with PGE for non-gravity project

Energy Vault’s mystery partner announced during its Q3 2022 earnings call has been revealed to be PG&E, as the companies plan what it calls a battery-hydrogen energy storage system (BH-ESS) with a minimum of 293MWh of dispatchable carbon-free energy, with the possibility of expanding the system to 700MWh should a use-case present itself.

The system is destined for the Northern California city of Calistoga – in California wine country – and will be capable of supplying the downtown and surrounding areas for 48 hours during planned outages and Public Safety Planned Shutoffs (PSPS), which occur most often during wildfire season. The BH-ESS will be owned, operated, and maintained by Energy Vault while providing PGE&E with tolling services under a ten-and-a-half-year agreement.

The system will directly replace diesel generators that would otherwise be used to power the microgrid during broader outages and will offset emissions accordingly.

While this partnership is definitely a step in the right direction in the replacement of diesel generators with some kind of energy storage system (ESS), battery, hydrogen, or otherwise, Energy Vault’s “raison d’etre” is its gravity system, so why isn’t the company employing its proprietary system where it can? If this system is as revolutionary as Energy Vault says it is, why aren’t we hearing more deals and announcements about it?

If it was, we’d never hear the end of it, companies like to boast about the implementation of a new and unique system whenever the opportunity arises, but it’s becoming an increasingly uncommon site to see from Energy Vault.

Energy Vault Solutions, the company’s subsidiary that handles “technology agnostic” projects like this BH-ESS project for PG&E and other BESS projects elsewhere, has been getting plenty of business, far more than Energy Vault itself in recent times. It also feels like every announcement from the company bangs on about technology agnosticism, about “software-side implementation of an effective battery management system across different chemistries”.

We’ve commented before that the company’s main business focus seems to be changing, and that while it continues to claim to be the provider of innovative solutions, its flagship energy storage design seems inapplicable for most of the projects the company receives. Putting your pilot project out of the way in the Swiss mountains is excusable, particularly when you’re swinging around multi-ton concrete slabs, if anything we would appreciate being out of earshot for that one.

But then redesigning your product only to stick it in Mongolia, one of the least population-dense areas in the world, where even the cities are sparsely populated, doesn’t exactly inspire confidence. The lack of concrete orders in major population centers for the company’s flagship product should be a point of concern. As should the company’s insistence on diversification, which at this point looks more like an admission of defeat in developing its own unique selling point within its proprietary system.

Energy Vault’s announcement states “We’re excited to partner with PG&E on this groundbreaking project that reflects Energy Vault’s differentiated ability to design, build and operate innovative and utility-scale energy storage solutions that meet our customers’ specific needs in achieving their grid reliability and decarbonization goals”. While this reads well with no context, it seems as if Energy Vault’s customers’ specific needs tend to eliminate the company’s proprietary solution more often than not, and that the company has been forced to offer alternatives if it wanted to attract enough business to compete in the long-term.

Energy Vault has recognized this, otherwise Energy Vault Solutions wouldn’t have been made to shore up orders for the company to maintain a semblance of success on the company’s balance sheet.

The key piece of information everyone seems to be missing here is why? Why isn’t Energy Vault implementing more of its proprietary solution when it claims to be cost-competitive with the rest of the energy storage industry? This would explain the existence of Energy Vault Solutions, a company that if owned by anyone else, would be a direct competitor with Energy Vault and its main offering.

We’ve always said that Energy Vault’s proprietary solution is something that makes you think, why hasn’t that been done before? Energy Vault’s refocusing on what other companies have proved to work might be all the explanation we need as to why other companies haven’t pursued this particular avenue of energy storage. Or at least why none have succeeded as of yet.