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24 June 2021

EnerVenue has the chemistry to dent lithium ion for grid stores

EnerVenue is a classic case of how fast energy markets can change in the current energy transition – just 3 years ago, the breakthrough that made this type of energy storage possible, did not exist. In two more years it expects 2 GWh to be installed.

CEO Jorg Heinemann talks in reverential tones about Professor Yi Cui, of Stanford University, and how he took a 50 year old technology and gave it a modern day facelift.

That technology was part of the initial NASA forays into space, when nickel hydrogen batteries, with a platinum catalyst, were the best way of powering applications on a space craft. Three years ago Cui suggested his first replacement for platinum as the catalyst, in a paper that can be widely viewed on the internet, and now the company is on the verge of taking a chunk out of a market dominated by lithium ion, which itself is backed by hundreds of massive global multinational companies. That first catalyst was a Nickel Molybdenum-Cobalt alloy, and today the company won’t tell us what has replaced it – at least not yet, but it has travelled a long way and now involves no rare earth metals and is 1,000 times cheaper than Platinum.

“This is fundamentally different from lithium ion,” says Heinemann, “it is really half way to being a fuel cell. As we charge the battery we build up hydrogen inside, then re-absorb it into water. It is stable, durable, can do 30,000 cycles. It can be charged fast or slow.

Essentially this is a battery that is significantly less energy dense than lithium ion, so it is not a candidate for Electric Vehicles, but it won’t suffer thermal runaway, it won’t decay after a few thousand charge-recharge cycles, and as long as you have the rent for a slightly larger physical footprint, it has none of the disadvantages of lithium ion, given that two of the most plentiful things on the planet are the element Nickel, and the compound water. You could build it anywhere with local supplies.

“The product is a simple version of that, a stack of electrodes 30cm x 6cm, with separators, in a metal box that is welded shut and will stay that way for 30 years. This battery design has virtually no maintenance costs,” says Heinemann. It perhaps should be described as a two way fuel cell rather than a battery, and there are other businesses looking into this approach – the largest of which is France’s Schlumberger.

The company has brought it to market, writing its own battery management system, which it says is compatible with any other Energy Management System, and when we suggested they should have used an existing BMS, such as the one from Fluence, they explain, “Most BMS are based on voltage control, whereas ours is based on the pressure of the stored hydrogen, and the voltage of the system. “This means it can track the state of charge more precisely, which is tough to do in Lithium,” hence it was a simpler task to write the BMS he reckons, and one written for lithium ion would not have helped.

The whole discussion then goes down the path of maintenance and its cost in lithium ion batteries. Heinemann is very clear that most contracts for lithium ion on the grid, involve limitations to when and how often the battery can be used, and he suggest that Opex is as high as the capex, and both are around a third of the total spend, the rest being cost of finance.

“Our product will compete on Levelized Cost of Storage (LCOS) even if we get a modest amount of scale,” he says. “In lithium so often the size of the storage has to be ‘augmented’ or oversized, because of concerns that some of the cells will cease operating after a while, and this is built into developers’ thinking. Then there are those charge-discharge limitations per annum built into the usage, which we don’t have, and then there is the true cost of maintenance, which for lithium usually involves air conditioned containers – none of which we need. And then there is a warranty expense – again something nickel hydrogen won’t need,” or at least won’t cost as much.

The company has a modest plan compared to most battery makers – it will manufacture 1 GWh of product per year and that will match the LCOS of lithium ion in just two years, so by 2023. At the moment it is making batteries by hand, but still getting yields of 90%, and once manufacturing moves over to a fully robotic system, the yields will go up.

“Our system will also work in minus 40°C up to plus 60°C, just as it comes. We don’t have to build anything for them to be weatherized, it just comes as part of the technology,” he says.

It will take time for banks to understand that all of this is actually true, and to stop them automatically assuming that if lithium has these problems then a new technology is bound to have them too. Which is why having a shareholder that can underwrite the finance for installations 100% in the early market is important. Doug Kimmelman the founder at Energy Capital Partners was an early investor. ECP is a private equity firm with a $2.25 billion fund to invest in renewable assets. The other main investor right now is Peter Lee, owner of Hong Kong-based utility Towngas.

Today the roundtrip efficiency of energy in and energy out for this type of battery is 80% says Heinemann, “but we have line of sight for that to raise to the high 80s, and perhaps past 90%,” he insists, which would put it considerably ahead of Flow batteries and all lithium products.

“The most important thing in batteries is that they are flexible and that is our key strength,” says Heinemann, “we can be used in a use case for 4 to 6 hours constantly, or multiple times each day. It doesn’t matter to this type of battery.”

So far EnerVenue has filed some patents, but Heinemann nods sagely when he ways, “but not enough for anyone to work out precisely how we do this, so some of the essential patents are there, but separately we have a kind of recipe and further trade secrets and of course the team, led by Professor Yi Cui.”

In our experience at Rethink Energy, this type of product will not unseat the momentum behind lithium ion, there’s too much of it and the drive downwards in LCOS over the next decade in lithium will be driven by the billions of dollars chasing that and EV batteries. But that does not mean that every utility will be blind to the benefits of a safer, slightly cheaper and far more flexible technology, who can be brought one at a time to use nickel hydrogen, once it is proven.

“There are some US utilities who have expressed big concerns about the stability and price of lithium ion batteries, and they are first on our list of calls, and are expressing interest,” but Heinemann cannot be convinced to say more at this point. We will watch this company with interest.