Energy Vault Loses $1.2 Billion/40% Market Cap, CO2e/kWh Worse Than Natural Gas

Energy Vault was so obviously flawed in so many ways in its first incarnation that I didn’t even bother to critique it. I expected it to wither and die, unmourned. But I didn’t count on the SPAC craze which is so heavily distorting cleantech markets, or the ongoing ability of Bill Gross to get a lot of money for poor ideas. Like Bill Gates, he made his money in computers, although in the dot-com era with a bunch of shrewd and lucky bets. And like Bill Gates, he keeps getting a lot of money thrown at marginal climate technologies.

This isn’t to say that either Gross or Gates’ hearts aren’t in the right place, but they are clearly listening to the wrong technical advisors when it comes to energy. As I asked and answered two years ago, What Does Bill Gates’ Favorite Energy Guru, Vaclav Smil, Get Wrong? Smil misreads the energy transition, especially around natural gas, and ignores rejected energy and economies of scale for manufacturing. These critiques are only on his efforts around energy and renewables, not on the rest of his body of work, of which I have no opinion. But they do lead to Gates and others thinking that we need breakthrough solutions when we have the vast majority of the solutions in mature technologies which just need incremental innovation and continued economies of scale. Many in the Breakthrough circle are still stuck in the mid-2000s, when there were a lot more unanswered questions, and they haven’t updated their assumptions.

Gross wasn’t really on my radar screen, but certainly his companies have turned out to be. I tore apart Heliogen’s claims and results 2.5 years ago (part 1, part 2), pointing out that a small percentage improvement on concentrating solar power’s generation efficiency would still not make it competitive with photovoltaic solar, and that its claims of being an industrial heat provider made no sense at all as heat isn’t required in a 1-meter disc 100 meters off the ground, but deep inside industrial complexes. It appears that Gross has loved concentrating solar power for a couple of decades, with two previous CSP ventures before Heliogen. Getting attached to a technology and not realizing that it was time to let it go isn’t a good sign. The US DOE has a similar problem.

Similarly, while I haven’t specifically torn apart Carbon Capture, it’s just another direct air capture solution, requiring absurd amounts of manufactured materials and energy to separate 415 ppm of CO2 from the air. As I calculated while assessing Carbon Engineering, an alternative technology which is also funded by the crowd around Bill Gates, you have to filter a Houston Astrodome’s worth of air to get a ton of CO2.

Direct air capture’s failure of scale is that while the space blanket of 415 ppm of CO2 is enough to warm the planet, it’s very expensive to extract.

Getting up a to a million tons of CO2 a year would require two kilometers of 20-meter high, 8-meter thick fans running 24/7/365 for 0.0025% of annual CO2 emissions, and 0.0001% of the historical problem. As this isn’t about Carbon Capture, I’ll just say that Carbon Engineering’s solution is only fit for enhanced oil recovery using unmarketable natural gas, which is exactly what it’s doing in the Permian Basin with Oxy. The natural markets for direct air capture are capturing governmental funding, oil and gas greenwashing, and enhanced oil recovery, none of which merit investment in 2022.

And now there is Energy Vault, making Gross’ contribution to climate solutions a trifecta of challenges.

The initial concept was terribly silly in obvious ways, which didn’t prevent a lot of money from being thrown at it. It involved cranes picking up big concrete blocks and stacking them in an increasingly high circle around the cranes to store energy and lowering them back down to the ground again to release energy. It was the concept and prototype I first looked at and then ignored as it wasn’t worth my time to debunk it.

The failures, to reiterate them, were that it couldn’t work in winds that were more than negligible due to long lines, swaying blocks, and a requirement for precision placement, the decreasing energy with each lower row of blocks meaning that it left a lot of potential energy untapped, the requirement for non-degrading Lego-like blocks that fitted over one another securely, and, of course, the massive embodied carbon problem of an awful lot of reinforced concrete at 732 to 941 kg CO2e per metric ton. Basically they were creating a 120-meter potential energy for mass, and leaving half of it unused on average.

Potential energy is calculated as mass in kilograms times the acceleration due to gravity times the height in meters, so the average block of 35 non-metric tons turns into 60 x 9.8 x 31,751.5 = 18,669,882 joules of energy, which sounds a lot more impressive than it is. That’s only 18.7 megajoules or 5.2 kWh. That block had about 27 tons of embodied CO2e, so at 5 kWh per lift on average it was going to have to be lifted and lowered close to 500 million times to get down to the level of wind energy, which is running about 11 grams CO2e per kWh right now.

At their remarkable claims of 360 days working per year, one cycle per day, and 35-40 years of work, that would be 14,400 lifts. That brings the carbon debt delivered down to only 1.8 kg per kWh, which is to say about 80% worse than burning coal and about 170 times worse than wind energy.

This is, of course, ignoring mechanical efficiency losses which include the motor efficiency of 60%-86%, gearing efficiency, and cable friction. Round trip, this is unlikely to be better than 75% with a very high degree of maintenance. Multiply the carbon debt by 1.33. There is a reason that one of my rules of thumb for assessing technologies is that “electronics outperform the physical.” There are counter-examples, but they are relatively few and far between, such as the mechanical component of HVDC hybrid circuit breakers and pumped hydro storage.

Of course, cranes require constant inspection and maintenance to keep working, and as stated don’t like high winds. The thing about grid storage is, everyone wants it just to sit there and work unattended 24/7/365, not have a lot of people clambering around it keeping it going.

These are the glaringly obvious problems that aren’t easily solved that were clear to me without bothering to look further, hence the reason I didn’t bother to do the above calculations and critique it before. I assumed it would be obvious to any reasonably informed person. I typically just posted a video of a crane collapse in a port or downtown area when the subject of Energy Vault came up and went about my day otherwise.

“Fixing” the problems

Of course, these glaring problems meant that Energy Vault had to ‘refine’ its solution, all of which is making it much more expensive and differently silly. The first thing that it did was make it wind proof by putting it in a huge building, which has its own problems. The building height for the EVRC grid-scale solution is 40% shorter than its original tower design, per the company website. The EV1 commercial demonstration unit tower and Energy Vault’s claims of 35 MWh of storage was 120 meters, so the building is presumably in the 72-meter range, or roughly a 25-story building.

Instead of cranes, they are using elevators, which is to say cranes inside the building, but protected from wind and rain.

And of course, they are going to, at some point in the future, make the blocks from “waste and remediation material for beneficial re-use, such as coal combustion residuals (coal ash), fiberglass from de-commissioned wind turbine blades and waste tailings from mining processes.” None of this material will be anywhere near the location of the energy storage, so it will have to be shipped, molding it into blocks will require cement or other binding agents with their own carbon debt, and still require reinforcement with steel with its carbon debt, which is a big part of the carbon debt of concrete blocks.

What is the carbon debt of steel today? A lot more than reinforced concrete, at 1.8 metric tons of CO2e per metric ton of steel, over double the median number.

So we have some new numbers to work with and some approximations to make. The building is about 72 meters tall, and their intent, per their CGI video explainer, is to have 30 non-metric ton blocks raised up by internal elevators, then roll on wheeled dollies down tracks to the back of the building so that more bricks can take advantage of that height. As the explainer makes clear, however, they are still stacking bricks on the bottom, so they aren’t taking full advantage of height regardless, just more on average.

Let’s give each brick 50 meters of elevation gain on average. 30 non-metric tons is 27.3 metric tons. That equates to 3.7 kWh per lift per brick.

Assuming 20% of the carbon debt per block, because there’s only so much you can do to make something that behaves like reinforced concrete, and the same remarkable 40-year life time and equally remarkable 97% uptime, that gives a carbon debt per kWh of 317 grams CO2e, or 60% of natural gas.

Oh, but wait. Remember that building? Think of all the extra steel to make a 25-story building full of load-bearing steel pillars and rails and cables. Remember that steel has 1.8 metric tons of embodied CO2e per metric ton. Unsurprisingly, while Energy Vault is claiming to make long-lasting concrete replacement blocks with significantly lower carbon debts, they are completely silent on the massive amounts of additional steel that their ‘solution’ involves. I’ll note in passing that their CGI makes the steel girders look tiny, so I don’t believe that they are representative of any structural engineering assessment yet. I’ll also note that cargo elevators typically max out at 4.5 non-metric tons, so 30 non-metric tons going all the way to the top floor is already past the bounds of usual building technologies.

All of the steel to hold hundreds of 30-ton concrete-surrogate 72 meters above the ground will probably weigh 20% of the mass of the blocks as a guesstimate (it could be more as steel weighs around three times as much as reinforced concrete for the same volume). That means we have to add about 40% of carbon debt to the kWh, bringing it up to around 450 grams CO2e per kWh, or really close to the range of natural gas generation.

Oh, but wait. Let’s add in that mechanical efficiency. 20% loss there, to be very generous, means adding another 25% of carbon debt, so well over 500 grams CO2e per kWh, worse than natural gas.

Oh, then there’s maintenance and replacement as this massive Rube Goldberg contraption ages and large chunks of it have to be replaced. Add more carbon debt per kWh.

Sure, we’ll be making less carbon intensive steel over time, but when the best case scenario is worse than natural gas over the lifetime, you can’t turn that into low-carbon storage.

Of course, that building is much more expensive than three cranes, and the special low-carbon blocks are going to be a lot more expensive than reinforced concrete, otherwise we’d be using them in construction everywhere, and their claims of 97% up time when the best wind farms in the world — much simpler, much more mature — have a maximum of 95% uptime don’t stand up to scrutiny, so their claims of low-cost storage look pretty dubious as well.

Energy Vault’s solution which ‘fixes’ the problems with their first approach leads to CO2e per kWh numbers worse than natural gas generation, and makes a mockery of their claims of low cost storage. I’m not shorting Energy Vault, by the way, and publishing this hoping to clean up like the Nikola surgical dissection by a shorting analyst last year. This analysis is like the rest of my work, free guidance for investors and policy makers to assist them to make better decisions.

I’ve been assessing and publishing on grid-scale storage options for years. I’ve looked at the embodied carbon, the thermodynamics, the chemistries, the deployments, the economics and the research. I’ve spoken to grid storage researchers and deployers globally. I’m strategic advisor and board observer for the multiple-award winning Agora Energy Technologies, a company developing a CO2-chemistry based redox flow battery, and I’m engaged professionally in pumped hydro as well, something I’ll be able to write more about later. I write, speak and consult on grid-scale storage regularly, and have spent time with a couple of the biggest investment banks in the world as well as VCs working through my observations. What some may consider bias, others would consider professional expertise. I’ll leave it to readers to be the judge.


 


 


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