SoftBank’s first bet in energy storage is a startup that stacks blocks

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SoftBank’s Vision Fund is investing $110 million in the Swiss startup Energy Vault, which stores energy in stacked concrete blocks. Quartz was the first to report on the startup when it came out of stealth mode last year.

Two things make this investment unprecedented. First, it’s an unusually large sum for a company that hasn’t even existed for two years or built a full-scale prototype. Second, by making an energy storage bet, the $100 billion SoftBank Vision Fund—which has invested in startups like Uber, Slack, WeWork, and Paytm—is signaling to the wider market that this area of technology is ripe for large investments.

So far, most investments in energy storage have gone to companies building lithium-ion batteries. They’re an attractive bet, because carmakers are willing to pay a premium for batteries that will help electric cars compete with their gas-powered cousins.

But the technology to store electricity doesn’t need to be as powerful as lithium-ion batteries. While companies like Tesla and Sonnen sell lithium-ion batteries for homes and, in larger packages, for the grid, Energy Vault’s bet is that its technology will prove to be cheaper. That’s because it uses low cost materials: cement and sand to make blocks, cranes to lift and drop the blocks, and reversible motors to convert electricity into potential energy and vice versa.

Energy Vault was founded in 2017, and it built its first energy-storage prototype in only nine months with less than $2 million. Now Akshay Naheta, a managing partner of SoftBank’s Vision Fund, believes the startup is ready for an injection of a large sum to deploy its technology around the world.

Fifth-grade physics

Here’s how that system works, as we explained previously:

A 120-meter (nearly 400-foot) tall, six-armed crane stands in the middle. In the discharged state, concrete blocks weighing 35 metric tons each are neatly stacked around the crane far below the crane arms. When there is excess solar or wind power, a computer algorithm directs one or more crane arms to locate a concrete block, with the help of a camera attached to the crane arm’s trolley.

Once the crane arm locates and hooks onto a concrete block, a motor starts, powered by the excess electricity on the grid, and lifts the block off the ground. Wind could cause the block to move like a pendulum, but the crane’s trolley is programmed to counter the movement. As a result, it can smoothly lift the block, and then place it on top of another stack of blocks—higher up off the ground. The system is “fully charged” when the crane has created a tower of concrete blocks around it.

When the grid is running low, the motors spring back into action—except now, instead of consuming electricity, the motor is driven in reverse by the gravitational energy, and thus generates electricity.

Since it came out of stealth mode last year, revealing a one-tenth scale prototype in Biasca, Switzerland, the company has received plenty of interest from potential customers, says Rob Piconi, Energy Vault’s CEO. The SoftBank investment will help it first build a full-scale prototype—one each in Italy and India—and then build multiple towers—each with a capacity of 35 MWh—for actual customers soon after.

“We at the Vision Fund want to come in when a technology is proven and it’s ready to scale. That’s what’s so exciting about this technology. It’s not a science problem. It’s fifth-grade physics,” said Naheta. “There will be teething problems with any new technology. But this is more of a scaling problem.”

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