SoftBank to invest $110m in brick tower energy storage start-up

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Series B Energy Vault funding marks first time Vision Fund 1 has invested in sector

SoftBank Vision Fund will invest $110m into an energy storage start-up, Energy Vault, that plans to build huge brick towers that can store energy, marking the Vision Fund’s first foray into the fast-growing storage sector.

The Lugano-based start-up said it would use the funding to pursue a rapid global deployment strategy, simultaneously building commercial-scale projects on four continents.

The Series B funding of Energy Vault marks the first time the $97bn SoftBank Vision Fund 1 has invested in energy storage, although renewable energy has long been a key area for the broader SoftBank Group.

Energy Vault’s storage system uses a crane to lift heavy bricks into a tower formation, with machine vision and algorithms to operate the crane.

When excess power is on the grid, for example from renewable energy on a very windy or sunny day, that power can be used to stack up the giant bricks — which weigh 35 tonnes each. Then when power is needed, the crane lowers bricks back down to the ground using the force of gravity to generate electricity.

Energy Vault has a one-quarter-scale pilot tower in Switzerland that became operational last year, and will complete a demonstration unit in northern Italy by the end of this year.

“The beauty of the Energy Vault solution lies in its simplicity,” said Akshay Naheta, managing partner for Emea at the SoftBank Vision Fund. “It’s like what we all learned in fifth-grade science, you can convert one form of energy into another very easily.”

Energy storage is seen as one of the main technological bottlenecks that is holding back the deployment of renewable energy worldwide. Current systems such as lithium ion batteries or pumped hydro storage are, respectively, too expensive and too geographically limited to be deployed on a large scale.

Robert Piconi, chief executive of Energy Vault, said the funding would help the company construct projects on four continents where it has commercial agreements already in place.

“We will be able to do multi-continent deployment concurrently,” said Mr Piconi. “When we launched in November 2018, the demand was so overwhelming and there was no region I could single out, it was across every continent.”

He emphasised that the energy towers can be a cost-efficient way of storing power, because the giant bricks can be constructed from local materials such as compressed soil combined with a special sealant produced by Cemex.

The Vision Fund will take a seat on the board of Energy Vault, and SoftBank is the sole participant in the series B round. Previous investors in the start-up include Cemex, the global cement company.

SoftBank will be a customer of Energy Vault, Mr Naheta said, without disclosing any details.

Energy Vault is also building a tower for the Tata Power company that will have a peak power delivery of 4MW and storage capacity of 35 megawatt-hours.

SoftBank Vision Fund makes first energy bet

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Swiss startup Energy Vault raises $110m to deploy brick storage towers worldwide

TOKYO — SoftBank Group‘s near $100 billion Vision Fund made its first bet in the energy sector with a $110 million investment in Switzerland-based startup Energy Vault.

The funding will enable Energy Vault to deploy its huge brick energy-storage towers across the world, the company said on Thursday.

“We looked at who can bring a global network to accelerate our deployment, and SoftBank was an easy choice,” said co-founder and CEO Robert Piconi in a phone interview. He declined to comment on the financial terms of the deal.

Earlier investors include the corporate venture capital arm of Mexican cement giant Cemex.

The cost of storing energy is considered a major problem for the renewable energy sector. Founded in 2017, Energy Vault is developing a tower that moves thousands of giant, 35-metric ton bricks to store excess energy.

The company says the system is more affordable and easier to deploy than conventional pumped hydro storage systems.

Energy Vault plans to demonstrate a tower with a 35-megawatt hour storage capacity for the first time during the fourth quarter in Italy, and has agreements with customers in four continents.

SoftBank operates a renewable energy business within and outside Japan. But the deal marks the first time that the Vision Fund — which mainly invests in disruptive artificial intelligence technology — is venturing into the energy sector.

Energy Vault said it is developing machine vision software that enables the towers to operate autonomously.

Energy Vault raises $110 million from SoftBank Vision Fund as energy storage grabs headlines

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Imagine a moving tower made of huge cement bricks weighing 35 metric tons. The movement of these massive blocks is powered by wind or solar power plants and is a way to store the energy those plants generate. Software controls the movement of the blocks automatically, responding to changes in power availability across an electric grid to charge and discharge the power that’s being generated.

The development of this technology is the culmination of years of work at Idealab, the Pasadena, Calif.-based startup incubator, and Energy Vault, the company it spun out to commercialize the technology, has just raised $110 million from SoftBank Vision Fund to take its next steps in the world.

Energy storage remains one of the largest obstacles to the large-scale rollout of renewable energy technologies on utility grids, but utilities, development agencies and private companies are investing billions to bring new energy storage capabilities to market as the technology to store energy improves.

The investment in Energy Vault is just one indicator of the massive market that investors see coming as power companies spend billions on renewables and storage. As The Wall Street Journal reported over the weekend, ScottishPower, the U.K.-based utility, is committing to spending $7.2 billion on renewable energy, grid upgrades and storage technologies between 2018 and 2022.

Meanwhile, out in the wilds of Utah, the American subsidiary of Japan’s Mitsubishi Hitachi Power Systems is working on a joint venture that would create the world’s largest clean energy storage facility. That 1 gigawatt storage would go a long way toward providing renewable power to the Western U.S. power grid and is going to be based on compressed air energy storage, large flow batteries, solid oxide fuel cells and renewable hydrogen storage.

“For 20 years, we’ve been reducing carbon emissions of the U.S. power grid using natural gas in combination with renewable power to replace retiring coal-fired power generation. In California and other states in the western United States, which will soon have retired all of their coal-fired power generation, we need the next step in decarbonization. Mixing natural gas and storage, and eventually using 100% renewable storage, is that next step,” said Paul Browning, president and CEO of MHPS Americas.

Energy Vault’s technology could also be used in these kinds of remote locations, according to chief executive Robert Piconi.

Energy Vault’s storage technology certainly isn’t going to be ubiquitous in highly populated areas, but the company’s towers of blocks can work well in remote locations and have a lower cost than chemical storage options, Piconi said.

“What you’re seeing there on some of the battery side is the need in the market for a mobile solution that isn’t tied to topography,” Piconi said. “We obviously aren’t putting these systems in urban areas or the middle of cities.”

For areas that need larger-scale storage that’s a bit more flexible there are storage solutions like Tesla’s new Megapack.

The Megapack comes fully assembled — including battery modules, bi-directional inverters, a thermal management system, an AC breaker and controls — and can store up to 3 megawatt-hours of energy with a 1.5 megawatt inverter capacity.

The Energy Vault storage system is made for much, much larger storage capacity. Each tower can store between 20 and 80 megawatt hours at a cost of 6 cents per kilowatt hour (on a levelized cost basis), according to Piconi.

The first facility that Energy Vault is developing is a 35 megawatt-hour system in Northern Italy, and there are other undisclosed contracts with an undisclosed number of customers on four continents, according to the company.

One place where Piconi sees particular applicability for Energy Vault’s technology is around desalination plants in places like sub-Saharan Africa or desert areas.

Backing Energy Vault’s new storage technology are a clutch of investors, including Neotribe Ventures, Cemex Ventures, Idealab and SoftBank.

SoftBank invests $110 million in a startup trying to solve a big problem in renewable energy with a giant brick-lifting crane

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SoftBank’s $1 billion Vision Fund has invested $110 million into Energy Vault, a Swiss startup that has come up with an innovative way to store renewable energy to meet the ebb and flow of demand.

It’s SoftBank’s first investment into an energy-storage company and marks growing investor interest in the space as countries shift away from fossil fuels.

One of the thornier issues in the switch to renewable energy is that energy provided by the weather is, naturally, dependent on the weather.

A sunnier or gloomier day will dictate whether energy production goes up or down, potentially overloading the grid. That can lead to power cuts. And most power grids were built with fossil fuel rather than renewable sources in mind. The issue then is around capturing and storing any excess energy for days and months when consumer demand is higher.

Some firms are already working on short-term energy storage — it’s why Tesla built a giant lithium-ion battery next to a wind farm in Australia. But, according to Robert Piconi, the CEO and cofounder of Energy Vault, batteries work only to smooth out short-term spikes in energy demand. You need other technologies to store renewable energy for months at a time, something that is likely to become more common.

“You want to store that in an efficient way, in a way that doesn’t degrade,” he told Business Insider. “Like in a chemical battery — if you’re going to store it, that solution is going to degrade over time.”

This stack of concrete bricks is Energy Vault’s alternative to the giant battery:

The stack is made up of 35-metric-ton bricks, topped by an autonomous six-arm crane. As a solar or wind farm produces surplus energy, the crane’s software directs it to pick up and stack the bricks to form a tower. Energy is stored in the elevation gain. As and when energy is needed, the crane’s software returns to the bricks from the ground and turns the resulting kinetic energy into electricity.

The tower can be as big as needed, and Energy Vault says each plant has a capacity of between 10 and 35 megawatt-hours and power output of between 2 and 5 megawatts.

The concept, according to Piconi, is similar to mainstream pumped hydro-storage solutions, which use a reservoir and dam system to store energy. With pumped hydro, however, “you have a dependency on that topography and if you build it, it hurts the environment.”

“It hurts the wildlife and the local ecosystem,” Piconi said. “So while that’s the largest type of energy storage today, all the best locations have been built. And it’s not mobile, you can’t go build in other locations.”

Ravi Manghani, the head of energy storage at the consultancy Wood Mackenzie, said Energy Vault’s tower “has all the makings of good long-duration storage.”

He said: “It’s cheap, it’s readily off-the-shelf for the most part, and it’s going to last forever if you take care of it. It’s not a lot of manufacturing investment to build those blocks, and then it can last decades, unlike some current technologies. Most of the battery storage would last about 10 or 20 years, but here we’re talking about lasting double that.”

Energy Vault was founded in 2017 and launched in 2018, and has announced Tata Power, one of India’s biggest energy providers, as a customer. It’s building a 35 megawatt-hour tower in Milan for completion this year. It also has a partnership with the Mexican materials firm CEMEX.

According to Piconi, the money from SoftBank is part of the Japanese investor’s efforts to back big global ideas, such as tackling climate change. “They’re trying to invest in things that solve big world problems, climate change being, I think, one of the highest priority problems we have,” he said. “It’s no surprise SoftBank would be trying to find a solution in energy storage.”

Manghani said SoftBank’s backing signaled growing investor interest in energy storage. “It does speak volumes about which the direction of storage investment is going. We’ll see many more investments in the coming months and years as this area gets more mature.”