As battery storage booms, investors spend big on startups – Utility Dive

Dive Brief:

  • Chevron Technology Ventures, the oil giant’s venture capital arm, is investing in long-duration energy storage firm Malta Inc. as part of a Series B financing round
  • Chevron is joined by Piva Capital, Bill Gates’ Breakthrough Energy Ventures, Proman, Alfa Laval and Facebook co-founder Dustin Moskovitz in the fundraising round, which topped $60 million. Malta spokesman Matt Burke said the funding will support construction of the company’s first 100 MW plant relying on thermal energy storage. 
  • Separately, North Carolina-based storage firm FlexGen announced a $150 million equity commitment from Apollo Global Management, which FlexGen CEO Kelcy Pegler Jr. said would support hiring and training as the company expands its storage contracts. The company works on utility- and commercial-scale storage and developed the HybridOS management system, which supports automation of energy storage and dispatch.

Dive Insight:

Pegler said the equity commitment reflects a “huge uptick in interest” in battery storage as utilities install variable solar and wind generation. A new report from the Energy Information Administration predicted a massive ten-fold growth in U.S. large-scale battery storage installations between 2019 and the end of 2023, with enough storage to contribute 10,000 MW to the grid being installed between 2021 and 2023. Industry supporters say the growth could be even more significant, given a sharp rise in deployments in 2020. 

Higher demand, coupled with a drop in prices for lithium-ion batteries, has led to a flurry of new interest in storage producers, especially those working on more novel long-duration technologies. A June 2021 analysis from Wood Mackenzie forecasts that the U.S. storage market will grow to $8.5 billion a year by 2026. 

FlexGen produces a software platform to integrate storage and has supported deployments of more than 1.2 GWh of storage for utility, microgrid, commercial and industrial customers. Pegler said the $150 million investment will “allow us to do more, quicker,” especially as the storage market rapidly evolves. 

“This industry is coming into focus in real time,” Pegler said. “Today, nobody questions whether renewables will be part of the grid in the future. Battery storage happens to sit at the intersection of this grid transition.”

That’s contributed to a flurry of investments and partnerships for storage startups, even for the more novel long-duration technologies. The volume of investment and subsequent expansion in domestic manufacturing could help address one of the problems facing the storage market: a perceived lack of high-volume and trusted manufacturers. 

“Investors are reacting to the growing momentum of the energy transition — they’re getting on board with technologies that can facilitate or accelerate it.  And battery storage is clearly in that category,” Marlene Motyka, Deloitte’s U.S. and global renewable energy leader, said in an email. “They’re also seeing the DOE investing in RD&D for storage technologies — and more funding proposed in the infrastructure bill. Long-duration energy storage is one of the big targets for the electric power and renewables industries — because if they can store electricity across days, months, and even seasons — the system can use far more renewable energy and get to 100% clean electricity sooner.”

Malta, a Google X spinoff, is developing a pumped heat storage system that it says could store 100 MW for between 10 and 200 hours. Chevron’s investment in Malta came from its $300 million Future Energy Fund II.

Barbara Burger, president of Chevron Technology Ventures, said in a statement the oil giant backed Malta for its “potential to be a key enabler of grid stability as renewables have become a greater portion of the energy mix.”

In recent weeks, Massachusetts-based Ambri Inc, which is working on utility-scale batteries, announced $144 million in financing from investors including Bill Gates, Paulson & Co. Inc. and Reliance Industries Limited, the largest company in India, which will support high-volume manufacturing in the U.S. Relectrify, an Australian battery startup, also announced a multi-million fundraising round led by venture capital firm Energy Innovation Capital, including investments from a Portuguese utility and South Korean conglomerate GS Group. Form Energy also made waves this summer with a $200 million fundraising round and the announcement of a battery chemistry it says could offer long-duration storage at less than $20/kWh. 


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