When I first heard about the company Energy Vault NRGV, I thought it was an implausible though wonderfully creative idea. In short, Energy Vault has developed a plan and is now designing and building facilities that essentially recreate the physics of the most popular form of energy storage – pumped hydro – without pumps or hydro.
Energy Vault installations use excess renewable energy to lift massive composite blocks; then, when the energy is once again needed on the grid, the blocks are dropped and the kinetic energy from the dropping blocks spins generators that supply electricity to the grid.
Some online reviewers of Energy Vault’s technology have been scathing. Still, the more I have read and thought about the present needs of our grid, the more I think the Energy Vault solution is an interesting and potentially valuable one for two main reasons:
I have split my coverage of Energy Vault into a series of three articles. My previous article looked at Energy Vault’s technical solution; this one looks at the advantages of Energy Vault’s solution from a political and social perspective, and the last article sums everything up and offers my take on Energy Vault as an investment.
Energy Vault facilities are essentially large civil engineering projects. The company’s EVx storage units are combined into modular Energy Vault Resiliency Centers (EVRC) that are up to 450-feet high (to put this in perspective for my fellow Chicagoans, this is about 100 feet taller than the Merchandise Mart).
Because EVRCs are constructed rather than manufactured, there is a major component of the Energy Vault solution that simply cannot be outsourced to low-wage countries. In other words, because EVRCs are construction projects, they create local jobs and stimulate local economies. This difference in approach is worth a great deal in my opinion, in that it provides a way for a wider segment of the population, including people living in rural areas, to directly benefit from low-carbon transition projects.
This advantage of Energy Vault’s local construction project over the assembly of Lithium-ion battery facilities cannot be overstated. Lithium-ion battery components are mined, and the batteries and their housings are assembled in far-away factories; the economic advantages from the production of those batteries are highly concentrated. Some local work may be needed to pour concrete foundations for Lithium-ion installations, but the installations themselves tend to be assembled at a German or Californian plant and shipped intact to the facility location.
Some critics of Energy Vault talk about how large of a carbon footprint constructing EVRCs will be. Steel and reinforced concrete is used in the buildings and both materials carry a heavy cost in carbon emissions.
To these critics, I have a few responses:
First, I agree with your basic premise. We do have to pay attention to the Scope 3 emissions embedded in the materials that go into the products we use, and make sure that the projects we undertake offer true benefits that offer net GHG emission reductions in a reasonable amount of time.
Second, we simply cannot build new infrastructure — infrastructure that is necessary for future emission reductions — without emitting greenhouse gases. The point of an investment is to realize an immediate expense in the expectation of an uncertain future payoff; by investing part of the world’s carbon budget in the short-term building an EVRC facility, we buy a long-lived asset that carries out a necessary function while emitting no greenhouse gases.
Last, steel and concrete are presently high carbon footprint materials, but a lot of research is being done into cutting and eliminating emissions from those activities (e.g., Blue Planet for cement manufacturing, SSAB for steel production).
The discussion of materials makes a nice segue to my next point.
One of the things that struck me when I spoke with Energy Vault’s CEO, Robert Piconi, was his comment that he thought of Energy Vault as a materials science firm. Energy Vault has been working with Caltech engineers to develop an aggregate used to create the 25- to 28-metric ton blocks that consists of coal ash, recycled carbon fiber, and local dirt.
Coal ash is a natural biproduct of burning coal. About half of the waste coal ash, the smallest particles that get scrubbed from exhaust flues is called “fly ash;” fly ash is used as a filler for making cement and other uses, but the remaining half is simply plowed into landfills where they are notorious for polluting water tables and causing ecological problems.
Energy Vault blocks are partially made using this waste stream, which is of course plentiful near coal-fired power plants (this is another reason why I can see synergy between Energy Vault and coal-burning powerplants backfitted with oxy-combusting boilers made by a company like Jupiter Oxygen, as mentioned in my previous article).
Another component of the Energy Vault blocks is carbon fiber recycled from decommissioned wind turbine blades. As wind turbines age, the blades become pitted and damaged and the efficiency with which they produce power drops. When this happens, they must be removed and, because there is no way to recycle them, they end up getting dumped into a landfill. Energy Vault projects that roughly 57,000 giant turbine blades will be landfilled this year and that the amount of turbine blade waste is going to grow exponentially into the future.
Energy Vault shreds the old blades, combines those shreds with the coal ash and with local soil at each of its facility sites, and compresses the detritus into the blocks used to store power in the EVRC facilities.
Again, this is a big win – creating a circular economic flow for toxic and / or otherwise impossible to recycle materials and combining that with a local supply chain (i.e., the supply of local dirt) is exactly the type of circular solution we need to be thinking about.
Cleaning up coal ash pools will also likely provide human health and ecological benefits to local communities, further providing evidence of the benefits realizable from the low-carbon transition.
It is amazing to me that maintaining an ecosystem that will continue to support plant and animal life and a complex, vibrant human civilization is a partisan issue, but somehow this is the reality we all face right now. Given the cultural milieu, solutions that are not only palatable to politicians of different partisan affiliations, but solutions that will actually help politicians of different affiliations get reëlected are very valuable indeed.
Think back to what we have mentioned about Energy Vault’s technology.
If these features don’t sound very good to you, you are probably not a politician.
My guess is that construction of Energy Vault facilities are the kinds of projects that politicians will have an easy time rallying behind. In this fraught political climate, an energy storage solution like Energy Vault’s that checks the boxes regarding local work forces and supply chains while also offering environmental benefits to politicians’ constituencies strike me as a 10-out-of-10.
Now that we have covered Energy Vault’s technical solution and discussed how its solution generates social and political benefits, let’s tie everything together and take a look at Energy Vault as a potential investment idea. That is the topic of the next article in this series.
Intelligent investors take note.
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