Insider's Guide to Energy

Episode 37 The energy transition requires all kinds of storage. Find out about longterm storage batteries

September 13, 2021 Chris Sass
Insider's Guide to Energy
Episode 37 The energy transition requires all kinds of storage. Find out about longterm storage batteries
Show Notes Transcript

This week Chris and Johan speak with Eric Dresselhuys the CEO of ESS Inc.   Eric shares his knowledge of energy storage and the different types of batteries.  The energy transition demands storage for grid stabilty as well as industrial uses.  Have a listen and learn about flow batteries and why ESS batteries are ecolocially sound.

If you thought lithium batteries were the only key to the energy transfromation you are missing a big part of the puzzle.

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 | Timestamp | Speaker | Transcript

 | 04:42.56 | chrissass | Welcome to insider's guide to energy I'm your host chris sass and with me as co-host Johann oberg johan how's going this week
| 04:55.10 | Johan | Doing good chris another week another day look great to be on again. Feels like it was a while ago but it was last week so we're ready to go. How's your weeking.
| 05:08.70 | chrissass | My week's been going. Great. We've been ah, really busy at my day job. We have been working really hard. Get some new customers on board. So it's exciting exciting times in the energy market. We're getting ready for the etat conference which will be a first face-to-face conference in london and just. Few weeks out so we're excited and optimistic that we're actually going to go to a conference.
| 05:29.90 | Johan | Same thing we just came off of our weekly marketing planning meeting in my day job and we start looking at with the local teams and suddenly we're starting to see the events opening up more and more coming in more and more physical meetings. But I'm still looking forward and seeing where does this hybrid going to lead us because I think that we're dying to go out and meet people again I think the event business will boom for a bit of time now because we're really especially me itching to get out there. But then you come back to efficiency. And then I think we've come back a little bit to this hybrid models I've already signed up for a number of webinars or actually virtual meetings that I could have attended in real life. But I Thought why not? why not start finding this hybrid now and I'm only going to go to the 1 that I think is really really important. The rest I will follow online.
| 06:21.50 | chrissass | Yeah I don't know if I'm there yet I still think there's value in face to face. But I think the the world is is adjusting. It's interesting that we're all getting excited about meetings just as the news and the press talks about potential lockdowns and more restrictions. But I'm still bullish that that. We'll still have these meetings so I notice another thing is that you last couple episodes seem to be in your office.
| 06:45.46 | Johan | I am so offices are opening up which once again, a little bit of a hybrid version coming back coming out of my living room after a year and a half or whatever it is. It's fantastic I love my home. But there's ah, there's a limit to what you can do. So good to be back meeting the the colleagues in real life we had in the pre-show talking about coffee. That's the downside, the coffee machine at the office is not as good as the 1 I have at home. So but I can live with that.
| 07:17.76 | chrissass | Well I'm glad to see you back. What I think I'd like to talk about is what the show's about today because our audience wants to hear about battery technology and and I'm excited to learn more if if you look at what we've done over the last few weeks in last few guests I think. We talked recently to a company that was helping revolutionary revolutionize. How lithium is is mined and brought into the existence but lithium apparently isn't the only kind of battery out there.
| 07:48.10 | Johan | No, and this this is what when when I did a little bit the the kind of preparations and and the background around this as well suddenly and a number of new Technologies came out as you said the lithium and and the way you're almost fracking lithium was new to me now we're talking about long term. Battery storage as well. I think this is really really interesting. You know my background and knowledge around batteries literally a few years ago was tesla and Northwolt the swedish company that's kind of my limit around this I really look forward to see what is going on. And how it's interrelated also to us as an energy company and as you you know I can always and I'm always interesting and in the the transformation new companies. The the entrepreneur spirit around this so'll throw out a few questions around us as well.
| 08:41.74 | chrissass | Well I think you'll like this guest because he has an entrepreneurial spirit He he's done this before but rather than speculating as we always say let's jump in and introduce our guests so without further ado I'd like to introduce Eric Dressselhouse Eric is the Ceo of. Yeah, Ess Eric Welcome to the program.
| 09:00.48 | Eric Dresselhuys | Thank you Chris Thanks for having me yohan.
| 09:03.87 | chrissass | Well, we're excited to have you on So You heard our preamble saying we're going to talk about batteries because I think that's what yeah ess does. Um, or or perhaps shipping containers I'm not exactly sure what you guys do but you got a lot of pretty pictures of shipping containers on your and your website. So Maybe you should do a little introduction of who you are and what you do.
| 09:24.79 | Eric Dresselhuys | Yeah, excited to be here and yeah, what could be more exciting to talk about the batteries really? Ah, you know so the the first thing is you know we we if you think about what's happening to lay some context. What we're trying to do is really a little bit like magic because the 1 thing we all know about electricity is it's a it's a real time thing right? We flipped the switch and the light comes on and we didn't have to plan for that we didn't have to. Phone in our order. We didn't have to wait 24 hours for that electricity to get delivered to the House. We just expect it to be there all the time in real time and as we're trying to decarbonize the energy system that becomes more challenging. So ah. So we've got to do this kind of magic act of time shifting energy from when we produce it to when we use it and that's really just to kind of lay the the fundamental groundwork for what we're doing and what a lot of other people are doing around energy storage which has become in. In some ways. Ah a part of all of our lives. Everybody has a cell phone. They all know that it has a battery. They all are very thoughtful about having to charge it and when they're going to use it. But what we're working on edss is something at ah at a much in some ways. Grander scale. We're doing long duration storage for the grid for fixed yeah applications and that's important now because of renewables renewables as we all know are kind of inherently um, intermittent they they. Wind doesn't always always blow the sun does not always shine and yeah, we've all really as a society recognized and declared the importance of creating an energy system that's been decarbonized and so how do you solve that and you know enter long duration energy storage.
| 11:28.60 | chrissass | So we had this conversation in when when we were talking about setting up this call and not understanding long term short-term in the differential or what that means maybe framing that would help the audience as well as us as to what long.
| 11:47.12 | Eric Dresselhuys | Sure and and first thing I'd say is you know we'll say storage and we'll probably say batteries and we'll probably intermix those things but they're not exactly the same thing there are ways you can store energy that are not batteries per se in terms of.
| 11:47.31 | chrissass | Term storages.
| 12:03.18 | Eric Dresselhuys | You know batteries as ah, as ah as a bit of chemistry that you use but let's stick with storage as as the thing so short duration storage which has been around and used on the grid for a long time is typically defined as kind of a 1 to four hour duration having some way to buffer the system. To ah to help ride out short term short duration outages so you know a blip on the system or in some cases used by utilities to help stabilize the system so you'll hear terms like ancillary services. Injecting you know, ah frequency into the network to keep the whole system stable but it's relatively short duration then there's this category of long duration storage which is what we work on which is kind of broadly speaking from four to 24 hours of time. And that's really important because that's how you create a 24 7 decarbonized system most of the time right? So think of it as taking the electricity you generated from solar panels during the day storing it up and then getting you through the evening hours and dinner time and overnight. So that we can have decarbonized energy then today what we do normally is we fire up the gas fired peaker plants and that's how we get through the night and then there's this other category which people will call different things ah ultra long duration is what we most typically hear. And those are people that are working on energy storage techniques that are designed to be used kind of seasonally think of it as days or weeks worth of electricity that are stored that are used. You know much less frequently but really solve a pretty big problem. When when it when it is used so think about it. What happens if the wind didn't blow for five days and you were reliant on wind power to make your electricity that doesn't happen very often. But when it does happen. It's a big problem.
| 14:07.38 | Johan | So So when we come back to this. We I think we had on the Showsve before and I think not only me, but definitely me as well mixing up the whole things I'm I'm really glad you clarify short and long term. But but if we if we look at it from from an energy grid point of View. You're you're saying up to 24 hours. That's quite quite some time if we don't have anything we need to back up 24 hours with battery capacity that requires quite a lot of capacity where where are we in terms of of building this because we have the coal fire as you mentioned they are already. There. People will say that they need to be there for forever. Not maybe not forever and forever. But for a fairly long time. So it so where are we in terms of of battery in order to make sure that 24 hours which is are we there or when are we there.
| 14:59.94 | Eric Dresselhuys | Well I think we're getting there. You know in and the market's changing pretty quickly again driven by this this desire to decarbonize. So um, if if you look in and of course various country to country region to region. But what we have found is that when renewable penetration was rather low think you know it was 2 percent four percent six percent of our energy supply. We didn't pay a lot of attention to it right? because we just kind of absorbed it and we used it and you know I'll say we were thankful. Ah, that we had what we could get when we could get it I remember giving a talk back in 2003 or four where we were all excited that in the us we thought we might hit five percent renewable penetration and that seemed like a pretty big deal back then well fast forward. Many geographies now are twenty percent or 25 percent renewable penetration with with ambitions you know, kind of stated by by Regulators or actually codified into law that says. 70 percent eighty percent a hundred percent decarbonized by say 20302040 so so think of it as an evolution yohan where we're at today you know well I'll start with it. Not so many years ago 1 2 years ago
| 16:13.52 | Johan | See.
| 16:28.11 | Eric Dresselhuys | All of the energy storage projects. You would have seen would have been short duration 2 to four hour timeframe four really on the high side a lot of 1 in 2 hour projects just to provide that ancillary service which was the first problem that people saw. Now. Fast forward a couple of years to where we are today. We've seen the market jump dramatically more towards the eight to ten and on to twelve hours and if you think about it in many geographies, especially those with really high solar penetration. If you have a reliable 12 hour battery. You can create a you get pretty close to a 24 hour system most of the time you can get twelve hours of sunshine pair it with twelve hours of storage and that's a day but I think as time goes by.
| 17:13.64 | Johan | Yeah.
| 17:18.42 | Eric Dresselhuys | As we get to penetrations North of 70 then we're going to need some of those ultra long duration storage solutions to kind of tuck in around the edges to handle the edge cases because the starting point for most people is when I flip the switch the lights have to come on. Um, and we've talked about we've talked about this electrify everything idea. Yeah, we're electrifying transportation. We're electrifying buildings. We want to take natural gas out of buildings. We want to put everything on electricity. That's kind of great. The the goal be the reasoning for that I should say is that we we know that we can generate that electricity in a carbon free way. But what it is going to do is put a lot of pressure on the system to keep ah keep the resiliency up and and make sure that the lights come on when we flip the switch.
| 18:08.70 | chrissass | So would what Johann asked I guess was the question and in in your previous life. You also but a grid expert as well was it. It takes a tremendous amount of power to to to sustain base load or or whatever at given time. And in the opening I offhandily joked and teased you about having shipping containers. But I think your batteries can be delivered I don't know if they always are and in these big look like a formerly shipping container that you take them out and I assume you stack them out or make a farm in these things if you need more capacity or.
| 18:45.20 | Eric Dresselhuys | Yeah, kind of so we we do make ah a shipping container based version. We call an energy warehouse and ah, that's ah the full battery system in a box and people that like that are you know, think of it as commercial industrial customers.
| 18:45.30 | chrissass | Is that how that works.
| 19:03.26 | Eric Dresselhuys | College campuses micro-grids love that kind of a thing because it's really easy to set up. You can literally drop the box in place hydrate the battery do a little startup routine and it's often running then we make a we make a system that's a bigger scale system which we call an energy center. And that can be the size of a building so really big batteries. But but tens of Megawatts of capacity.
| 19:23.74 | chrissass | Hide see up.
| 19:30.72 | chrissass | Um, and then so do you have these buildings go ahead. John.
| 19:31.12 | Johan | So I have a question that there. So if we just just out of Curiosity. We. We ran a project a while ago at my my company where we work with big outdoor venues. So Concert Arenas Cetera and we replaced a lot of the diesel engines with industrial batteries. So but literally what I saw on your website. A big container kind of a thing battery and it lasted for a short period of time. What fair bit of time at least to few a few parts of this were perfectly fine. Obviously we knew the customer it was. Outdoor events that want to become green in your cases who is actually and ah I think I'm understanding the reasoning. Well I do understand the reasoning behind it and I think it's an important part is we wouldlaborate on on the long term but who is your customers who who are is it. The utility is it. The grid operators. Who was who's buying this from you or who were you working with.
| 20:24.98 | Eric Dresselhuys | Well, yeah, well yeah, a little bit of all of the above. So we work with you know, large commercial and industrial customers. So Maybe your your your concert venue would have been a good example, good. A good case for us. We have a lot of customers who are. Are large commercial users of electricity who have already put solar panels on their roof so they've already started this journey and they've said geez. How do I get to be 24 7 How do I take over responsibility for my own resiliency of my own supply and you can do that with our kind of battery. Ah, but we also sell to utilities. We. Also our products are used by ipp, big independent power producers who are building you know in some cases just to use an example very large solar plant but they want to now pair solar plus storage at great scale.
| 21:17.30 | Johan | The.
| 21:20.88 | Eric Dresselhuys | Because they want to be able to shape the delivery of that energy over the course of the day. An example, we've seen in the us is if you if you're in ah in ah in a market that has high solar penetration and you want to build a solar plant. That's. You know going to be crinking away making a lot of electricity at 1 2 o'clock in the afternoon There's no buyers california dumped a gigawatt of juicy sweet carbon free electricity into the ground last year because there were no takers at the right time. And so if you're an independent power producer. You've got a real ah real challenge which is your economics are all on the assumption that somebody wants this great power. You're you're generating and if nobody wants to take it at 1 o'clock in the afternoon I will tell you that. There's a lot of people who will take it at 6 o'clock at night.
| 22:12.61 | Johan | And.
| 22:14.22 | chrissass | Well like that makes sense I could see that yeah you want to use the electron when you want to use it and in and wasting them doesn't seem to be all that productive I also think that in doing a little show prep that I did a little research and startups and technologies focused on flow battery technology. And I so I found at least 1 list with over 100 twenty startups in in the Space. So I don't think you're wrong, right? I mean there's there's there's certainly money chasing the problem that that that others agree with you. What makes yeah ess different I mean so you were actually ranked in the top 5 in 1 of the lists I looked at so you're you're definitely doing something right with what's your special sauce. What's different between you and 1 hundred and 20 other aspiring flow battery companies.
| 22:57.87 | Eric Dresselhuys | Not, we're not number 1 that Hurtt. Um, ah so what we do is ah, you know you're absolutely right? Let me let me level set it a little bit. There's a lot There are a number of different technologies that are used within the category that we play in flow batteries. Um, flow batteries are different than lithium batteries or alkaline batteries. You know that you put into your into your remote control a flow battery is interesting in that it it stores electricity through a chemical reaction but the electrolyte the the juice if you will is kept separate from. Power electronics. So effectively what that does for the energy geeks on listening in is it separates power from energy so you could decide as an example that you wanted. Let's say a 3 Megawatt power configuration. But then you wanted 8 hours or ten hours or twelve hours of duration which is of course the energy component and you can separate that you get more duration by adding more juice. So what we use within ours. So that's an all flow batteries work that way. The. There are flow battery technologies that have been around and studied for a long time using chemicals like vanadium and venadium works but the denadium is kind of Spendy. It's just an expensive technology chemically ah that makes it. A little cost prohibitive to use at grade scale what we use is an iron salt based solution. So this is known as an iron flow redux battery and we think it's great advantage is that if you think about cost structure. What's cheaper and more abundant. Then iron salt and water. It's it's really got kind of the best long-term price. You know you've got a lot of work to do and and of course ah there's always a lot of engineering and a lot of optimization that happens at an operational level. But the starting point is iron salt and water. Um.
| 25:09.41 | chrissass | Does environment play a big role like temperature in in performance I mean I know you said you could build it in a building so you can control these things but is that a big variable on the amount of power you got.
| 25:20.87 | Eric Dresselhuys | Um, it's actually 1 of the great advantages of this technology is it has an extremely wide operating range of temperature if you if you if anybody that's worked with lithium knows that lithium's pretty fussy. And you've seen fires in australia and other places it has to be temperature Controlled. It has a very narrow operating range around 25 c and if it gets any hotter or any colder. It doesn't like it very well. The iron flow battery will operate from you know, minus 10 to plus 65 c pretty reliably so it actually and it actually kind of likes to run a little bit hot so we have applications sitting out in the middle of the desert in Nevada where it just kind of hums along and does its thing so it likes that pretty well. But I'd say the environment question where where I thought you were maybe goingnna go with that chris is the environmental impact of storage I think people probably are aware. It sounds like you had somebody on the show earlier talking about lithium extraction. There's a a growing concern around. Some of the sourcing of materials that go into other solutions lithium sourcing cobalt nickel other rare earth minerals that are used are pretty problematic and and there are people working on those and they're trying to work on. Um. Ah, recycling techniques that aren't just burning the battery in an incinerator which is what mostly happens today. Um, 1 of the great things about iron flow is that it is nearly entirely recyclable entirely non-toxic solution. So to to answer your question. What have we done that other people haven't done well, the biggest thing is we have a product that works a lot of companies that have worked on this. You know it's still in kind of the science experiment category which is great. We you know I kind of love that. On a personal level I like people innovating and doing interesting things but we actually have a commercial product that works and that's what's driving a lot of the interest now because it's it's been a bit of a holy grail kind of thing across the industry where people have said geez if we could find a safe. Reliable low-cost way to store our energy that would really change the game in terms of how we think about the grid.
| 27:40.84 | Johan | So it's in terms of that. Yeah, we read about lithium batteries in cars and and the lifecycle of this and how that before they need to be replaced and then you have the Secondhand batteries on top of that 1 is there any any kind of restrictions on. On flow batteries in terms of of lifecycle or length or.
| 28:01.99 | Eric Dresselhuys | No, no, not really I mean you can cycle this battery effectively. You know, unlimited numbers of times we talk about a twenty year operating life of the system. But the. The electrolyte doesn't wear out as it were so it's not like a lithium battery where its efficacy is going to kind of slowly start to fade we. We probably have all seen that you get a new cell phone and. In the beginning. It's awesome and it lasts all day and you never have to recharge it and then by year 2 you know you got to recharge it a couple of times during the middle of the day and by year five at some point you know. You probably will end up trading your cell phone out simply because of the battery life as much as any other single factor in deciding to upgrade your phone ah flow batteries don't have any of those problems and they also are not terribly fussy in terms of how they're used. So we get a lot of customers who come to us. And say I looked at a lithium solution. But then there were all these rules I had to charge it 1 hundred percent all the way to the top if I started to recharge it and then once I did I had to let it rest for four hours and then I could start to discharge it but I had to discharge it all the way down to twenty percent but no more than twenty percent you know charge. And then I had to rest again and then I had to recharge and so that's kind of not the way grid operators operate um you know grid operators are kind of real time orchestrating a very complex set of interdependencies and so they want to be able to use it for a little bit turn it off charge it back up. Run it all the way to the bottom charge it all the way to the top so on and so forth.
| 29:40.36 | chrissass | So you talked about Grid Operators We we talked about some industrial uses. Let's talk about the market a little bit in in in where where we go with it. So do people buy the batteries lease the batteries from you. How is this tech work.
| 29:55.61 | Eric Dresselhuys | So in our case, we sell the batteries. We're a technology company. We sell technology to all of those players that I mentioned in some cases they are just built into the economics and the rate structure of the utility or or paid for by the business.
| 30:11.36 | Johan | But.
| 30:14.80 | Eric Dresselhuys | And their business case is often. You know, measured by deferred say peak capacity charges or being able to time shift their energy use if they're on a time of use rate so a commercial customer would get an economic payback but they would typically operate it on their own behalf. Um, whereas a ah, a big ipp a big solar developer might use our technology and build it into a you know dollars per kilowatt you know euros per kilowatt solution that they're selling into the Market. And and so they may be playing all of the arbitrages and market interactions that that these kinds of people play and they're using the battery as a way to shift when and how those transactions happen.
| 31:02.84 | chrissass | So has it gotten to the point where it's it's a fact of the napkin kind of calculation for a developer who's going to put in a renewable project saying okay well you know ten percent goes to storage or fifteen percent of you know whatever the project is goes to a storage or is it still. Kind of nascent and people figuring it out as they go.
| 31:21.60 | Eric Dresselhuys | I think that's it's both I think people are figuring it out as they go it also frankly depends a little bit on local circumstances. So you know there's a joke here in the States you know all politics are local I would say all grid economics are local right? You're ah you're you're. Yeah, what the value of different grid assets and and grid capabilities are really depends on what market you are playing in and how you live you know in in in some parts of europe where people are off on remote or island big grids. It's a very different set of economics than if you were in you know downtown zurich and and and and maybe there's no capacity or ancillary services markets for you to play into your economics might be very different. If you're in a geography that allows full net metering for your solar assets which is what most people have done but but we're starting to see a real shift away from that because it's economically untenable to go pay people full retail rates for electricity at 1 o'clock in the afternoon. And then have the utility turn around and you know ground that electricity into into the dirt because there's no takers for that and and of course that creates you know equity issues across the ratepayer base. So it really depends a little bit on where you go and. And and what the local market requirements so or market conditions are.
| 32:55.91 | Johan | So Which which I think is Interesting. We're talking about the sustainability angle around this as well and and we we talked about the production. 1 thing that I heard between the lines a little bit. You mentioned that you're technology company which which obviously triggers my interest. Course because when we're discussing a little bit. We're talking about hardware in terms of of large capacity batteries in the production of these. But so where how how do you define yourself as a technology company delivering hardware.
| 33:29.22 | Eric Dresselhuys | Yeah, well I'd say that that Apple thinks of itself as a technology company too and they deliver a fair amount of hardware. It's really creating a solution that works right? So we we developed the you know when when you asked chris asked earlier. Why. Yeah, ess has been so successful and why it's getting as much recognition as it is our our technical team has solved 1 of a couple of the really great problems that have held ah flow batteries back over the years by using really simple ingredients I earn saltd and water.
| 34:04.86 | Johan | Um.
| 34:06.89 | Eric Dresselhuys | Of course gives us a great cost structure but it takes a little bit of technical magic to make that work so we've had to invent a couple of pieces of technology that are embedded in the system to keep things in balance and keep the system really clean. Anybody can go to our website and see some pictures but we. We developed a thing which we call the Proton pump which is taking some of the byproduct of our chemical reaction which is hydrogen and using it to keep the system clean and imbalanced so that you don't have to shut the system down and clean. It. There's things called dendrites that build up which you can think of it. It looks like lime scale on the side of your of your bathtub that can be a real problem and and it makes it makes some batteries frankly just impractical to use so having a system that can operate.
| 34:47.35 | Johan | Next.
| 35:01.69 | Eric Dresselhuys | But effectively no scheduled maintenance other than kind of you know, checking in and and monitoring is ah is something that's really desirable to a grid operator.
| 35:12.50 | chrissass | So I I buy the technology argument all day long I look at your history your scientists and and being there I think it's important to note you guys aren't a new company. You've been around for a little while you're you're you're somewhat mature right? I think if I remember correctly.
| 35:31.17 | Eric Dresselhuys | Yeah, okay.
| 35:31.37 | chrissass | thousand ten 2000 eleven somewhere in there I think is when you guys came into formation so where is the company you're you're not the first ceo you've you've come in and you're you're you're taking it into the next next level. Where's the company at today where are you guys at? are you.
| 35:47.73 | Eric Dresselhuys | Yeah, there's a hanging the hit. Yeah yeah, so you're right? The company was founded in 2000 eleven and for the first bunch of years of the company. It was a true r and d house solving a really hard technical problem.
| 35:48.16 | chrissass | I didn't I didn't have an end to that is leaving it open ended for you to tell me.
| 36:05.81 | Eric Dresselhuys | And so our co-founders craig and julia were toiling away inventing things like the pro Tom pump learning how to build it with great reliability. Great scale. We can come back to that in a minute and started shipping product a few years back ah, for a first generation product learned a lot and then that led to the development of a second generation product which is what we shipped today. Ah so so we're now a production shipping company. We are also going through an ipo process. So we'll be a publicly traded company and will be the First. Publicly traded long duration storage company around. So we think that's pretty cool and and that does a couple of things for us but largely it gives us some resources to really accelerate the global expansion of of what we're trying to do. Both from a go-to-market perspective and a manufacturing perspective because the 1 thing you do find about products in the energy business in general and certainly those that have hardware is they really want to get to scale really quickly right? You have to you you kind of got to get big to get. To get all of the efficiencies and leverage out of the business that you want so today most of our production is is head headquartered here in Oregon in wilsonville oregon just south of portland but 1 of the really cool things about about ess.
| 37:22.98 | chrissass | So where is production.
| 37:39.90 | Eric Dresselhuys | Because of the nature of our technology our expectation. We've shared you know Publicly is that we expect to open manufacturing capabilities within the region of views so we would expect. We've already started to identify some potential in australia new zealand and then europe will likely be. Right? behind that because we use. Um, ah you know pretty broadly available and commonly sourceable materials combined with the fact that our thing as you pointed out before is pretty big so shipping its you know real work. Um. Our plan is to build locally and have facilities located around the world.
| 38:17.95 | chrissass | So you you just said, you're going to be a publicly traded company I guess it it started its history as more of a research organization. So that's a technology angle. You've come up with you know, a better mouse trap for lack of a better term I think I've heard you say on previous talks. About the industry's acceptance of new technology that it it really just needs to work. There's there's no alpha or beta trial. It is kind of needs to be there. So have you partnered with large grid operators that you can talk about in North america is or any success stories you can share with our audience.
| 38:54.10 | Eric Dresselhuys | Yeah, well there's a number of success stories and not just grid operators. We've worked across kind of a broad range of market participants and kind of you know other industry stalwarts. The the first 1 I'd call out which I think is a really interesting 1 is we have. A longstanding relationship with Munich re and you might say I didn't know that munich re the giant german reinsurance company ran a grid and of course the answer is they don't but they are the largest and arguably most reputable. Ah, reinsurer in in the world and our group sat with them and said listen yeah this is a new company in an industry with a really high bar. How can we prove the bankability finanability durability of the company and the product. And so they went to work munich ree brought all of their technical experts in and spent eighteen months kind of understanding our technology and what that resulted in was we offer an extended warranty on our product that's backed by Munichry so when people buy our product they can buy up to 10 years of guarantee behind that which isn't just backed by ess's good word. It's backed by munich re so it's got real teeth to it and that's really been a game changer out in the marketplace because we think we're the only battery company of any kind certainly and the only 1 in long duration. That offers that kind of a guaranteed back product then we've got you know customer projects that run the gamut. The 1 that kind of immediately comes to mind. It's not a utility It's a big ipp softbank energy. So softbank everybody probably knows but softbank. Ah, energy is their group that goes off and develops very large scale solar projects and we have a framework agreement with them in in addition to near-term projects that after they understood the technology and started to use it ah to to put 2 gigawatt hours of. Capacity out on the grid over the next couple of years and then the last 1 that I'll call it. That's more of an investor but they're really some of the smartest people in the energy world is 1 of the I say early the last five years. Backers that stepped in once our technology was developed was bill gates and the breakthrough energy ah group and so breakthrough is really you know trying to place the big bets on the game-changing technologies that are going to move the needle in the energy world.
| 41:37.77 | Eric Dresselhuys | And ah, and so we're pretty happy to have them on board in terms of utility projects. It really runs the gamut. You know we've worked with people in the us. But we've worked with people 1 that just comes to mind. That's a really interesting use case is a group called groupos. So. Sayesa down in chile so they are using our technology as a way to replace diesel generation in Patagonia. So if you've ever been to Patagonia or even just kind of know what it is. Of course it's 1 of the most beautiful pristine parts of the world. Um, and they've largely powered electricity locally through what's called run of river hydro so it's hydrop plant. That's not a dam so it just kind of you get what you get whatever the river whatever the river happens to give you that day and then they've enhanced that with diesel generation. Which you know if you think about it just kind of you know makes their hair on your neck stand up. Why would you turn on a dirty polluting diesel engine in Patagonia so they want to get rid of all of those or at least minimize as much as possible. Their use. And so they're using our technology to take excess capacity that's made by the by the run of the river hydro and then use that as the bridge for when they need it so lots of use cases across all sorts of different applications.
| 43:06.37 | chrissass | I think that's pretty exciting to hear all the different applications. You've got and and where it's going and and so being a technologist myself. what what I think I heard you say in previous question as well was. You're kind of at the two zero version of this technology. So it's transformative in what you've told is so far if I take everything at face value. There's clearly a transformation where does it go from here. Yeah, what? What is the next incremental step for for long-term storage so you're you're in the business you you have some product that's able to. To to meet the need today. Um, if we're looking at you know paris climate accord goals and in in kind of the the goals globally that people talk about is some pretty aggressive things that need to happen in the next I don't know how many years right and so what's next.
| 43:58.49 | Eric Dresselhuys | Yeah, well I'd I'd answer that in a couple of different ways the first and I'm glad you brought up the paris accordon of course edinburgh coming up here in November um, ah. Yeah, there has been a lot of progress made at national levels at at local and state levels to create decarbonization goals which are great and we love those. But of course those are just ambitions and so somebody then has to do the next level of work which says okay, great. We want to have a 24 7 decarbonized electricity system and oh by the way we want to electrify everything. So perhaps that's going to require a twenty five percent growth in the total electricity demand and you know electricity has been a pretty flat market for the last twenty five years so now we're talking about changing that and making electricity growth market but a green growth market getting the policies right? getting the economic incentives right is the is ah really the first thing that that has to happen and that's true for ess. It's true, really for. The entire Market. We've got to get the market structures right? But then I think where you were going with your question is I think a couple you're going to see a couple of things the first is it's incumbent on us and on all of the other folks working on this to make it. Ah. Cheaper right? We we all want to you know the lower the cost to store energy is the more ah acceptable. It will be for use you know on a broader and broader and Broader basis. So there's a cost out curve just like you've seen in solar just like you've seen in wind. Um, you're going to see a cost curve in storage. To make it even more and more cost effective. The second thing I think you're going to see is you're gonna you're gonna need to build a lot of them right? You know so just manufacturing capacity supply chain has got to get cranked up to meet this and I mentioned. Ah, that we build here in wilsonville oregon but we we really build it here. It's not just the 3 pieces get snapped together I mean we ah we are welding things and building stuff here and we like that model we're working very hard to avoid some of the problems with. Supply chains that extend into china that use rare earth minerals mined by you know, slave children in the republic of the congo right? That's not where we want to be. That's not our idea of what a great sustainability journey is so we're working to create the supply chains that are sustainable from the bottom.
| 46:36.57 | Eric Dresselhuys | The bottom up and then and then finally because we talked about technology. There are just a ton of things that you can do to continue to push the technology forward. You can get better energy density. You can get faster charging what's called round trip Efficiencies. You can just do things to make it. You know in the broadest sense. You know, better faster cheaper.
| 46:59.78 | chrissass | John.
| 47:00.73 | Johan | Yeah I think coming out of it you we're talking about sustainability a little bit once again I think if the shifting focus a little bit away from from the actual batteries and the technology and and a little bit more to you as a person. Obviously I went through some of some of your background and and and looked and some of the the engagement you have sits on a number of board of of companies. Pretty sure with your background and in and technology. And as an innovativeator and and a transformer you get a lot of offers. But what makes you choose to to take on these additional parts is are you driven? What are you driven by is it the technology. Obviously that's there's financial. Is it sustainability. What drives you? what? What makes you.
| 47:48.12 | Eric Dresselhuys | Yeah, ah I have an unhealthy addiction to working on big problems right? Ah, you know to me? What's what gets what gets. Yeah I've been really fortunate that I've never been a person that has that moment where they wake up.
| 47:48.69 | Johan | Get engaged in all of these companies.
| 48:07.64 | Eric Dresselhuys | In the morning and go Oh God do I have to get out of bed I usually jump out of bed in the morning because my brain instantly kicks into all of the things that are out there that could go get worked on and so you know energy is a fascinating. Area to work I feel really fortunate that I um that I found my way to this industry because it's so pervasive it touches so many lives.. It's so truly important that when I think about the fact that there are. You know, still roughly half a billion people on Earth that do not have access to the regular supply of electricity. Um I Yeah just it's still I've known this for a long time and every time I think about it it I find that stunning and I and I have a lot of friends that are working. Um, very specific implementations of solving that part of the problem but but I like puzzles I like a puzzle that's hard to solve that. Um that takes a lot of coordination you work across regulatory technical commercial aspects. And unwinding all of that is ah is for me a lot of fun and I can tell you that when you solve it as we did at my last company Silver Spring Networks as we've as we're doing here at Ess. It's as it's as gratifying a professional experience as you can have to. To actually see the success on the other side of the problem.
| 49:40.46 | Johan | Which which really really like the questions and then the answer to it because I was actually reading an article where they quoted you before which you refer to an old statement of Jimmy Carter the precedent where the solution is actually just put on a jumper and we'll be fine and low with the temperature. And you claim that that's totally the wrong direction. There's a problem we'll solve it browser thing adapt to it. So I thought it was quite interesting.
| 50:05.90 | Eric Dresselhuys | Yeah, absolutely' and I heard somebody and I don't remember this I certainly remember the scene of him sitting by the fire telling everybody to just kind of grin and bear it. Um, what? what? I hadn't realized until somebody reminded me the other day was that. It was also just ride the bus right? but but we're but but then we're not going to do anything to make public transportation Better. We just think you should have to suffer through and in the states anyone who's ridden the bus. It's not a pleasurable experience certainly parts of europe have fantastically better public transportation options than we have. In the States. So I think that's what we're trying to do right? We're trying to you know, apply technology and innovation to make this a case where I don't want anyone to have to use a less electricity that's going to sound. A little crazy because a lot of conservation. Ah conservationists will will say oh we just have to use less. But if if it if it had no environmental impact. Why would we care if it if it literally if we could if we could take the environmental impact. And that's I'm talking about the entire entirety from the supply chain you know through to the production through to disposal at the end of life if that didn't have a negative impact or it could be a a minimal measurable and and and and addressable impact then we wouldn't care. And I think that's that's a fun thing to go work on.
| 51:39.36 | Johan | I.
| 51:40.21 | chrissass | Um, I think that's great I I think energy is complex right? and and so with the naive of ah of when I was new in the business I yeah would say Well yeah, we got to be all carbon Neutral We ought to be green tomorrow. But there's always a give and take right? So it's it's there's there's nothing for free. You know there's if energy is stored somewhere. There's an impact but I think marginal impact or limited impact right? I don't see that there's a world with no impact because if you're mining iron you're you're mining Iron. You're you're using resources but Humans have always done that and I don't think people would argue that we don't have some impact.. It's just negligible impact.
| 52:23.35 | Eric Dresselhuys | Yeah, no I think that's right and listen we we use iron and we use it for 20 years and at the end of the 20 years the thing that breaks is the pump. It's not the actual iron so you could take the electrolyte out of the first battery and just move it to the next battery and use it for another. 20 years so you can do things in clever ways that that that meet the needs of society and and and don't destroy the earth and yeah and that's those are fun things to go work on.
| 52:57.90 | chrissass | I'd have to agree with that I do have 1 final question from me so you've evolved a new technology a new area the energy business and what careers. So If someone's been in energy and they're in. Some former energy. That's probably going to go away and they like the energy business because I think there's a great future in it. There's always need for energy What what new skills or new jobs are created through your your solution.
| 53:25.75 | Eric Dresselhuys | Well a ton and and I'd tell everybody on the call that if you're if you're thinking about making the career move chris mentioned please call us because 1 of 1 of the 1 of our challenges for growth is hiring fast enough to go. I'd say a couple of things the first at the basic level we we've got we're doing high quality skilled manufacturing work that everybody bemoans has disappeared we we do that and we need to hire people fast and we pay you know good wages to to do that so come work on the factory floor. You know at the basic level. But there's also you know, really across the across the the spectrum of the technology and working on. You know the electrochemistry that's involved to make it go further on through to the economic modeling. We have a lot of work to do to help? Um, ah. Educate people and understand better. How to best use the technology to create the maximum value out in out in in the wild as they say out on the grid on a daily basis. So so we need everybody from electrochemistists electrochemists chemistryists if I could speak to economists. To all come on and and join the effort.
| 54:38.51 | chrissass | Cool. That's that's my last question Johan any final thoughts.
| 54:42.86 | Johan | Final thoughts I thought it was really really interesting I got a much much more sense around batteries and also the sustainability around this I Wish I had more time to talk a little bit about your background and Iot and all the the entrepreneurial stuff. But maybe we'll bring you back in all this time if we have the opportunity. But really appreciate the call I thought it was really interesting to understand and learn more about batteries and how that fits in So. Thanks, a lot for for joining.
| 55:10.71 | Eric Dresselhuys | Well I appreciate you having me and appreciate the what you're doing with the podcast because it's yeah it is the most important topic out there right now and and so the more we can spread the word and help educate and share. It's all to the benefit of of us as individuals and us as a society.
| 55:33.32 | chrissass | Well thank you so much Eric for being our guest. It's been a pleasure for our audience. You've spent another hour listening to Insider's guide to energy and if you've not yet subscribed please subscribe and tell your friends about us.