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Oct 23, 2024

West Virginia Lobs Energy Storage Brickbat At Fossil Fuels

It’s a strange position for one of America’s iconic fossil fuel producing states to be in, but there it is. The Appalachian state of West Virginia, known for its deep roots in the coal industry, is

It’s a strange position for one of America’s iconic fossil fuel producing states to be in, but there it is. The Appalachian state of West Virginia, known for its deep roots in the coal industry, is hosting a long duration energy storage venture that will help squeeze fossil fuels out of the US power generation profile.

The venture in question is a sprawling, newly opened factory in Weirton, West Virginia that produces long duration energy storage systems under the umbrella of the Massachusetts startup Form Energy.

Long duration storage systems are not the same as the familiar lithium-ion battery arrays. The most common long duration system today is pumped hydropower, but that is limited by specific site requirements and it is not reproducible in factories. In contrast, Form designed its long duration system to be factory-built and shipped out all over the country (see more Form Energy background here).

The long duration angle is a crucial one. Today’s generation of lithium-ion battery arrays can typically store electricity from wind and solar farms for 4-6 hours. That’s enough to handle daily grid balancing tasks under current conditions. However, to shepherd an increasing amount of renewable energy into the grid, the US Department of Energy anticipates that storage systems with a duration of at least 10 hours will be needed. Preferably, the storage systems of the future will last for days, weeks, or even months.

In addition to accelerating the energy transition, new long duration systems that don’t rely on lithium will help diversify the energy storage supply chain, potentially freeing up more lithium for use in EV batteries and other crucial areas. As a ripple effect, non-lithium energy storage systems could enable the US to avoid an excessive build-out of new lithium mines, and avoid the consequent environmental and socio-cultural impacts.

Form Energy fits the long duration energy storage bill and the supply chain diversity, too. The company’s 100-hour technology leverages the rusting process that occurs during the interaction of iron, air, and water.

“The basic principle of operation is reversible rusting,” Form explains. “While discharging, the battery breathes in oxygen from the air and converts iron metal to rust. While charging, the application of an electrical current converts the rust back to iron and the battery breathes out oxygen.”

The mass-producible batteries consist of cells about one meter tall, each with its own iron and air electrodes. The electrolyte is a non-flammable, water based solution that Form describes as similar to the formula used in AA batteries.

About 50 cells are packed into an enclosure about the size of a washer-dryer. Scaling up to the megawatt level requires assembling hundreds of these enclosures into a group that Form calls a “power block.” The result is a grid-connected energy storage system that can be configured from double-digit power blocks up triple digits.

Form selected Weirton for its the new battery factory out of a pool of 500 potential sites. Among the deciding factors was handy access to key transportation routes including the Ohio river along with rail and highway networks, indicating the company’s intention to export its technology from West Virginia to points elsewhere around the country.

Work on the project began in May of 2023 and was completed last spring. In its current iteration, Form Factory 1 is a 550,000-square-foot facility with 300 employees.

That’s just for starters. Earlier this month, Form described plans for expanding the facility to approximately double its current size. “By 2028, Form Factory 1 is projected to have more than 1 million square-feet of manufacturing space, employ at least 750 people, and have an annual manufacturing capacity of 500 megawatts, at minimum,” explained Form CEO and Co-founder Mateo Jaramillo in a press statement.

If all goes according to plan, Form’s long duration energy storage system will help accelerate the energy transition in states all across the US regardless of partisan politics, and the taxpaying public of West Virginia can give themselves a group hug for supporting it. To motivate the company to set up shop in Weirton, state office holders provided Form with an incentive package worth $290 million, including use of the former Weirton Steel complex.

“As part of the deal, the state will retain ownership of the land and buildings as collateral to guarantee the state’s investment, while Form Energy leases it back as it meets certain project requirements,” the West Virginia Senate reported in February of 2023.

In September, the US Department of Energy also chipped in for the expansion plan, providing a to-be-negotiated $150 million award through the 2021 Bipartisan Infrastructure Law.

Further enabling the factory ramp-up is a $405 million Series F financing round led by T. Rowe Price, announced by Form on October 9. The round attracted new investor GE Vernova, which cemented its investment by nailing down a strategic relationship with Form.

The series F round also attracted existing Form investors including TPG Rise Climate, Breakthrough Energy Ventures, Capricorn’s Technology Impact Funds, Coatue, Energy Impact Partners, MIT’s The Engine Ventures, NGP, Temasek, GIC, Prelude Ventures, Claure Group, Gigascale Capital, Blindspot Ventures, and VamosVentures.

Deploying both public and private funds to remake a former centerpiece of the domestic coal industry into the long duration energy storage capital of the US is rich in irony. It’s also a poke in they eye of certain state officials who have been taking steps to obstruct renewable energy investing. Exhibit A is State Treasurer Riley Moore, who is currently running to represent US Congressional District 2 in West Virginia.

Moore has been front and center in a multi-state campaign to protect fossil energy stakeholders, under the guise of protecting public pension funds from ESG (environment, social, governance) investing principles. As Treasurer he proposed establishing a Restricted Financial Institution List in West Virginia, prohibiting state agencies from doing business with firms that “boycott” fossil energy.

The state legislature took up Moore’s proposal and passed it into law in 2022. He promptly tapped BlackRock, Goldman Sachs Group, JPMorgan Chase, Morgan Stanley, and Wells Fargo for inclusion on the list that same year. Last April he added Citigroup, TD Bank, The Northern Trust Company, and HSBC Holdings.

“All institutions on the list will now be ineligible to provide banking services to the State,” noted the West Virginia Press Association reported on April 9.

The WVPA also cited Moore’s official statement on the matter. “My action today represents our continued commitment to protect state funds from furthering these politically motivated, subjective ESG policies that attempt to cut off financing for our coal, oil and natural gas industries and harm our state,” Moore said.

“We cannot allow institutions that seek to destroy our state’s critical energy industries and the economic activity they generate to also profit from handling the very taxpayer dollars they seek to diminish,” he added for good measure.

Apparently the state officials who supported taxpayer financial aid for the Form venture did not get the memo.

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Image: These “power blocks” house new long duration iron-air energy storage systems, designed to shepherd more renewable energy into the grid (courtesy of Form Energy).

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