Energy Vault nets another $100M for gravity energy storage ahead of NYSE debut

Gravity-based energy storage upstart Energy Vault Inc. has reeled in another $100 million in commitments from strategic investors, this time from Atlas Renewable LLC and its majority owner, China Tianying Inc., a large environmental services company traded on the Shenzhen Stock Exchange.

The funding, announced Feb. 1, adds $50 million to what is now a $200 million private placement investment associated with Energy Vault's planned listing on the New York Stock Exchange in February through a merger with Novus Capital Corporation II, a special purpose acquisition company. Separately, Atlas Renewable and China Tianying agreed to pay $50 million in 2022 as part of a multiyear technology licensing and royalty agreement for deployments in China.

The investment comes ahead of a shareholder vote on the merger scheduled for Feb. 10. If approved, an additional $288 million from Novus' cash trust would go toward Energy Vault's effort to make the jump from startup to commercial enterprise.

Based in Westlake Village, Calif., Energy Vault is one of a host of companies raising significant funds to compete with lithium-ion battery storage and provide longer-lasting solutions, both in terms of storage duration and product lifespan, to help reliably integrate growing volumes of intermittent renewable energy into power grids.

"We've got a fully funded business plan," Robert Piconi, Energy Vault's CEO and co-founder, said in an interview. "It's a great position to be in. Any CEO loves to be in a position where you can just focus on execution."

This latest investment and first licensing agreement add to a growing roster of strategic plays into Energy Vault.

In August 2021, Saudi Aramco Energy Ventures LLC, an investment arm of Saudi Arabian Oil Co., one of the largest companies in the world, participated in a $100 million series C funding for Energy Vault. A subsidiary of SoftBank Group Corp. had previously invested $110 million in a series B round. Other investors include BHP Ventures, an affiliate of Australian mining giant BHP Group Ltd., and smelting specialist Korea Zinc Co. Ltd.

Energy Vault is collaborating with several of its strategic investors to explore the use of recycled materials in its bricks and to build projects.

"A lot of customers are rooting for us, and they're voting with their checkbooks," Piconi said.

Proving ground

The first big opportunity to prove the technology appears to be in China, where licensees Atlas and China Tianying intend to start building a roughly 100-MWh system in the Jiangsu Province in the second quarter of 2022. It is planned as a 15-MW to 20-MW system with five to eight hours of energy storage capacity, according to the Energy Vault CEO.

"We're going to tune that based on the application and use case," Piconi said. The company is focused largely on applications requiring four to 10 hours of storage. "That is becoming the main sweet spot of the market," Piconi said.

"We see broad applications for implementing Energy Vault's unique gravity energy storage and power generation system," Neil Bush, chairman of Houston-based Atlas Renewable, said in a statement. Bush is the son of former U.S. President George H.W. Bush and brother of former President George W. Bush.

Energy Vault is developing additional projects in Australia, the Middle East and North America.

The company's latest design is an evolution of a demonstration project in Switzerland. It relies on a software-controlled system to raise and stack composite bricks during periods when cheap renewable power is available. It is designed to release the bricks to turn motors and generate electricity when demand is high.

Notably, the new design abandons the tower platform of the demonstration project, lowers the height of the system by 40% and has a streamlined architecture to remove cost.

"Everything about the tower is irrelevant because we aren't building it," Piconi said in response to skepticism over the demonstration approach voiced by some energy experts. Energy Vault believes its technology can beat its primary competition, lithium-ion batteries, based on the total cost of ownership, a more sustainable supply chain and a safer technology.