Eos Energy Enterprises, Inc. (EOSE) Earnings Call Transcript & Summary

Sheila Hollis, I am the Executive Director of the United States Energy Association. We welcome you all today. Just a moment about what the USEA is, nonpartisan, non-lobbying, nonprofit organization that does 2 things. We work throughout the world hand-in-hand with the State Department, USAID, and the Department of Energy to enhance the energy supply to the world and to improve and educate in areas of the world where it is needed and requested, all hand-in-hand with the U.S. government. We're a unique organization in our respect, founded in 1924. We worked in 104 countries throughout the world. And we do -- we have another major role, which is to convene on the cutting-edge issues of energy and its associated factors on an ongoing basis. So it's a tremendous honor to have representative, Curtis, with us today, and we are delighted and thrilled to have him here to lead the charge on very critical significant issue of our day, which is energy storage, which is going to God willing solve a whole lot of problems for this country and the world at large. So we're delighted to have you here. Congressman Curtis, please take it away at your show, and we welcome our speakers with their tremendous insight and their lives on the line to make this happen. Thank you.

Sheila, thanks so much. It's a delight to be with all of you today, and thanks you to USEA for hosting this very important conference, this webinar. I've got to tell you just personally, I'm kind of excited to host this because I want to learn. There's a lot I want to learn about this, and I feel like this is a great opportunity. So thanks for making this happen. Listen, long-duration energy storage has got to be part of the answer. We've got to understand this. We have to make progress on this. No better time, of course, to talk about this than right now with [ talk ] going on over in Scotland and everybody turning their attention to answers, and we have a lot of the answers right here with us today. I think it's -- it may be a slight overstatement, but if so, it's only slightly that this is perhaps the most critical part of the solution to our long-term energy needs. And so I'm pleased to be part of this. And by the way, I'm Co-Chair of the Energy Storage Caucus. And I'm pleased to play that role as well, and be here with you today. Let me introduce our speakers, and we're going to ask them all to introduce them by name and company. And then we're going to ask them each in the order that I introduced them to take 2 minutes and introduce themselves before we jump into questions. First of all, Eric. Welcome Eric Dresselhuys, the CEO of ESS, pleased to have you with us; Joe Mastrangelo, CEO of Eos Energy Enterprises; and Ben Catt, CEO of Pine Gate Renewables; and finally, Geoff Brown, President of Powin. And we're pleased to have all of you with us. Eric, would you start? And we'll just go in that order, and please take a couple of minutes to introduce yourselves.

Sure. Well, thank you, Congressman, and thank you to USEA for hosting this event. My name is Eric Dresselhuys. I've been working in the energy transition for about 30 years. And here at ESS, we are focused, as you see on long-duration energy storage. And the part of that that we worry about is how to create a 24/7 energy system that's decarbonized, so extending renewables, which are inherently last throughout the day. As you see, the challenge in front of us, Congressman, is large. It's not just about decarbonizing our current energy system, but we're also talking about electrifying everything and electrifying the 800-or-so million people around the world who don't have power. And so we've got to build a lot of energy and a lot of energy storage to make that happen reliably and reasonably.

Thank you. Joe?

Thanks, Congressman. And thanks to the USEA for the opportunity today. I'm Joe Mastrangelo, I'm the CEO of Eos Energy Storage. We are also a long-duration energy storage technology. We are fully a product that was invented in the United States and is manufactured outside of Pittsburgh, Pennsylvania. We are a product that brings to market highly flexible solutions that are fully recyclable in 20 years at the end of their useful life and also provides safe and flexible operating parameters. I've been in the industry myself for 30 years, everywhere from oil and gas through traditional fossil fuel power generation. And this is the most exciting time I've seen in my career. I think we have the opportunity as a group to really change the trajectory and how the world powers itself and not only change the energy mix that we have today, but bring more reliable power to parts of the world that don't have it. So it's very excited to be part of this.

Thank you. Ben? If we don't have...

Hello, everyone hearing me well?

Yes, welcome.

There we go. Thanks Curtis and apologies, I was having some technical difficulties getting on there. So just again, really excited to be here we are. I'm CEO of Pine Gate Renewables. My name is Ben Catt. We are a utility scale, renewable energy, developer, finance company and construction company. And we were originally focused primarily on solar, but have moved into the storage space, both on a hybrid resource standpoint and from a stand-alone storage perspective. We are -- have expanded very rapidly and are really excited to engage with conversation. As we are being in the solar space for a very long time and knowing what a critical role that storage is going to play. Ultimately, as we move and as more solar penetration gets on the grid, we are really excited about where the industry is going, renewables as a whole, but really what storage ultimately is going to be able to unlock for us as we go from a -- in the solar space, certainly from a 3% penetration rate to potentially up to 40% penetration rate based on some of the forecasts that are out there now. And so it's been a huge initiative for us to partner in the industry, not only on the development side, but also really work with technology partners of ours to find ways for us to be able to really increase the footprint out there and really the actual on the policy side to make sure that we've got supportive federal initiatives that ultimately are helping us with the energy transition.

Thank you. And finally, Geoff?

Thank you, Congressman. Hi, everybody, my name is Geoff Brown, I'm CEO of Powin Energy, joining you from outside beautiful Oregon, right down the road, actually from Eric with ESS. We got a good energy storage Nexus in the Northwest here. And I'm incredibly happy to be speaking with everybody today because part of Powin have been growing the company for the last 5 years here because we believe it's necessary technology revolutionizing the carbonate grid as all the other panelists are saying. And I believe this conversation is so important because the only way that that's going to happen is through supporting market cloud technology, we need a proper regulatory framework that levels all technologies, and it's going to be -- something that's going to be consistent and lasts for a long time. These fundamentally, the storage technology, the platforms take years to develop, and we need to understand the market and regulatory framework by growing ourselves into. So we've been developing our lithium-ion battery-based systems outside of -- from our Tualatin headquarters here for over a decade now. We've got over 2-gigawatt hours in operation and construction around the world and another 5-gigawatt hours coming shortly along the way. It's been like incredibly exciting time for all of us. We've grown over 100 people just in the last year, nearly tripling our workforce, and we expect to close out 2023 with another 150 for a total of over 300 U.S. employees and 500 around the world. And I think that last point is just incredibly important as the stakeholders people sort of consider why storage is so important to invest in and support for a strong domestic storage market. It's because we will be building the technology that we keep then export around the world. We just -- most of our projects right now are based in North America. Well, we see a massive growing international market, and it's been incredibly rewarding to see our ideas and products of -- grades of our friends in Taiwan and Australia, Israel and Greece. And I think that's just the beginning. So it's important for me to be able to say and to everybody that's listening hear today to understand that getting a strong national framework helps to change our local grid, decarbonize our grid, helps to create a strong local storage industry, but that can be the foundation for American leading the way to -- and exporting these technologies around this.

Thank you, Geoff. Maybe just a quick note to our guests. Let's try. I'm getting a little bit of a [ colistrialmuting ] unless we're speaking and see if that helps at all. I'm going to start now with some questions that really are aimed at all of you. But I'm going to -- we'll start in our reverse order, and Geoff, let you start. We don't need to all answer every question, but I want to hear -- if it's important to you, I want to make sure you speak up. So Geoff, let's start with you and then we'll let other speak as well. But this is pretty simple. Why are stand-alone energy systems so important in coordinations grid? I mean why are we having this conversation?

Yes. It boils down to a couple -- a few key things here. Increases reliability and resiliency, it's absolutely essential and properly designed. Low-cost reliable energy storage is the best way to deliver a flexible grid, particularly as you start to get more and more renewable penetration. We need to reduce -- in order to move to a renewable grid as it's very transparent, there will occasionally not be -- sun won't shine and the wind won't blow, you absolutely must have some level of storage to be able to transition past 10% to 15% renewable penetration. It's just the only way you can manage it. The only other way to manage it is by massively over installing renewables resulting in curtailment. So storage is by far the most cost-efficient way of managing that. And which leads to the last question, is it's the lowest cost solution. Right now, solar plus storage, as I know Ben knows that when you're building these projects, they are much in a high ratings environment, high solar environment. The lowest cost form of capacity is solar plus storage today, and that's just the beginning. We are just starting to move over the low of the elbow, and we're seeing 100%, 200% market growth, dramatic cost reduction in energy. I am 100% convinced that the power plants of the future -- capacity of the future is going to be a renewable and storage technology.

Excellent. Ben, he called you out, so I'm going to call on you. I remember, I was actually the Chair of [ Utah's ] Power Authority many, many years ago. And we talked about doing solar and we kind of had to go up and say, well, it's the right thing to do, but it's not the cheapest alternative. Well, things sort of have changed. Haven't they? And one of the reasons I think that's so important is, look, one of the best ways to move and change our energy reliance is to be the low-cost leader. And so I don't want to get too far off this track, but jump in and tell us a little bit from your perspective why stand-alone energy systems are so important to our good.

Yes. And I think really echoing what Geoff said is that -- and really kind of getting to the original point, which is, we are seeing across the country that solar and wind and kind of all renewal resources are the lowest cost energy that we're producing. And on top of that, obviously, all of the environmental benefits by replacing fossil resources with renewable resources beyond even just the kind of the economics and the cost component that comes with it. But there is just the very kind of the facts of the matter are -- those are intermittent resources to some degree, and they are complementary. And certainly, whenever we bring hydro everything else in the mix, we're able to kind of have a little bit more of a well-rounded generation profile. But being able to have stand-alone energy storage and hybrid energy storage is incredibly important for that buildout to continue to occur. And so when we look at that and when we look at kind of the cost profile of being able to add the cost on storage are, we are getting much more efficient on that side. We are seeing the cost curve drop there, very similar to how we saw the cost curve dropped towards solar. And so whenever you were looking at it back in Utah and saying, this is not the lowest cost energy, but ultimately, we think that it's good for what we're doing here. Storage is in somewhat of a similar profile right now where those costs are dropping, where we're getting much more efficient on the production side, and we're just scaling that up. As that continues to happen, you're going to see a similar profile happen on that hybrid resource and stand-alone storage component. But what's going to come with that is the shifts that are happening, what that impact is ultimately going to do to the transmission grid, everything else, it's not just how we're going to be able to generate power at an economic profile with wind and solar and how we're going to be able to see that cost curve drop with energy storage and then allows those intermittent resources to be more robust, to be more like a base load profile, but it's also really going to be how much we're going to be able to save in transmission and distribution upgrades by being able to be smart about how we're citing stand-alone storage facilities. So it's really like there are multiple ways to look at this and say, it is -- the cost savings are not just in the energy generation, but it's ultimately what it means for the grid whenever we're really looking and being able to be smart about how we cite these and how we ultimately are able to defray some of those costs, which are substantial and ultimately are going to be something that, depending on where you're going to be, those costs are borne by ratepayers or, in some instances, depending on how the structure is. That's something that we're really -- we're looking to say, how are we doing this in an efficient way because the transition of the energy grid is an expensive proposition. And we want to make sure that there's really a both an economic and obviously, all of the other benefits that come with.

Excellent. Joe or Eric, any comments or should we move on? Good. Joe, let me target you with this next question, and then we'll ask Eric to follow you. Let's talk about American jobs in the domestic manufacturing sector. And what is the impact of investing in energy storage technologies will have on jobs in our whole manufacturing sector?

Yes. So great question. When you look at Eos on where we are right now, so we have a factory that can manufacture 250-megawatt hours of energy storage, but not even a drop in the bucket where we are today. And doing that, we've created 100 jobs in Turtle Creek, Pennsylvania, which is old field country and created green jobs turned in an empty old Westinghouse factory into a factory that's producing and shipping daily out of this. Now as we scale that up, the jobs scale, when we get to where we want to be with these factories to have it at a gigawatt hour, you wind up creating between 300 and 400 jobs depending on how we scale up the different parts of the manufacturing. And not to mention that, but when you look at our product, there's the knock-on effect of this where every one of our suppliers is within a 3-hour drive except for one part that we have in the battery right now. So we've also created jobs with other industries to supply to us. I think this is critical for us because what I've watched in my time in the industry, when you look at what's happened in solar, when solar came on here and a lot of the product coming in was imported, we have an opportunity with companies like Eos and Eric's company to create a technology leadership position and to build off what Geoff said, it's a great technology in the United States, but also something that we've got. We actually have a system installed in Nigeria. We have a system installed in Greece, and we're installing a couple more in Europe. So this is our opportunity to continue to be a leader in the value chain of this transition in the energy industry. And I also think, since it's so critical for us from a national security standpoint, I think it's important that we have these national champions that are manufactured right here in the United States because as it grows, we want to grow with it.

Excellent. Eric, I'm going to ask you to way in -- and before you do, just an idea for our guests if you unmute, I'll take that as the queue that you have something to say. Does that make sense, and then I'll call on you. So Eric, go ahead.

Yes. I would just -- I would echo a little bit about what Joe said at ESS, we've had that same kind of growth curve. We've more than doubled our staff in the last year. We'll do that again plus in the coming year. And so I think it's -- and the supply chain is largely domestic. The installation of these, of course, can't be outsourced. So that's domestic. But I'd put it in a little bit of perspective. If we look back to the last major industrial revolution we have, which we'll call the Internet revolution, U.S. companies really dominated that. We were first, second and third place in about every subcategory of the Internet. The #1 router company, the #1 search engine, the #1 -- and you name it down the line. If this energy transition is the next major industrial revolution, and we look at who's winning that fight, it's not U.S. companies. So this is an amazing case for storage and the 3 companies on the call today. Our U.S. companies building U.S. originated technologies for the U.S. supply chain that are the leaders on a global basis in these technologies. And I think that's important because if you look at solar panels, if you look at wind turbines, a lot of that is not manufactured in the U.S. And if we don't have that U.S. manufacturing base, we're going to really end up offshoring a lot of our investment in these 2 jobs that are going to be created in Asia or other parts of the world. So I think it's something that we should all be conscious of. And as Joe said, there's a national security implication on this as well. Our product uses iron salt and water as its key ingredients. It can all be sourced domestically. And we think that's important when you look at the next click down of the supply chain behind a lot of renewables because these are minerals that are coming from Latin America and from Africa in some cases, largely dominated by Chinese companies. And so we should be very thoughtful of that as we're driving the energy transition.

So Eric, you've just here on something -- I'm going to deter all of us for a minute to bore down in on this. I wish every member of Congress was listening right now because what I'm going to ask you all to do let's take a few minutes or a minute just each and look at me as if I'm 435 members of Congress and 100 Senators and say, if we're not careful, we will waive this over to China, right? We will succeed this over to China. And these jobs that you all are talking about, these businesses that you've established will not be the world leaders, right? But China will be. So Eric, you start and tell Congress what you need, right, in order to be a dominant -- what -- not just you, but what the United States leads to be the dominant player on this to let this be the next industrial revolution, as you have described, I totally agree with it. So that we're creating U.S. jobs and not buying all of this technology materials overseas.

Simple. I just need a level playing field. We have the world-leading technology. We just need a fair marketplace to go and compete against all of these other interests. And unfortunately, that's not the case today. There are subsidies and subsidization that happens broadly in some of these offshore markets. Those products then come to the U.S. And so I'm competing against an unlevel playing field against foreign competition. I'm also playing against an unfair playing field -- an unlevel playing field when it comes to some of the historic carbon-based alternative generation or nonalternative but traditional generation technologies. I think people don't appreciate that we do quite a bit to subsidize traditional carbon generation today. And there were reasons for that, and I'm not going to argue it. But if we're coming in with something that's new, that's on the early part of its learning curve, we just need a level playing field to go off and establish these in the marketplace. And once that happens, then economies of scale and the volumes will all kick in. And just as you saw in that experience with your solar municipal activity in Utah as we get the flywheel going, then the costs will come down. The efficiencies will rise, and this will be by far the preferred technology going forward.

I love it. Joe?

So I would just build off Eric said. Look, the stand-alone ITC -- stand-alone Energy Storage Investment Tax Credit that's now in front of for approval, I think it's critical to accelerate the marketplace. And I think having an advantage where you have incentives to buy from Made In America is going to be critical for us to be able to launch our technologies out in the marketplace. The other thing I would say from my career standpoint, I spent 26 years at GE and the last 4 years in a startup at Eos. It's very easy to get funding for a new idea. The jumping from idea to industrialization at scale is where companies need help. And I think Secretary Granholm and the team at the Department of Energy are certainly working to be able to do that, but coming up with backstops around new technology to get the bankability that you need as a start-up, I think, is critical for us and a key thing that we've been working with them on. And then as you scale manufacturing, how do you continue and come up with programs to allow companies that are manufacturing to get low-cost financing to scale their operations and create the jobs that we're talking about. And I think that will level the playing field where companies like Eos can grow in the future.

Excellent. Good. Geoff?

Thanks. I mean I totally agree with everything that Eric and Joe was just saying. I think the one note what I would add to it and the thing that I'm incredibly encouraged by about the bill that's coming out of Congress right now is its duration. Before storage, I was doing renewable projects. And there is this constant sawtooth to the market and everything was extended by 2 years or 3 years. I think it's incredibly important that the initiatives that we see, the tax credits that are being considered, the domestic content consideration, those are all great. The fact that we're talking about it for 10 years makes it -- it's completely different. I can talk to our investors, I can talk to our counterparties and talk to our customers. They start working with us, here's how we're building our team, here's our business plan, and we can plan on the duration of a decade. But storage takes years to put in place, platforms take a long time to build. And it's really important that we see this. I think when the Congress stands up and they say, this is a 10-year plan, that is the long-term planning, the long-term leadership that we need to see in the capital, and I'm incredibly encouraged by that. So just keep doing that. That's what I want to pass the bill, that's number one.

Good. Ben?

And I would really going to echo what Geoff is saying, too. And it really is -- from our side, we start our development projects from greenfield assets, which take 4 and 5 and sometimes 6 years to really start from concept to execution. And to Geoff's point, kind of when we live in this world of 1- and 2-year policy extensions and not a lot of transparency beyond that, it's incredibly difficult for us to make the investment into the activities that we need to do today what ultimately are going to be kind of the projects and advancements that are going to happen in 4 or 5 years. And so really, what I see that is those policy initiatives really come in 2 different ways. There is, one, on how are we incentivizing the ability to what Eric and Joe were emphasizing, the ability to scale that domestic supply chain, which is incredibly important. I can tell you as a purchaser of a whole lot of solar modules, the more that we can bring stability to the supply chain because that is a constant challenge that we're always managing on our side because it really is, I mean, without making the investments right now as the industry is really starting to expand in that domestic supply chain, we are going to be playing catch up later if we don't do those things right now and really incentivize that domestic supply chain today. We can't wait 3 years, 4 years, whenever the industry matures beyond where it is now. Those investments have to be made right now. And then on the other side of it, and this is to the point that Geoff was making is it's scalability on the business model side, too. Because right now, a stand-alone storage project doesn't have a really consistent execution as we look at them today. We're working and we're looking at how we're going to make that a viable commercial execution in the future. There are several territories and states throughout the U.S. right now where I can't look at a projected financial model and say this stand-alone storage project is going to work based on the current structure of the market as we sit here today. A huge part of that is going to be a stand-alone storage ITC. A stand-alone storage ITC allows us to have a policy mechanism and basically kind of a foundation to that business model that then is going to be something that you can scale across multiple regions. And so it's really saying it's 2 things. That's how are we really -- how are we putting in the support mechanisms? How are we incentivizing the domestic supply chain that ultimately is going to lead to jobs and growth in terms of that, the merit -- that next industrial revolution being right here in the U.S. and not something that people are importing from somewhere else. And then it's how are we looking at the business model for how those stand-alone storage assets actually come to life and how they get built and how they get financed and having kind of smart policy initiatives that allow us to plan 5, 6, 7 years in the future be able to do that. So those are the 2 things that we look at. Those are kind of the 2 barbells that really are going to drive the growth that we think is necessary.

Well, I'm only 1 of 435, but you've all convinced me.

Congress, maybe I can just add one thing to what Ben said because I think it's important. I was around involved in building smart grids during the Obama administration when the Recovery Act had a thing called the SGIP, right? It was a bit of money. It was one of the most successful government programs that I'm aware of, certainly, in the world of energy. And something that happened that was really interesting because we have a state regulatory system for electricity in most cases. That's what drives our business on a daily basis. Once the federal funds were available, and in this case, the tax credit, it created a little bit of a rush on the part of the regulatory agencies to figure out the thing that Ben was talking about, which was what are those market mechanisms that are going to allow storage to take place. So my prediction is going to be that if we pass the bill, what will happen is 50 states plus the District of Columbia moving at the staff level, at the commissioner level, saying, how do we make sure that we get some of this money flowing into our jurisdiction. So whether that's in Utah or Iowa or New York or wherever, people will see this as an opportunity to leverage the tax credits to accelerate the investment in this renewable transition in their geographies, and that will drive some of the market mechanisms to be put in place at the local level. And I think that's really exciting. It doesn't take a lot. What we saw in the SGIP program is that, that didn't really amount to much more than 15%, 20% of the total economics. But that little bit just tipped everything over the side and the deployment of smart grids accelerated by about 400% during that period of time. So it was really -- it was a great payback for the country and great for the energy transition.

Thank you. By the way, I took notes on all of your comments, and I'm going to go tell my colleagues above -- this isn't everything, but above everything else, level playing field, predictability and stability. And it's interesting because you could go to almost any industry, not just your industry and say, "What do you need from government?" And if we could deliver as government those things, I think we could accomplish anything, if we could just keep those things in Congress. Unfortunately, particularly with that predictability and stability thing, I think we're our own worst enemies sometimes. Let me shift gears a little bit. I'm going to go to Ben, let you start on this one, but I'll give you all the chances to comment. What would you tell the general public about the state of energy storage technology right now? And then couple that with this thought, how scalable is this, right? So not only where you guys have, but like how scalable is this? There are some, we would say, look, we're just going to solve all of our problems with wind and solar. And the reality of it is we can't do that because of storage right now, right? And if we get you all off the ground and running right, do you see a world where renewables in the narrow sense of, let's say, wind and solar and storage can really take care of all of our energy needs or do we still need to be working on parallel paths with other technology, whether it's hydrogen or new nuclear and things like that? So give me a sense. Ben, I'll start with you the state of things and scalability.

I think it's a great question, Congressman. And I think that what -- while we're always going to, I think the innovation in this industry has always led the way and has been something that's been incredibly important. And so when we look at new technologies like hydrogen and other things out there that could continue to kind of help the transition. I think it's important for us to continue to make investments in those to understand how those technologies can help where we're going. But I think largely, we really have the belief that we have the technology today to do all of the heavy lifting or very much of the heavy lifting to get where we need to ultimately go with the energy transition. Wind, solar and energy storage are with where we are today, with where we need to go and where we need to make those improvements are going to be able to get us the vast majority of getting into a place where we can ultimately start to really make that energy transition. So while we're always going to be encouraging of new R&D and new technologies, we can't wait for those to ultimately come along. And we don't necessarily need them to either because we think that as we're sitting here today, we need to continue to scale the manufacturing capacity when it comes to energy storage, and that's a huge piece of this entire puzzle. But really like the technology is there. And we think that we have the tools available to really tackle the decarbonization goals of states and municipalities in the country is at large, we just need to make sure that we are putting proper structures behind them to the point that we've been making all along to have that stability from a market perspective, so that everyone who is really going out and trying to deploy all the technologies at scale can continue to do that and have the transparency and clarity in making that.

Excellent. Joe, it's -- your body language is so clear that you want to jump through that camera and tell us something, so I'm going to call on you next.

Thank you, Congressman. So I think energy is always going to be a mix. So you're going to need multiple technologies to serve the needs and the use cases that are out there. There are very scalable technologies. You look at the way that we tried to design our product was we use only earth abundant raw materials, only things used in other industries that you can scale it up to grow. You -- but our technology will not be the only technology that's going to serve the need. You're going to need -- as this evolves, you're going to have use case 3, you need energy storage for minutes, for a couple of hours and for a longer duration than that, and you're going to need multiple technologies to be able to meet that. Now on your question of multiple paths, I think the thing that I see right now in the industry is that we've muddied up everything into what being discussion, and there is a place for hydrogen in this energy mix that allows you to more effectively use natural gas assets that are producing power and could be a great transportation tool. So we're going to need those different bets to be able to start to decarbonize the entire value chain. And I do personally believe that energy storage can scale just like every other technology that we've had in the energy issue. I agree with Ben that innovation is the hallmark of this industry. And if you look at where we are from energy storage and think about traditional fossil fuel gas turbine power generation, we're 40 years ago, when you think about where we are in developing these technologies. So we have to accelerate that innovation curve and that cost curve so that this will scale and become a technology of choice as we decarbonize the entire value chain. So it's an exciting time, and I think we can do it.

Good. Geoff and then Eric, and then we're going to transition and we know -- I've got some reporters waiting for us. So yes, this question will transition.

Sure. I mean I think the important thing to say is I don't think there is a more scalable technology out there than storage when people say, it's oh, this is years away. We've got a decade or so before see if batteries work. I mean we've been using battery technologies for over a decade. When we started this, Powin's first project was 8-megawatt hours, and we were high 5 and in back lapping, and that is an incredibly small project right now. We've got multiple projects that are gigawatt hour. I mean the largest projects going forward that are announced are multiple gigawatt hours. All of those are being supported by manufacturing and supply chains that are being built up at scale. This market is growing at multiple hundreds of percent a year. It's happening both inside the United States. It's happening internationally. This is -- and this is happening because we have been able to develop a market that's going to demand it. But I don't think there is any limit on how quickly and how rapidly we can transform the grid. The technologies are proven. We just need to make sure that the policies stay in place.

Thank you. Eric?

Yes, I would just say two things. The first is, as I said in my introduction, if we look on a global basis and we combine the decarbonization of the current energy system with giving power to people who don't have electricity and changing cooking fuels, just to put it in perspective, we need a global electricity system that's 2.5x the size of the current system, and it all has to be carbon free, right? So let's just kind of baseline to the scale of what we're talking about here and kind of echoing what Geoff said, this is a massive transformation. Will storage plus solar and wind solve every problem out to the last 5% of the edge cases? Hey, probably not. But if you want to know what's going to drive the bulk of that transition. These are technologies that are proven available today. They're safe, they're scalable. So I think we should keep the R&D train running. The only thing I would caution the group is I want to be -- I think we should be careful to not always hope that the next thing coming over the horizon might be the silver bullet it solves all the problems because that gets really distracting in our industry. There's always a hope or a promise or a wish or a dream that people think are going to make it all easy. And I would just encourage us all to get on and do the work. This is a good old tough American roll up your sleeves and start building, and that's what we're doing.

I love it, I love it. Okay. We're going to transition a little bit. We've got some reporters that are joining us, and I'll introduce them. Sheila, you coach me here if I got the format wrong.

I think you've got down cold by now.

Well, I regret I won't be invited back because I didn't even make it through a fraction of the questions that we had.

[ Hunters out ]. Yes.

Yes. We're going to start -- we've got Lisa Martine Jenkins, Senior Reporter Energy Morning Consult; K Kaufmann, Mid-Atlantic bureau chief; Darrell Proctor - Senior Associate Editor, POWER magazine; Laura and Laura, if I do this -- if I don't say this correctly, please correct me. [ Sequoia ] Energy and Renewables, Reuters. Listen, it's so good to have you with us. Lisa, we're going to start with you. I'll moderate and I may cut in because I want to make sure that all 4 you have a chance to ask your question. But Lisa, we'll start with you if you want to jump in and direct it at someone specifically or at the group.

Great. Hi, everyone. So this is actually pretty connected with what we were just speaking about and is inspired by a question in the chat. Can you speak a little bit about the specifically what the cost of scaling up these technologies, ideally to the point where they could replace or be integrated into large fossil fuel plants as part of the grid. And is this something that utilities have expressed interest in? Are you in conversation with some of these utilities?

And Lisa, are you directing that at any one or...

Anyone who would like to answer.

Okay. And I might just mention, I don't think we've got a chance for everybody to run through. So we use that same drill, if you want to -- Geoff, you have unmuted.

Yes. Sure. I mean, I think just to quickly go, I mean, this is -- I mean, we are already at a cost point and a price point to the utilities where they are providing accretive market value. There's a massive interest from utilities. They are seeing that this is the way that they want to be able to modernize their grid and control their grid going forward. So I mean, we can -- I'm happy to speak specifically to sort of price points and where we think the direction is going to go. But I think the really important thing that we want people to take away that -- these aren't [indiscernible] Eric saying, we are in the process of building the platforms that are currently installing products that are operating and running and changing the grid. We want that to continue.

Thank you. All right. We're going to -- Eric, go ahead, quickly.

I'm just going to say, Lisa, there's a research analyst called -- named Colin Rusch from Oppenheimer. He has done some great work on this and looks across all of the spectrum of ways you can generate electricity. And he's come out and declared it's kind of game over. Solar plus storage beats natural gas-fired peaker plants, period hands down. Now of course, we have a lot of peaker plants -- gas-fired peaker plants in use today, and they have useful life left. So as the transition happens, they're not going to all go away overnight. But if you think about where you're going to invest the new money going forward, there's a straight-up economic story. So even if you don't care about climate change, even if you don't care about the energy transition, if you're just playing for economics, this is now the most cost-effective thing to do.

Thank you. K Kaufmann?

Thank you all for a great panel. All right. I'm going to talk a little -- ask about transmission planning. As I'm sure you all know, FERC has its advanced notice on proposed rulemaking on transmission planning and cost allocation going on. And the grid operators have been trying working on how they will integrate storage. Can one or all of you talk about how that's going, particularly Eric and Joe, on longer-duration stuff because I know utilities and grid operators tend to be a little wary of any new technology. They always want to check it out and say, well, we have to see how it works on our system. So that's -- what do you need?

Joe, I'll take -- I'm happy to take a first crack and then chime in. First off, I think that certainly we're going to need some more transmission and we're going to need infrastructure investment in the distribution grid on a more localized basis as well. There's no doubt about that. But I think one of the things that long duration storage can do is create the buffers in the system that are more cost effective than building new transmission. New transmission tough to state. Everybody wants it to exist. Nobody wants it in their heck yard. And so one of the things you can do with long-duration storage at scale, and we're talking hundreds of megawatts up to gigawatts of scale, is it can create buffers more locally. So I think one of the big things that we're talking about -- when we talk about the renewable of the transition to renewables is a more distributed and more localized energy system. So what you can imagine is, if we can generate more of our electricity using wind and solar locally and store it more effectively, that obviates the need for some of that transmission to get built. And I think if you just look at the economics behind it, the economics of long duration storage versus the economics of transmission are quite appealing in most cases. It's, of course, all things are local. And then in terms of the provenness, I hear you -- I've been working with utilities for a long time, and everybody is from Missouri in the utility world, as we like to say. But there is -- that's a problem that's getting solved already. Geoff talked about a lot of the demonstrated projects. I think that there is broad acceptance at this point that storage technology works, it works effectively, can work safely. And it's ultimately going to come down to just ensuring that the economic incentives are fair and balanced as people go through what's called their integrated resource planning processes. And we've got great reasons to believe that California, just to throw 1 data point has come out and called for more than 1-gigawatt of long-duration storage to be on the system by 2026. That's lightning fast and utility dump, right? That's pretty quick. And as they look down the line to 2030 and beyond, it gets into the hundreds and hundreds of megawatts of long duration -- hundreds and hundreds of gigawatts, excuse me, of long duration storage that are going to be required.

Go ahead, Joe.

Yes. The only thing I would add on the top of what Eric said is, when I look at the opportunities that we're out pursuing in the marketplace, we do see a shift to longer duration discharge. So discharge time of above 4 hours. Our median now is around 6 hours when you think about what we're looking at as a company. But inside of that, I think what's very important here is that you need technologies that are dynamic and not static. And what we try to bring to the market is the ability to go down to as little as 2 hours of discharge and as long as 12 to 15 hours of discharge time with the same size system by managing the technology through software and just the way that we've designed the product. So I think as we think about this duration is going to be important and talking long short, I think it's going to become less important as we talk about flexibility because what we're trying to do is give the grid more flexibility, and we need to bring storage solutions that are flexible to allow this to happen. From the standpoint of -- I fully agree with Eric's point around the energy industry wanting you to prove out what you're doing, and we've been around for 13 years. We've got 2 million cycles on our technology, and that's how we start off with every customer that we talk to. And then from there, go through and run the process. Now I do think that to hit the goals that we're talking about, that process is going to have to change. And I go back to what I said earlier here is that somehow we have to enable people to take -- keep the grid safe, but take the risk on introducing these new technologies that we can get to scale.

Excellent. Thank you. Darrell?

So here's an announcement that came out today Alliant Energy up in Iowa, taking the decommissioned Duane Arnold Nuclear Plant and putting solar plus storage at that site. So the infrastructure for transmission is already there. We're seeing this, I know, in Europe, in Germany, where they're repurposing old batteries from EVs into closed coal plants. Is this something that could help mitigate the T&D problem by taking brownfield sites of closed coal, nuclear natural gas, any type of thermal plan and putting solar plus storage arrays there?

Go ahead, Joe.

I would -- I saw it, Darrell. It certainly improves the economics of your project by doing that, by being able to plug into existing infrastructure that you already have from getting on to the grid takes down the cost of being able to make your project successful. I also think it's a way that we have to plan as an industry to do things like this because it just allows for better land use. When you start talking about the size and the density that renewables -- the amount of land that renewables requires to scale using land that's already been used for power generation or other industrial applications is a great solution to be able to allow the overall system to be more effective and allowed to be green. So I think we're going to see more of this as we move forward just from an economic standpoint and not just on power plants, coal and nuclear retirements being converted over, but you can also use on our product, we're working on a couple of projects in Europe, where we're taking close down warehouses and putting batteries inside the warehouses and solar on the roof to turn it into a renewable power plant without having to lose any green space. So it's something that we all have to work on, and I think will be a trend as we move forward.

Ben?

Darrell, I would just going to say, and I think that, that is certainly something that we are looking at because, obviously, using existing transmission infrastructure as opposed to building new is a much more -- that is a huge piece of the cost profile and we're looking at building hybrid assets or anything else. What I would say is it's an exercise in collaboration because when you're really looking at it, we're working with exciting and developing brownfield any projects are complicated. And so it's working with the local communities where those power plants are being retired. It's working with the utilities and the RTOs and everyone else to help understand that planning process. And being able to put all of those things together to get those projects online, we think there's a huge opportunity to do similar projects like that and be able to utilize that transmission infrastructure. And again, it's -- but it is -- it takes a really collaborative effort across multiple stakeholders to make something [ within that ].

Darrell, you didn't ask me. But if you wouldn't mind, let me just share a thought with you. I represent some coal country in Utah. And so I've seen this problem firsthand. There's a coal power plant in 1 of my counties that -- the schedule has been moved up for closure. And as you have alluded to kind of in your question, that causes a lot of trauma in some of these communities. And in my opinion, in many cases, makes them want to push back against this movement. And it's not so much that they're fighting for coal as they're fighting for jobs, right, and for wave life. And one of the comments I hear and maybe we'll see if any of our guests want to respond to this is, look, if you bring in a renewable, whether it's a wind farm or solar, you're giving me some jobs initially upfront for installation and things, but you're really giving me 2 or 3 people to run these facilities where we used to have 100 on a coal plant or probably more like several hundred run a coal plant. And so I guess one of the things that I think would be nice to couple with this is not just using these transmission lines but actually going to these communities and doing some of your manufacturing in these communities, right, doing more than just the few jobs that it would take to maintain a solar plant once it's up and running on this grid. So is that feasible? And how could we help these communities beyond that, just that initial, yes, we're going to install this and it's going to take a couple of employees to run it? Joe, go ahead. Eric, I'm sorry, you've unmuted, you go ahead.

Yes, I'll take it. So the short answer is, yes, it is practical. It's probably not practical to build an energy storage factory in every community, right? That's not probably going to happen. But at least in our case, the combination of having a supply chain of broadly available kind of materials, and it was comparatively low cost manufacturing setup. It does make it practical to build on a more localized basis. Somebody joked when they looked at our facility, it looks more like a metered washing machine, assembly facility than it does a silicon plant, which is where lithium batteries, which are a different technology than ours. It's a much more sophisticated kind of very expensive infrastructure to build. So I do think you're going to see that where jobs are going to be more localized. The one thing about large-scale long-duration energy storage that you'll find is that these are pretty big batteries. So there is some economic advantage to building closer to where it's going to get deployed because shipping things is big and it's bulky and you've got some incentive to go more closely.

I'll just comment quickly, and then we'll need to move on. Ironically, these same communities, at least in the case of Utah, are the very ones that have some of these minerals below that or services that they would love, right, to mine. And too often, we're kind of turning a blind eye and saying, well, it's okay to go mine these in China, but not here in the United States. And these communities would actually really benefit from that.

John, if you don't mind, sorry. I like to add one point to that. I mean I think the question of -- and I think one of the things why like -- why were such large supporters of this bill that we've got in front of Congress right now is the domestic ITC requirement that will help to bring manufacturing local here. I think, one, there are certain types of products that are challenging to manufacture in the United States. One thing that there is and I should say, all the representatives on the panel, we have slightly different technologies, different type of inputs, different sort of ratio between raw material and labor costs. I can -- speaking just for our product, we can quite cost effectively manufacture and assemble our products over here with the proper incentives and with sort of a more rational tariff structure. There's a few things that need to be changed on the regulatory side, but we can bring a substantial amount of manufacturing facility over here. We've been attempting to do this for over 4 years. If the supply chain and shipping challenges that Eric spoke to recently, this is incredibly difficult, expensive stuff to move around. I would love to be able to build this stuff on this closer to the project locations and with the right type of support, we should be able to do that.

I work for a whole hour on that topic. Laura, take us home. You've got the last question.

Can you hear me?

Yes.

Okay. Great. I was just hoping, and this is for anyone. If you could elaborate the real-world implications from a price point perspective on the expansion of the investment tax credit to energy storage technology and particularly stand-alone batteries. I know that's kind of a wide-ranging question, but I'm curious about that as the bill continues to take forward.

Who is going to jump it on that one. Ben, go ahead.

I can jump in on that. And so Laura, I think the -- as far as kind of -- if I'm interpreting your question correctly, kind of the price point implications of what that ITC ultimately means and kind of how that allows us to kind of build scalable business models across multiple regions. Really, what it does is, the -- really when we look at 2 different things, we're looking at a project, if it's a solar project or a wind project or a storage project under a couple of different frameworks. There's one, what is the revenue profile of the asset look like. And that is something that -- it's very regional specific, but there are a lot of different ways that we're going to be able to go out and deploy these. We are working actively with utilities now where we're kind of entering into tolling agreements where they're able to utilize the battery, we're able to locate it and kind of develop it on the grid and be a partner with them and doing that. There are opportunities that you're able to go out and do energy arbitrage and more of a kind of an open market type of framework where you're able to go out and optimize revenue profiles there. Ancillary services are available. There are many different things that are -- revenue profiles that are available to energy storage assets. And those are all available as we sit here today in the market structure as we currently do. The other side of that equation that was really kind of the capital stack and how you're actually getting that asset build. And so while we can secure the revenue streams, the ITC really speaks more of that capital stack side of the business, where we're looking and saying, how do we source the capital to actually build these. These are large facilities and they're expensive. And when you're out there and you're looking at revenue profiles that are in some instances variable, if you're doing things like energy arbitrage or more of a kind of merchant -- a market asset, those are things where you're able to -- the more you're able to kind of have fixed ways that you can secure pieces of capital stack, which you would do through a stand-alone storage ITC, it makes it that much easier to then optimize and monetize the revenue streams that come off of this. So it's really saying it gives you kind of the -- it's not necessarily as much of a pricing support because the markets are ultimately going to dictate where that energy is going to trade and how it's going to work or what tolling agreement utilities are willing to pay. It really comes down to -- is there a way to finance these assets at scale? And that ITC is a huge component of that. It allows us to go out and to be able to secure the capital to invest tens, if not hundreds of millions of dollars into these infrastructure assets that ultimately are going to be able to allow the industry to scale what we need to.

Eric quickly, and then we'll wrap.

Very quickly, and Ben, you can agree or disagree with me, but I think one of the things that doesn't get a lot of publicity that's included in the bill as a direct pay option. And I think that's actually going to make this a lot easier to implement today where there are ITCs, there's a lot of very complex banking that goes on in the background to how to monetize those credits. And so a direct pay option is just a little -- sounds like a little thing, but I think will really help it go a lot faster.

Yes. Agree.

Excellent. Listen, I regret that we're out of time. I would love to explore so many topics with you. Our listeners have put a number of good questions in. Sheila, I'm going to hand it off to you. One of those questions, I'll let you answer, and that is, is this recording going to be available and how can people access that? Thanks to each one of you and those who have tuned in to listen in to our reporters. Sheila, let's hand it back to you.

Thank you so much. Congressman Curtis, it's been a great honor to have you join us today and your precise questions and active participation really enliven the entire discussion and brought incredible vibrance to it. We're deeply appreciative and hope to have you back when we have more time. I know you're under a little bit of pressure too time-wise. But this will be available on the USEA website. It is obviously a topic that deserves a lot more conversation. And I think this could be qualified as just the warm-up act. We have many more -- we have miles to go before we sleep on this one. Thank you so much, everyone, for a tremendous, tremendously interesting relevant, timely group of presentations, and we march forward and very proud to be associated with the presentations today. Thank you.