Julian Spector
Fri, January 27, 2023
Back in late 2018, utility Xcel Energy got out in front of its peers in pledging to eliminate carbon emissions from its electricity production by 2050. But the company made a crucial admission. It could cut 80 percent of emissions by 2030 with existing renewables and battery technology, but getting to 100 percent would require tools “that are not cost-effective or commercially available today.”
On Thursday, Xcel unveiled its first contract for one of those breakthrough clean-energy technologies. The eight-state utility signed “definitive agreements” to install two novel iron-air battery systems from extremely well-funded startup Form Energy, which aims to make clean power available for days on end. Xcel will place these long-duration energy storage systems at two different coal plants slated for retirement — Comanche Generating Station in Pueblo, Colorado, and Sherburne County Generating Station in Becker, Minnesota.
The scope and scale of the projects make them a crucial test case in the effort to shore up power grids that are adding cheap but variable wind and solar production while shutting down large fossil-fueled plants. It’s also the biggest proof point yet for Form, which launched in 2017 to invent storage devices that cost-effectively store and deliver clean energy over long periods of time, in a way that’s not possible with current battery technology.
“Getting started with Xcel early means we can start to deliver in a valuable way to their system before 2030,” Form co-founder and CEO Mateo Jaramillo told Canary Media Thursday. “We understand pretty crisply what their portfolio will look like getting to 2030, and we definitely see value as they get there and we build up our production capacity.”
Each Form project will provide 10 megawatts of instantaneous power for up to 100 hours, meaning they each will store a total of 1,000 megawatt-hours. That makes them small relative to other grid-scale batteries in terms of how much power they can deliver in one moment, but they’ll be among the largest in the world in terms of the total amount of energy they can store.
However enormous the size of the proverbial tank, this is still a trial run for the technology. To fully replace the outgoing coal plants, Xcel will need more power capacity. But these long-duration storage units are big enough to give Xcel a “meaningful” test of the technology in real field conditions, Jaramillo said.
“It allows them to put a first commercial demonstration at two very relevant sites in their service territory and think about scaling it from there,” he noted. The projects, slated to come online in 2025, are 10 times more powerful than Form’s first scheduled installation, for Minnesota utility Great River Energy in 2024.
Several things need to happen before this vision becomes reality, however. Form is still commercializing its product, so the company needs to wrap up its internal quality validation and complete external certification for relevant safety standards. Form also needs to build the factory that will produce the iron-air batteries; the company chose the former steel town of Weirton, West Virginia as the home for this facility. Gov. Jim Justice (R) endorsed the vision in a December press conference and supports a package of state incentives to get the factory online.
The deal with Xcel has been years in the making, Jaramillo said. “We knew that there was clear alignment from the executive team all the way down” after the company pledged to eliminate carbon emissions from its power production, he noted.
The two companies have another point of common interest: Xcel is a backer of Energy Impact Partners, a venture capital fund that raised money from utilities to invest in cleantech startups tackling important energy-related challenges. EIP has invested in Form multiple times, including the $240 million Series D from 2021. Form topped that beefy fundraise with $450 million raised in October 2022.
Many startups claim to be building long-duration storage, but Form has little competition in the realm of delivering clean energy for 100 hours or more. Another startup, Noon Energy, is in the early stages of pursuing this goal, and just raised a $28 million Series A to commercialize its laboratory prototype of a battery that uses carbon dioxide to store energy.
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