ESS, a Wilsonville business, is riding the renewable energy wave toward a projected $1 billion valuation and an official listing as a publicly-traded company.
Due to a merger with the already publicly traded ACON S2 Acquisition Corp., the long-duration iron-flow battery maker, which has over 100 employees in Wilsonville, could significantly increase its production, double or triple its employee count and expand its markets to places such as Australia and Europe in the coming years, according to founder Craig Evans.
"If we stayed down the traditional (private financing) route, it would take a couple years to scale our organization quickly. With this route, we're able to raise a half a billion dollars and scale the company sooner," Evans said. "It's at the right time because the market is growing quickly."
Evans said the iron-flow batteries use iron, salt and water rather than more hazardous and costly materials like the traditional lithium-ion batteries. The company primarily works with energy warehouses in the commercial and industrial sectors, as well as independent power producers.
"We're just here to make sure we're putting clean batteries on the grid instead of polluting everything with not so clean and safe batteries on the grid, and do it at a cost that is economical and drives more renewable penetration," Evans said.
The batteries also don't need to be replaced, don't lose effectiveness over time and use energy from cheap chemicals, Evans added.
"If you want more energy, you put more chemicals in the tank. You don't need more batteries," he said, adding that capacity fade from traditional batteries can become a liability and result in a loss of revenue when you're trying to power a grid over a long span of time.
Evans also said the technology helps solve solar producers' conundrum of having to waste the solar generated at certain times of the day (the daylight hours) and then not have enough solar at night, because that solar can be stored in the iron-flow batteries and distributed when it's needed.
Evans started the company with fellow co-founder Julia Song out of his garage before expanding to multiple locations, including Tualatin, and settling into the current 150,000-square-foot facility on 26440 S.W. Parkway Ave. The company doubled its headcount in 2020 and is looking to do so again this year, he added.
Increased electrification and outages during recent weather events like the ice storm show a need for the technology, Evans said. The ESS founder also shared that the company does much of its business in California, which has been ravaged by extreme wildfires. He added that companies don't use traditional batteries because they are flammable and that the iron-flow batteries are a useful alternative. Australia has a similar blend of renewable technology deployment and consistent wildfires, which are reasons why ESS plans to expand into that market.
"You lose a line from a power plant and everything goes out off-line, but if you have long-duration storage at substations, you can keep those lines energized," Evans said. He added: "The tech we're developing is the only technology to be used in California to support those communities."
Evans says it's only a matter of time before wind and solar replace carbon as the primary energy source because they are cheaper to produce. However, he said the company was surprised at how long it took this market to grow and that the early years were spent trying to sell investors on a renewable energy future that had yet to come to fruition.
"Now it's people wanting us to move as fast as possible when we didn't have the capital in the early years to get there as fast as we needed to," he said. "If we had had capital in early years, we would have wasted it. It's good to struggle with the money because then you learn how to do it efficiently and wisely."
He predicted the merger would lead to hundreds of millions or billions of dollars in revenue compared to single or double digit millions of revenue prior to it.
Adam Kriger, the CEO of ACON S2 Acquisition Corp, also expressed optimism about the merger in a press release.
"ESS offers a remarkable technology that is a game-changer in the world's transition to clean energy," Kriger said. "With its tremendous market opportunity and leadership position in cost, performance and sustainability, ESS has a clear trajectory for growth as it scales. We are thrilled that this transaction aligns with our mission of combining with a leader in Strategic Sustainability; when a business' pursuit of sustainability — environmental, social and/or economic — is central to driving its performance and success. We look forward to collaborating with Eric, Craig and the entire ESS team."
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