Eos grapples with scale-up challenges on route to DC cost of $95 per kWh

The 1MWh Eos Aurora system installed by Advanced Solar Products for PSE&G's Caldwell Wastewater Treatment Plant solar project (Photo: Eos Energy Storage).

The 1MWh Eos Aurora system installed by Advanced Solar Products for PSE&G’s Caldwell Wastewater Treatment Plant solar project (Photo: Eos Energy Storage).

By Jason Deign

The zinc hybrid cathode battery maker Eos Energy Storage has admitted to facing challenges in scaling its systems up to megawatt levels.

The company is thought to be working through teething problems with its pre-integrated Energy Stack systems, in advance of an upgrade scheduled to be on the market in the second half of next year.

“The underlying battery technology is sound,” senior vice president Philippe Bouchard told Energy Storage Report, but “up until recently most of our testing and demo projects were small, kilowatt-scale.”

It is unclear how significant the issues might be. “Technology development takes time, especially in the hardware space,” stated Bouchard. “There is no way to shortcut the process.”

But Eos has been testing its batteries for grid-scale applications since 2012, when it launched a programme called Genesis in association with eight energy companies, including NRG Energy and Consolidated Edison.

Plans to ramp up manufacturing

Two years later, Eos announced plans to ramp up manufacturing with the support of a USD$1m award from the New York State Energy Research and Development Authority (NYSERDA).

“The NYSERDA award will also support performance and reliability testing of Eos’s Znyth battery technology at the NY-BEST Test and Commercialization Center in Rochester, New York,” said Eos in a press statement.

The testing was intended to “accelerate commercialisation of Eos’s 1MW/6MWh Aurora energy storage system,” the company said.

In 2015, Eos trumpeted further testing, this time with the European energy firm Engie in Belgium.

This was Eos’s first commercial customer, Bouchard said, and seems to have been a satisfied one: in April this year Engie placed an order for a 1MW, 4MWh Eos Aurora grid-scale energy storage system in Brazil. 

Taking Aurora system orders

Also in April, Eos began taking Aurora system orders “for volume purchases at a price of $160 per usable kWh for shipment in 2017 and $95 per usable kWh for shipment in 2022.”

The announcement made Eos the first company to accept orders below $100 per usable kWh for a complete DC system including batteries, the battery management system and an outdoor-rated enclosure, the company said.

Eos also offered up to 20-year performance guarantees, at additional cost.

“These price points correspond to a levelised cost of energy of approximately $50-$60 per MWh for storage,” said Jim Hughes, Eos chairman, in a press note.

The cost was roughly 30% lower than the lowest projected level for any competing storage system, Eos said.   

Eos will become “the default solution”

“With these economics, Eos will become the default solution for new peaking capacity and will enable a dispatchable renewable energy product that outcompetes conventional power generation,” Hughes said.

Bouchard clarified that these costs were for the DC system only, and that the total cost for an Aurora energy storage project would be roughly double the amount.

While this is still an attractive price point, the problem for Eos is that the economics of its main competition, lithium-ion batteries, are also improving over time.

According to the International Renewable Energy Agency, “energy installation costs for utility-scale applications are expected to decline from between $200 and $1,260/kWh in 2016 to between $77 and $574/kWh by 2030.”

Bloomberg New Energy Finance, meanwhile, estimates costs will drop to $74 per kWh by 2030, and around $150 per kWh by 2022. 

Total installed base today

Furthermore, the 2022 price estimates put forward by Eos are dependent on achieving a manufacturing volume of more than 200MWh per year. Eos’s total installed base today is in the region of 1.5MWh, Bouchard confirmed.

That small installed base alone could act as a red flag to some prospective buyers, placing Eos’s unpublished service and extended warranty costs under scrutiny.

Nevertheless, Eos is finally starting to see some of the grid-scale projects it set out to corner with Aurora.

Besides the Engie deal, last week Eos announced the installation and commissioning of a 250kW, 1MWh Aurora DC battery system at a wastewater treatment plant in the Borough of Caldwell, New Jersey, USA. 

Quick deployment and easy maintenance

“The integrated product solution combines Siemens’ AC power conversion and intelligent controls with Eos’ modular Energy Stack design to enable quick deployment and ease of maintenance,” said Eos in a press release.

The release conferred the idea that Energy Stack is a solid commercial proposition, a message that Eos itself has spent a long time building up.

With a question mark still hanging over the company’s ability to deliver, customers will be hoping that message isn’t just marketing hyperbole.

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