Below is the text version of the May 27, 2020, Energy Storage Grand Challenge Midwest and Northeast Workshop presentation. View a recording of this presentation.

Ladies and gentlemen, good morning and good afternoon, depending on where you are joining us from. Welcome to the Energy Storage Grand Challenge Midwest and Northeast Regional Workshop. We are so pleased to have all of you here with us today. I am Meredith Braselman with ICF Next, and our team will be guiding you through today’s workshop.

A few housekeeping items before we get started. Please note this WebEx is being recorded and may be posted on DOE’s website or used internally. If you do not wish to have your voice recorded, do not speak during the call. If you do not wish to have your image recorded, please turn off your camera or participate by phone. If you speak during the call or use a video connection, you are presumed to consent to recording or use of your voice or image. If you have any technical questions today, you may type them into the chat box and select “send to the host.” We will be muting your lines to minimize background noise.

Now, about today’s workshop. Pursuant to the Department of Energy Research and Innovation Act of 2018, the Department of Energy established the Research Technology Investment Committee, or RTIC, to identify potential cross-cutting opportunities in basic and applied science and technology. The energy storage challenge is managed by this committee.

Today, you’ll hear from Paul Kearns, [indiscernible] of the Argonne National Laboratory, Alicia Barton of NYSERDA, Stephen Hendrickson of the Office of Technology Transitions of the Department of Energy, and two outstanding panels about energy storage goals for 2030 and the economic voice of the customer. We also want to thank the team at Argonne National Laboratory; you have been wonderful partners in bringing this workshop to life and helping us transition to a virtual format.

To get us started today, we are pleased to have Paul Kearns, laboratory director at Argonne National Laboratory joining us for today’s webinar.

Good afternoon. I’m Paul Kearns, director for Argonne National Laboratory. Thank you for participating in the Energy Storage Grand Challenge. Argonne is excited for this important initiative; it will help us develop, commercialize, and utilize next generation energy storage, which is key to enabling new advances in transportation and grid technologies. This is our opportunity to promote Midwest and Northeast energy goals and help maintain U.S. global leadership in all aspects of advancing battery technologies from the very first innovations through to deployment of mature technologies.

One of our most prolific research areas at Argonne is energy storage. Our long history in battery innovations starts in the 1960s. We have emerged as a leader in tackling today’s energy storage problems thanks to decades of sustained support and investment by the U.S. Department of Energy. We’ve had great success in overcoming obstacles and transforming advanced battery technology into the auto industry. With General Motors, we’ve revolutionized battery technology by developing [indiscernible] technology. This innovation is instrumental for the Chevy Volt and other electric cars. It’s also been a game changer for the industry, and it’s used broadly in lithium ion batteries across multiple industries in addition to transportation.

Our pivotal discoveries have helped strengthen the U.S. battery manufacturing industry, aided the transition of the nation’s automotive [indiscernible] towards plug-in hybrid and electric vehicles, and enabled greater use of renewable energy. Argonne continues to design new technologies in this field. We are excited about the proactive approach of the Energy Storage Grand Challenge for transitioning U.S. technology and U.S. manufacturing. We look forward to helping the country strengthen its manufacturing and recycling of key battery materials that will power the future. Our scientists and engineers are leading the way in creative, innovative solutions with resources that cannot be assembled by any single business or organization on their own. At Argonne, we have direct access to the most powerful scientific tools, some of the most talented multidisciplinary teams and the most ~ cutting-edge user facilities. We bring those resources to bear on issues throughout the entire process, from initial discovery to transitioning those discoveries into practice.

For example, we have the advanced photon source with lines focused on energy storage research. We’re currently upgrading the advanced photon source to be a thousand times more powerful. We also have the Argonne leadership computing facility, where we’re deploying [indiscernible], the nation’s first exoscale computer system.

All of this is in addition to our state-of-the-art battery facilities that analyze every aspect of battery development, from fundamental electrochemistry, to materials, to battery systems development testing, all the way to recycling. With this expansion, our material engineering research facility has even more space for collaboration in taking lab tech to market. It is a convening ground for partnerships between Argonne, industry, national laboratories, and academia for manufacturing, science, and engineering. Argonne is also home to many collaborative research teams. Their headquarters is the Joint Center for Energy Storage Research, a DOE collaboration is really an innovation hub of some 20 institutions and over 150 researchers.

We also have access to the Argonne Collaborative Center for Energy Storage Science, which enables multidisciplinary science and assists private and public partnerships as they unlock innovative solutions and reveal the new potential of advanced battery materials. Our remarkable facilities and highly talented teams encompass our core capabilities at Argonne. They will help us achieve many research goals, including those related to the Energy Storage Grand Challenge.

The Energy Storage Grand Challenge is more than just an Argonne or DOE project. It is a national collaborative program that will involve many organizations and is now actively planning to transitioning technologies. From industry to government national labs to academia and research, [indiscernible] covering a wide variety of backgrounds and viewpoints. This diversity empowers comprehensive solutions. The research for next generation batteries embodies true leadership in science and technology. We are grateful for all of you participating in today’s webinar. During this event, we will explore the relationship between energy storage solutions and send a path forward in manufacturing, supply chains, and how to scale new innovative materials.

We are happy to have regional participants from across a broad ecosystem. They are speaking to the specific details and creating an electrifying future for the greater Chicago area. We are also pleased that the tech transition panel will address the challenges of investing and development manufacturing at scale of new technologies. Their work and insights are needed at this critical time as the U.S. works towards important scale and deployment objectives. New frontiers await, and it’s a quite inspiring moment for all of us. Our hard work would help secure America’s energy future and deliver economic growth nationwide.

Thank you for being a part of today’s webinar and the larger Energy Storage Grand Challenge. We appreciate your in-depth involvement and expert feedback. Together, we will help accelerate the science and technology that will drive U.S. prosperity and security.

Thank you so much, Paul, for joining us. And now, to provide today’s keynote, please welcome Alicia Barton, CEO of NYSERDA. Alicia was appointed president and CEO of the New York State Energy Research and Development Authority, NYSERDA, in 2017. She has held public and private sector leadership roles advancing clean energy projects and companies for over a decade. Immediately prior to her appointment, Ms. Barton served as co-chair of the Energy and Clean Tech practice at Foley Hogue, LLC, a global law firm based in Boston, where her practice focused on representation in clean energy companies in emerging market areas such as offshore wind and energy storage. Ms. Barton’s other private sector work includes serving as chief of operations at Global Unity Business Unit at [indiscernible] Edison, where she led teams working on utility scale wind and solar projects.

Prior to her work in the private sector, Ms. Barton served as chief executive officer of the Massachusetts Clean Energy Center, a publicly supported agency that funds and accelerates the [indiscernible] of the clean energy sector. As CEO, Ms. Barton led all investments, projects, finance partnerships, and commercial operations across a range of clean energy technologies and helped make the state a national leader in energy storage, renewable energy, and deployment of clean technologies.

Prior to serving as CEO, Ms. Barton was the deputy commissioner for policy and planning for the Massachusetts Department of Environmental Protection, assistant Secretary for environmental review and director of the Massachusetts Environmental Policy Act Office, and deputy general counsel at the Executive Office of Energy and Environmental Affairs. She began her career [indiscernible]. Ms. Barton currently serves on several organizations, including the Alliance to Save Energy, New York Creates, Greentown Labs, Environmental League of Massachusetts, and [indiscernible] Advisory Board of the New England Women in Energy and Environment. Please welcome Alicia Barton.

Hello everyone, and thanks very much for having me. My name is Alicia Barton, and I am the president and CEO of the New York State Energy Research and Development Authority, otherwise known as NYSERDA. It’s really exciting to be here today on behalf of NYSERDA to help kick off the Department of Energy’s Energy Storage Grand Challenge Midwest and Northeast Regional Workshop. Like many states and economies across the globe, New York unfortunately has been suffering the impact of the COVID-19 crisis, and unfortunately has also paused much of our economic activity until the reopening that has begun as of May 15.

This unexpected turn for our society certainly created an unexpected challenge in what otherwise had been an incredible time of growth for clean energy and especially energy storage in New York and throughout the country. Due to the crisis, Governor Andrew Cuomo has had all of state government focused on a safe reopening, and we are looking ahead and committed to finding ways to stimulate the economic build-back of new investments of the clean energy sector specifically.

By the end of 2019, New York state had a record number of storage projects in our pipeline, tremendous growth in our clean energy economy, and on top of that, a special treat was that late 2019, a Nobel Prize was awarded to the State University of New York’s Professor M. Stanley Whittingham for his pioneering work on the lithium ion storage batteries, work which was supported directly by NYSERDA, we are proud to say. Even with today’s headwinds, there’s a very bright future for the growing energy storage sector in New York, and I’d like to tell you a little bit more about that today.

For those of you that don’t know NYSERDA, we are the state’s primary clean energy and innovation agency. NYSERDA helps lead the way in implementing New York’s clean energy and climate policy agenda. Our mission is to find solutions for improving our economy and protecting the environment by supporting innovative clean energy technologies. To achieve New York’s nation-leading goals, we work closely with other state and federal agencies, such as the Department of Environmental Conservation, our Department of Agriculture and Markets, the New York Power Authority, the Department of Public Services, and Long Island Power Authority.

We develop markets for clean energy, support technology development from concept to market penetration, and provide financing, all in support of transforming the energy system to enable economic growth and reduce greenhouse gas emissions while building sustainable communities. Our work in New York is guided by the landmark climate law that Governor Cuomo signed into law in the middle of last year. This is known as the Climate Leadership and Community Protection Act, which enables New York to deliver a nation-leading energy transition and achieve 100% clean electricity system by 2040 while on a path to carbon neutrality economy wide.

Under the climate act, which was signed last year, NYSERDA is co-chairing, along with the state Department of Environmental Conservation, the states’ first Statutory Climate Action Council. The council will draft and adopt a scoping plan to invest in the electric grid of tomorrow through solar, wind, energy storage, and other renewable resources.

This year’s enacted state budget also included an important new law called the Accelerate Renewable Energy Growth and Community Benefit Act to combat climate change and continue to grow the state’s clean energy economy. The act accelerates environmentally responsible and cost effective citing for bidding and constructing large-scale renewable energy projects, prioritizes identifying and constructing emission and grid infrastructure, and establishes new initiatives that NYSERDA will administer to help steer renewable energy development to underutilized [indiscernible] and commercial sites.

This work will complement our ongoing efforts to scale up our renewable energy resources, including integrating more energy storage, enhance the efficiency of the grid as well as its resiliency as more renewables such as wind and solar are brought online. Energy storage is a critical component of New York’s renewable energy future. It enhances flexibility, reliability, and resilience. The climate act set an unprecedented target for energy storage, specifically of 3,000 megawatts by 2030, one of the largest such targets in the nation, and is expected to deliver more than $3 billion in gross benefits to New York rate payers as well as avoid 2 million metric tons of carbon dioxide emissions.

Our commitment to this goal is signaling to the market to do business with New York, and to date, NYSERDA has already committed to $105 million in statewide incentives. NYSERDA has already awarded $200+ million of those incentive for more than 65 bulk and commercial storage projects totaling 620 megawatts of storage capacity.

NYSERDA has also already committed more than $200 million in financing to be made available to the New York [indiscernible] to energy storage-related investments with our partners at the New York Power Authority also committing another $250 million over the next five years for grid flexibility enhancements. The state’s comprehensive policies and programs help support and accelerate development and innovation of energy storage. This includes the value of distributed energy resources [indiscernible] compensation stack, and other bulk storage incentives, which have been already awarded more than $100 million since April of 2019.

NYSERDA’s large sale renewable procurements have also made awards to energy storage projects that are paired with renewables for increased grid flexibility. We’ve awarded five such projects for a total of 71 megawatts for bulk storage as part of those awards. The Public Service Commission is also requiring utilities to procure energy storage, and storage is now competing in many of the non-wires alternatives, RFP processes that add utilities in the state are running as an option for those utilities to seek grid flexibility and support peak demand management. Interconnection queues in the state have grown enormously as a result of all of these market signals.

As of May, the New York ISOs queue had grown to 89 projects and over 7,000 megawatts of energy storage in the pipeline, which is extraordinary in light of the staples that we have for 2030. The pipeline of projects waiting [indiscernible] utilities is also over 1,500 megawatts of energy storage, so by every measure we are seeing a tremendous amount of interest by developers who see a significant value proposition in developing energy storage projects in New York.

New York’s holistic approach to developing its energy storage industry also provides a number of other opportunities, for example, to develop a market option of renewables. NYSERDA is investing in solutions and methods that will yield better performance, reduce costs, greater renewables hosting capacity, and improve integration with the grid. We at NYSERDA already have a portfolio of 29 energy storage technology and product development projects funded at approximately $10 million. These projects reflect solutions that enable the load flexibility required to maintain grid reliability and renewable ridge or non-dispatchable generation grid.

We are working on future operations in the area of long-duration energy storage systems to provide grid support and reliability during renewable energy generation shortfalls that may occur during winter peaks created by beneficial electrification that we anticipate will occur in the future.

The National Offshore Wind R&D Consortium, which we founded in 2018 in partnership directly with the Department of Energy, has awarded approximately $7 million for eight research and development projects in the area of renewable and distributed energy resources innovation to lower the localized cost of energy for offshore wind. We expect more to come from that important collaborative effort to advance technology with our partners at DOE as well as the states of Massachusetts, Maryland, and Virginia. Increasing renewables drives cost reductions and energy output to reduce both residential and commercial consumer costs associated with meeting the climate act requirements. This is why we have such a significant goal of accelerating the pace of deployment as well as the pace of innovation for both renewables and energy storage.

New York’s approach to developing the energy storage industry provides numerous opportunities for companies in this space to become engaged, so what I’m attempting to show on this slide here is really a full that represents an end-to-end ecosystem that accelerates innovation for clean tech companies, everything from concept to commercialization. This helps identify barriers that new products and technologies could face on their path to commercialization. Since 2009, NYSERDA’s overall financial support innovation portfolio has leveraged $1.1 billion in private capital and approximately $350 million in non-NYSERDA grants from other government entities. These programs provide clean tech startups and entrepreneurs with [indiscernible] from the earliest stages of mentoring, all the way through to investor relations, manufacturing logistics, and supply chain management to help facilitate management of demonstrated business models in all types of clean energy markets.

We have seen a number of specific success in our innovation portfolio that are squarely targeted at advancing energy storage innovation. One of those companies is C4-based chemistry, which creates a phosphate-based composite that utilizes low-cost materials, molecular doping of lithium-rich minerals, and a supercell of a crystal structure. Earlier I mentioned the work of Professor Whittingham, and this development came directly out of his lab [indiscernible]. We are proud to be able to support such significant work. Our technology-to-market programs have helped many successful companies grow, and while there are too many to list today, I encourage you to connect with us if you have innovative and disruptive technology that can help propel us towards the clean energy future we need to combat the climate emergency.

With all the milestones we have achieved, our focus remains clearly on the work we have left to do, recognizing the specific and difficult challenges that many of our partners are facing given the unprecedented circumstances we find ourselves in. NYSERDA has remained open, providing guidance and support to companies we work with throughout the COVID crisis. We are assisting clean energy businesses directly with resources to maintain worker safety and health as they plan their return to work, all of which can be found on our website.

Last year, NYSERDA’s clean energy industry report noted that clean energy jobs in New York had grown to employ nearly 160,000 workers across the state and creating jobs at a rate that was approximately 2.5 times the overall state average. Unfortunately, we have seen setbacks to that progress driven by this crisis, and numbers have already been reported that thousands of jobs have been lost in the New York City energy sector. These numbers are sobering and frankly heartbreaking, but we remain committed to fostering the industry’s ability to build back, and New York’s $175 million lien energy workforce development initiative can help integrate displaced workers into the clean energy industry as the economy rebounds.

NYSERDA itself has committed $70 million over ten years to assist clean energy businesses with recruiting and training and new employees, upscaling existing workers, and establishing a talent pipeline to reduce business cost of attracting and hiring new workers. As part of our response to the pandemic we’ve updated several of our workforce development programs to include special COVID-19 considerations, including flexibility. These adjustments may also increase funding, for clean energy companies seeking to hiring interns, on-the-job training, or expanding training for existing workers in areas we have targeted such as energy efficiency, and [indiscernible] technology.

All of this information can be found on our website and I’d encourage you to reach out to NYSERDA with any questions you have about how we can work together to build a clean energy economy in New York.

Lastly, I will conclude by saying thank you for having me. Thank you to our colleagues at the Department of Energy for the incredibly important work that you are doing. As you can see from my presentation, New York’s goals are ambitious. On top of that, we are facing new challenges, but I think I hope you will agree; this is a tremendously exciting time to be involved in energy storage and that the leadership being provided by states like New York and our colleagues around the country is good evidence that we can accomplish very rapid transition to a clean energy economy over time.

We believe that the climate crisis is one of the most pressing issues of our time, and so that’s why we are committed to working together with all of you, with partners in other states and in the federal government and the private sector to create a better future for all. That certainly involves creating a more reliable, resilient grid of the future. It’s been a pleasure to be here today; thank you very much for having me.

Thank you very much to Alicia for joining us; we appreciate it. Next up, we have Stephen Hendrickson for the Office of Technology Transitions at the Department of Energy to provide a short overview of the technology transitions track. So, Stephen, I’m going to hand it over to you.

Thanks, Meredith. Thank you to Meredith and her team, and to [indiscernible] and our counterparts at Argonne for other work in preparing for this session. My name is Stephen Hendrickson, and I am a program manager in technology transitions in the Department of Energy headquarters. I, along with my colleague Marcos Gonzalez [indiscernible] the Office of Technology Transitions are leading the tech transition pillar of the Energy Storage Grand Challenge, so some of you may be aware, but basically there’s five pillars to the grand challenge, there’s a tech development piece, there’s an R&D component, there’s a manufacturing pillar, there’s a policy valuation pillar that looks at what are the tools needed to help the decision-makers understand impact of energy storage on different infrastructure systems.

There’s a workforce component, and then there’s a tech transition piece, which is the theme of the sessions today, and that our track has been focused on.

Our main work in the tech transition pillar is to focus on strengthening U.S. leadership in energy storage through the commercialization and deployment of energy storage innovations. We are looking primarily at the financial dimension, what information needs to be disseminated in the marketplace, and to inform decisions, and to understand market dynamics to accelerate commercialization. So, what I want to share with you briefly today is just some high-level framing that the grand challenge team has put together and how we are thinking about the Energy Storage Grand challenge.

We plan on releasing a draft roadmap and a request for information in the next few weeks that will start the public engagement on how we’re thinking about the grand challenge. And the goal is that through the RFI and through other communication channels to engage the public, or find that draft roadmap and then release a final roadmap later this year. With that in mind, within our technology transition track, we are really focused on the field demonstration, building public/private partnerships, identifying what types of business models will allow for the deployment of energy source technology and focusing on financing, standards, contracting, and market data.

So, one way that we suggested framing the Energy Storage Grand Challenge is through a three-step approach of “innovate here, make here, and deploy everywhere.” That is kind of the shared lens across all of the pillars of the grand challenge. From that perspective with regard to technology transition, we are thinking about really ensuring a broad innovation pipeline, expanding options in the early stage of innovation stage, to maximize market opportunities and technology opportunities. So, really, funding those early-stage technologies through public and private investments to maximize optionality in the years to come, and then make your [indiscernible] that there’s an overlap between the innovation piece and the makepiece and also emphasizing the role of domestic manufacturing in U.S. leadership.

And then finally deploying everywhere both domestic markets as well as internationally, and recognizing that whether we’re talking about storage or transportation, there is a lot of different deployment scenarios that we need to dig into to understand. And as many of you are probably aware, there is a number of different of federal tools from the Department of Commerce, the USDA for example, from the export/import bank. There’s a number of different mechanisms we are assisting to collaborate with those commercialization and deployment opportunities. We recognize this will require significant [indiscernible] investment if we are to be successful.

I think one thing unique about the way we are approaching this Energy Storage Grand Challenge, is really thinking through some use cases. These are, I think, some [indiscernible] use cases that cover the wide range of the ways we might see energy source deployed in the marketplace, and this helps us think about sort of a market-first perspective of where the problems that energy storage can solve and what can be the requirements. Those six use cases we have identified are facilitating evolving the grid, serving remote communities, electrified mobility, interdependent network infrastructure, critical services, and facility flexibility.

For each one of those, we need to think through what are the markets that are applied in those use cases, what are the customers like in those use cases, what are the companies active in those use cases, and what does the work innovation look like in those cases, and who is investing in those technologies. And those become the target of technologies coming out of our national laboratories to help meet those needs.

So, now just to break down the technology transition in terms of “innovate here, make here, deploy everywhere.” With regard to “innovate here,” we see four important components. The first, as I alluded to earlier, financing a wide range of early-stage technologies. Making sure we are not cutting off technologies in that early stage, so that we have a number of different irons in the fire. There’s an iterative process with those early-stage technologies, identifying essential applications and recognizing there’s both immediate applications as well as emerging applications that may be appearing in three, five, seven, 10 years.

We don’t necessarily want to limit ourselves to existing applications but anticipate where the opportunity may be in the future, then asking ourselves, “What are the business models that might be able to meet the needs of those applications and save innovation in the business model space for existing companies looking for pseudo options or new ways that they may structure themselves?” And then other markets with other energy technologies and then really try to think that through for energy storage. And then finally, assessing those for their market potential. How big are the markets, how quick are they likely to grow, when will they emerge, how many different technologies may they be able to support based on their size and the characteristics of investors and customers in the market?

And then to make one important point, I think, is to identify the different sources of risk and the way that government mechanisms, with the grand challenge, are trying to address some of those risks, depending on the type of challenge. Project risk is much more about putting feet on the ground or deploying a mobility storage application. And then a risk to project development from a project finance perspective. That can be different from production risk related to manufacturing where you need to know the [indiscernible]. The contrast to build the plan is going to line up with the customers that will be there, to take the product as the production lines come online. Those are different challenges, and there may be different types of investors, different types of opportunities, to address those risks.

And then the bigger skill is looking at market risks more broadly and trying to understand from a geographic perspective or a technology perspective, where will those markets emerge, like I said earlier, at what timeframe and at what scale? And how much uncertainty is associated with the different markets you might be pursuing?

So, building on that, when you think about deploying everywhere, I think, when our office—when we think about this, you need to really understand each use case I included the uses cases on the right-hand side and what type of problem you’re trying to solve. You may be thinking about domestic markets; are you targeting independent system operators? Are you looking at vertical utilities? Are you looking internationally to an emerging market? Are you looking at much more nascent regulatory environments versus a much more mature European or East Asian market? And you need to really think through all those dimensions.

We are suggesting a multipronged approach to maximize the chance of U.S. leadership across these different market opportunities and technology spaces so that we create as many different opportunities as possible in the years to come. Some of those may be more successful than others, but we really want to maximize the portfolio approach to all these different opportunities and really to focus on the different decision-makers across that space, whether it’s a customer, investor, manufacturers, entrepreneurs, business leaders, policymakers, technologists, and really thinking through why they are making the decisions they are making, and how does that align with what we want to pursue in the grand challenge, and what are ways we can further support the commercialization technology and accomplish those goals.

With that in mind, we laid out 10 initial activities we are pursuing. Some are specific; some are bigger. It’s an area where we really want to get your input and engagement these ideas, both how to pursue the specific ideas and if there’s other opportunities we haven’t thought about. We want to start a discussion. We really look forward to your input to the RFI and other mechanisms to flesh these out. So, things like connecting the lab experts with extra partners, we have multiple ways of doing that.

My colleague, [indiscernible] in the Office of Technology Transitions is leading a request for information for the Energy Storage Grand Challenge, so if you go to the Department of Energy website, there’s an Energy Storage Grand Challenge page that will have a link to the RFI there as well as a lot of other content, so we appreciate your input there. We do things in the Office of Technology Transitions like a lab partnering service where we have a searchable database where you can look up intellectual property, subject matter experts, facilities that may help us test out energy source technologies.

The commercialization fund is this specific pot of money that is set aside and identified by Congress to pursue the commercialization of technologies that are highly relevant for energy storage and these tech projects when we are pursuing initiatives. And at a higher level, we are looking at how to develop real-world projects to demonstrate technologies, reduce risk, and accelerate commercialization.

We are interested at engaging with folks on the phone. And [indiscernible] what are ways we can be proactive as an agency and as a collaborative interagency partnership to pursue those. Engaging with industry, developing those collaborative relationships, acknowledge tools. And last but not least is having that industry and market analysis to understand where things are today, where they are headed and understand where these opportunities are, so we have a shared understanding of that opportunity space that informs both government strategy, private sector investments, technologists, and others.

With that, here is that summary of what we are doing on those dimensions. I wanted to highlight for you, the request for information will be coming out later this month or early next month, and then we will have it open for a couple of months. We want all of your input. That will feed into the revised roadmap that will come out later this year. Thank you all for your time. Thanks for the opportunity to participate. I will hand it back to Meredith. Thank you very much.

Yes, Stephen; we actually have a couple of questions that have come in. Do you mind taking those now?

Not at all.

The first question, regarding deploy everywhere: What are the barriers to overcome for scaling up energy storage applications so that they can be deployed everywhere?

That’s a big question. I’d say at a high level, part of the purpose of the goal, one of the initial tasks of the grand challenge and underlying work, is to understand that question. For instance, we’ve had a lot of interesting conversations with, say, USAID and Export Import Bank and others that are trying to deploy energy storage in sub-Saharan Africa. That’s a much different case than East Asia or even domestically here in the U.S.

What we are trying to do is build up that framework so we say, “Here is the technology. Here is the use case; what are the specific challenges to the use case? There will be a lot of different challenges from a legal perspective, a financial perspective, a technology perspective. We just want to be systematic about identifying those and working to address each of those and recognizing there will not be one one-size-fits-all solution. But where we can see a technology that may have a market potential, but for some reason, something that’s interfering with that, that we can work together to address those. That’s the basis of a lot of this engagement, is hearing from our external counterparts, what are those challenges, and then having that inform our strategy.

Another question: What is the role of academia going forward? Will there be specific opportunities for universities?

That is a good question. I don’t know if I’m in the best position to answer that. I know we engage with academia extensively across our technology research programs. I’m sure there will be further engagement on that front. If you can follow up with your contact info, we are happy to reach out further. We are often thinking of ways that we can increase and accelerate the way that we engage with academia, so I think that we are open to that input. Stay tuned. There’s definitely some specific activities in the works, but we are open to suggestions as well.

Very good; thank you so much, Stephen. And also, thank you, Paul and Alisha, for joining today as well. We have two outstanding panels for you today. H.G. Chissell of Advanced Energy Group is going to moderate both of our panels today. I know you all will continue to have questions as we go on today. We want to make sure we are able to get to as many questions as possible. We will hold the questions until the end of each panel. However, we would like you to submit them as you have them, so please make sure you reference the speaker or the topic in your question so we can go back to that at the end of the panel. H.G., I will turn it over to you to get us started.

Great; thank you very much. Let me pull this up. Good afternoon, everyone. While cooking in our kitchen last month and watching YouTube videos, I heard this great music with stirring violins, followed by the following words: “Without a powerful intention and a daunting obstacle, real drama cannot exist.” Aaron Sorkin, master class screenwriter. Those words stuck in my mind and have been with me over the month as we have been going through these extraordinary moments in our human history. So, hello, my name is H.G. Chissell. I will be your moderator today. An unexpected thing happened on my way to become an architect. I took a side path at a leadership consulting firm that specializes in breakthrough results. While doing outreach at the firm, I met Alphonse Stephen and Audrey Zimmelman, former chief technology officer and chief operating officer of PJM, who had an inspiring vision of optimizing energy supply and demand to enable a resilient and clean energy future. In 2009, they offered me a job, which led to key roles on DOE demonstration projects with Con Edison, a wayside energy storage project with the Philadelphia Transit Agency using ultra capacitors, a microgrid project at the Shedd Aquarium, a one-megawatt lithium battery to put in the frequency regulation market. [Indiscernible] a grid project with the Pentagon and several military bases, working with leaders, leaders like you, grid operators, developers, utilities, city government officials, and solution providers to deliver scalable viable projects with batteries left me with one key takeaway. Scaling these types of projects are practically impossible.

During this time, battery storage was consistently described as a mythical holy grail, an image which only served to bring tongue-in-cheek flashbacks of a Monty Python movie. Between 2009 and 2014, I saw no mobilizing stakeholder alignment on why we must quickly deliver a domestic clean energy system. An urgent, widespread intention did not exist. Consequently, I started Advanced Energy Group. AG is a company focused on effective stakeholder engagement for cities committed to clean energy transformation. A lot has changed since 2014, specifically regarding intention.

Today, national polls show that 85% of registered voters want to move their states entirely to renewable energy by 2050. Based in cities are listening and regulating and legislating now. By law, the vast majority of states in the Northeast, Midwest, will be supplied by 100% renewable electricity by 2050. By 2035, there will be over 21 gigawatts of offshore wind across Connecticut, New York, New Jersey, and Massachusetts. New York City, Boston, DC, Boulder, have more than an intention or vision to be carbon-neutral by 2050.

These cities have enforceable laws and mandates. Cities will electrify heating and government buildings and make private owners do the same. More cities will ban natural gas. Cities will electrify transportation and make commercial owners do the same. Chicago and New York City are already committed to electrifying their 7500+ combined diesel bus fleet in 20 years. One hundred percent renewable energy also means a lot of uncontrollable intermittent electricity, often in close proximity of major cities.

The electric demand of cities will be significantly higher and more volatile, with system peaks occurring during the winter versus the summer to provide essential services like heat and mobility. Power is more than a privilege; it is essential to life. Provide reliable, affordable, and resilient power to protect millions of people. Public service commissions, utilities, all of us in this webinar, must somehow act at a scale and pace previously unimagined. As Joe Dominguez, CEO of Con Ed states in preparation for the upcoming AG stakeholder challenge, “To achieve Chicago’s clean energy goals in post COVID-19 recovery, we must accelerate the pace at which we build clean energy infrastructure. There are inspiring examples.

Eversource energy is in an offshore wind partnership and has committed to be the first carbon neutral utility by 2030. [Indiscernible] latest integrative resource plan, Con Edison will add nearly 19 gigawatts of solar, 2.7 gigawatts of storage, and five gigawatts of offshore wind in the next 15 years. What does this mean in terms of intention, obstacle, and drama?

I believe the intention is now clear. For life, liberty, and the pursuit of happiness, Americans want healthy, reliable energy. What is the daunting obstacle? I believe the daunting obstacle is lack of alignment, and storage is essential. Stakeholder alignment is the active ingredient for mobilization. The power of alignment is on display right now in a way we have never seen before in human history. For months, despite grave consequences and sacrifices, nearly half the world’s population has stayed home to protect human life.

Last week, two dams in Michigan failed after unprecedented heavy rains and flooding. This forced 11,000 people to evacuate while being under stay-at-home orders. Our intention to have a clean, secure, domestic energy in the face of increasing catastrophic weather events and global disease, without aligning on the essential value of that battery storage, does not feel like a Monty Python movie to me anymore. This story is either a tragedy or hero’s journey. But for the real drama and a compelling story, I ask you to lean in listen, and engage with our panelists, who are right in the middle of it. Extra credit if you can name the character whose role and location in the middle picture. We will start off with John Zhang. John is the division chief for the city of Chicago. John oversees more than 100 staff members with an annual operating budget of over $300 million. John, great to have you join us, and welcome.

Good morning. And good afternoon. My name is John Zhang, chief engineer, electrical and innovation technology, city of Chicago. First, thank you for having me today, and thanks for the great work DOE has done putting this panel together. Briefly about Chicago, third-largest city in the nation. Population about 2.8 million residents and a major national and international hub. I want to take this opportunity to thank [indiscernible] for your leadership and guidance.

So, what is Chicago’s vision and clean energy goals? First, for the state of Illinois, the goal is to achieve 100% clean energy by 2050, as H.G. stated. The governor and the state legislatures had committed to that goal because they understand this will bring additional economic growth and reduce energy bills for Illinois consumers. So, for the city of Chicago, we are taking a step further: 100% renewable energy by the year 2040. This goal was drafted by the city council, signed by the previous mayor [indiscernible].

This resolution intends to develop a transition plan which will align key strategies, set progression milestones, to develop a timeline for reaching an equitable clean energy transition and further opportunities to create a 100% clean and renewable energy future communitywide. One of the main tenets of the resolution is that Chicago will power all its buildings with renewable energy by 2035. And also, the other aspects for the goal is for Chicago Transit Authority—CTA—to convert its 1850 buses to electric power by the year 2040. My colleague, Kate, from CTA, will talk more about this goal later in this slide.

Chicago has a very ambitious, aggressive goal to achieve 100% clean energy. We realized we couldn’t do it without a detailed plan. On this slide, I listed a few projects we are currently working on to help the city achieve that goal. I also wanted to highlight our partnership with federal, state, private agencies, and companies. First, the 5G project: next-generation mobile network that is designed to connect virtually everything together including machines, objects, and devices. We are partnered with a telecom company and the Office of Science and Technology Policy Division at the White House. Special thanks to Michael [indiscernible], the chief technology officer of the United States, for his support.

The deployment of sensor to collecting data with their air content and pollution utilized the latest innovation technology, AI, data science, IOT, and sensor technology to help CE make key decisions. This is a partnership with DOE Office of Science; special thanks to Paul Kearns, the undersecretary for science, for his support. Argonne National Lab, special thanks to Dr. Paul Kearns for his leadership. And the University of Chicago, Dr. Bob Zimmer’s team [indiscernible].

Smart city, smart energy, smart utility, and smart transportation projects. This is a project to provide safe and more reliable infrastructure for our residents. Again, partnership with DOE, Office of Science, number of different national labs, national renewable energy labs. Pacific Northwest National Lab, and Exelon Com Ed, which my colleague Suzanne will share their goal in a later slide. Also testing sites involve only 200 acres of land, with the option to expand to 400 acres.

This testing site would test battery-powered vehicles, autonomous vehicles, commercial drones, and smart CD applications. I want to say thank you for the partnership from states, Governor Pritzker’s team for his support, and the University of Illinois [indiscernible] team, Chancellor Jones, [indiscernible].

Smart power lane project. This is a project partnering with Chicago Transit Authority to embed charters underneath the pavement. This is a concept to power battery, bus, and car, stationary or dynamically. There’s also a number of other renewable projects, solar-related. I’m sure I will leave out somebody, but we have a number of industry partnerships, P33 organizations. Special thanks to its chair Penny Pritzger, Chris [indiscernible] Brett Henderson, [indiscernible], [indiscernible], Chicago innovations team. CD has an aggressive goal to carbon emission and achieve 100% renewable energy. We are enormously grateful for the support from our partners; thank you.

Thank you, John. Next, we’re going to go to Suzanna Mora from Exelon. Suzanne is the senior director of strategic initiatives at Exelon.

I guess I advance the slides; I apologize. So, good afternoon, everybody. Thank you for including me in this panel, and in this seminar I think it is an important topic to be discussing in terms of the role of storage and grid modernization in reaching some of the very heroic goals that H.G. set down for us to strive towards. I know it inspires Exelon. I want to make sure that I set a context for my comments going forward. I work for Exelon utilities, which branches across all of our utilities. The slide on your screen talks about the scope of our utilities.

We are probably the largest electric/gas distributor in terms of customers in the country, and our markets are predominantly—even though in this context a lot of people are talking about Con Ed, one of our utilities in Chicago—we are predominately on the East Coast. So, we also have PECO in the Philadelphia area; PEPCO holdings, which is in Washington, DC, suburban Maryland; also includes Delmarva Power, which is Delaware, coastal Maryland; and Atlantic City Electric, which is South Jersey; as well as Baltimore Gas and Electric.

The thing that unifies all of those service territories and all of those utilities is that they are in restructured markets, which means there are limits to some degree on what utilities can and cannot do. The other thing that unites us, I think, across all of those very diverse jurisdictions and markets, is that our communities have made a clean energy future to a reduced energy future. That is really what drives Exelon utilities, and all of our individual [indiscernible] and they’re jurisdictionally sensitive but joint efforts to meet those goals in terms of reducing carbon and modernizing the grid to allow for the clean energy as well as for customer engagement.

On the slide, I have some of the carbon reduction in clean energy and zero emission vehicle goals that are compelling us to move forward. These goals compel us, but then I have to say, we have to be mindful of how COVID and the economic situation post-pandemic might have to change the strategies that we might adopt to move towards these goals. I ask people to keep in mind two things as I go through my comments. Number one: I’m not speaking for any one of the individual Exelon companies; I am speaking for the joint vision across every one of our utilities. And also, the strategies that I am detailing now is potentially in flux, in that we will have to be sensitive to the economic situations in our communities.

We believe modernization is going to be a very important part of stimulating the economy of these communities as we go forward, but the pacing and the sequencing of things may change over the next month to reflect the conditions that we face in our communities and the hardships that a lot of our customers will be undergoing.

This is just a short depiction of some of the things that compel utilities to consider the transition that they are going through and how some of these imperatives actually have competing influences. Energy storage very much fits into all of this. Yesterday, utilities were expected to be safe, reliable, and affordable. Today, they are expected to not only be safe, but safe and secure, not only reliable, but reliable and resilient, affordable now more than ever is key, we need to have an increased level of customer focus. And tomorrow, what is expected of us? And in some jurisdictions, tomorrow is today.

Some of these expectations are already compelling action amongst our utilities. Safe and secure, reliable and resilient, affordable and equitable meeting access to the same types of services regardless of your income in a community. Customer-focused and interactive, we’re sustaining the transition from consumers to pro-consumers or consumers who are more actively engaged in managing their energy demand. Not only clean but also carbon free. Not only a reliable and resilient platform for energy transactions, but potentially a service platform that will allow other transactions to occur or transactions to occur between entities that are not even a utility, and then a platform for other infrastructure.

These are the challenges that utilities face today that compel us to move forward. DERs increase system complexities. The truth of the matter is that some of these imperatives work as a counterbalance to each other, in the way we operate the system and in the way that we plan for future operations of the system. The DERs, as clean as they are, and as much as they offer, they do increase system complexity. And the intermittent nature of DER is affected, in system reliability.

So, as we increase clean, we have the potential to reduce reliability and affordability because of the engineering that has to go on. The cost of the system may go up. If not, the reliability could go down. These are some of the compelling, conflicting imperatives that drive utilities. That can be part of the solutions and can be potentially challenges we face. So, batteries can increase system reliability but are not currently cost comparable to some of the traditional solutions at the distribution level. I will move on and talk about how we can make sure that even in this situation, where we’re having more complexity, where batteries have a key role from a utility perspective, dealing with that complexity, and delivering on reliability, security, resiliency, and all those other imperatives. How we can counter some of those challenges we are facing, and the cost side on batteries.

So, finding value, new business models, and regulatory evolution. I just [indiscernible] into this one slide. I don’t expect it to be extremely informative, but it does give you insight as to how as a utility we think about this. When it comes to batteries, if you find that they’re not cost competitive at the distribution level with traditional solutions, often it’s because that the primary purpose for a battery, from a utility perspective, is to deal with peak load. Peak load doesn’t occur every day; peak load occurs for a couple of days out of every year, which means that a battery could be installed and only used five or 10 days of the year.

One of the keys to making batteries work from a utility perspective is finding multiple value streams. In a restructured market such as those that we work in, some of the value streams are not traditionally available to these utilities. So, to find value, we need to develop new business models that allow us to engage with other parties who are able to tap those value streams. We are in essence creating a very new type of structure where one aspect is shared by multiple entities for different uses, so that the value of the battery is stacked.

These new business models require regulatory evolution. So, the basic tenet of what I'm trying to communicate is that for batteries to continually to grow and be successful in the future and adopted at the utility level, we need to find creative value streams and stack those value streams to require new business models, and those new business models are going to require regulatory evolution, which is not really federal regulatory; it’s jurisdictional. So, increasing battery value to offset the high cost requires tapping multiple value streams. Tapping multiple value streams requires new business models, adopting new business models requires new regulatory construct. What is the value stream?

You have a single battery with three basic value streams states we have identified that are practicable at the distribution level. We’ve already talked about peak load management; that’s the grid value. You have a wholesale value in terms of ancillary services. That might be an area that is not available to all utilities in a restructured market. And then you have a customer value in terms of resiliency, for instance, being able to use the battery for backing up a data center during a grid outage or so forth. There are three different value streams. One is available to the grid, probably executed by the utility. One is at the wholesale level (probably need another party to do that) and one is at the customer level.

So, business models that can be deployed, that allow us to have those different value streams, I am putting forward four here. Four is just a random number. As we been exploring these concepts of how to get more value out of batteries, for every four that I can come up with, there will be another four of them I haven’t thought of, and it’s just going to continue to grow. I want to emphasize this key to business models as being open and listening as stakeholders to all the parties, figuring out what everybody needs. Having honest conversations at minimum that everyone needs. And being open to new contractual arrangements to be able to deliver on everybody’s needs. In a way that is sharing the risk.

The first business model, the utility, owns the battery and uses it as a non-wire alternative or managing peak load. Also uses it in the wholesale market. This requires a regulatory construct to engage in the market and the second one, Hybrid 1. The utility owns the battery and uses it for the grid value as peak load management as an NWA and leases it to a third party used for wholesale transaction. That of that lease payment benefit brings down the cost of the battery to the utility who owns it and operates it for the grid value. Hybrid 2, the utility doesn’t own the battery.

The third party owns the battery and uses it in wholesale but gets extra income from that battery by leasing it to the utility used for peak load management as an NWA. In that case, customers save, because instead of the utility having to own the battery directly, the utility only has to rate base the lease payment that it’s making to the actual battery owner. Again, you need a regulatory construct change to allow utility, not on an asset but on a contract. And then the final one is virtual powerplant. The idea here is that multiple entities own the batteries. A third party uses it in the wholesale market and also leases it to the utility to use for its grid.

Those are just four of the types of business models we are exploring that could be applied to try to tap multiple value frames. They all represent regulatory change that needs to happen at jurisdictional levels. New regulatory constructs that might be needed under some of these. You need a unique asset class for storage; you can’t put it in as a generation asset because that would make it unavailable for utility use for operations. [Indiscernible]. Sometimes it acts like generation; sometimes it acts like load. You need to look at the primary purpose of the storage asset in the application to determine how to classify it or give it a unique category.

Another regulatory construct that needs to change: utilities need to be able to earn on contracts. If we are to be indifferent between the ownership of the asset or accessing the asset that is owned by someone else, we need certain contractual assurances regarding its availability and some sharing of the risk, but we also need to run on contracts, which traditionally in the utility finance world [indiscernible] the expense [indiscernible]. And then the utility can be indifferent between a lot of these types of solutions; need to be able to earn on the savings it creates by using the battery through one of these creative business models, rather than owning assets directly. That’s where I will end up, and I’ll be glad to take questions from anyone at the end. Thank you.

Thank you, Susanne. Next, we will go here, to J.D. Brannock, given the slide on the screen. Welcome. Thank you for joining us. Thank you. J.D. is the manager of an energy storage strategy and energy.

Thank you, H.G. Just a quick introduction to Invenergy. We are a developer and independent power producer based in Chicago. We build and operate projects across the U.S. and internationally. We started exploring energy storage a while ago back in 2012 with a lithium ion battery in Illinois. That business has grown substantially the last few years. You can see some of our portfolio stats at the bottom of this slide. The industry awards we’ve won. I want to focus here to talk about some of the steps to get a project built; how does a project go from an idea to an energy storage project? So, at Invenergy we focus on the later stage part of the project.

Obviously, we develop, own, and operate, but the battery starts as a cell typically. We’re technology agnostic at Invenergy, but if you’re doing a large-scale on the grid right now, it is a lithium ion project. So, that starts with lithium ion cells, and that starts with, OAMs, typically, and this is a global supply chain, so most of the battery cells that we get a shared manufacturing capacity with electric vehicles and other industries.

We are riding on the coattails of a very large lithium ion industry right now. That helps keep our cost down. That’s largely what has driven the cost to come down as much as it has in the last 10 years and made storage possible to go on the grid, or feasible. We also work with system integrators who will take all of the different components and put it into a complete engineered system. These tend to be more domestic companies, and a lot of these companies have other businesses, but the groups that work on energy storage integration tend to do just grid storage integration. The scale isn’t quite as big as it is for cells that share other industries.

There are also EPC companies that work across the grid, and generally these are the same companies, the same contractors that are building other large power projects. There’s a robust industry in place to help with different places in this as part of the project. Once we build the project, we can either sell it to a customer utility who wants to use it or we could assign a power purchase agreement and basically offer the contracted services of the system.

Why do we care about storage as Invenergy? As a privately held company, we don’t have any mandates or required targets we need to hit, but our foundation is developing and operating sustainable energy projects around the world. That has been a lot of wind projects, a lot of solar projects; we have natural gas. We think that storage is a critical part of continuing this transformation into a more sustainable and reliable grid. So, we think it’s going to be an important technology over next few decades. We are building our expertise to make sure we can help with that transformation.

There are a lot of challenges to building an energy storage project, but to touch on a few highlights, the main challenge I see today in building energy storage projects is cost. Cost has come down dramatically over the last 10 years. It’s gone from being completely infeasible to working in some use cases in some parts of the grid. For energy storage to really be a critical part of every utility’s toolkit in every corner of the United States, we need to have change in cost. The cost is still going down; it will continue to go down. But especially for long-duration projects, I think new technologies are going to need to come around to new innovations that will really make this affordable as an extensive system throughout the grid.

This is something where obviously the DOE has planned impact where we can accelerate the development and deployment of lower cost technologies; so, that’s an important aspect. In terms of executing an energy storage project, even if you have an application that makes sense, energy storage is a new technology. It’s fundamentally different from traditional resources in the way that it operates and the specifications that it has. So, utilities and regulators need to have rules that can accommodate energy storage and allow it to connect. If it is allowed to connect, it needs to have ways to participate in markets where there are structured markets where it can be compensated for those benefits that it is providing.

So, this is something that is being worked on across the U.S. But it’s a little bit patchwork right now, with every region, every utility doing things differently. The DOE can help by bringing together best practices and standards and making recommendations and standards on how local jurisdictions and regional utilities can integrate storage in a fair and consistent way. And then on the safety and compliance side, energy storage has come a long way. It’s something that we think we can install safely, and standards have been developed over the last several years, but a lot of people are still unfamiliar with it; it’s new technology.

So, I think the DOE can help here by bringing in standards, by bringing in recommendations, and just guidance on what are the risks. And how can they be safely mitigated and managed. And I think that would help move our industry forward and help us overcome some of the obstacles that we see in building projects. So, from there I will pass it on. Thanks, H.G.

All right, thank you. Next is Kate Tomford, who is a senior analyst at the Chicago Transit Authority. I think it is perfect that she is actually going to be finishing off our panel here to lead into our next session, which will be on the economic voice of the customer. Kate’s work with the CTA is pretty groundbreaking in terms of taking one of the country’s largest bus fleets towards electrification in 20 years or less. It is great to have her join us. Kate, welcome.

Thank you so much, H.G. I appreciated your inspiring introduction as well. I also wanted to thank DOE for gathering us all to share this powerful intention of being energy storage as a solution for great modernization and lower carbon. Thank you. I will give a quick overview here of CTA, and particularly our goals for fleet electrification. As H. G. and my fellow panelist John Zhang alluded to, we have a goal of electrifying our entire fleet by 2040. We have 20 years to do that. This is a vision that was set out by a former mayor of Chicago, [indiscernible], and reiterated and strengthened by our current mayor, Lori Lightfoot, in partnership, really, with CTA and our own leadership. CTA is independent from the city of Chicago.

We have our own governance structure. We have a board made of seven members. We have three members appointed by the mayor and four members appointed by the governor of Illinois. But we do have this goal of electrification by 2040 set out by our city council in a resolution. We are currently working towards that. As John mentioned, there are a lot of partners involved in this project. I particularly wanted to mention the partnership with Commonwealth Edison, our electric utility in the Chicago and northeastern Illinois area. Commonwealth Edison, or Com Ed, as we call it, has been a great collaborator on all of our planning for electrification and helping us understand the technology requirements in terms of our charging infrastructure, all of the service upgrades we will need, and also understanding cost implications of all of that work.

Charging the buses, all 1,860 every day, is extremely complex operationally. I wanted to reference the point that Susanne, my fellow panelist from Exelon, mentioned about balancing reliability and resilience with cost and affordability. We have to keep our system affordable for all residents and visitors to Chicago. We have to keep our buses running reliably; we also have to consider the cost of all the upgrades that we’re making to our system.

To the extent we can, we hope to have a bus fleet that’s as minimally expensive as possible and as operationally straightforward as possible. One thing that will help us there is having bus fleets as we buy new electric buses, bus fleets or sub-fleets that are all inter-compatible so that any new electric bus we buy can charge on any infrastructure or on any charging station we have already installed. All of the protocols match, and all the technology connections match so that we don’t have the stranded assets over time, especially considering this 20-year horizon and how we’re adding to the fleet over time.

Lastly, I will mention we’ve thought in advance of the second life of our batteries that we have in our electric buses. This is something we’ve already been grappling with the hybrid fleets, as those batteries have reached their end of life. We’ll love to see solutions ideally some cost effective ones for the second life of these batteries. It could be a second life at CTA, or perhaps there are other industrial uses out there or other storage uses out there where another customer besides CTA could take advantage of the remaining capacities within of these batteries as they come out of the buses. I know Argon and other DOE labs are working on that. It’s something that we’d love to continue partnering on and continue collaborating on. I’m looking forward to answering questions, but I’ll stop there and hand it back to you, H.G.

 Great; thank you so much. All right, we’re going to go right into Q&A. We have gotten some great questions already, and we want to go into those so we can get some engagement from the audience. Would you please help me with the Q&A?

Absolutely. As a reminder, as you send questions and as you put them into the chat, and please also mention either the speaker or the topic when you submit your question. J.D., the first question is for you. What thermal energy projects have you explored, and what role do you see towards thermal energy storage?

Thank you; that’s a good question. I realized I glossed over a lot of technologies because I was talking about lithium ion. But there is also low air, compressed air, liquid air, gravity storage, there’s a number of different technologies that are available. Each has its own technical challenges, including thermal. Some are competitive, especially at long-duration storage, for long-duration storage. I think the reason I was focusing on lithium ion is that in today’s market with the kind of batteries that we are building today, lithium ion is very difficult to beat. Part of that honestly is that lithium ion is supported by the electric vehicle industry. As we get more storage on the grid and we reach higher scale, some of these other technologies, we’ll start to see more of a variety.

Great, thank you. John, the next question is for you. Does the city of Chicago collaborate with other major cities having similar vision?

Yes, this is a great question. The smart CD drive as I mentioned, Chicago is one of the largest cities, with the official goal to achieve 100% renewable energy. Because of that, the city is now a member of what we call ready for [indiscernible], which is a group of more than 100 U.S. cities with similar commitments. Just to name a few, the city of Atlanta, Cincinnati, Denver, Kansas City, Los Angeles, Orlando, and Philadelphia. We have regular communications from task force in carbon level, regular conference calls and meetings. In fact, Chicago hosted a summit at the UI lab about two years ago. Over 100 people flew in from different cities. We shared our successful stories, our challenges, some of the policies, and strategies. We also have our private partners, vendors, to present their solutions, their capabilities with municipalities, to help address some of these issues. To answer your question, we collaborate on all fronts. Thank you.

Thank you. Kate, who pays for the infrastructure investment capital associated with charging? And does EPA have to support that?

Sure. The infrastructure investment we’ve proportionally been able to fund largely with grants, at this point. We’ve been fortunate to receive some competitive grants come mostly from the Federal Transit Administration, FTA. One of the large sources we’ve relied on is the CMAQ program; that’s the Conduction Mitigation and Air Quality Program. Chicago is a nonattainment zone, so we do have federal funding for that program.

We’ve also been awarded some [indiscernible] bus program grants from FTA. We do have funding for buses along with charging infrastructure. So, we have been able to scope some of those grants to cover part of the infrastructure cost. Going forward, I think we will rely on some traditional, if you want to say, capital funding sources. Did most of the funding does come from federal sources? We do have some state funding. Of course, we have share box revenues as well. And we have the sales tax in Chicago that goes towards our own capital financing programs.

It’s really a mix of different sources. I say primarily to date we have relied on federal grants. We are also interested in partnering with Com Ed on this. Some of the infrastructure on their side of the meter will be funded with [indiscernible] funding. We do have a slice of that we will need to pay for ourselves. It is relatively small. There is legislation in Illinois to provide more utility-based infrastructure funding, which was probably slowed down by COVID, but we hope it still being brought up in the general assembly over the next year.

Great; thank you. J.D, a question for you. You said the cost must be approximately two times lower for wide adoption. How are you measuring that, and is it over the lifetime of the storage asset or just upfront?

Sure. The best way to measure the cost of energy storage is the lifetime cost of storage, or L-COS. Similar to lifetime cost of energy, but instead of measuring the cost of producing [indiscernible] an hour, you measure the base of the total cost. How much does it cost for each megawatt hour that it gets stored in the system? I don’t think there’s anything magical about the two x number. The incremental improvements will increase the amount of storage on the grid, but if we want storage to be the solution to intermittency at 100% renewable, we need more than just incremental change. We need dramatic improvement.

Okay, very good, John, question for you: Does the city set aside funds when the visions were created? Is there federal support for city programs at a conceptual level, or is this just project by project?

Yes. A good question. Since this is a vision, we created with a relatively large time span. A lot of detail and planning are in the works. It is quite a challenge to come up with an exact amount or estimate for overall funding, but the city approach is to first work with our partners, doing research and capability studies and then work with federal and state partners. Typically, project-by-project analysis for the work scope and funding. Just to give you an example, one of our projects we are working on, [indiscernible] project, $160 million of city funding with some support from federal and DOE. We’re grateful for that. And also, the state also provided incentives, around $40 million doing construction, and also made an Illinois credit. So basically, we are taking a project by project. An approach to solve that problem. So again, we’re enormously grateful for all the support. Thank you.

Great, thank you. And Kate, I’m going to give you the final question for this panel. Did you consider other fuel-cell solutions? If so, why did you choose [indiscernible]?

The CPA did have two pilot buses, single-cell compulsion systems, about a decade ago. That was before I joined the agency. I don’t have a lot of first-hand knowledge. I understand we had a lot of challenges with those buses, particularly with the hydrogen delivery and operating those buses on a reliable basis. I think fuel-cell technology has advanced a long way since then. We haven’t recently reconsidered fuel-cell. But I understand several other agencies around the country are experimenting with it, piloting it, thinking that it will be a component of the electrification strategy. We may go that direction eventually, too, but is not currently part of our plan.

Great, thank you. And thank you to John, Susanna, J.D., and Kate for the first panel. We are going to move on to our second panel now, on the economic voice of the customer. As a reminder, please continue to submit your questions in the chat and reference the speaker or the topic as we go along. So, H.G., I am going to turn it back over to you.

Thank you very much, and thank you to our panelists. As I mentioned, this was just a great way to transition with [indiscernible] presentation into the economic voice of the customer. We have an excellent panel set up for you next, starting with Craig Rigby of Clarios and followed by Yet Ming Chiang of MIT, and Colin Wessells of Natron Energy and ending with Sara Chamberlain of Energy Foundry. We’re going to dig right in. I encourage as you listen to the presentations from our panelists, to listen from a place of curiosity and investigative journalism on where is that essential obstacle that we need to align on solving. I would like to go ahead and get things started, Craig, with handing the floor over to you. Thanks.

Thank you. There is a little lag. H.G., thank you, and I appreciate the DOE and all the organizers for letting me join this panel. All right. [indiscernible]. A relatively new company, we celebrated our one-year anniversary in May. Previously known as [indiscernible]. So, we are the leading manufacturer of automotive batteries. We have more than 50 facilities worldwide, producing more than 150 million batteries for our customers in both the original equipment automotive field as well as truck and other transportation applications as well as the after markets for replacing those batteries.

We have also been a leader in global applications generally using [indiscernible] and lithium ion technology for a long time. I think it’s important to know we have also helped establish the larger economy of batteries on the planet. My role at Clarios is to lead the technology and advance engineering. I have 20 years of experience in automotive electrification. Including in time in the DOE space. I spent the last 13 years at Clarios leading engineering and product management—most recently technology development. It’s really a focus on identifying new technologies that we can leverage to help support our customers and grow our business.

Before I jump in—I only have one more slide but before we go there—I’d like to make a couple of comments before we jump into the conversation of new technology and the challenges of bringing those technologies to a mass market. First of all, many of the energy storage applications, and many of the ones you have heard about already today, are well served with existing technology. Even in their own right, [indiscernible] have opportunity to grow to provide better performance and provide better value to users.

With continued investment in research and development, I want to say I appreciate the DOE with the support they provided using advanced diagnostic tools that we haven’t had access to, to understand in greater detail the ability of [indiscernible] performance. There are things going on in existing technologies that are worth the time and worth the investment to take those further.

The second point is there is a lot of focus on with the lithium ion technology, many believing [indiscernible]. There is a lot of value in lithium ion; you heard it earlier from J.D. and some others about what lithium ion can do to enable applications. Especially those in transportation, [indiscernible] is important. The value drivers and critical characteristics vary dramatically across a range of application. Some combination of safety, power, energy, calendar life, cycle life, cost and sustainability just to mention a few. Define the optimal solution, and sometimes that’s with lithium ion and sometimes that’s going to be something else.

We just have to have an open mind about what the landscape looks like. The point is really to identify the best solution of the problem we are trying to solve. That’s how we at Clarios think about guidance for new technology. And what can we do that builds on the things we do well. Helps to better serve our existing customers and/or create opportunities for new markets and to grow a business. Not everything has to be a moonshot. But for sure, you’re going to hear some really cool stuff from the next couple of speakers, keeping our eyes out for those rare breakthrough opportunities can be very, very important.

From Clarios’ perspective, the biggest challenge of bringing new technologies to market is managing the risk of getting prototypes in mass production ready and really a product marketing effort in order to build a demand pipeline. While some of that risk is technical in terms of establishing and verifying performance or developing manufacturing processing, the best way to quantify that is to think about it in terms of investment, especially in a system with a return on investment with a critical meaning from a corporate perspective, what is the return on investment and does that justify what I’m being asked here, and what I spend?

While the initial investment required to develop new technologies that are necessary and critical, the reality is when I look at a company like Clarios bringing that technology into production, the investment commitment is usually a magnitude greater than what it took to get it to that prototype point. And that is really only for the first [indiscernible]. So, just to get it into some sort of quasi mass-market state—that’s what it takes. We are talking hundreds of millions of dollars at least. Finding technologies that reach sufficient maturity is really important to help mitigate the risk, especially when the investments are so large.

The other side of the risk is the uncertainty of demand. We’ve heard a lot about that already from the previous panel. Establishing a value proposition for technologies, especially new technologies, that will resonate with end users is absolutely critical to bringing that technology out of the lab and into mass production. Often there is an assumption that simply because new technology, has “better performance,” that it will get adopted. The reality is far more nuanced than that. If it was all about better performance, we would all be driving Porsches. There are multiple aspects of convincing the customer to switch to [indiscernible], not the least of which is getting them to give up the thing they know and are comfortable with for the thing they don’t, even if there is an opportunity.

Building a case for mass-market demand is complex, and the risk is if it’s not done correctly or sufficiently, it’s in the best case reducing the return on investment. From what was expected at worst, you can [indiscernible] that capital that has been on capacity because the demand never materializes. There’s a quick example that illustrates these first two points.

If we think about lithium ion, I think we all know, as mentioned early on by Stephen. The lithium ion  was developed largely here in the U.S. People are getting Nobel Prizes here in the U.S. for the work they did. The scale of [indiscernible] is through Asia [indiscernible]. Why was that? Well, it was because lithium ion batteries enabled camcorders. Companies wanted to sell camcorders, and that gave a unique value to the way those camcorders worked. You had a built-in demand; you had a built-in understand of what the value is.

Fast forward 20 years, and think about how that translates; it’s far less clear because of the value proposition is far less clear to the end user. This has been overcome in certain places to a certain extent, where, for instance, in China there’s incentives for domestic companies to build capacity out in ways that far exceed what was demanded at the time. There’s also been controls put in place that establish what that demand should be and can be using [indiscernible] for consumers. There are ways to make that happen.

And moving to the third point, I often hear the phrase, “We need to build infrastructure to make something, whether it’s lithium ion or something else in the U.S.” I agree to a point that incentivizing development of new technologies is important to drive innovation. We need that. You will hear from some people who have been superstars in that respect. When it comes to driving the scale of the mass-market, I strongly believe that driving demand is the most critical [indiscernible]. If demand for new technology is understood, relatively stable, and predictable, then companies will make the choice to build the capacity, and the chunks it should be built in [indiscernible] and the optimal locations. In the long term, those choices and those commitments will drive the best return. This is especially true for larger products when shipping is a substantial cost [indiscernible].

In addition to building manufacturing plants for end projects, the necessary and critical [indiscernible] ecosystem of components and materials that will support those [indiscernible] as they grow. Components supplied will evolve naturally. Recently what we’d expect from manufacturing for products. The material supply is really an aspect defined by the chemistry of the technology that we’re looking at. The last point I would like to make is really around the notion of overall lifecycle of batteries and the materials that are used in them. Based on the experience we have at Clarios with a closed loop [indiscernible], we see having new technology with the same type of virtuous lifecycle is a critical component for investment and adoption. Getting to that point, or at least understanding what the path could be for new technology, is absolutely critical for having a sustainable supply-chain and secured resources in the long term. Thank you for your time. And your attention.

Great, thank you. Next we’re going to go to Yet Ming Chiang. Are you ready?

I am. Am I projecting?

Yes, welcome, thank you.

Thank you very much. I am not sure that I can forward yet because I don’t see the control panel on the left.

You do have control, Yet Ming. Let me know; we are happy to help.

Thank you. I am Yet Ming Chiang; I’m a professor at MIT. I’d like to talk about grid storage today. In particular, the fact that for the grid, the timescale to restore energy and the time to recharge a battery is on orders of magnitude. The first grid storage using lithium ion with frequency regulation is on the order of one half hour or so. Imagine the [indiscernible] that what we might store for an entire season. The thing that I think what we are facing in the near future as we complete decarbonization of the electricity system is storage that will have to be multiple days. I would like to explain that in this first slide here.

So, first of all, for this crowd it’s no secret that renewable electricity is the cheapest electricity for many of us. So, the question is, how do we make that electricity fully dispatchable and reliable? The lower left-hand plot is a plot of the state of charge of a hypothetical battery over a 20-year period. This one was located in Iowa, and this is the last 20 years of wind and solar generation in Iowa. What you see in this plot is that the state of charging a battery is near 100% for most of the time, and it stays fully charged. But then, periodically for several days at a time, it has to discharge and once in a while has to completely discharge. This is what I mean by the statement that we need multi-based storage to turn that noble electricity to be fully dispatchable electricity.

The next part of this is, how cheap does that storage have to be? So, the competition today is natural gas. A natural gas powerplant depends on what type, but a rough number is that it will cost you about $1,000 a kilowatt as the installed capital cost. I’ve given you a very simple equation over on the right here. Since the target is $1,000 a kilowatt, and we’re storing for about four days or 100 hours, then it is clear the battery has a clear cost on an energy basis of about $10 a kilowatt hour in order to beat natural gas. [Indiscernible] is about $250 of kilowatt hours to the same equation will tell you in perhaps oversimplified ways, why is lithium ion today suitable for storage of four hours or less? This gives us an idea of what the cost value would have to be.

The second question is, how much storage do we really need, in the US and worldwide. This is a question that the MIT Energy Commission, has recently spent some time trying to understand with a model. Without being too nuanced about the argument with many elements to it and a number of key assumptions, let me just say that we meet on the order of 100 kilowatt hours worldwide. Roughly a tenth of that would come from the U.S. So, how do we get to that 100 kilowatt hours, and is it conceivable we could do it all with lithium ion? I don’t think so, for two reasons at least.

The first is that in order to reach that 10,000 kilowatt hours, it would require lithium ion to cost about three times lower than what the minerals alone today cost. The second is that, if we were to model with a scale up in production of just the key elements, not even the batteries themselves, how much additional mining and production of lithium and nickel would we need between now and, let’s say, in the year 2050. That’s a compound annual growth rate in production of about 10%. It’s not impossible, but it is a very heavy lift. What I and many of my colleagues now believe is that getting to the 100 kilowatt hours, and at a cost of roughly 10,000 kilowatt hours, is going to require that we start looking at storage that uses ultra-abundant materials. Low cost, again, sulphur, zinc, nickel, ion, things like that. Let me move over to the next slide here.

I am not able to change the sides.

Okay, thank you very much. What does the kind of storage look like? The second thing I want to tell you, is that there is new battery technology developing which is aimed at the targets I gave you. There’s going to be a new wave of battery storage technology, and when we deploy it, it will look something like this. This, of course, is an artist rendering, but it is to scale. If you take the wind farm, the kind of multi-based storage because of the high energy density of any electrochemistry, this is roughly a footprint of the batteries that would support that wind farm. Numerically, the kind of the storage facility, the storage farm, we’re talking about here, it has about one megawatt of power per acre. That’s actually not very different from a natural gas power plant. This is the kind of storage we are talking about. Go to the next slide, please.

So, one of the places in which this kind of storage is being developed there is a company I cofounded called Form Energy; they’re located in Sommerville, Massachusetts. They’re about 40 people today. We developed a battery technology first under the Joint Center for Energy Storage Research, and then in 2017 it was put out as a new startup. Initially funded by the [indiscernible], which is a new venture fund at MIT, which helps to provide [indiscernible] space. In the most recent round, the lead investors were Breakthrough Energy Ventures, which was the arm of the Breakthrough Energy Coalition. [Indiscernible]. To get through 100 kilowatt hours, you have to start somewhere. One of the bits of news just this month is that Form announced its new pilot project, which is a battery designed to operate cost effectively over 150 hours. Any battery we can discharge over 150 hours if we choose to do so, but the number of times we discharged that over a battery lifetime isn’t really worth it in terms of cost.

In this case, cost-effectively in competition with natural gas, over 150 hours. And this pilot project is in partnership with Great River Energy—GRE—is a Minnesota utility. Simultaneously with the announcement of this pilot, GRE also announced that it’s retiring its coal plant in North Dakota some 10 years ahead of schedule and in the future will rely more on renewable energy. This gives you an idea of what is to come. I wanted to say something about the Energy Storage Grand Challenge. The beauty of this kind of storage, this new technology, is because we need to use these very low-cost inorganics. These are all elements and minerals that we have right here in the U.S., as well as on every other continent in the world, and essentially they have [indiscernible] of cost that they have available in unlimited supply. So, it fits very well into the kind of thing we’ve been talking about with the Energy Storage Grand Challenge.

We will also need a new kind of manufacturing model. These kinds of batteries won’t be built in a purpose designed for a [indiscernible]. Ideally, we will be able to actually construct them onsite with contractors. So, this kind of a paradigm in energy storage, it’s tailor-made for innovate here, make here, and then deploy it everywhere. In my last slide, what could go wrong in this whole picture here, and what could we do to help? Well the three suggestions here you can read for yourself faster than I can say them to you, but the first point here is that [indiscernible]. Three years ago, if we used the phrase, “long-duration storage,” a common reaction was, “Well, what is that?” Today, we understand much better what value it provides, but modelling of storage of this kind in the grid setting is something that needs to be done and needs to be done in many use cases, ideally an open-source manner.

The second thing is that we need to figure out how to manufacture these kinds of batteries. Manufacturing R&D starting with basic research but also in terms of how to manufacture components for large-scale storage using things like these very low-cost elements is something that needs to be sorted out. What we really need is a manufacturing revolution in storage, which is like what happened in 3D printing and [indiscernible] manufacturing. The last thing is that when you support for both tactical pilots to show what the batteries can do and commercial demonstrations to show how they provide value, and that’s the kind of thing that all important [indiscernible] bank ability, which is necessary in order to continue to sit here [indiscernible]. Let me stop there, and I look forward to your questions. Thank you.

Thank you, appreciate that. We are up to go to: Colin Wessells, the CEO of Natron Energy. Colin, welcome.

[Indiscernible]

Colin, we are having a hard time hearing you. You’re kind of coming in and out. Colin, can you hear us? I’ll tell you what. Why don’t we switch over to Sara while we work out the technical issues with Colin? Is that okay, H.G.?

I do see Colin on video so he might be back. That’s fine.

Colin, can you hear us?

I think it might be a bandwidth challenge so maybe if we just have him just on audio when we come back to him, but next we could go back to Sara Chamberlain, Energy Foundry.

Yeah, let’s do that. So, Sara, we’re going to advance the slides here, and give us just a moment. Bryce, if you could give me control I’ll advance the slides. We do see people are putting questions in the chat and that is great. We will hit up those –as soon as we get through our panelists and cover them jointly together.

Hi, Sara, we’re going to give you control.

No sound issues, I take it?

We can hear you.

Excellent. I will just start by saying a little bit about Energy Foundry, which I cofounded with my partner back in 2012 when [indiscernible] was facing—was standing over the edge of a cliff. It was an interesting time to enter the market as a cleantech venture fund, but it’s been fun. We focus exclusively on this sector, and in general I would say we use a pretty standard set of investment criteria, but we do have an evergreen structure, and so what that means is we can be more patient and a traditional VC, which is ultimately one of the things that enables us to invest in things like hardware and material technology. We’ve made 18 investments, and thus far we have had four successful [indiscernible], including an advanced materials company which was acquired by a large industrial partner so we are on the path towards our evergreen model even in a space that is particularly challenging.

In terms of stage, we invest at the very earliest stages of a company’s launch, and we work with them through their early growth and commercialization. So, my comments are really going to be going back to the beginning of the journey for folks to reach scale and in energy and especially energy storage we certainly [indiscernible] but we also expect them to do it in a capital efficient manner and also only once there is some clear customer value proposition. Let’s see if I can advance this.

As far as energy storage, overall we evaluate about 800 business plans a year. Storage is a pretty big proportion of those, about 10% to 12%, and it kind of varies as different things occur in the market, for example, when GC’s work extended at Argonne, the battery hub, we saw a big uptick in battery technologies, and so after seeing just in energy storage over 300 technologies [indiscernible] we’ve made three investments in the sector. Our first investment was into a battery materials company called Nanograph. The second was a project developer called Glidepath and they were technology agnostic and their first project were actually grid scale lithium batteries, and the third and most recent investment was into a non-lithium, long-duration storage company called EZinc, which we similarly see long-duration as a very important gap in the market.

So, if I step back and just look across these three investments in general, hardware and materials, there’s a couple of things that come to mind as being really crucial for supporting their efforts to get to scale. The first and probably most important and sort of the theme that we’ve been hearing today is finding ways to obtain non-deluded funding and resources, which can come in a variety of forms. Nanograph is a good example. They leverage several large DOE grants to help mature their technology, and EZinc is following in their footsteps similarly with grants from the California Energy Commission and some of Canada’s cleantech programs.

Besides supporting the technology, the thing about these grants that’s so interesting is they really can bring customers to the table because it de-risks the profile of a project for their customers, and two of EZinc’s grants actually are funding that first commercial demonstration of their grid scale system, but they are doing it in partnership with the customer, so limiting customer risk is huge for these early technologies.

It’s also programs that can just offset or delay those early equipment investments that we see. For example, [indiscernible], and I know DOE has funded several other labs that run similar platforms which give an entrepreneur two years of funding and then access to all the equipment and resources at the lab. Last, I think the best kind of non-deluded support is working with your customers as early as possible so that you can develop something and make sure you have something that customers really want.

If I take this one step further to the second point I wanted to make about the support that’s needed, it’s for companies to take the path of least resistance and figure out how their technologies or products can just plug right into their customers in a way that’s as seamless as possible, whether that means giving them their product in a form factor that makes the most sense for the manufacturing process or whether it means using equipment, new or existing, that can be integrated into the facility. This is really important.

Nanograph, for example, used a very well-known off-the-shelf piece of equipment that was borrowed from another industry’s manufacturing process, and they applied it to scale their own. And the fact that they used this off-the-shelf equipment in a new way is what helped them secure JV partner to scale to commercial production.

The last thing I think that’s important to keep in mind is the definition of success. At least for the early stage that we invest in, it has a wide range of possibilities, and for us, success is not based on how much VC funding a company raises. It’s really about how they leverage our money with non-deluded funds and how they secure customers to scale their business. When we invest in the materials or hardware and technologies, it’s because we believe the team will find customers or partners who are going to be there to support that scale of commercialization.

Similar to some of the other comments, we would love to continue to see programs that will de-risk that new technology adoption and manufacturing, whether it is support for startups directly or support for their customers or supply-chain partners, because ultimately that’s leverage on our dollars, which de-risks things for investors. I think more examples of that is what will encourage investment in technologies at these early stages and hard technologies. So, with that I’ll hand it back to H.G. and we can try and get back to Colin.

Colin, I just want to test to make sure we’ve got you back? I think you are on mute at the moment, so you need to unmute yourself. Bryce, are you able to unmute Colin? There we go. Collin, can you hear us?

I can hear you just fine. Can you hear me alright?

We can hear you. Would you like us to drive your slides for you?

Let me see if I can control it. It looks like I can, so I’m good to go. I’m thrilled to be here finally. It’s great to be participating in this panel, and I apologize for the issues. It looks like we’ve got some internet trouble here. My name is Colin Wessells. I’m the founder and CEO at Natron Energy, and I want to provide a different perspective for ESGC looking at the transition from development of a new technology into manufacturing. Let me just start with a brief introduction to Natron Energy for those of you that are not familiar with Natron. We are actually a Stanford spinout based in the Bay Area. We are not in the Midwest; that’s why we are appreciative of the opportunity to be here today.

We were first funded by [indiscernible] with [indiscernible], and Natron exists because of [indiscernible]. They took a bet on us that the VCs would not at that time. Since then we’ve gone through four private funding rounds in the past seven years, and we have about 50 employees as of this quarter. –Natron has a new technology; our sales are based on all new chemistry. [indiscernible]. Our technology offers a different set of features from what you would see in lithium ion and some of the other advanced technologies such as what we heard from yet.

What Natron offers is safety, high power, long life. For us, what that means is no thermal runaway, sustained operations, [indiscernible] rates, and thousands of cycles. The trade-off is relatively modest—energy density. On an energy basis, our systems are similar in footprint, so we don’t compete with the lithium iron for anything that is space constrained. Natron has a fully de-risked product. It’s on sale today, and you can buy it.

In terms of technology readiness level, one of the indicators [indiscernible] talks about for technology maturity, we are at 9+ and this is a once-in-a-decade event for new cell chemistry. What you can see on the right hand of the slide is we actually got a picture of some neutron batteries and a server rack in a data center. This is [indiscernible] in Arizona. They are a telecommunication services provider, and these batteries are providing power to support peak compute services. [indiscernible] batteries are dispatched on demand to do this. At this point, Natron is focused on manufacturing scale-up. The product works, the technology works, and there’s a question of how do we take it big?

To provide some context for how Natron fits in to the energy landscape and with ESGC, let me share a little bit about our markets and how we are growing. Natron’s first market is data centers. This is the largest battery market that no one has ever heard of. More than 3% of global electrical load is consumed by data centers today, and there is more than a one-to-one ratio of backup battery power to grid power into these facilities. And that means over $7 billion a year in lead assets going into these data centers.

Down the road, Natron is also developing products for EV fast charge support. We heard about this as an issue for one of the first panelists. This is a future market. Energy storage at every charging station to enable fast charge. How does Natron fit in with ESGC? We are looking at network infrastructure, [indiscernible] ability, and resilience and recovery. Natron’s goal is global scale impact, and we started with domestic production. We actually make batteries in Santa Clara, California, and we are selling to customers in the U.S. But we will build and sell anywhere because we want to have an impact everywhere.

In terms of how we fund the company, our strategy has been to pursue impacts and strategic investors. What is an impact VC? It’s a fund that is focused on energy, cleantech materials, but it has a focus in a specific area that may be relevant to our business. In Natron’s case, the strategics are typically customers that want our batteries. They may also be system integrators or suppliers. Neutron has done reasonably well over the past seven years, and we’ve raised about $66 million in private funding on top of almost $8 million in awards, and that sounds like a lot of money. But the challenge Natron faces and a lot of new ventures face is we need to go out and raise $180 to $200 million to establish profitable greenfield manufacturing. And taking that leap to be big enough to actually make money is a huge, huge challenge for new technologies.

So, with that I want to tie in the work we are doing at Natron to the manufacturing pillar at ESGC. We at Natron encourage DOE to fund product plant partnerships to achieve U.S. competitiveness. What I mean by this? We see a value of depth in public and private funding. There is $20 to $50 million required for first manufacturing. Existing funding sources focus on either early-stage R&D, which is true for the DOE [indiscernible] or high-volume growth.

We see project finance, debt instruments but in between there lies a systemic gap in funding. For first manufacturing and sales. Investors don’t want to fund first manufacturing because the customers aren’t there. The customers aren’t there because they don’t see the manufacturing supply chain, and this is the valley of death for new technologies. What can we do about it? There are untapped opportunities to leverage existing domestic manufacturing. For instance, idle lithium ion plants such as those funded under ARRA should be repurposed for new products. Similarly, idle fine chemicals and pharmaceutical plants should be repurposed for battery materials. The difficulty is most idle plants are troubled businesses; they are unwilling or unable to take the risks for new products.

So, to achieve domestic production of new batteries that is truly competitive, we have a couple of options. We can systematically fund partnerships between existing plants and new products. And we are talking a $20 to $50 million award with less than six month lead time with a proposal to disbursements so that the venture can take off or alternatively we could build a network of public foundries. What I mean by this is buy and operate existing plants for ventures that agree to keep their future production in the U.S. This is already happening in other countries overseas that are trying to simulate their own domestic manufacturing.

To give you a feel for the scale of this, what we are talking about is production output 1,000 times bigger than DOE user facilities, big enough to be truly de-risk the economics of future privately funded plants. With that, I will turn it over to H.G. Thanks for the opportunity to share our perspective.

That’s great. Thank you so much, Colin. That was excellent. You’ve heard from our panelists and now I want to just really have an opportunity to open the floor. I invite our panelists as well as the participants to engage in a discussion in terms of critical takeaways, questions that you feel still need to be answered, and any observations of where you seek critical obstacles really are per this discussion.

Narrative, please help me in terms of seeing any questions come through the chat that we can address as well. Really, let’s open up the floor for a dialogue for a few minutes based on what we covered so far. Let me go first to my panelists; have you heard anything today that is a compelling takeaway for you in terms of how the DOE [indiscernible] on this intention they have on moving forward?

H.G, I will take a quick answer. I think as I look at this workshop and previous workshops and this whole grand challenge program, I think it’s really refreshing to see what I would say is a comprehensive view of the different aspects that go into a successful effort here, and so having a conversation about putting plants in the ground or developing any new technology, but just understanding what will drive demand and incentivize adoption, I think thinking holistically is exactly what needs to be done and I think that’s what’s being done here in this activity.

I agree. That is encouraging to get a holistic view first and then find the true challenges that we need to collaborate together to address. I can’t think of challenges that we couldn’t address with that approach successfully. Meredith, I’m going to look to you to see if there are any questions you want us to cover and I will just keep the line open for our speakers to moderate and answer those questions with me.

Absolutely. Our first question [indiscernible] is for Yet Ming. Even if you have a 150-hour battery, will a 150-hour cycle be the most profitable way to use it, or would it end up doing a lot of shorter cycles?

I’m sorry, you cut off for a second. Can you please repeat that?

Absolutely. Even if you have 150-hour battery, will a 150-hour cycle be the most profitable way to use it or would you end up doing a lot shorter cycles?

Yes, I think—good question. Thank you for that. You would of course like to be able to stack as many applications or batteries as you can. But we are looking at it from the point of view of providing the necessary value without having to stack that. So, if you can stack applications it gets better. There will be lots of ripples on top. We said 150 hours, right? That is not the rate at which we use the battery all the time. You can always have higher frequency ripples on top of a large battery. That don’t discharge it very much, but in the interest of coming up with a nice, simple, clean characterization of how long you could use the battery for if you were to discharge it at its rate of power from top to bottom, that is 150 hours.

Okay. Great. Thank you. Craig, I’m going to give the next question to you. A major focus of the Energy Storage Grand Challenge is reliable supply chains. What prospects do you see for servicing the critical mineral refining, manufacturing of the battery production in the U.S.?

I think that’s a massive question because it covers a lot of aspects, but I think you need to break it down into a couple of subsets. The idea of minerals in availability and in the process of minerals—how you answer that question is largely dependent on what technologies you are looking at. I would refer back to what Yet said earlier; to really drive mass adoption of affordable technologies, finding minerals that are widely abundant everywhere is absolutely critical.

That is not necessarily the situation we have today, so you have supply chain for minerals that sometimes isn’t all that attractive or can be very expensive. I think the idea—I think what is more likely to be addressable here in the U.S., sort of broadly across technologies, is cell manufacturing and or battery manufacturing. And I think that largely follows the same view of how you set up a network or a footprint of manufacturing based on centralization of things that are highly capital intensive and valued—good value for mass production. And then distribution of things like assembly processes that are more easily addressable on a smaller scale and in smaller investment. Once you have demand, those will locate themselves where need to be, so I don’t mean to go back to what I said earlier, but I think it is a critical point.

If I could jump up on that with a question. Yet, one of the things that’s inspiring about the batteries is the recyclability and the ability to have it be domestic. What do you see as a recyclability of those battery systems that you are working on?

They also have to be recyclable. I have a comparison for this type of low-cost battery that may be useful. When we think about storage of [indiscernible] or compressed air, that is a mechanical system with a near-zero cost working fluid, which is water or air. These truly large-scale low-cost batteries have a chemical working fluid; let’s call it, that’s similar. It is the lowest cost part of the entire system. So, at the end of life it can also be disposed of in a similar way. There probably won’t be enough value to recycle it, but the rest of the battery will go on to be recycled.

Excellent. Thank you.

All right. Sara, the next question is for you. Have any of your companies gone offshore for scale-up, if so, how could Department of Energy change it the next time around?

Sure. I think in energy storage specifically, just one thus far but it’s also probably a function because they are at a stage where they are ready for that expansion. The others are either not technology-based or are starting out earlier in the process. So, it’s one-for-one for the folks that are ready at that point. More generally across the portfolio, they have also gone offshore to expand and scale up in other industries.

I think across the board, one pattern is that a key consideration of course is IP, and universally there’s a preference for keeping all their core IP in the U.S., including any direct know-how operation and process technology innovation. That all needs to say here. I think that what sort of is beyond that, the key considerations are proximity to your customers and proximity to your customer’s supply chains, and in the case of our energy storage company, our battery materials company, Nanograph, they are selling and working with other materials companies, and so it doesn’t mean there isn’t a supply chain of other folks in the states that they could've worked with; it just means the universe of folks that had an appetite to engage. They had to go where the demand was and where the supply chains were. So, what can DOE do differently?

I think some of the ideas that have been floated around sending those facility partnerships and/or partnerships that would encourage or maybe increase the universe of interested partners to engage in that discussion about scale-up; that would be the most helpful because there is certainly a profile of who they were looking for and what would make sense for them. There’s partners that exist like that in the states, and if startups and entrepreneurs had a little pot of funding that could help attract folks to the party then that would be useful.

Very good. Thank you. Colin, for you. Many emerging battery technologies are based on new materials, what is the state of upstream material supply chains in the U.S.? You are still on mute. [Technical difficulties]

So, I’m not an expert in ultra high-volume material supply chains, as you can see with the Tesla Gigafactory, but I can speak from experience about Natron’s transition in the pilot production R&D. Generally speaking, plant capacity exists in the U.S. to [indiscernible] new battery materials that pilot scale and [indiscernible]. We’ve seen this is true for not only electric materials electrolyte [indiscernible]. Just to give you a couple of examples, if for Natron we regularly produce [indiscernible], which is a pharmaceuticals plant.

The difficulty we see is that pilot plants that have idle capacity generally lack the resources to ramp up production to a higher level to get the cost structure down. The tough challenge is identifying where in the United States can you drop in new production capacity for hundreds of tons of materials per month? Finding that new dedicated capacity is enough that any venture is going to have to crack in setting up a domestic materials supply chain.

Quick question for Colin on the idea of the foundries. Is that an idea that you could see coupled with national energy labs? I’m trying to get a visual of what that could look like?

That’s a great question. I think a good example of this is actually going on in the UK. The UK has pursued a foundry model at the national level with a plant called the Battery Industrialization Center. Just to give you a feel for the scale of this, it’s a multi-hundred million dollar facility that can literally tons of material to produce tens or even hundreds of thousands of cells. Why is it so big? A single demo with an automaker or storage product might require 100,000 cells.

Access to the battery industrialization center in the UK is open to everyone that commits to manufacture there once they outgrow that center. Could this be partnered with national labs? Perhaps, but what we are looking at is a plant that has a campus that’s big in comparison to a national lab, and it’s a question of resource commitment to set that up as opposed to going to a model where an existing plant is chosen and an entity is set up to manage that plant for clients that commit to domestic manufacturing.

Okay. Next question is going to be for Yet Ming. What timescale do you estimate the form energy solution will be available for general use? What is the technology of Form Energy?

Thank you. I answered that question in the chat, but I am happy to do it verbally here as well. The pilot I refer to is going to be—is called [indiscernible]. After that, if we get the model right, it’s hard to say how fast you can scale, but it is a model where we won’t be either plant limited or factory limited or materials limited. So, “as fast as we can go,” I would say. But it’s hard for me to give you a position on that at this point. But the pilot itself is in a couple years. It will be a 150-megawatt hour battery. And if you think of how big is that? You can reference it to Tesla’s 129-megawatt hour lithium ion battery in South Australia. It’s a big battery. We call them big batteries. And so, even though its 150 hours, it comes out to 150 megawatt hours.

The scaling of the materials is something that we are working on right now, so even though you can use plentiful low-cost materials, the specific supply chain issues, exactly what grade, what purity you need, those still need to be worked out. The question is, what exactly is technology? Publicly, what has been said is it’s an aqueous electrolyte battery and uses very low cost inorganic materials. I’m afraid I can’t be more specific than that right now, but in the—maybe in the next year or so we will be saying more about the technology.

Great. Thank you. Craig, this question is for you. Can you offer specific [indiscernible] increase your demand enough for a [indiscernible] capital investment and also [indiscernible]?

Right, that’s a great question because in some ways if the elements are there that sort of define what I will call natural demand, meaning that every part of the value chain from the end user all the way back to whoever is producing raw materials, if everybody can see value in terms of how to use it or the return on investment, you don’t need any help, and I think the example I used earlier about the camcorder served that purpose. Everybody in the value chain saw the value, and therefore the investment happened. I think when you don’t have that, when there is elements that don’t see that value naturally is where you need to find the help. Part of that is, to be blunt, is regulation in terms of if you’re talking but efficiency and CO2 for vehicles.

If you create a floor by which automakers have to comply and that floor raises every year, there will be technologies that get put into those vehicles, but if you are looking to trigger something that starts happening spontaneously, you need to find a way to allow everybody to have some form of reasonable value and that can be through subsidies, that can be through different business models where how you think about paying for a service or product is different than what you might've seen before, you know, in terms of what maybe doesn’t work is we’ve seen models where there have been consumer-targeted incentives through tax credits and whatnot. And those work for a period of time, but they always have sunsets on them. They always have limitations on them that never lead to something that delivers the industry to a sustainable point. So, I think a lot of different things can work, but the thought has to go into them, and the commitment to them has to go to the point you get to maybe cross that chasm of the valley of death and you get to the point where [indiscernible] occurs, and everybody sees value in those subsidies or incentives.

Great. Thank you. Sara, the next question is for you. Where does the initial support for an evergreen fund come from, and how is that repaid?

Sure. Our funding actually comes from Com Ed, which is part of Exelon and Ameren, which is headquartered in Missouri and specifically Ameren Illinois, which covers about two-thirds of the state. The reason our funds came together was sort of twofold. Number one, because it was 2012 and the bottom had sort of dropped out from cleantech venture while these two utilities were about to embark on a multibillion dollar grid modernization plan.

There was a realization that there would be a lot of new technologies that could enable all of the other investments that the utilities were going to make so they set aside and created a pool of capital to support an evergreen venture fund in this way. They also did it because they wanted to see what was happening on the fringe where much earlier stage, Exelon has Constellation Technology Ventures, which does much later stage investing, and in general, the utilities wanted to understand what was on the horizon for their businesses, and so certainly energy storage is part of that.

In terms of how it gets paid, the idea is that it doesn’t. That was an up-front donation of capital, and we become evergreen as we invest in companies; those companies have exit events, whether it’s a less likely IPO, whether they are acquired by a large player, and all of that capital comes back into our fund and we can redeploy into new investments.

Great. Thank you. Colin, the next question is for you. Regarding interplay location, opportunity, and cost, could you have been successful with Natron Energy in the Midwest? What does the Midwest need to do to make it a widely viable option?

You will need to take me off of mute please.

We can’t hear you.

Great. Thank you. Sorry about that. We’ve had some connectivity issues here. What does the Midwest need to do? I mean any venture needs three things, we need investors, we need talent, we need facilities. I would defer to Sara on how to incentivize [indiscernible] based in the Midwest. That is not my purview. In terms of attracting talent, [indiscernible] the technical skills required to commercialize [indiscernible]. They are not practiced by any research group, and this limits the number of successful technologies to the number of scientists who are world-class itself educating.

Let me give you an example. Natron’s material has different service chemistry than the carbons or ceramics you would see in a lithium ion cell, and it requires a new adhesive binder. So, after getting the cell to work, at R&D scale we have now learned to manufacture electrodes that have both the new and old material and the new binder. And this requires an understanding of everything from [indiscernible] spectroscopy to polymer chemistry. That is accommodation of skills that isn’t taught. We had to self-educate to solve these problems.

So, one way to attract new battery ventures to the Midwest would be to build up the talent pool. What if there were a fellowship program in which the smartest young scientists and engineers were taught skills relevant to commercializing batteries? If any region had that, then after a few years the talent pool would build up to the point that new ventures would come there. The other thing the ventures need is facilities for early-stage R&D, and Natron was fortunate. We actually got access to the user facility of [indiscernible] lab before we raised any money. That’s how we got going. We’ve actually seen that institutionalized with the [indiscernible] program, but that can be done anywhere. It can be done at Argonne; it can be done elsewhere in the Midwest. And beyond that, for later stage battery ventures, it’s all about the manufacturing facilities.

For the Midwest to attract commercialization in manufacturing, I would argue cite manufacturing foundries, cite plans that would incentivize ventures to scale up in the Midwest. If facilities are there the ventures will come because they can’t find them anywhere else.

Very good. Sara, any follow-up on that? 

Sure. I think all of that was very well said. We need a number of different resources to scale from idea to product. I think we saw that journey with Nanograph, for example, the core technology was funded through Argonne through one of the energy frontier research centers. They further worked on it at Northwestern, which is a partner on that grant. They went through a business plan competition as part of Northwestern's joint agreement between [indiscernible] programs together to work on a startup around the technology. They happened to choose the same technology that was pulled through and then went out and launched the business. They leveraged lots of resources at Argonne and they just fought fiercely to get in front of customers and partners to win those grants, but ultimately I think the talent pool, the most challenging thing about scaling in the Midwest from a talent perspective is that the competition on the coast can be very strong.

In particular, in the last five years where you have some major corporate players that are spitting up very large [indiscernible] with very well-funded positions, and as a small startup where you are trying to bootstrap, it’s hard to compete. So, the idea of some kind of—whether is a fellowship or how you structure it. I think that is one interesting idea that maybe could’ve helped them attract additional talent quicker, but in the same vein I think in the Midwest you have a different approach to building a startup. You keep your head down, you focus on your customers, it’s less about momentum and, you know—it’s about building a real product, and so I think that mentality is just fundamentally; it exists or it doesn’t. So, we are pretty happy with that model and think there’s plenty more examples of Nanograph yet to come.

Think how cities can play a strategic role in this conversation as well, moving forward.

H.G., I want to give you an opportunity to ask any final questions of our panelists here before we move into our wrap-up. You’ve done such a great job today handling both panels. Any final questions or comments?

I truly just—an expression of gratitude and thanks for the different perspectives we were able to hear from today. Real-life examples, leaders on the front lines telling us truly what’s needed in order to achieve these intentions that we have. And understanding the obstacles in front of us. I hope the conversation will continue. I think the ability for these panelists to communicate among themselves and then also with the audience participating is so important to get alignment on what is critical for us to address in order to achieve this future that we want. I think I will stop there and make sure we have time for some special closing remarks.

Great, thank you so much, H.G. And thank you to Craig, Yet Ming, Colin, and Sara for your contributions today as well. Before we do our final wrap-up, I do want to ask for the opportunity—ask you all, our audience, some questions. In the chat box, we are going to post a link to a feedback form that is about today’s workshop as well as the Energy Storage Grand Challenge.

Your comments and thoughts are important to the RTIC committee as the Department of Energy moves forward with the Energy Storage Grand Challenge roadmap. The survey link is going to be open for two more days, so until Friday. So, we really do encourage you to provide some feedback, and know that the committee is going to read through these. We are near the end of the webinar. Thank you so much for our keynote speaker and our panelists for your time and energy today. For our final remarks, I will turn it over to Sue Babinec, stationary storage program lead at Argonne National Laboratory, for our final thoughts. Sue, it is all yours.

Can you hear me?

We sure can.

That has been an amazing few hours. We have very excellent panelists, all very committed and very, very skilled in their topics. But we have arrived at the last few minutes of the last webinar. So, we are at the end of this journey in which DOE has walked us through the ESGC plan and provided this form for feedback.

The first two sessions described the vision; it is similar to the past in its deep commitment, but it’s expanded for this program that we have here and now the new GC catchphrase, innovate here, make here, deploy everywhere. So, that is the big plan, and before I just briefly recap the speakers, let’s think about how it is that we actually came to this moment, which my colleague George Crabtree, the GC director, loves to call “the energy storage moment.” Very briefly we go all the way back to the early 90s when lithium ion was the key enabler for portable electronics. We move from there to electrified transportation, where lithium ion was pushed to new heights of performance and low cost that nobody ever thought was possible. These gains in so many ways were due to the long-term vision of DOE and the decades of U.S. funding to academia, national lab startup, and industry.

So, today we are at the precipice of yet another big application space, which is the modern grid. Its rebuilding using renewables, distributed generation, but now it has this enhanced reliability and flexibility demands with energy storage again as a key enabler, as described so well by Susanne just a few minutes ago. And again, performance and cost targets for this application space are different than they were in the previous, and once again it’s all very exciting and challenging, but DOE has paused to organize their vision now to address across the breath of all these spaces for this ESGC. Its high-level vision is for U.S. leadership, which is reflected once again here in this amazing diagram. It is so simple that it is so clarifying. It says, “Innovate here, make here, and deploy everywhere.”

So, that is all very inspirational, but let’s briefly summarize today’s speakers before I let you go. We started with Paul Kearns, the director of Argonne National Lab, which is a huge enterprise with a rich 50-year history of energy storage innovation, and they stand ready to direct their incredible U.S. investment to this next stage. Today our [indiscernible] source, where today we’re looking at the details of charge and discharge on the inside of single cells, not only lithium ion, but as Craig said before, also with [indiscernible]. [Indiscernible] where we might use AI to predict the lifetime of storage in these very complex deployments, which are necessary to make the economics work out for grid, both regular grid or bi-directional.

We are of course just one of the many national labs to work with [indiscernible] in this area. Alicia Barton, the CEO of NYCERDA, showed us what it takes to act on this incredible, comprehensive vision in the state of New York. It was not just a demonstration, but frankly, to me, it was an inspiration. Speaking of inspiration, we have H.G., our moderator, who is unlike any other, and really inspired all of us to think deeply about what’s going on here, not just at a superficial level.

Our Panel 1 was a regional story with—it’s all about renewables, and with the large Midwest cities, the city of Chicago, it’s decidedly lithium ion-focused, and as we heard, lithium ion is considered a done deal but not really so for grid storage. John, the chief engineer of Chicago, explained the complexity; Suzanne of Exelon described these incredible trade-offs about making sure you are reliable while you bring in the new technology and the need for different business models, and frankly that energy storage doesn’t always pencil out. Kate of Chicago Transit described the need for this massive infrastructure, and JD of Invenergy, an energy storage product developer, noted that standards will be needed. Panel 2 was very interesting.

It’s about a future of technologies which addressed the performance and cost demands that lithium ion really cannot. The economics here in this last panel were not just about whether you can hit the cost target in dollars per kilowatt hour or pennies per storage cycle, but the economics of investing capital and the risks which are very often overlooked. Craig of Clarios explained his paradigm of risk management, and that frankly no amount of information and analytics are sufficient to supersede the requirement of stable demand when you invest a lot of capital.

A look to the high renewables future absolutely requires long-duration storage with incredible economic constraints and an equally incredible impact with the supply chain we need to do. Colin of Natron actually brought forward a new chemistry, and I have to say I was watching this company when I started at ARPA, and not only is it amazing but I would hope that as we go forward, the amount of dedication and the hard work and how taxing it is on our scientists really needs to be diminished over the future and hopefully this program we have will help do that. Colin also enlightened us about how we could use the assets that we have today to make this path easier, and Sara of the Energy Foundry, the iconic early-stage VC, spoke about how all these issues reflect on her investment capabilities. So, I want to again thank our incredible panelists.

I’d also like to thank the DOE ESGC team, [indiscernible], the DOE logistics team, especially Meredith, whose voice we have all come to know. My national lab colleagues and counterparts who also organized these other super interesting regional workshops. That is [indiscernible] and [indiscernible] of [indiscernible]. So, on behalf of Argonne National Lab, we are so excited about this initiative. It’s more than just an Argonne or DOE project. It is a comprehensive, national, collaborative program empowering many solutions, and no doubt I think I speak for many when I say that we believe the future is bright and that the U.S. can lead in this all-important technology. Thank you very much.

Thank you so much, Sue, and thank you again to everyone. The Department of Energy will be posting recordings of these workshops as well as the slides on the Energy Storage Grand Challenge website in the coming days. So, please do check back next week if you are interested in downloading a copy. Ladies and gentlemen, this completes today’s workshop. Thank you so much, and have a wonderful day.