Slide 1: Long Duration Energy Storage Systems for a Cleaner Future
Long Duration Energy Storage Systems for a Cleaner Future November 2023
Slide 2: Disclaimers
Disclaimers This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can be identi
Slide 3: ESS Technology is Commercially Available Today
ESS Technology is Commercially Available Today Large and Simple, yet fast-growing TAM revolutionary technology Compelling Low risk value proposition expansion plan Considerable pipeline of opportunities Catalyzing a Clean Future. Every Day. 2
Slide 4: Renewable Penetration Drives Further Storage Needs
Renewable Penetration Drives Further Storage Needs Duck Curve Evolution Shows Sharp Ramp Energy Shift to Evenings Using Needs and Overgeneration Risk Long Duration Storage CAISO lowest net load day each spring KW (March – May, 2015 - 2023), gigawatts 600 Storing Energy Releasing Stored Energy 400 Re
Slide 5: 140 TWh of Long Duration Energy Storage Needed
140 TWh of Long Duration Energy Storage Needed COP 26: Major global report by McKinsey declared that LDES is key to energy transition • LDES sits between lithium batteries and hydrogen • LDES defined as two categories: 8-24h and >24h storage • Lithium will continue to play a role for <6h but not app
Slide 6: LDES to Receive Up To $3T in Cumulative Investment by 2040
LDES to Receive Up To $3T in Cumulative Investment by 2040 ~$50B ~$200-500B ~$1100-1800B ~$1500-3000B USD bn Cumulative capex investment ~85-140 TWh 140 $3 Trillion investment 120 in energy storage 100 required by 2040 ~35-70 TWh 80 60 With LDES, total energy 40 system costs can go down ~5-10 TWh ~1
Slide 7: Significant Market Tailwinds Building Momentum
Significant Market Tailwinds Building Momentum Catalyzing a Clean Future. Every Day. 6
Slide 8: ESS a Leader in Long-Duration Storage
ESS a Leader in Long-Duration Storage Catalyzing a Clean Future. Every Day. 7
Slide 9: Batteries are a BIG Part of the Solution
Batteries are a BIG Part of the Solution 1800 1600 1400 Projected Oil market size 1200 Fuel Cells Market Size ($B) of energy Electrolyzers 1000 Offshore Wind Onshore Wind technologies Solar PV to reach zero 800 emissions 600 400 Batteries 200 0 2020 2030 2040 2050 Catalyzing a Clean Future. Every Da
Slide 10: Challenges Face the Grid Storage Incumbent: Li-ion
Challenges Face the Grid Storage Incumbent: Li-ion ESS has received increased inbound opportunities due to Li-ion uncertainty Catalyzing a Clean Future. Every Day. 9
Slide 11: Global Deployment of ESS Projects
Global Deployment of ESS Projects More On Stanwell Here Catalyzing a Clean Future. Every Day. 10
Slide 12: ESS & Honeywell: A Category-Defining Relationship
ESS & : A Category-Defining Relationship Broad ranging Accelerates strategic Validates ESS’s technology relationship to proprietary iron innovation and redefine the flow technology as value creation Long-Duration market-leading through the energy Energy Storage LDES technology transition (LDES) cate
Slide 13: Investment and Global Collaboration to Drive Growth
Investment and Global Collaboration to Drive Growth Investment Market and Product Collaboration Strategic Investment Go-To-Market Combined Intellectual Property Joint Innovation Honeywell has invested $27.5M Honeywell purchase ESS receives exclusive license of ESS and Honeywell will into ESS common
Slide 14: Commercial Traction: Large, Signed Supply Agreements
Commercial Traction: Large, Signed Supply Agreements Customer Background Deal Details Status Sacramento Large, CA-based utility serving Shipped first phase Six EWs onsite Municipal 1.5 million electricity customers Developing LDES Center of Excellence Commissioning in process Utility District Aggres
Slide 15: Commercial Traction: Deals with Large Upside
Commercial Traction: Deals with Large Upside Customer Background and Deal Details Broader Opportunity Turlock Pairing storage with solar that will cover CA 20-50MW by 2030 aqueducts, providing multiple benefits Excess solar to capitalize in ISO for peak shifting Demonstration of new solar storage fo
Slide 16: Differentiated Iron Flow Design and IP Protected
Differentiated Iron Flow Design and IP Protected Power Module (-) (+) ESS IP portfolio Electrode Electrode Current • 235 patents granted and in pipeline Collector pending applications • Undisclosed number of trade secrets and identified patents Proton Pressure • World-leading iron flow expertise and
Slide 17: ESS Benefits
ESS Benefits What Customers Demand How ESS Transforms the Grid • Up to 12 hours • Can replace coal and gas with Longer duration • No capacity fade solar and wind • No power fade • Designed for utility-scale applications • Lower LCOS than other technologies • The first truly low-cost flow battery Low
Slide 18: 70%+ Less Capital Required – Ready to Scale Globally
70%+ Less Capital Required – Ready to Scale Globally Simple, low-cost production in the USA Simple, automated ESS manufacturing line ~$140 VS Expensive, complex ~$40 Li-Ion battery manufacturing line Li-Ion competitor $in millions/GWh of battery module production capacity Catalyzing a Clean Future.
Slide 19: Energy Warehouse Overview
Energy Warehouse™ Overview • First commercial deployment in 2015 Specifications Nominal Power 75 kWdc • Generation II launched in 2020 Max Discharge Energy Capacity 500 kWhdc at electrolyte temperature of 50ºC Rated Discharge Energy Capacity 400 kWhdc at electrolyte temperature of 50ºC • Containeriz
Slide 20: Energy Center Overview
Energy Center Overview Power Container Specifications Configurable Range Customizable up to GW scale; 145 kWdc increments Rated Capacity 8 MWhdc per MW installed Tank Container Total Capacity 9.6 MWhdc per MW installed • Front-of-the-meter solution Ambient Temperature -5ºC to +40°C rated power; dera
Slide 21: Our 2023 Operational Focus
Our 2023 Operational Focus 01 02 03 04 Scaling Improving supply Optimizing product Reducing time manufacturing chain quality designs through to commission capacity, including and outsourcing simplification solutions at automation and non-core of electrical client sites injection molding components a
Slide 22: Four Major Technologies of the EW
Four Major Technologies of the EW Battery Modules Proton Pumps Electrolyte Balance of System (BoS) (Stacks) •Intellectual property that •High-grade iron, •Necessary componentry to make the differentiates ESS salt, and water other three work together •Intellectual property that •Keeps the iron flow b
Slide 23: Energy Warehouse Product Improvements
Energy Warehouse Product Improvements Simplifying Plumbing Design Dramatically Lowers Cost and Assembly Time Piping / fitting / Electrical wiring and union / flange reduction component reduction Q3 Design Update – Lowers Labor By 38% and Material Cost By 21% Catalyzing a Clean Future. Every Day. 22
Slide 24: SMUD Startup – Six EWs Commissioned in <6 weeks
SMUD Startup – Six EWs Commissioned in <6 weeks • Well-Defined Mobilization Plan • Partnered with EPC and Customer on Division of Responsibility • Site Lead drove consistent process and daily progress reviews. • Large deployments staffed by ESS Team Leads with EPC trained techs to scale Catalyzing a
Slide 25: Path to Profitability
Path to Profitability 2021 – Early 2022 2022 2023 and Beyond Very low volume, Significant design enhancements Ongoing design and vendor/supply chain upgrades hand built and vendor transitions Increasing volume (lower fixed cost/unit) Higher labor content More units produced through automation Signif
Slide 26: Q3 Results
Q3 Results Revenue Adjusted EBITDA $1.5 million Loss of $14.2 million, improvement of $6.3 million sequentially Non-GAAP Cash and Operating Expenses short-term investments $7.5 million $124.5 million, improvement of $25 million sequentially Catalyzing a Clean Future. Every Day. 25
Slide 27: Thank You
Thank You
Slide 28: Appendix
Appendix
Slide 29: LCNRV – Impact on Cost per Unit Over Time
LCNRV – Impact on Cost per Unit Over Time LCNRV is a standard accounting term that is applicable to all companies. It is more predominant in the results of early stage companies that are ramping their manufacturing operations. Its calculation involves adjusting the value of inventory on hand to the