ESS Tech, Inc. · NYSE:GWH
ESS Tech — ESS — SPAC Merger (August 2021)
43 slides from ESS Tech's SPAC merger presentation, August 2021
Slide 1: Long Duration Energy Storage Systems for a Cleaner Future
Long Duration Energy Energy Storage Systems Storage for for a Cleaner Future a Cleaner Future AUGUST 2021
Slide 2: Disclaimers
Disclaimers This presentation (this “Presentation”) was prepared for informational purposes only to assist interested parties in making their own evaluation of the proposed transaction (the “Transaction”) between Acon S2 Acquisition Corp. (“ACON”, “we”, or “our”) and ESS Inc. (“ESS”). This Presentat
Slide 3: Game Changing Technology
Game Changing Technology The Power Grid of the Future – Feasible Today STABLE. SECURE. CLEAN. CONFIDENTIAL 2
Slide 4: Transaction Overview
Transaction Overview Category Catalyst in Long Duration Energy Storage Solutions Leadership ESS ▪ Founded in 2011 to enable the stable, decentralized and decarbonized power grid of the future Offering Size ▪ ACON S2 (NASDAQ: STWO): a special purpose acquisition company ▪ $250 million cash in trust ▪
Slide 5: Welcome
Welcome 4
Slide 6: Our Goal: To be the leading provider of long-duration energy storage technology
Our Goal: To be the leading provider of long-duration energy storage technology CONFIDENTIAL 5
Slide 7: Growing Market Momentum
Growing Market Momentum U.S. Renewables California Federal policy EU RPS now more than 25% targeting 1 GW adds potential increased to 40% of all U.S. generation of long-duration for investment, by 2030, up from 32% (EIA, June 2021) storage by 2025 tax credits ESS believes the potential for long-dura
Slide 8: Regular Positive Updates to Market Growth Forecast
Regular Positive Updates to Market Growth Forecast “U.S. battery storage projects grow by 10 times beyond the 2019 figure between 2021 and 2023 to contribute 10,000 MW to the grid” 7
Slide 9: Investment Highlights
Investment Highlights First Large Differentiated Long-duration Addressable Strong Balance Technology Storage Market Sheet Positions With First Mover Company + Us For Growth Advantage To Go Public Macro Tailwinds 8
Slide 10: ESS: A Category Defining Investment Opportunity
ESS: A Category Defining Investment Opportunity 1 Large and Fast-Growing TAM: ~$56bn by 2027 growing at a 33% CAGR1 2 Simple Yet Revolutionary Technology: Iron, salt and water; strong patent portfolio 3 Compelling Value Proposition: Highest performance, lowest cost2 and most sustainable 4 Low Risk E
Slide 11: Market Opportunity
Market Opportunity 10
Slide 12: What Is Long Duration Storage?
What Is Long Duration Storage? Low Cost to Enable Shift Supply to Meet Reliable Replacement of Alternatives Demand from 4 – 12 Hours (Grid Stability) (Peaker Plants) CONFIDENTIAL 11
Slide 13: ESS Transforms the Value Proposition for Long Duration Storage
ESS Transforms the Value Proposition for Long Duration Storage What Customers Demand How ESS Transforms the Grid ▪ Can replace coal and natural gas with solar and ▪ Up to 12 hours Longer Duration wind power ▪ Flexibility allows multiple revenue streams ▪ Greater resiliency to unexpected events ▪ Low
Slide 14: Stabilize the Grid and Accelerate Renewables
Stabilize the Grid and Accelerate Renewables US Renewable Energy Penetration (2015-2050)1 Renewable intermittency creates a 65% massive problem for the grid, 57% 47% particularly >25% penetration 36% 40% 31% 23% 15% ▪ Carbon-free is the goal 2015 2020 2025 2030 2035 2040 2045 2050 ▪ Intermittency an
Slide 15: Strong and Growing Demand for Energy Storage
Strong and Growing Demand for Energy Storage Cumulative Additions to Global Storage Capacity (GWh) Global Total Addressable Market ($bn) Front of the meter +43% Front of the meter 534 Behind of the meter CAGR Behind of the meter +33% $56 CAGR 397 $46 301 +44% +32% CAGR $39 $28 CAGR 287 $33 $22 226 $
Slide 16: One Technology – Two Products of Different Scale
One Technology – Two Products of Different Scale Energy Warehouse at Jean Airport Energy Warehouse™ Energy Center™ ▪ Behind the meter solution ▪ Front of the meter solution ▪ 50kW – 90kW configurable range ▪ Customizable configuration range ▪ First commercial deployment in 2015 ▪ Customer trials sta
Slide 17: Validated by a Blue-Chip Customer Base
Validated by a Blue-Chip Customer Base Utilities IPPs/Developers Commercial & Industrial EW EC EW EC EW EC ▪ Peaker replacements ▪ Peaker replacements ▪ Energy cost savings Demand ▪ T&D upgrade deferrals ▪ Resource adequacy & grid reliability ▪ Operational resiliency Drivers ▪ Wildfire resiliency ▪
Slide 18: ESS Wins on Performance
ESS Wins on Performance Operational 4-12hrs 4-12 hrs 16hrs+ 16+ hrs Compelling Performance Flexibility Li-Ion Li-Ion < <44hrs hrs ✓ Can cycle when needed with no impact to asset life Longer Asset Life Unlimited cycles, no capacity loss ✓ Operates at peak efficiency 6,000 cycles1 Li-Ion independent o
Slide 19: Flow Batteries are Scalable, Low Cost, Long Duration Storage
Flow Batteries are Scalable, Low Cost, Long Duration Storage Iron Flow Battery Scaling Increasing Storage Duration = Same System, More Electrolyte A theoretical 100KW/400KWh ESS battery contains: 400KWh configuration 1,000KWh configuration Component Number Cost Fixed Equipment: i.e., power electroni
Slide 20: ESS Wins on Cost
ESS Wins on Cost Illustrative Cost Comparison Versus Li-Ion How ESS’ Technology Delivers Superior Economics1 4 hours 12 hours Competitive with Li-Ion at 4 hours; No scaling Li-Ion ESS wins thereafter $200/kWh $200/kWh Marginal cost of $20/kWh Capital Cost ($/kWh) $200/kWh $80/kWh Li-Ion LCOS at 4 ho
Slide 21: ESS Wins on Sustainability
ESS Wins on Sustainability Sustainability Focus Areas Raw ingredients of iron, salt and water are Responsibly Sourced Materials earth-abundant Global Warming Potential (GWP) 67% lower CO2 emissions than Li-Ion1 Contains no toxic materials and Recyclability requires no special permits for disposal2 N
Slide 22: ESS is a Category Defining Technology for Long Duration Storage
ESS is a Category Defining Technology for Long Duration Storage Vanadium, Sodium Compressed Pumped Li-Ion Li Metal Zinc Bromine Sulfur Air Hydro Low cost at 4 – 12 hours Field proven1 Earth abundant materials Unlimited cycling Zero capacity fade Wide operational temperature range Environmentally sus
Slide 23: ESS Technology is Proven and Insured
ESS Technology is Proven and Insured Munich RE Aon One Beacon Insurance Investment-Grade 10-year extended Surety and Corporate Bonding Warranty warranty covering battery modules Growing project surety capacity Investment-Grade Warranty continuity Project Insurance insurance provides additional suret
Slide 24: Technology Overview
Technology Overview 23
Slide 25: Technological Breakthrough, Field Proven and Shipping Now
Technological Breakthrough, Field Proven and Shipping Now Technological R&D roadmap for breakthrough – Iron Flow first conceived But “dirty” electrolyte Field proven1; S200 additional breakthroughs Proton Pump eliminates in 1970s caused rapid degradation shipping now to extend technology power fade
Slide 26: Robust Intellectual Property Portfolio
Robust Intellectual Property Portfolio ESS Critical Technology ESS IP Portfolio (-) (+) Power Module Electrode Electrode Current 125+ Patents Granted Collector and in Pipeline Pending Applications Proton Pump Pressure Plate Undisclosed Number of Trade Secrets and Identified Patents Conductive Porous
Slide 27: ESS Site, Manufacturing & Shipping Video
ESS Site, Manufacturing & Shipping Video 26
Slide 28: Case Studies
Case Studies , | et
Slide 29: BTM Microgrid (Customer-Owned)
BTM Microgrid (Customer-Owned) Use Case Customer TerraSol Energies, Inc. Project Sycamore, Pennsylvania Location ▪ Behind the meter microgrid owned by customer ▪ Customer is an electronics recycling facility Use Case ▪ Energy shifting, load management ▪ Energy Warehouse™ product (75kW/400kWh) Projec
Slide 30: BTM Microgrid (Customer-Owned)
BTM Microgrid (Customer-Owned) Use Case Customer Medical Device Manufacturer Project Southern California (multiple sites) Location ▪ Behind the meter microgrid owned by customer ▪ Customer is a vertically integrated medical Medical Device Use Case device manufacturer Manufacturing Company ▪ Multiple
Slide 31: BTM Microgrid (Utility-Owned)
BTM Microgrid (Utility-Owned) Use Case Customer US Utility Project Western US Location ▪ Standalone storage owned by utility in behind the meter application (DER) Use Case ▪ Customer energy shifting, load management, resiliency for critical loads ▪ Energy Warehouse™ product ▪ Customer energy cost sa
Slide 32: FTM Microgrid (Utility-Owned)
FTM Microgrid (Utility-Owned) Use Case Customer Domestic Utility Project California Location ▪ Microgrid solutions required to mitigate Public Safety Power Shutdown impacts Use Case ▪ Solar + storage microgrid Site construction (June 2021) ▪ Energy Warehouse™ product (540kW/3MWh storage) Project ▪ M
Slide 33: Green Hydrogen
Green Hydrogen Use Case Customer Siemens-Gamesa Project Denmark Location ▪ Wind + Solar + Storage + H2 Use Case ▪ Energy Warehouse™ product ▪ Flexible project package that can be Project optimized for sustainable resource Benefits availability and market conditions (for H2) ▪ No battery degradation
Slide 34: FTM Microgrid (Utility-Owned)
FTM Microgrid (Utility-Owned) Use Case Customer Utility Project Chile Location ▪ Remote grid served by RoR hydro and diesel gensets ▪ Storage systems will minimize genset Use Case usage ▪ Energy Warehouse™ product (300kW/2MWh) Project ▪ $3.1M incremental savings over LIB Benefits ▪ Avoids 12 years o
Slide 35: Strategy to Scale Globally
Strategy to Scale Globally ESS’ ability to grow is supported by ✓ Relationships in Europe and Asia-Pacific ✓ Automated manufacturing process Manufacturing Capacity (MWh) ✓ Supply chain of readily sourced components and raw materials ~16,000 ~10,000 ~5,000 ~2,000 ~150 2021 2022 2023 2024 2025 202 150
Slide 36: 97% Less Capital Required – Ready to Scale Globally
97% Less Capital Required – Ready to Scale Globally Simple, automated Simple, Low-cost Production in the USA ESS manufacturing line $in millions/GWh of Battery Module Production Capacity ~$140 Expensive, complex Li-Ion battery manufacturing line ~$4 Li-Ion competitor Source Lux Research. 35
Slide 37: Capital Investment Will Enable Rapid Expansion
Capital Investment Will Enable Rapid Expansion Net Cash for Growth Increase Expand Sales Footprint Manufacturing Capacity Hire new sales team members and ~$493M1 Fully funds capital plan to increase capacity from >250MWh in 2021 to expand production footprint into Europe and Australia 16GWh by 2025
Slide 38: Financial Forecast
Financial Forecast 37
Slide 39: High Quality Pipeline
High Quality Pipeline Projected Pipeline for Energy Center™ Global Identified Opportunities and Energy Warehouse™ Deals continue to convert 2022E Update: Booked 20%, Awarded 52%, Negotiating 28% Qualifying Negotiating Qualifying 28% 40% Booked 100% Awarded 66% Negotiating Negotiating 40% Awarded Awa
Slide 40: ESS' Robust Revenue Growth
ESS’ Robust Revenue Growth Projected Revenue by Product Offering ($in millions) $3,562 ▪ Growth accelerates as Energy EC EW EF Services Center deployments start in 2023 $2,572 ▪ Forecast driven by identified pipeline of near-term Update: No change to revenue forecast opportunities $1,645 ▪ ESS expan
Slide 41: ESS Delivers Compelling Profitability
ESS Delivers Compelling Profitability Projected Gross Margin ($in millions) Projected EBITDA ($in millions) $1,332 $1,059 2021E Update*: COGS expensed $950 2021E Update*: (~$42M) 2022E Update*: (~$43M) Drivers: Accelerating EC&EW 2022E Update*: (~$87M) $739 Drivers: Supply constraint challenges supp
Slide 42: Potential Upside to Business Plan
Potential Upside to Business Plan New US federal and state policies on infrastructure, decarbonization and national security Emerging mandates in EU and Asia-Pacific on decarbonization and storage Demand impact of USTDA, Power Africa, UNDP and World Bank targets Further economies of scale and techno
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