Eos Energy Enterprises, in Turtle Creek, Pa., has a solution to the California duck curve: zinc-based batteries with a duration of three to 12 hours, which can easily cover the curve’s trademark steep ramp in demand in the late afternoon when solar panels stop producing energy.

And the Department of Energy’s Loan Programs Office (LPO) is backing the company’s plan to expand production of its next-gen Z3 systems with a conditional loan guarantee of up to $398.6 million.

If finalized, the money will cover about 80% of the $500 million cost of Eos’ Project AMAZE (American Made Zinc Energy) expansion, which the company said will allow it to produce up to 8 GWh per year of the Z3 batteries by 2026. When charged and discharged daily, that capacity could be enough to meet the annual electricity needs of 130,000 average U.S. homes, according to the LPO.

Eos still must meet certain milestones and conditions before the loan is finalized, but the conditional commitment represents a stamp of approval, marking the Eos batteries as a potential first mover in the emerging long-duration storage market.

“Eos’ zinc … batteries provide alternative battery chemistry to lithium-ion, lead-acid, sodium-sulfur and vanadium redox chemistries for stationary battery storage applications,” the LPO announcement said. “Eos’ technology is also specifically designed for long-duration grid-scale stationary battery storage that can assist in meeting the energy grids’ growing demand with increasing amounts of renewable energy penetration.”

The batteries are manufactured using five low-cost and readily available raw materials: zinc-bromide, industrial-grade titanium, graphite felt, plastic and water, according to the company website.

The company prides itself on procuring most of those materials within a day’s drive of its plants in Turtle Creek, Pa., a small town east of Pittsburgh where George Westinghouse built his first factories in the 1890s. That local sourcing should qualify Eos to receive the investment tax credit for standalone storage under the Inflation Reduction Act, including a bonus credit for domestic content, the company said in its release on the award.

The Z3s are rated for 6,000 charge-discharge cycles — about 20 years — with minimal degradation, according to Eos. The basic technology also can be configured for a range of uses, from grid-scale standalone installations to small commercial and industrial applications.

The LPO also notes that the batteries are nonflammable and do not need extra cooling to operate, avoiding some of the hazards of lithium-ion batteries.

Eos’ technology “has been validated by GE and Siemens in the past,” LPO Director Jigar Shah wrote on LinkedIn. “The technology works well, and with automation, we can bring … down the cost curve.”

Targeting The ‘Intraday’ Market

Long-duration energy storage is one of the missing pieces of the U.S. and global energy transition, the answer to perennial concerns about the intermittency of renewables and what happens when the wind doesn’t blow and the sun doesn’t shine. While lithium-ion batteries can provide up to eight hours of duration, most projects today are designed with four hours of duration or less.

The critical mineral supply chain for the technology ― in particular, lithium, nickel and cobalt ― remains a long-term challenge for the industry as well.

Citing DOE’s recent Long Duration Energy Storage Liftoff Report, Shah said U.S. long-duration energy capacity will need to scale rapidly over the next two decades to reach President Joe Biden’s 2050 goal for a net-zero economy. The Liftoff Report estimates 225 GW to 460 GW of grid-scale long-duration storage will be needed.

While other companies, such as Form Energy, are developing multiday technologies, Eos is targeting what it calls the “intraday” sector with its three- to 12-hour batteries.

If finalized, the Eos loan would be the LPO’s first in the long-duration battery energy storage sector. The office’s battery storage investments to date have focused primarily on the electric vehicle (EV) sector, including an $850 million conditional commitment to Kore Power and a $9.2 billion conditional commitment to Blue Oval SK, a joint venture of Ford Motors and SK On, a Korean EV battery manufacturer.

The LPO also provided a $504.4 loan guarantee to Advanced Clean Energy Storage, a project in Utah that will produce green hydrogen to be stored in salt caverns to provide “long-term, seasonal storage.”

‘Time is of The Essence’

Eos started working on its zinc-based battery storage in 2008 and has 95 patents pending on the technology, according to the company website. Eos originally manufactured its units in China but came back to the U.S. in 2018, building a workforce of 300 in Turtle Creek. The company went public via a special purpose acquisition company, commonly called a SPAC, in 2020.

The conditional loan announcement comes at a pivotal moment for Eos, as starting up Z3 production has put a major dent in the company’s earnings, as reported in its second quarter financial results, released Aug. 14. Revenue shrank year over year from $5.9 million in the second quarter of 2022 to just $200,000 this year.

On the upside, Eos booked $86.9 million in new orders in the first six months of 2023 and now has a back-order pipeline of $533.6 million.

The company’s current semiautomated production lines are located in a former Westinghouse facility, renamed Ingenuity Plaza, where production of the Z3s began in August.

Eos also recently announced it is partnering with Wisconsin-based ACRO Automation Services on the design and construction of up to four high-output production lines by 2026. The company predicts the scale-up could create up to 650 permanent jobs.

To help build up that workforce, the company has committed to working with its regional chamber of commerce on expanding science, technology, engineering and math programs in local schools.

“We are putting in place all the elements that will allow us to build an efficient, optimized, state-of-the-art facility at scale,” said Nathan Kroeker, Eos’ chief financial officer. “We believe we can pair the conditional commitment from the DOE with private capital and state and local investment programs to meet our requirements.”

Eos CEO Joe Mastrangelo said the industry must “move with speed and urgency … to meet the demand for long duration energy storage. At such a crucial moment in our global energy transition, time is of the essence.”