More than half of Eos’ $12.9 billion project pipeline comes from proposals delivered in 2023, an uptick in volume driven by passage of the Inflation Reduction Act, Chapin said. Because the projects are getting bigger, and thanks in part to complexities with the project development market and grid interconnection queues, around 60% of these projects are slated to come online in 2026 and beyond.
“The great news here is we still have $5 billion in 2024 and 2025 COD projects, which should allow us to grow the company in the near term,” he said.
This September, Eos was granted an up to $398.6 million conditional loan guarantee from the Department of Energy to support the expansion of a manufacturing plant for its zinc-powered energy storage systems. The company is aiming to manufacture 8 GWh worth of systems every year by 2026 at the plant, which is in Turtle Creek, Pennsylvania, in an initiative called Project AMAZE.
Its Z3 battery — which has discharge durations of three to 12 hours — is made using predominantly domestic components, meaning it can access the 10% 45X advanced manufacturing direct pay tax credits included in the Inflation Reduction Act.
The company has seen an increase in customer engagement after the conditional loan guarantee announcement and Z3 product launch, Chapin said on the call. The DOE loan guarantee was the result of a rigorous, two-and-a-half year due diligence process, which along with the product launch “act as important validations of our technology and our business,” Chapin added.
Eos’ project pipeline is up $1.3 billion from the last quarter and about half of the pipeline was refreshed this year, at higher prices, with utility customers bringing in larger projects and longer durations, he said.
Record-breaking deployments of wind and solar in the U.S. are creating a need for large, long-duration energy storage so that they can perform like baseload resources and compete with traditional fossil fuels, Chapin said. Projects over 1 GWh now represent $8.7 billion — or two-thirds — of the company’s total pipeline.
And then there’s the pivot to longer-duration storage, driven by the deployment of large amounts of renewables and the “duck curve” in regions like Texas and California, where load drops down during the day when renewables are being generated, and then shoots back up in the evening hours as renewable energy production declines. In California, this effect is so extreme it’s been renamed the “canyon curve,” Chapin said.
“[S]ixty-four percent of our pipeline today is made up of projects with durations over six hours, where the market historically has been focused on two- to four-hour durations,” Chapin said.
Deloitte’s Motyka agreed that the energy storage market is moving towards longer durations and larger projects. In terms of the economics of new energy storage technologies, “I think we’ll continue to see them scale as they become more economic,” she said.
Even if some of these projects are more expensive on a dollar-per-megawatt basis now, “when you look at the project economics over the operating life, they still pencil out as a good deployment opportunity,” she said.