The CEO of ‘All-iron’ flow battery manufacturer ESS Tech Inc (ESS Inc) has resigned, one of a number of steps the company has taken to ‘position it for the future’ after slower-than-expected growth.
Eric Dresselhuys has resigned as CEO and member of the board, with Kelly Goodman, VP legal, appointed as interim CEO. Goodman will be part of an ‘office of the interim CEO’, also comprising the firm’s CFO Tony Rabb and EVP engineering Ben Hang.
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ESS Inc is now actively bidding for projects of 12-24 hour duration to serve emerging AI/data centre-driven load needs and applications to firm renewable production. Previously, the firm has said it was targeting durations of ‘up to 12 hours’ and also targeted the broader array of market applications for long-duration energy storage (LDES).
“The Board has engaged advisors to evaluate potential commercial or financial transactions to enable this new strategic direction,” ESS Inc added in its announcement.
Harry Quarls, chairman of the board, said: “As we look to the next phase of ESS and the opportunities in the long duration storage market, we are confident that Kelly, Tony, and Ben will work to best position ESS to enter its next stage and maximise value for shareholders.”
“I am deeply honored to have served ESS the past several years, am proud of what we accomplished and the team we have built and remain confident that ESS can further extend its leadership in the LDES industry,” added Dresselhuys, who has both contributed guest blogs and given interviews to Energy-Storage.news previously.
Lithium-ion increasingly cost-competitive
The increase in targeted duration may speak to the firm’s difficulties in scaling up thus far. In the time since ESS Inc listed, price falls (bar a blip in 2022) for lithium-ion battery energy storage systems (BESS) have seen the industry incumbent technology become more cost-competitive at longer durations, which may have made it difficult for ESS Inc to market its alternative technology.
Analysis by BloombergNEF in July 2024 found that flow batteries had a capex requirement per kWh significantly higher than lithium-ion and that, in general, LDES technologies would struggle to match the cost falls of lithium-ion.
Part of the SPAC wave of 2020-2022
ESS Inc was one of four of the most notable energy storage firms to go public via a special purpose acquisition company (SPAC) transactions between 2020 and 2022, the others being energy storage technology firm Energy Vault, zinc-hybrid battery firm Eos Energy Enterprises and system integrator Stem Inc (though there were many more).
However, analysis by Energy-Storage.news in August 2023 (Premium access) showed the four companies were significantly behind the financial performance forecasted at the time of them going public, and their share prices were subsequently down a combined 80% from the time of listing. A banking source at the time called them an “unmitigated disaster for investors.”
ESS Inc has announced some major agreements since listing in 2021, including a 2GWh deployment with California utility SMUD and 500MWh with Germany utility and IPP LEAG, as well as reaching close to GWh-scale manufacturing capacity. But, these have not yet translated into financial growth.
Having forecast US$300 million in revenue for 2023 at the time of its SPAC listing in 2020, the firm only saw US$7.5 million that year and, while full-year 2024 results are not yet out, it does not look likely to better that.
Stem Inc also announced a change in CEO and strategic review in September 2024.
