Make More in America Initiative to Fund Expansion of ESS’s Long-Duration Energy Storage Manufacturing Capacity

Rhea-AI Summary

ESS, a leader in long-duration energy storage, will expand its manufacturing capacity in Wilsonville, Oregon, backed by a $50 million financing package from the Export-Import Bank of the United States (EXIM). This funding, part of the Make More in America Initiative, aims to meet the surging global demand for ESS's iron flow energy storage systems and enhance cost efficiencies. ESS's technology, already in use in Europe, Australia, and Africa, supports the global transition to clean energy. The expansion will triple the annual production capacity and is expected to deliver significant economic benefits locally and nationwide. ESS's commitment to U.S.-made products maximizes the initiative's job-creation potential.

Positive

• $50 million financing from EXIM.
• Tripling of annual production capacity in Wilsonville, Oregon.
• Expansion supports global demand for iron flow energy storage systems.
• ESS's technology aids in global clean energy transition.
• Significant economic benefits for Wilsonville and nationwide.
• Commitment to U.S.-made products strengthens domestic job creation.

Negative

• None.

Insights

Financial Analyst

The $50 million financing package approved by the Export-Import Bank of the United States (EXIM) for ESS Tech, Inc. marks a significant milestone in the company's growth trajectory. This funding will enable ESS to expand its production capacity threefold in Wilsonville, Oregon, which is a substantial increase and indicates strong future production capabilities. For investors, this expansion means a potential increase in revenue and market share as ESS meets the growing global demand for long-duration energy storage systems (LDES).

ESS's manufacturing scale-up will allow the company to achieve cost efficiencies, which can improve profit margins. Increased production capacity often leads to economies of scale, where the cost per unit of production decreases as volume increases. This move could make ESS's products more competitively priced, potentially increasing sales.

Additionally, ESS is leveraging a domestic supply chain that spans 29 states. This not only mitigates risks associated with international supply chains but also aligns with the increasing focus on domestic manufacturing and job creation in the U.S. This financing will also support the creation of good-paying jobs, which can have a positive economic impact locally and nationally.

Market Research Analyst

ESS Tech's expansion comes at a pivotal time in the global clean energy transition. As more countries adopt renewable energy solutions, the demand for reliable energy storage systems becomes critical. ESS's iron flow batteries, capable of up to 12 hours of energy storage, address this need by mitigating renewable intermittency—one of the biggest challenges in renewable energy adoption. This positions ESS as a key player in the renewable energy market.

Moreover, ESS's existing partnerships with major global entities like Honeywell International and German energy company LEAG signal strong market validation. These partnerships not only provide ESS with a solid customer base but also enhance its credibility and market presence.

The company's recent venture into sub-Saharan Africa with Sapele Power showcases its international expansion strategy. This move not only diversifies ESS's market but also taps into emerging markets with high growth potential. Such strategic expansions can attract new investments and open up further growth opportunities.

Energy Specialist

ESS’s focus on iron flow battery technology is noteworthy in the context of the broader energy storage landscape. Iron flow batteries offer several advantages over traditional lithium-ion batteries. They are inherently safer, have a longer lifecycle and are more environmentally friendly due to their use of abundant and non-toxic materials. This makes ESS’s technology particularly well-suited for large-scale, long-duration energy storage applications.

The ability to triple production capacity will likely lead to increased adoption of iron flow technology, as scalability often drives down costs and makes new technologies more competitive. This could position ESS as a front-runner in the LDES market, which is expected to grow substantially as renewable energy adoption increases globally.

The environmental benefits of ESS’s technology also align with global sustainability goals, making it an attractive option for countries and companies looking to reduce their carbon footprint. This alignment with global trends can drive sustained demand for ESS's products, ensuring long-term growth.

$50 million financing package provided by the Export-Import Bank of the United States of America will enable ESS to expand manufacturing capabilities, achieve cost efficiencies and accelerate deployments.

WILSONVILLE, Ore.--(BUSINESS WIRE)-- ESS Tech, Inc. (ESS) (NYSE: GWH), a leading manufacturer of long-duration energy storage systems (LDES) for commercial and utility-scale applications, today announced that a financing package of $50 million was approved by the Export-Import Bank of the United States (EXIM) Board of Directors under the Make More in America Initiative. This financing will fund the expansion of ESS’ production capacity in Wilsonville, Ore. to meet rapidly growing global demand for LDES. ESS is delivering iron flow energy storage systems to customers in Europe, Australia and Africa, providing energy resilience and accelerating the global transition to clean energy.

Launched in 2022, EXIM’s Make More in America Initiative (MMIA) makes available medium- and long-term loans, loan guarantees, and insurance to finance export-oriented domestic manufacturing projects. MMIA supports environmentally beneficial projects, small businesses, and transformational export transactions, in areas including semiconductors, biotech and biomedical products, renewable energy, and energy storage while supporting domestic jobs. This partnership with EXIM is expected to deliver economic benefits both in Wilsonville and nationwide. ESS manufactures 100% of its products in the United States, leveraging a predominantly domestic supply chain that spans 29 states, which will maximize the economic benefits delivered by this financing package.

“Our partnership with EXIM underscores the critical role that American-made clean energy technology will play in the global clean energy transition,” said ESS CEO Eric Dresselhuys. “ESS’s iron flow technology is already deployed in Australia and Europe and with this agreement, we are well positioned to meet the growing needs of our current and future global customers.”

Financing approved by EXIM will enable the tripling of annual production capacity in Wilsonville. New manufacturing capacity funded by this initiative will be based upon the proven battery module production processes developed and refined by ESS.

“We are proud to approve EXIM’s fourth Make More in America transaction to small business and energy storage manufacturer ESS,” said Chair Reta Jo Lewis. “This transaction will ensure that EXIM continues to meet our mandates to support technologies that are critical to the global energy transition while bolstering supply chains and supporting hundreds of good- paying jobs at home.” As the leading commercial manufacturer of iron flow battery technology, ESS’s LDES solutions mitigate renewable intermittency and enable renewable energy to become baseload energy. With up to 12 hours of energy storage capacity, ESS iron flow solutions bolster energy resilience and reliability, ensuring electricity is consistently available, despite aging infrastructure, climate impacts, location, or fluctuations in renewable supply and demand.

Recently, ESS announced a partnership, financed in part by EXIM, with Sapele Power, a Nigerian integrated energy company, representing one of the first energy storage projects in Nigeria and the entire sub-Saharan Africa region. The deal won EXIM’s Sub-Saharan Africa Deal of the Year Award for driving investment in Africa and creating new opportunities across the continent. ESS also has partnerships with global energy and services companies including Honeywell International, German energy company LEAG and, through a local partner, Australian generator Stanwell Corporation, among others.

About ESS

ESS Inc. (NYSE: GWH) is the leading manufacturer of long-duration iron flow energy storage solutions. ESS was established in 2011 with a mission to accelerate decarbonization safely and sustainably through longer lasting energy storage. Using easy-to-source iron, salt, and water, ESS iron flow technology enables energy security, reliability and resilience. We build flexible storage solutions that allow our customers to meet increasing energy demand without power disruptions and maximize the value potential of excess energy. For more information visit www.essinc.com.

Forward-Looking Statements

This communication contains certain forward-looking statements regarding ESS and its management team’s expectations, hopes, beliefs, or intentions regarding the future. The words “estimate”, “expect”, “will” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Examples of forward-looking statements include, among others, statements regarding the status of ESS manufacturing, products and technology and customer relationships and product deployments. These forward-looking statements are based on ESS’ current expectations and beliefs concerning future developments. Many factors could cause actual future events to differ materially from such expectations, including, but not limited to, disruptions, or quality control problems in the Company’s manufacturing operations; as well as those risks and uncertainties set forth in the section entitled “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2024, filed with the Securities and Exchange Commission (the “SEC”) on May 8, 2024, and its other filings filed with the SEC. Except as required by law, ESS is not undertaking any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240627543084/en/

Investors:

Erik Bylin

Investors@essinc.com

Media:

Morgan Pitts

503.568.0755

morgan.pitts@essinc.com

Source: ESS, Inc.

FAQ

What is the value of the financing package received by ESS?

ESS received a $50 million financing package from the Export-Import Bank of the United States.

How will the $50 million financing impact ESS's manufacturing capabilities?

The financing will enable ESS to triple its annual production capacity in Wilsonville, Oregon.

What initiative is the $50 million financing part of?

The financing is part of the Make More in America Initiative by the Export-Import Bank of the United States.

What is the ticker symbol for ESS?

The ticker symbol for ESS is GWH.

Where is ESS planning to expand its manufacturing capacity?

ESS plans to expand its manufacturing capacity in Wilsonville, Oregon.

Which technologies does ESS's iron flow energy storage solutions support?

ESS's iron flow energy storage solutions support the global clean energy transition and provide energy resilience.

What regions currently use ESS's iron flow energy storage systems?

ESS's iron flow energy storage systems are in use in Europe, Australia, and Africa.

What are the expected economic benefits of the EXIM financing for ESS?

The EXIM financing is expected to deliver economic benefits both in Wilsonville and nationwide.