Energy Vault Expands Global Footprint for Gravity Energy Storage with 10 Year License and Royalty Agreement Covering Southern Africa
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Insights
The licensing agreement between Energy Vault Holdings and GESSOL has substantial implications for the Southern African energy market. The exclusive rights to deploy Energy Vault's gravity energy storage technology and VaultOS™ software in the SADC region underscore the growing demand for sustainable energy solutions in markets transitioning away from coal dependency. This transition is propelled by both environmental considerations and the need to address chronic electricity shortages. The expected market potential of over 125GWh by 2035 highlights a significant shift towards renewable energy sources, with long-duration storage playing a critical role in ensuring grid stability and managing intermittent renewable output.
Energy Vault's gravity energy storage system offers a novel approach to energy storage, potentially overcoming limitations of traditional storage technologies like lithium-ion batteries and pumped hydro, which face scalability and environmental challenges, respectively. The royalty revenue model also indicates a long-term commitment to the region and provides a continuous income stream for Energy Vault, which could be seen as a vote of confidence in the technology's viability and the region's market potential.
The SADC region's commitment to decarbonization, as reflected in the Energy Vault-GESSOL agreement, aligns with global sustainability goals and the Paris Agreement's climate objectives. The shift from coal, which currently dominates the region's energy mix, to renewable energy sources is crucial for reducing carbon emissions and improving air quality. Energy Vault's technology not only supports this transition but also addresses the prevalent issue of energy access, particularly in rural areas where electrification rates are low.
Furthermore, the emphasis on local content in project deployment by leveraging regional EPC contractors like WBHO and iX Engineers could stimulate local economies, create jobs and build technical expertise within the SADC. This approach to localizing the energy transition could serve as a model for other regions facing similar challenges and opportunities.
From a financial perspective, the multi-year licensing and royalty agreement between Energy Vault and GESSOL represents a strategic expansion into a growing energy market. The involvement of WBHO, a significant player in the region, suggests a robust execution capability for upcoming projects. This partnership could potentially enhance investor confidence in Energy Vault's ability to scale its operations and deliver on its technology's promise.
Investors should monitor the deployment progress and the integration of Energy Vault's technology into the SADC's energy infrastructure. Successful implementation could serve as a proof of concept, encouraging further adoption in similar markets. However, the technology's relatively new entry into the market means that its long-term operational reliability and cost-effectiveness will need to be proven over time. This presents both a potential risk and a growth opportunity for stakeholders.
License executed with GESSOL (Pty), a
Agreement includes multi-year license revenues and additional royalty revenue streams tied to project deployments in
License includes exclusive use of Energy Vault’s leading gravity energy storage technology portfolio and VaultOS™ software platform, which will serve energy storage use cases within the public utility, mining, IPP/micro-grid and broader industrial sectors toward achieving the region’s energy storage requirements coupled with its sustainability goals
Total addressable market regionally for energy storage expected to be 125GWh+ through 2035, yielding a market potential of multi-billion dollars in EPC projects and associated royalty streams to construct gravity energy storage systems throughout the 16 member-state SADC region
License executed with GESSOL (Pty), a
The multi-year agreement is expected to facilitate multi-gigawatt hours (GWh’s) of long duration Energy Vault GESS deployments to contribute to the SADC region’s energy storage needs, estimated to reach over 125 GWh by 2035. In addition to the technology licensing revenue, Energy Vault will receive a project revenue royalty over the complete operating life of each project, including software and maintenance revenues.
Under the terms of the agreement, GESSOL will have exclusive rights to deploy Energy Vault’s portfolio of gravity energy storage technology and VaultOS throughout the SADC region, a 16 member-state regional economic community with a mission to promote sustainable and equitable economic growth and socio-economic development. SADC’s member states are comprised of:
“We conducted extensive due diligence to bring the most economical, efficient, flexible and sustainable long duration energy storage solution to the SADC region and Energy Vault’s gravity storage technology is the clear choice,” said Les Lange, Director, GESSOL. “Southern Africa is a rapidly developing region with increasing energy demand, which historically has been met with coal-fired plants. Economic development in the SADC region is critical for improving quality of life, but we need to rapidly wean the region off of coal to simultaneously reduce carbon emissions and grow our economy. Energy storage is critical for the scale up of clean, baseload renewable energy in the SADC region and we are confident that with Energy Vault’s GESS and energy management software, as well as its broader energy storage portfolio that can address both shorter and ultra-long duration, we can achieve this objective.”
The Energy Vault-GESSOL agreement brings together a coalition of world-class EPC and Project Engineering firms who will partner on Energy Vault GESS project deployment, including WBHO, one of the largest civil construction EPC contractors in the SADC region, and iX Engineers, one of the largest pan-African engineering design and consulting firms in the SADC region.
“Given the significant pan-African potential of Energy Vault’s unique gravity storage systems, we’re excited to play a leading role in bringing the deployments covered by the Energy Vault-GESSOL agreement to life,” said Russell Adams, Director, Projects Division, WBHO. “With our license partners and our significant local skills base and supply chain, as an EPC contractor in
According to the SADC, an electricity shortage has strained the region since 2007, where only
According to a 2023 report by the International Institute for Sustainable Development, South Africa’s power system has fallen into crisis, and the national electricity utility, Eskom, can no longer provide sufficient supply to balance with demand. In response, frequent scheduled power cuts (commonly known as load shedding) have become more prevalent and 2023 was the worst year on record for load shedding. The report notes that to address the electricity supply shortfall, grid storage can contribute to optimizing the use of existing power generation and maximizing the use of the existing grid.
Energy Vault’s expansion into
“Excited to be working with GESSOL and its consortium partners to bring our unique gravity storage technology and broader energy storage portfolio to market in order to best address the region’s renewable and decarbonization imperatives,” said Robert Piconi, Chairman and Chief Executive Officer, Energy Vault. “South Africa is undergoing a significant energy transition and has one of the world’s highest per capita emissions given its current reliance on coal fired power plants. In the broader SADC region, only half of all residents have access to electricity,
About Energy Vault
Energy Vault® develops and deploys utility-scale energy storage solutions designed to transform the world's approach to sustainable energy storage. The Company's comprehensive offerings include proprietary gravity-based storage, battery storage, and green hydrogen energy storage technologies. Each storage solution is supported by the Company’s hardware technology-agnostic energy management system software and integration platform. Unique to the industry, Energy Vault’s innovative technology portfolio delivers customized short-and-long-duration energy storage solutions to help utilities, independent power producers, and large industrial energy users significantly reduce levelized energy costs while maintaining power reliability. Utilizing eco-friendly materials with the ability to integrate waste materials for beneficial reuse, Energy Vault’s EVx™ gravity-based energy storage technology is facilitating the shift to a circular economy while accelerating the global clean energy transition for its customers. Please visit www.energyvault.com for more information.
About WBHO
WBHO is one of the largest construction companies in
About iX engineers
iX engineers is a proudly South African engineering design and consulting firm with operations across the African continent. iX’s determination to carve out business-driven solutions that directly and positively impact humanity is its motivating factor. The foundation of iX operations relies on the principle of Ubuntu – an African proverb meaning “I am because you are”. iX engineers is committed to combing science and art to address complex infrastructure challenges, with a dedicated team of highly skilled professionals specializing in civil, structural, chemical, process, electrical, and mechanical engineering, as well as instrumentation and project management. iX team possess intricate knowledge of the African continent’s geopolitical and socio-economic terrain, using their diverse experiences to deliver ground-breaking and significant projects on the continent. iX executes projects with zero-harm tolerance to safety, health, and risk for human life, assets, and the environment. iX is celebrated for its purpose of developing sustainable infrastructure to creature a future of opportunities for
About Sizana Solutions
Sizana Solutions facilitates renewable energy deployment in
About GESSOL
GESSOL is a special purpose vehicle company created to execute an exclusive license and royalty agreement for the SADC region with Energy Vault. It comprises a consortium of companies that can effectively execute a significant rollout of Energy Vault GESS systems in the region. The consortium comprises WBHO, iX engineers and Sizana Solutions. WBHO will perform the EPC function, iX engineers the EPCM function and Sizana Solutions the business development function. Sizana has been the appointed consultant for Energy Vault in the region since 2019 and has built up a considerable pipeline of potential GESS customers across the full spectrum of energy stakeholders.
Forward-Looking Statements
This press release includes forward-looking statements that reflect the Company’s current views with respect to, among other things, the Company’s operations and financial performance. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan and strategies. These statements often include words such as “anticipate,” “expect,” “suggest,” “plan,” “believe,” “intend,” “project,” “forecast,” “estimates,” “targets,” “projections,” “should,” “could,” “would,” “may,” “might,” “will” and other similar expressions. We base these forward-looking statements or projections on our current expectations, plans and assumptions, which we have made in light of our experience in our industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances at the time. These forward-looking statements are based on our beliefs, assumptions and expectations of future performance, taking into account the information currently available to us. These forward-looking statements are only predictions based upon our current expectations and projections about future events. These forward-looking statements involve significant risks and uncertainties that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including changes in our strategy, expansion plans, customer opportunities, future operations, future financial position, estimated revenues and losses, projected costs, prospects and plans; the uncertainly of our bookings and backlogs equating to future revenue; the lack of assurance that non-binding letters of intent and other indication of interest can result in binding orders or sales; the possibility of our products to be or alleged to be defective or experience other failures; the implementation, market acceptance and success of our business model and growth strategy; our ability to develop and maintain our brand and reputation; developments and projections relating to our business, our competitors, and industry; the ability of our suppliers to deliver necessary components or raw materials for construction of our energy storage systems in a timely manner; the impact of health epidemics on our business and the actions we may take in response thereto; our expectations regarding our ability to obtain and maintain intellectual property protection and not infringe on the rights of others; expectations regarding the time during which we will be an emerging growth company under the JOBS Act; our future capital requirements and sources and uses of cash; our ability to obtain funding for our operations and future growth; our business, expansion plans and opportunities and other important factors discussed under the caption “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, and in our Annual Report on Form 10-K for the year ended December 31, 2022, as such factors may be updated from time to time in its other filings with the SEC, accessible on the SEC’s website at www.sec.gov. New risks emerge from time to time and it is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Any forward-looking statement made by us in this press release speaks only as of the date of this press release and is expressly qualified in its entirety by the cautionary statements included in this press release. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable laws. You should not place undue reliance on our forward-looking statements.
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Source: Energy Vault Holdings, Inc.
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