ENERGY STORAGE

World’s super rich do battle in energy storage sector

Musk, Gates, Bezos, Zuckerberg & Buffett are among the elite entrepreneurs that are plotting to build storage empires

BEN COOK

May 8, 2024

  • Elon Musk has said Tesla’s storage operation will be the fastest-growing part of its business
  • Bill Gates’s Breakthrough Ventures has invested in multiple energy storage companies
  • Jeff Bezos, Mark Zuckerberg, Michael Bloomberg and Jack Ma have also invested in Breakthrough Ventures 
  • Meanwhile, Warren Buffett-owned PacifiCorp is targeting 4GW of battery and hydro storage in the western US
  • But results are mixed, with Bill Gates-backed long-duration battery company Ambri recently filing for bankruptcy

The world’s richest entrepreneurs now consider the rapidly expanding energy storage industry as presenting one of the biggest opportunities to further increase their wealth. Earlier this year, Tesla CEO Elon Musk – the third richest man in the world as of 7 May 2024, according to Forbes’ real-time billionaires list, with a net worth of $200 billion – said that growth in the company’s energy storage operation will outpace its car business this year after deployments more than doubled, with EV volume expansion set to stall in 2024. Deployment of Tesla’s ‘Megapack’ batteries hit 14.7GWh in 2023, a 125 per cent increase boost on 2022’s figure.

Musk has for many years predicted a massive increase in global energy storage deployment, given the widespread drive to integrate variable renewable energy sources into the grid. In addition, storage will also be much sought after as a means of balancing supply and demand created by electrification, a trend which is in no small part being driven by Tesla’s electric car business.

The richest billionaires in the world (Source: Forbes Real Time Billionaires List)

Tesla in turmoil

There will be obstacles that Tesla will have to overcome if it wants to maximise its prospects for growth in the storage sector. Though the semiconductor chip supply shortage – which was its height in the aftermath of the global Covid-19 pandemic – is easing, it’s impact on Tesla has demonstrated how macroeconomic circumstances can force storage businesses to revise growth forecasts. For example, in 2021, Musk said that, while demand for Tesla’s Powerwall home storage battery at one point stood at 80,000 units, it only had the capacity to produce 30,000 to 35,000 units because of the chip shortage. Today, while demand for energy storage is on the increase, Tesla as a company is going through tough times as its core business encounters headwinds in the form of waning consumer interest in owning electric vehicles and increased competition. Tesla’s woes were highlighted when it emerged last month that the company would be laying off around 14,000 of its employees.

Gates builds portfolio of storage companies

Meanwhile, the world’s ninth richest man Bill Gates – who has a net worth of $129 billion – has invested in a number of energy storage companies via the investment firm he founded in 2015, Breakthrough Energy Ventures, which has raised more than $2 billion in committed capital. The fund’s portfolio includes iron flow battery company ESS Inc, iron-air battery company Form Energy, and thermo-electric energy storage system business Malta Inc.

In March this year, ESS Inc become the first non-lithium LDES provider to be awarded the highest level of IEEE 693 certification, a widely accepted seismic rating for energy infrastructure. ESS received the rating for its ‘Energy Center’ product line. The standard provides assurance that the Energy Center product line qualifies for deployment as critical infrastructure across the US. Meanwhile, in January this year, it was announced that ESS has commissioned an ‘Energy Warehouse’ (EW) system – incorporating iron flow battery storage – at a site run by the US Army Corps of Engineers (USACE) Engineer Research and Development Center (ERDC) located at Fort Leonard Wood in the US state of Missouri.

Meanwhile, in December last year, the California Energy Commission (CEC) awarded Form Energy a $30 million grant to support the deployment of a 5MW / 500MWh multi-day energy storage system in California. And, in September 2023, Dominion Energy Virginia outlined plans for what it described as a “ground-breaking” battery storage pilot project that could increase the length of time batteries can discharge electricity to the grid to up to 100 hours.

In November last year, Malta Inc’s German subsidiary was awarded a federal government grant to support a €9 million project to accelerate the country’s energy transition. The grant will fund a “technoeconomic analysis of the potential for Malta’s long-duration energy storage technology to help decarbonise both electricity and heat generation in Germany”, a statement said. It will also support the expansion of the German Aerospace Center’s (DLR) test facility for thermal energy storage in molten salts.

Bezos & Zuckerberg jump on the storage bandwagon

Gates’ Breakthrough Energy Ventures has successfully attracted co-investment from some of the world’s most successful businesspeople, including Amazon founder Jeff Bezos (the world’s second richest person with a net worth of $206 billion), Facebook founder Mark Zuckerberg (the world’s fourth richest person with a net worth of $163 billion). Bloomberg founder Michael Bloomberg (world’s twelfth richest person with net worth of $106 billion) Alibaba Group co-founder Jack Ma (net worth $25.3 billion), and Carlyle Group founder David Rubenstein ($3.8 billion).

However, if proof was needed that receiving investment from the world’s richest people is no guarantee of success, it emerged last week that Bill Gates-backed long-duration battery storage systems provider Ambri had filed for bankruptcy and agreed the terms of a proposed sale to a consortium of lenders.

Buffett betting big on storage

Meanwhile, Berkshire Hathaway founder Warren Buffett (the world’s eighth richest person with a net worth of $133 billion) is also betting big on storage. Buffett-owned US grid operator PacifiCorp has outlined plans for 7.4GW of battery and hydro storage in the west of the country by 2029.

But this is only the beginning. Global investment in battery storage is expected to soar from around $40 billion in 2023 to approximately $140 billion by 2024, according to the IEA (see graph below). Expect more of the world’s wealthiest individuals to enter the fray in the coming months and years as they seek to bolster their investment portfolios. Predicting which of them will enjoy the most success in what is a highly competitive sector, however, is a much more difficult task.

Source: International Energy Agency

 

  • Main image (pictured, clockwise from top left): Michael Bloomberg, Bill Gates, Elon Musk, Jeff Bezos, Mark Zuckerberg, and Jack Ma.