Westlake Village and Switzerland-based Energy Vault Holdings began trading on the New York Stock Exchange earlier this month following a merger with special purpose acquisition company (SPAC) Novus Capital Corp. II.
Shares of the company, which makes a gravity-based energy storage system, closed at $9.39 on Feb. 14, the first trading day. They have since risen to $12.20 on Feb. 23.
Energy Vault has developed technology to solve a basic problem in the emerging green energy sector. A lot of emission-free electricity comes from wind and solar panels, but the hours of maximum electrical production don’t match the hours of maximum consumption by consumers.
The company has developed three-dimensional grid-structured buildings to store electrical energy. Powered by excess solar or wind energy, cranes inside the modular building lift composite blocks weighing 30 metric tons made from low-cost materials such as local soil, mine tailings, coal ash and decommissioned wind turbine blades. Later, the blocks are lowered to release energy.
The mechanism’s AI software lowers the blocks at a speed that can be accelerated or decelerated to release specific amounts of power. The blocks are not prone to degradation.
Energy Vault Chief Executive Robert Piconi said in addition to the mechanism’s decarbonization and sustainability advantages, it also gives back to whatever community it is placed in.
“It goes right back into the local community and creates local jobs because we’re making the blocks local, we’re building the structure local, the maintenance we’re going to do over time, it’s all local,” Piconi said. “We aren’t shipping things in from other countries.”
Funding challenges
Energy Vault’s path to going public was not an easy one, according to Piconi.
“Early on, there were a lot of naysayers about the technology because no gravity energy storage companies have progressed past seed funding, let alone Series A, Series B and Series C like we did,” he said.
Energy Vault’s early challenge was designing and getting people to believe in its technology. The company started with a quarter scale concept in 2018 as a means of proving that its creation would work. The concept was backed by multinational conglomerate Softbank. By 2020, Energy Vault was dealing with the fallout of the COVID-19 pandemic, which significantly impacted the company.
“We actually took salary cuts in the company because no one knew what COVID was going to do,” Piconi said. “100 percent of the team stuck through it even with the salary cuts we had to take, and we got through it. We got the system built and connected to the grid.”
The company has now amassed multiple partnerships and agreements with domestic and foreign energy companies.
Last October, Energy Vault entered into an energy storage system agreement with DG Fuels that will see Energy Vault provide 1.6 gigawatt hours of energy storage to support the Louisiana-based sustainable aviation fuel producer across multiple projects.
Energy Vault also announced this month a license and royalty agreement for renewable energy storage with Atlas Renewable and its majority investor China Tianying Inc. Atlas made a $50 million investment and agreed to pay an additional $50 million as a licensing fee for use and deployment of Energy Vault’s mechanism in Mainland China, Hong Kong and Macau.
Heather Castle, a lecturer in California State University – Northridge’s Nazarian College of Business and Economics Department of Finance, said the collaborations have given Energy Vault the ability to play in the global arena with inroads into Chinese and Korean energy storage and management marketplaces.
However, she added that although such collaborations can be positive factors, they could add challenges.
Castle said that Energy Vault may run into governmental regulation and legislation changes while having to manage potential challenges of securing contracts, licenses and permits in foreign markets.
“Since Energy Vault is a participating in the global economy, they face global risks such as political instability, changes in government policies, potential introduction of economic sanctions, not to mention the fluctuations in exchange rates as well as domestic economic risks,” Castle wrote in a follow-up email.
According to Castle, one factor that works in tandem with Energy Vault’s decarbonization efforts is President Joe Biden’s 2030 greenhouse gas pollution reduction target. The target aims at 50 to 52 percent reduction in U.S. greenhouse gas pollution from 2005 levels in 2030.
“It seems that their (energy storage mechanism) will complement an existing underlying storage technology for companies that would use their services,” Castle said. “So, I felt like it was pretty interesting that it was a value-add, and not a whole new creation of infrastructure for a company to take on.”
Stock trading
The SPAC merger was announced in September, not long after Energy Vault announced $107 million in Series C funding. The combined company was expected to receive up to $388 million in gross cash proceeds from a combination of a $100 million private placement and $288 million in cash held in Novus’ trust account.
Shares of Energy Vault opened at $11.50 before falling 18.3 percent, closing at $9.39 on the first day of trading. Since then, shares have risen to around $12 as of Feb. 18, a day when volume skyrocketed to more than 23 million shares.
Energy Vault also trades under Energy Vault Holdings Inc. Warrants (NYSE: NRGV WS) which closed at $1.40 on its opening day and has since sustained a similar price.
The company has not announced when it will issue its first quarterly report.
“We are pleased to begin this exciting new chapter in Energy Vault’s history as we transition to a public company,” Piconi said in a statement. “The proceeds enabled by this transaction, coupled with the additional strategic partnerships we have signed with some of the largest energy and industrial leaders across the globe, provide a significant runway for us to drive shareholder value and execute against our growth strategy.”