Making big steps towards a sustainable electricity system

Elestor is a developer and manufacturer of systems that can optimally bridge longer periods. Elestor has developed a flow battery using hydrogen and bromide as active materials. The innovation leverages the very inexpensive hydrogen and bromine, which are available worldwide in enormous quantities in seawater, combined with a patented system design and easy-to-produce compact cells. This ‘triple cost reduction’ strategy opens up a range of profitable business cases, which are essential for the large-scale adoption of the technology, and thereby also for accelerating the energy transition. Ultimately, the Elestor technology is the ideal candidate to replace fossil fuel power plants, making this technology essential for fully decarbonising the energy system.

Guido adds: “The main difference with conventional batteries is that in the Elestor technology, power [MW] and energy [MWh] are not linked, which allows for extremely cost-efficient long periods (± 8 hours to 5 days) to be bridged. Besides long-term energy storage, the battery generates hydrogen during the charging process. This introduces new and unique possibilities for integrating energy storage with hydrogen infrastructure and electrolysers. This enables various new optimisation possibilities of the energy system, in which both forms of energy storage (through a battery and in the form of hydrogen) are integrated.”

The contact between Elestor and Invest-NL was established in 2020 during the annual event of InnoEnergy, one of Elestor’s early investors. In 2021, the first commercial contract was signed with Royal Vopak, marking a significant step in the go-to-market strategy.

To meet the high demand and simultaneously reduce production costs to the desired level, the need arose to produce battery systems on (ultimately) GW scale and to expand and professionalise the company. Driven by the ever-increasing urgency to introduce very cheap, large-scale electricity storage, the company needed to grow quickly. The associated financing requirement was initiated at the end of 2021 and successfully completed in August 2022.

Diederik further discusses the investment process: “Elestor is a capital-intensive company where, at an early stage, relatively large investments are needed to scale up quickly. This also requires extensive collaboration with other members of the consortium of existing and new investors. As a start-up or scale-up, you need to start building relationships with potential investors early on. There was good cooperation with the other investors in this round. Together with Equinor Ventures and Royal Vopak, we carried out the analysis, conducted negotiations, and this led to a successful closing.”

Visible mission

The added value of Invest-NL in the field is becoming increasingly apparent. And with that, also the mission of Invest-NL; ‘making financeable what doesn't seem to be’. Guido has also experienced this first-hand: “Elestor is a relatively young company that has developed a new technology and whose products have a lifespan of 15-20 years. That gives Elestor quite a lot to prove. Although the need for this technology is now obvious and there was considerable interest from potential investors, at the same time the technology is new and still needs to prove itself in the market, but it also requires substantial capital to finance the necessary growth. That’s a tricky combination. Precisely there, Invest-NL played a very important, possibly crucial, role: The signal from Invest-NL that they were willing to significantly supplement part of the financing lowered the barrier for new investors to get involved.”

The collaboration between Invest-NL and Elestor is intensive. Diederik: “At Invest-NL, we like to understand well what we are investing in, and the entire Elestor team has really taken the time to give us a good insight into, among other things, the technology, operations, and business plan.” Guido experiences it as a pleasant, informal collaboration: “Besides the formal progress reports, there is regular informal contact about all sorts of business-related matters. I value that very much. Invest-NL is establishing an increasingly strong presence through new initiatives. This has pleasantly surprised me. Apart from being an investor, Invest-NL undertakes various initiatives, such as market analyses like the recent ‘Financing Power-2-X research’; an analysis of the revenue models in the various electricity markets of about five technologies. The concrete support Offer from Invest-NL to assist in establishing contact with specific target groups such as investors and potential customers is very valuable to Elestor.”