Gravity Power, LLC
4(a)(6) offering provided by Netcapital Funding Portal, Inc.
Utility Interest in Gravity Power
Southern California Edison, USA - “SCE met with staff and management at LaunchPoint Technologies, and has been briefed on the Gravity Power Module (“GPM”) energy storage technology. SCE finds the technology conceptually interesting in terms of potentially providing the utility with benefits of storage in a characteristic similar to familiar pumped hydropower, but in a more flexible form – and without the challenges of siting, permitting, time and upfront capital required prior to commissioning. GPM technology, if proven, may have certain advantages over other technologies currently being evaluated, such as simplicity and life cycle, and for overall storage market benefit, it is important that there is diversity at this stage. If the GPM technology were demonstrated and proved viable in terms of the projected commercial costs and performances as laid out by LaunchPoint Technologies, Inc and its spin out company, Gravity Power, LLC, SCE would want to further investigate the technology as a potential asset for the SCE system.”
ENEL, Italy - “Gravity Power is developing a novel hydraulic-piston energy storage system, with the potential to reach low costs for Large-scale long-duration energy storage. By analyzing the propose technology, two of the most critical elements of success for the Gravity power team seems to be the completion of their seal tester program and the proof of their technology through the MW-scale demonstration plant under construction in Bavaria, Germany (Project). With this letter EGP would like to express its interest for the Project as the success of the demo will greatly increase the likelihood that the storage technology Gravity Power is developing becomes a commercial reality. Indeed, if the team achieves the goals they have set forth for the MW-scale demonstration in Bavaria, EGP could be interested in evaluating the possibilities of commercial demonstration at one of EGP renewable plants.”
MASEN, Morocco - MASEN asked that Gravity Power consider a 30 kW demonstration plant in Morocco. MASEN would provide the necessary infrastructure but not the financing. Khalid Afanga told Gravity Power that successful completion of a 30 kW demonstration in Morocco will qualify Gravity Power as a demonstrated technology for the purpose of participating in MASEN RFPs for solar plus storage.
Southern Company Services (SCS) Research and Development has met and communicated on the phone on several occasions with staff and management of Gravity Power, LLC and has been briefed on the Gravity Power Plant (“GPP”) energy storage technology. Southern finds the technology conceptually interesting in terms of potentially providing the utility with benefits of storage in a characteristic similar to familiar pumped hydropower but in a more flexible form – and without the challenges of siting, permitting, time and upfront capital required prior to commissioning. GPP technology, if proven, may have certain advantages over other technologies currently being evaluated, such as simplicity and life cycle, and for overall storage market benefit, it is important that there is diversity at this stage. If the GPP technology was demonstrated and proven viable in terms of the projected commercial costs and performances as laid out by Gravity Power, LLC, Southern would want to further investigate the technology as a potential asset for the Southern Electric system in the S.E. USA.
Gravity Power sells turnkey, utility scale energy storage systems (also called GPPs) to entities that develop, own and operate such systems. Customers include developers, utilities and very large commercial users.
The worldwide need for energy storage is exploding as renewable generation grows exponentially while nuclear and fossil fueled generation recedes throughout the world. Storage can substitute for gas peaking plants or with wind and solar generation for baseload power plants.
It is widely accepted that burning fossil fuels is undesirable. Nuclear power has fallen out of favor because of Fukushima and the long time it takes to develop projects and the very high cost of plants.
Gravity Power provides energy storage at 20% of the cost of LI batteries. The Gravity Power Plant (GPP) consists of a deep shaft with a massive piston hydraulically raised by pressurized water. During peak periods, or whenever stored energy is required, the piston descends, forcing water below it up through a penstock to drive a conventional Francis-type pump-turbine and generate power. When excess power is available on the grid the water is pumped back under the piston to raise it again. The GPP uses conventional, proven components, operates in a closed-loop system to virtually eliminate the need for make-up water, and is silent and barely visible above grade. Unlike pumped storage hydropower (PSH), which is environmentally destructive, extremely difficult to permit, is limited geographically and produces less power as the upper reservoir empties, GPPs are environmentally benign, relatively easy to permit, flexibly sited and can produce constant power. While thermal power plants can take hours to start and tens to hundreds of minutes to ramp up, a 1,200 MW GPP can ramp from zero to full power in less than 20 seconds. The expected construction time for a 400 MW GPP is ~36 months. The GPP design is scalable from 50 MW to 1,600 MW, with installed cost per kW decreasing and efficiency increasing as project size increases. A 1200 MW, 4 hour unit has an overnight cost of approximately $900/kW, making large GPPs more economic than PSH, which can cost between $1,000/kW and $5,000/kW. GPP costs will likely be even lower in many regions, as GP estimates used German engineering, materials, equipment and labor costs.
GPP patents have been issued in the U.S., 22 European countries, Canada, Mexico, Japan, China, Russia, South Africa, Australia and South Korea. More patents are pending globally including in India and Brazil.
GPPs provide high round trip efficiency of 78 - 84% and will be the lowest cost power producer of all available energy storage technologies. Large GPPs will also be more cost-efficient than simple cycle gas turbine peaking plants, even in a low cost natural gas market like the U.S.
Many parts of the world are building or considering Concentrated Solar Power (CSP) due to its compatibility with thermal storage, but solar PV with GPP storage has significantly lower capital cost and LCOE. In addition, GPPs provide more flexibility as they can store electricity from any generation source.
According to forecast (source: World Energy Outlook-International Energy Agency (2014), more than 2,457 gigawatts (GW) of power capacity will be installed worldwide over the next 25 years, while total renewable energy capacity will grow to 3,930 GW by 2035 representing 31.2% of the total world market. Forecasts have tended to increase projection since 2014. A GW of capacity costs $1 to $2 billion to install, so we are talking about a power market with $2.5 to $5 trillion to be installed in the next 25 years. Gravity Power estimates that at least 30% of that capacity will need storage. As Gravity Power has a proprietary energy storage technology that is the cleanest and lowest cost, it should be able to capture a significant portion of this market. In short - the market is huge!
In recent years the full cost of battery storage has been shrouded in fog, to the detriment of the power industry, the battle against climate change, and particularly to the price consumers pay for power. But with utilities now signing contracts for solar PV combined with storage we can begin to tease out the prices utilities are paying and compare them to the prices utilities could pay for electricity storage alternatives. You might find the results startling.
The best example so far is probably Tucson Electric (Updated: Tucson Electric signs solar + storage power purchase agreement for 'less than 4.5¢/kWh', Utility Dive, May 23, 2017). At first glance the reported price of 3¢/kWh for electricity provided by the PV solar plant and a total price of 4.5¢/kWh with storage seems to indicate a storage cost of only 1.5¢/kWh.
Wow! Can that be true?
Actually, no. It’s not even close. Let’s take a closer look.
Here are the basic parameters for the plant:
- PV system power output: 100 MW
- Battery power output: 30 MW
- Battery output duration: 4 hours
Operation on a summer day in Tucson with 8 hours of full sunlight and a battery storage efficiency of 85% results in the following numbers:
- Daytime energy to grid: 659 MWh
- Daytime energy to storage: 141 MWh
- Total PV energy output: 800 MWh
- Evening storage output to grid: 120 MWh
- Storage energy losses: 21 MWh
- Total energy output to grid: 779 MWh
In a plant with no storage 779 MWh at 3¢/kWh would cost the utility $23,370. For the Tucson plant with storage, at the reported price of 4.5¢/kWh, the utility pays $35,055. The difference is the cost of storage ($11,685), which works out to 9.7¢/kWh.
OK, that’s quite a bit higher than 1.5¢/kWh. So what?
On one hand, even adding the 3¢/kWh cost of power provided by the solar plant, the resulting 12.7¢/kWh cost of electricity from storage is significantly less than the typical cost of energy from a new peaker plant. That’s good news.
On the other hand, the plant provides 659 divided by 8 or 82.4 MW to the grid during daytime operation, but only 30 MW during the peak hours of the evening. That doesn’t make sense. Any reasonable system would provide higher power during peak hours, not lower — but since that would require much more storage the overall cost of energy from the plant would be far higher than 4.5¢/kWh and it wouldn’t appear nearly as attractive.
What’s the alternative?
A few utilities are building Concentrated Solar Power (CSP) plants, at much higher cost than PV solar, mostly because of their ability to store thermal energy at low cost and release it after sunset. The resulting cost of solar plus storage can be significantly lower than the 12.7¢/kWh calculated for the Tucson plant. But CSP plus thermal storage is still relatively expensive and doesn’t provide a general electricity storage capability, e.g. it cannot store energy from wind.
Of course, the preeminent electricity storage technology is still pumped storage hydro (“PSH”), with over 150 gigawatts installed worldwide and more planned. (Have you noticed that the battery industry routinely excludes PSH from electricity storage installation totals?) Where feasible it provides far lower cost than batteries, and PV plus PSH can be far less expensive than CSP with storage. In fact, PV plus PSH would be almost the perfect solution for large scale solar energy, were it not for one minor detail – conventional PSH usually can’t be built when or where it’s needed due to the severe siting constraints of the reservoirs required.
There’s a better way. The Gravity Power Plant, or GPP (www.gravitypower.net ), is an unconventional PSH design that removes the need for reservoirs, providing an alternative with similar scale, lower cost and better operating characteristics. Like PSH it elevates mass to store energy, but instead of pumping water from a low reservoir to a high reservoir it hydraulically elevates a massive piston in a water-filled shaft (see figure below). On demand the piston descends, forcing water back through the pump-turbine to spin a generator and produce power.
Net energy stored is “mgh”, i.e. piston mass m (minus the mass of water displaced) multiplied by the gravitational constant g and the height the piston is lifted h. Both m and h are large, providing enormous storage on very little land. Some of the parameters for practical GPPs are:
- Shaft diameter: 20 – 100 meters
- Shaft depth: 500 – 1000 meters
- Piston height: 250 – 500 meters
- Storage mass: 0.5 – 9 million tonnes
- Piston seals: Sliding hydraulic-type
- Turbine pressure: 375–750 meters of head
- Power output: 50 – 1600 megawatts
- Storage capacity: 200 – 6400 megawatt-hours
Note that GPPs require no new science or technology breakthroughs. They use standard, proven hydropower components and conventional shaft construction techniques (people have been digging big holes for a very long time), making it practical for civil construction companies to build utility-scale storage in countless places where previously it was considered impossible, including cities. GPPs need no make-up water, are silent, and are barely visible above ground. They can ramp from zero to full power in seconds, making them an excellent complement to variable wind and solar energy. Cost per kilowatt-hour decreases and efficiency increases as plant size increases, with AC-to-AC efficiency reaching an excellent 84% in large plants.
Compared to CSP with thermal storage, PV solar with GPP storage is both cheaper and more flexible due to its ability to store electricity from any source. Based on detailed construction plans from a leading underground engineering company, large GPPs will have a lower cost/MW than natural gas peaking plants. Applications include peaking power, ancillary services, intermediate power and time-shifting of renewable energy.
Going back to the Tucson PV+battery plant, let’s see how a PV+GPP plant would compare:
In addition to its much larger scale the PV+GPP plant has a couple of particularly noteworthy features: first, its output during the peak hours just after sunset is higher than its daytime power output (800 MW vs. 524 MW), greatly increasing the value of that power; and second, its storage cost per kWh is almost 5 times lower than the PV+battery plant.
Unlike batteries, where costs are roughly proportional to storage capacity, GPP construction and equipment scale factors drive the cost of storage down as plant size and duration increase. Combined with the usual construction learning curve, over time we can expect GPP diurnal storage cost/kWh for large plants to drop close to one cent per kWh— far less than almost anyone currently imagines.
Storage this inexpensive has interesting implications. Instead of providing only four hours of peaking power output, it will be cost effective to provide enough storage to last all night. With daytime solar PV energy already costing roughly 3¢/kWh in much of the world, and still dropping, we can expect 24-hour solar energy costs in those regions to approach 4¢/kWh on most days. This is a fraction of the cost of fossil energy. Other regions won’t be far behind. And since GPPs can store electricity from any source they can be used in conjunction with wind or backup power to compensate for loss of solar energy on cloudy days.
Battery storage does have advantages; it can be installed quickly, its input and output power can vary over a wide range, and relatively small installations are nearly as cost effective as large ones. But storage customers should ask themselves if the advantages of batteries are worth paying four or five times more than the alternative. In some cases the answer will be yes. For large plants and large scale conversion to renewable energy, however, storage alternatives such as Gravity Power Plants will be very hard to beat.
GP will gain market acceptance by building a 1 MW, 0.5 MWh GPP demonstration plant in Wilson, Kansas using an Atlas F missile silo as its power shaft, or at a site in Bavaria, Germany. System construction is expected to begin in 2019. Thereafter GP will license GPP technology and sell turnkey plants.
In 2017 German company Gravity Energy AG licensed GPP technology for application in Europe and made an initial €350,000 payment. If successful with financing efforts it will fund seal testing, contribute to the construction of the demonstration plant, and pay annual license fees in 2018 and beyond. GP will receive 40% of licensed GPP project fees for sales in Europe.
China has massive market potential with the planned addition of tens of GW of new pumped storage hydro over the next decade to support many GW of new wind and solar constructed annually. Two Chinese companies are currently considering a GP investment and/or project. The Moroccan Agency for Solar Energy (MASEN) has determined that GPPs will be qualified to bid into future MASEN solar + storage RFPs once the demonstration plant is complete. GP is currently in discussions with large entities in the Kingdom of Saudi Arabia, including its national utility, which are considering participation in development of the GPP technology for solar + storage capacity at large scale. GP has visited South Africa which holds promise given their power needs and large number of disused mineshafts.
How GP’s business works:
In some markets:
- Find a buyer, such as a utility, Independent Power Producer (power plant owner), or developer
- Sell them a plant
- Build the plant
- Provide on-going plant services
In other markets:
- Identify a specific need for bulk electricity storage
- Find and secure a good location for a plant
- Sign agreements with sources of power (solar, wind, nuclear, fossil)
- Obtain a 20-30 year power purchase agreement with the local utility
- Arrange plant financing (GP puts up 20-30%, borrows the rest)
- Build the plant
- Operate the plant for the full term of the power purchase agreement, financially backed by a utility or government with a capacity payment that provide adequate debt coverage for debt repayment and a variable component to cover costs and provide a fee for operation.
- By the end of the power purchase agreement the plant is debt is paid off and an acceptable return on equity has been received.
- Obtain another power purchase agreement
Management has experience overseeing the construction of constructing several dozen plants simultaneously.
Gravity Power’s strategy is to complete system seal testing, help finance a demonstration plant in an existing Kansas missile silo, fund Gravity Power Plant marketing within the Americas, Europe, China, Africa and the Middle East and for corporate purposes.
The Company projects the sale of up to ten utility scale projects ranging in size from 50 MW to 1,200 MW over the next five years. The Company recently signed an exclusive license Agreement with Gravity Energy AG, a German Corporation, which will pay GP license fees and fund seal testing and much if not all of the cost of GP’s demonstration plant in Bavaria, Germany. Four of the first ten projects sold are projected to be developed by the AG in its licensed EU territories.
- Secured patents in 31 countries covering approximately 85 % of the world markets.
- Completed a license agreement for Europe.
- Secured commercial project interest in various world markets contingent on completion of the technology demonstration.
- Raised $5 million in cash and $3.5 million of in-kind investment.
- Bill Nye
- Cleantech Concepts, “Grid-Level Storage: Are We Missing the Boat?”
- Duurzaambedrijfsleven, “Gravity Power Plants: old form of energy storage, in a new look”
- Journal of Renewable and Sustainable Energy, “Sizing and economic analysis of gravity storage”
- POWER Magazine, “Let Gravity Store the Energy”
- The Economist, Technology Quarterly, Q4 2014, “Smooth Operators”
- The Economist, Technology Quarterly, Q1 2012, “Packing some power”
- POWER Magazine, “Energy Storage Enables Just-in-Time Generation”
The management team has deep experience in developing new technology, understanding power markets, developing, financing, constructing, staffing and operating power generation projects. It is well positioned to commercialize the technology.
Tom Mason is a recognized expert in power generation and gas turbine technology. He was Executive Vice President of Calpine and President of Calpine Power Company, responsible for the largest fleet of gas-fired power plants in the world and the world's largest geothermal facility. While at Calpine he managed the simultaneous construction of 30 power plants, most of which were 500 MW or above. Prior to that, Tom was President and COO of CalEnergy (now Berkshire Hathaway Energy) and prior to that with Solar Gas Turbines and Commonwealth Edison.
Tom has extensive experience in power grid deregulation and restructuring. He is an engineering graduate of Purdue University and holds an MBA from the University of Chicago.
Jim Fiske leads the team developing the new Gravity Power Plant (GPP) and has spent over 30 years in technology R&D and commercialization. He has founded three venture-funded companies and led R&D efforts in fields ranging from high speed digital electronics to electromechanical energy storage systems. He has won research grants from organizations including the National Science Foundation, the Department of Energy, and the Air Force Office of Scientific Research. He received his Electrical Engineering & Computer Science degree from the Massachusetts Institute of Technology.
Chris Grieco joined GP in March 2009 and brings over 25 years of technical and business management experience in power generation, renewable energy, energy storage and transportation. Previously he served as Head of Technology for Dehlsen Associates, LLC, the founders of Zond Wind (now GE Wind) and Clipper Wind (UTC Wind). Chris also spent 3 years as COO building a startup company now invested in by Bill Gates and Vinod Khosla (EcoMotors).
Chris spent 12 years with Ford Motor Company in engineering and mergers and acquisitions. He received the Henry Ford Technology Award, the highest technical achievement for new technology commercialized within the Ford Motor Company. Chris received a Master of Science degree in Mechanical Engineering from the University of Michigan, a B.S. degree in Mechanical Engineering from The Ohio State University, and holds several global patents.
Mr. David Gelbaum has been the Chairman of the Board for Entech Solar, Inc. since January 2009. From 1989 to 2002, Mr. Gelbaum performed quantitative modeling for stock price returns and derivative securities at TGS Management. From 1972 to 1989, he served at Oakley & Sutton in a similar capacity. He is a Co-Trustee of The Quercus Trust. He serves as a Director of Standard Renewable Energy, LP and AirDye Solutions LLC. Mr. Gelbaum has been a Director of Entech Solar, Inc. since February 21, 2008 and Colorep, Inc. since April 2009. He served as a Director of Thermoenergy Corp. from September 2008 to January 22, 2009 and Energy Focus, Inc. since February 2009. He served as a Board Observer at Axion Power International Inc. since February 2010 and served as Director from September 2009 to March 3, 2010. He served as Board Observer of Energy Focus, Inc. Mr. Gelbaum graduated from University of California, Irvine in 1972.
Use of Proceeds
- Obtaining and maintaining global ownership rights (patents) to the GP technology.
- Financial Review in preparation for a $1 million Netcapital round.
- Expenses used for business development activities and a planned $18 million raise.
Be a Part of Gravity Power, LLC
This is an offering of Membership Units, under registration exemption 4(a)(6), in Gravity Power, LLC. This offering must raise at least $10,000 by February 8, 2019 at 6:59pm ET. If this offering doesn’t reach its target, then your money will be refunded. Gravity Power, LLC may issue additional securities to raise up to $106,998, the offering’s maximum.
If the offering is successful at raising the maximum amount, then the company’s implied valuation after the offering (sometimes called its post-money valuation) will be:
11,072,292 units × $1.16 per unit = $12,843,859 implied valuation
Gravity Power, LLC’s SEC Filings
The Offering Statement is a formal description of the company and this transaction. It’s filed with the SEC to comply with the requirements of exemption 4(a)(6) of the Securities Act of 1933.
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