Good morning, everybody. Welcome to Energy Vault's first Investor and Analyst Day. On stage, I'd like to welcome Bernie Colson, who's going to take us through the Safe Harbor language.
Good morning. Welcome to Energy Vault's inaugural Investor and Analyst Day. Thanks for being here with us today, those here in New York, as well as those joining us virtually. The full Investor and Analyst Day presentation, first quarter financial results, press release, and an abridged earnings presentation are all available now on our investor website. We will be referring to these materials throughout the day. A replay of this event will also be made available later today on the investor relations page of our website. The entirety of the Investor and Analyst Day is being recorded and broadcast virtually. Please note that Energy Vault's first quarter 2024 earnings release, as well as today's Investor and Analyst Day presentation, will contain forward-looking statements that are subject to risks and uncertainties.
These forward-looking statements are only estimates and may differ materially from the actual future events or results due to a variety of factors. We caution everyone to be guided in their analysis of Energy Vault by referring to our SEC filings for a list of factors that may cause our results to differ from those anticipated in any forward-looking statement. We undertake no obligation to publicly update or revise any forward-looking statements except as required by law. In addition, please note that we will be presenting and discussing certain non-GAAP information. Please refer to the Safe Harbor disclaimer and non-GAAP financial measures presented in our earnings release for more details, including a reconciliation to comparable GAAP measures.
History has shown us that true progress is the undertaking of the few, made by those that race towards the biggest challenges and tackle the unknown with conviction, fueled by the people that take on questions others deem impossible, unlocking opportunity with their answers. Today, together, we will unlock our vault and share with you all that it contains. Within it is our journey, one that's taking us to all four corners of the globe. Our energy storage technology is making clean power flourish, transforming it from a minor contributor to a major element of power grids, reliably powering homes, offices, businesses, communities in a way that's unique, safe, sustainable, and indigenous. What others see as the future, we're making happen right now, delivering projects that can be seen in real time, building infrastructure and licensing our technology around the world.
Within our vault is our hardware, with its short, long, and ultra-long duration capabilities, as well as our cutting-edge hybrid-enabled software that can seamlessly orchestrate and optimize the most ambitious operational needs. Our unparalleled expertise is in the vault, too, with our dedicated global R&D and engineering teams always looking to the future, addressing the big challenges and answering our toughest questions, ones that affect us all today and for generations to come. Our journey is only just beginning. Already, it's accelerating. The momentum of clean power is unstoppable, and our storage is the essential driver for it happening better, faster, and quicker than anyone thought possible. We're in the right place at the right time, and we've opened the vault. Take a look and see what's inside.
I'm delighted to welcome to the stage Robert Piconi, our Chairman of the Board and Chief Executive Officer.
Okay, good morning, afternoon, and evening to everybody. I appreciate, all of you that have joined us here, in New York this morning. It is, great to be back. I also want to welcome everybody that's dialing in. We have a few hundred people actually, that have dialed in for this event, so welcome to all of you. Great to be back here, where just over two years ago, we took the company public on Valentine's Day in 2022. Amazing, the last two years and what it's been.
And I think in terms of timing, and as I think about the timing of us having this dialogue and this concept of unlocking the vault, and what we've done in the last two years, in different solutions all over the world, four corners of the world, different technologies, it is the right time to have this discussion. And why is that? This is now a discussion not about what will come, or what needs to be proven, or what we are going to do. It's building off a base of what we've already done, from turning over 1 GWh already in the United States, for example, in battery projects, getting our technology up and operating, for example, in China. It will be a very data-driven discussion today.
As you would expect, this is an investor day, so I think there'll be a lot of transparency. We have a new CFO that I'll be introducing here in a minute that's gonna be covering most of that. But it will also be a customer-driven discussion, meaning this is a discussion that's gonna come from also testimonials from our customers that are operating the systems that we built and delivered. So in terms of us having a dialogue, I think, with investors now about what we've done in the last two years, but then, very importantly, what we're going to be doing in the next few years as an investment thesis, it's quite a strong, compelling message we feel that we've put together today. And with what we're doing in the energy storage space and transforming how we deploy-...
solutions, how we solve customer problems from a mentality and mindset, I hope you'll agree with me that we're really innovating in ways no one has ever done in energy storage, and at a speed and velocity that has not been seen. On the agenda here, we've got a great portfolio of things to discuss. I'm gonna spend some time up front talking about some of the state of the business. We are gonna get into some numbers here right away, and go over some of the things we are announcing new today.
So part of this day is not only about getting into what we've done, getting into what we're going to be doing over the next few years, so we will be sharing some of that guidance, but today, we're also announcing new customers, new products, new regions, and also sharing a little bit about our business model, opening up, the kimono a little bit on how some of these things are gonna flow over the next few years. We've got a great and deep set of discussions around our product portfolio, so I think that's fundamental and important. It's a great, I think, time for us to be talking about that technology, given what's happening in the market.
Uniquely, just in the last two weeks, I've spent 10 of those days going around the world, into China, also in Saudi Arabia, that I'll talk about for the World Economic Forum, and then coming back here... actually flew back over the pole, so it was quite a round trip. I'm gonna share some of those perspectives because there are some transformational things happening in energy, transformational in terms of the amount of just the pure terawatt demand that we're seeing and that the world is seeing, and a lot of questions of how we're gonna meet that demand. Absolutely, I think, what would be undisputed and not disputed at all is energy storage is gonna play an important role.
We're gonna be finishing with Michael Beer, our new CFO, that's, I think, what is this, your, I think, fourth week or third week, Michael, on the job? Fourth week on the job. Very excited to have Michael here and, having him covering the bulk of what we're gonna be going over financially, both in terms of the results we announced yesterday, that hopefully many of you have seen, as well as, importantly, some guidance as we look and standing today over the next 18 months. So it's another, I think, unique time, given we're progressed here in 2024. We have pretty good visibility, as you would expect, in terms of the rest of this year, but as well, as what we have underway into, 2025. So Michael's gonna be covering that.
We will insert some question and answer periods within this, and a lot of very exciting content and videos directly from our customers. That's how we lead. That's what drives our company. At the end of the day, we can say, and you can believe what you want from what comes from our mouths, but at the end of the day, it's the customer that decides who's best. They're choosing us. That feels great, and we're gonna share with you what that's gonna look like over the next few years. Okay, we're gonna start with numbers, and let's first start by looking back over the last two years. We built almost $500 million in revenue over the last two years.
I think in energy storage is obviously a newer space from a technology perspective, but as an energy storage company, there are some that have been around for 10-15 years, pretty unprecedented in what we've done here in the first 24 months of revenue, and with a gross margin profile that is quite unusual in this space as well. So to have a blended double-digit gross margin, a combination of businesses where we've been able to monetize, for example, our gravity energy storage in a long-duration market that is still evolving and still can be described as nascent, I think that's gonna be changing and more quickly than we thought. I'll share with you why in a little bit. But also built and built a very large funnel.
Marco Terruzzin is here, our Chief Product and Commercial Officer, that if you start from the left side, almost 10 GWh of things that's either awarded or shortlisted. Very interestingly, over 60% of that, that's awarded and shortlisted, comes from either existing customers, where we've already turned things over, or strategic partners, investors. So obviously, a high confidence there. We're gonna talk about that a little later. Contracted of the 2 GWh, some of which we've seen in some of the revenue already, but a full 1 GWh now in operation, and you're gonna be hearing from our customers in that regard.
But very importantly, in our first two years, all the projects we've delivered on time, on budget, safe, and again, no surprise the priority that is today, especially with some of the incidents that have occurred in some of the technologies, but with the team we've built, not a surprise to me that we're managing that very well, and all with quality. Akshay Ladwa was here and gonna be talking a little bit about our software and our execution that he's driving for the company. And then I think very importantly for investors, strong cash position. We have managed that and continue to manage that well.
It's very important because that gives us the optionality and the flexibility as a company to do things like investing in our R&D centers and new customer centers that you're gonna learn more about today, to make some strategic investments as we've done in key strategic partners and just keep the working capital going through a business. That's been a tough last two years between the interest rate environment, what's happening on the geopolitical arena. So we have to continue to plan for the unexpected and continue to manage as the stewards of investor and shareholder money. No debt on the balance sheet, and I think importantly, we have not, nor do we have plans to do any dilutive type of financing.
I think if you look at a company of our size and scale and our growth, that's something quite unique, something we're proud of, but always looking now as we're growing more and more for continuing to look at ways to get growth capital into the company, with some of the business models that we're gonna be sharing with you today. If you look on the right side of that page across our gravity, our battery and hydrogen portfolio, very interestingly, monetizing in the business model in different ways. Gravity through licenses, and in some of the biggest markets in the world, like China. We are building out and have built out over 1 GWh of lithium-ion batteries.
Then another business model with the green hydrogen, the largest one in the U.S., announced with the largest California utility. We own that project. It's a 10.5 year tolling agreement. So different technologies, different business models, all managed in a progression that we feel very good about, and with a customer set, as you read there, that is really some of the largest players in their respective, either states or in their category, like, IPP. So China, if you follow us closely, which I think most of you, either on the call or here in the room, do, we had some big announcements over the weekend. The first operation and testing, successful of the system that's charging and discharging our first gravity system in Rudong in China. It was grid interconnected last year in December.
Mechanically complete a little earlier in the Q3, so everything's progressed, despite two COVID shutdowns in Shanghai, progressed in a very positive way with that, and up to and including, this past weekend. I was just there the week before in Shanghai. I'll share a little bit, more from that trip. We also announced, with China Tianying, an extension of another seven and a half years of our, license agreement, which will bring future royalties. On the left-hand side, some, again, top customers, Wellhead, one of the largest and oldest companies in California of, gas peaker plants, but now going with hybridization. That came online in the summer at a very critical period.
For those of you that know California, it's a, it's a tough market, especially if you're building things right in the middle of a neighborhood, which is where this was. So not a small achievement there, at an important time for Wellhead. NV Energy, the largest energy company, largest utility in the state of Nevada, completed a project in four months, 440 MWh. Never been done in that time frame before to get them up and energized before the end of the year. Big accomplishment of the team putting that together and the partners we used. Jupiter Power, the largest IPP in ERCOT, BlackRock-backed, another battery project brought online and energized just January last quarter, and now being brought to final completion here this quarter.
So a lot, a lot happening that culminated in the Pacific Gas and Electric announcement we made about a year and a half ago, and now building and delivering that project this summer. It was a great culmination, if you look at the first 12 months we had, demonstrating our energy solution approach of addressing an ultra-long duration need that Pacific Gas and Electric thought could only be solved with gas, because of the nature of what was a requirement. They bring in diesel gen every year. We proposed a sustainable solution. We designed it, we architected it, we brought the best technology to the market to do it, and now we're deploying it. Again, another first, and we'll be one of the first ones operational.
It really solidifies our leadership globally in long duration technology to have these technologies not only announced, not only being built, the gravity system now operating in China, and now this ultra-long duration microgrid will be operating this year. All first, very excited, and that everything I've just described and spending some time on it, really starts with leadership and people. I'm talking about this up front. It's not just about the 10 people that you see on this chart, it's the 180 strong of our employees. That's not a large number, by the way.
It shows the flexibility of our business model, and also the, not only the CapEx light, but the resource-light way we deal with technology development, but are very resourced to work with our customers in developing projects, as well as executing those projects safely and on time. We've done it, so it's not something that I'm standing here saying we're going to do. We have been doing that. It is a strength and core value of this company to be known about delivery and execution. The other thing, if you look at this team from a leadership perspective, we are very global. This is not a U.S. centric team at all. Everyone you see here is here, except Andrea Pedretti, our CTO, who's Swiss by birth, but living now in California.
And, he's hosting a technology collaboration session with also some customers, hence he could not be here in person. Gonca Icoren is here, our head of HR, there in the back, from Turkey originally. Worked in Switzerland, from the healthcare area, Pfizer, Amgen out in California. We were lucky to grab her when we were out there, and avoided a move. But again, global, multinational, functionally excellent, and the people function, and has been a great partner as we've built this company very quickly. Lawrence Alexander is here. You heard from him a little bit earlier, based out of the U.K. and handles all of our marketing PR activity.
Michael Beer, we announced a few weeks ago, and is here, there in the back of the room, our new CFO, and will be taking through a lot of the financial areas, but a lot of experience, no stranger to high growth and public companies. Josh McMorrow, who's based out of Germany, is also here, our Chief Legal Officer of the company, and just a wealth of experience dealing globally in all the parts of the world where we're strong in building and growing. Chris Wiese here, also in the front. Chris, I've worked with for over 20 years across four companies. So we know each other. That's for the good and the bad, I guess you say, and that makes work very well and very lucky to have him.
Pulled him out of retirement to come and help us out. He's in Texas there, where we are announcing a new solution center for energy that's already being built in collaboration with Enel Green Power. Marco Terruzzin, our Chief Product and Commercial Officer, an Italian by birth, has worked all over the year all over the world, including seven years in China after the Kyoto Protocol, looking at putting in place new carbon pricing models there. So just a wealth of experience. Akshay Ladwa, from India, originally, more experience, I think, from an integration perspective than most in the world, having spent a lot of time at Greensmith Energy and integrating over 100 projects in 12 countries.
There is a reason we've been able to commission these systems in the last 12 months, bring them up safely, bring them up at the quality customers expect. And it's not just about developing good technology. It starts with people and experience. Those customers that were on that prior stage do not give orders to new customers that present risks to them. Public utilities do not take risk. Companies like Wellhead, tried and true, very conservative company, they do not take risk. They do bet on people, and they do bet on some of the best people in the industry. I feel very good about this team. Finishing here, Kevin Keough, who we crossed paths at Danaher, a company many of you in the financial community know, on the corporate development side, and assisting us on development initiatives for the company.
Okay, starting off here to talk a little bit about what are we announcing today that's new. There is a lot new. You know, I think with Energy Vault, you can always expect the unexpected. There's a lot that goes on behind the scenes we get done with a very efficient team. With China, you saw that we announced the first operation of the system and the testing of the system, the discharging of the system for the first time, but we also announced an extension of that license agreement, and that's fundamental. You'll remember that they paid and prepaid $50 million upfront to have that right to deploy the technology. Of course, what's the most exciting part for us is getting to deployment at volume.
So having this first system up and running now, but already they had started six months ago a second system that was already out of the ground, obviously shows a lot of confidence from them, but already announced also 3.7 GWh of projects in gravity. I mean, that's a number that is not announced by any other long-duration storage technology, showing the flexibility of the technology, that the mandate in China, four hours, they are using that system for four hours. So, just tremendous in terms of the confidence in building that out. That is a long technical life asset. That's part of the reason they're deploying it initially for the four hours. Long duration will come in China as well, but, I don't think we could have chosen a better place, given it's the largest energy storage market in the world.
Shortly, China will be deploying and has been at a pace of renewables greater than the rest of the world combined. That's not a light statement, with a mandate of 20% of storage at power 4x what's gonna probably become six hours. Those are big numbers. You can do the math on that. You've seen the numbers on China. There's a reason we went there to get the technology developed, in a way, that positions us well. A lot of confidence, I hope it gives the investor community the fact that, when I was there 10 days ago, signing a doubling of the time of the license agreement around our, our core EVx technology there. So not a lot of companies doing that, I think, in China these days. We've worked very well with our partner, China Tianying.
The other thing to mention, and we announced already, is another license agreement for Gravity in South Africa. That's not just South Africa, that's the SADC region, so that includes 16 member states. Very excited about the potential there. I'll mention, and it's with one of the largest public... Well, the largest publicly traded EPC in South Africa, WBHO. The company is called GESSOL itself, which is the partnership that was created to build out the technology. What's not on here is ACWA Power. So, this is public already, but ACWA Power, which is a $+35 billion desalination plant player, one of the largest in the world. They're also one of the largest EPCs, backed by the Public Investment Fund in Saudi Arabia.
They did a competition of 20 different companies for long-duration energy storage to look at helping the needs, in particular in South Africa, with projects and energy storage to combine with renewables, and we were one of the two companies selected. So that was released, I believe, in March by ACWA Power directly, and we are moving on that partnership and now looking at locations, not just in Africa, with them. So, very excited about that, given what that brings. And then very excitedly, just to move down the page to the left, we announced this this morning, the entry into Australia and an entry into what is not just a country, but a continent. I think one of the most important growth markets for energy storage in the world.
They're looking at some fascinating things in that continent, including building out massive solar to leverage that sun, looking at building out subsea DC cables to go to places like Singapore, for example, or into Southeast Asia, to power some of the largest cities in the world, but also a very strong utility and IPP environment in and of itself. A lot of companies there, like one of our investment partners, Korea Zinc, big strategies there to make green hydrogen. To make green hydrogen with the sun, you need long-duration storage to drive electrolysis. We're essentially splitting water, making green hydrogen, so that's gonna be very important. To have a market entry where we have what we announced this morning with ACEN, which is based in Southeast Asia, but is an IPP in operations in Australia.
It's one of the owners of one of the largest solar plants, the New England Solar Plant in Australia, 720 MW. So this 400 MWh that we announced this morning with ACEN, is gonna be coupling to that, to that solar development, for storage. So very excited. There's actually two projects that's a part of that 400 MWh. We will be getting started on that the second half of this year and having it deployed through 2025. Another very large project, we developed, it's listed here, is and, and will be the largest battery project in the world, developed there in Australia. Working on that, and you'll be hearing more about that project.
But suffice to say, we have other things going on, here in Australia as well, in our very near term pipeline and funnel. A lot going on in a country that we've always represented as a strategic growth priority for us. You'll remember that we appointed our first non-US-based board member last quarter, Stephanie Unwin. She's the CEO of Horizon Power. So there was no coincidence there in terms of the timing, as we have been developing in the Australian market since even back to the IPO. Recall that Korea Zinc invested $50 million in the company in January, just before the IPO. So Korea Zinc, based in obviously in Korea, but they're the largest non-ferrous metals producer in the world.
So that's not only zinc, that's silver, that's lead, a soft metal called indium, which is a rare earth metal. So all of that core ore operations is in Australia, and they have publicly stated global aspirations there around green hydrogen, the development of that, and being one of the largest net exporters from Australia into Southeast Asia, into Korea with that. I'm very excited to have them as a strategic partner, and supporting what their plans are. They wanna have the first 100% green zinc production facility. I really—I can't speak enough about them and their... In not only setting goals, but putting wood behind the arrow with investment and build out.
So, with their subsidiary, Ark Energy, they acquired over 9 gigawatts of wind and solar projects, so this was all publicly announced in the last 18 months. So they are moving and developing, and real excited about that partnership. On the right side there, some of the new portfolio of things that we're announcing. And, if you look at those pictures, and the development of what's behind that, that we're gonna share in some detail today, we're announcing many new applications of our gravity. Those applications are focused on, first of all, economics, so really achieving the lowest levelized cost over time. As you know, gravity is not new. It's actually the law, in some aspects, and something that's the basis of what today is about 95% of all energy storage, which are pumped hydroelectric dams.
So we are leveraging those applications, continuing to innovate. You're gonna hear from some of our innovation leaders on this today. You'll see there EV0, EVy. Some of these things are also expanding our total addressable market, so this will be new. We're very excited today to be announcing a new strategic partnership with Skidmore, Owings & Merrill. Because they have a large office here in New York, for the people in the room, you may know them, so we're—they're one of the most renowned engineering and architectural firms. Bill Baker is here. He will be up on stage with me today. He, as a part of SOM, was the lead designer and architect around the Burj Khalifa, the largest building in the world, 820 meters.
There are gonna be many large superstructures built, many, many over the next 10, 20, 30 years. We can do it very efficiently now, but most importantly, we are going to be mandated, and it will be required, to look at things like carbon payback on these buildings. We've been innovating around integrating energy storage, and in particular, gravity energy storage, in the design of superstructures, and tall buildings. Very excited to share that. It does introduce a whole new addressable market for us that I think from a financial or analyst perspective, would not have been included in how you've been thinking about, some of the things that are addressable to us.
I think one of the, hopefully, the confidences we've earned is that we are no stranger to taking technology and applying it to solve either customer problems or environmental problems in a very strong way. This is another example of that. We're also gonna have Dr. José Andrade, that's been working with Energy Vault since the beginning, chair of Mechanical and Civil Engineering at Caltech, which probably has one of the most world-renowned seismic studies in the world. So we're gonna be talking about and sharing a little bit about what we're doing on that technology side and what that means in terms of how we're thinking about the evolution of the company and the evolution of the gravity technology.
And then finally, we're gonna be talking about some other projects that are known, I think, to the community in terms of the PG&E project with Calistoga. That is one that we are keeping on our balance sheet and have a 10.5 year tolling agreement. In Snyder, Texas, we also acquired a 57-megawatt interconnect. That's another project we are gonna be owning, keeping on our balance sheet. We are and will be doing project financing. So from just a cash perspective, there's pretty attractive models out there to project finance these, given the... All of these projects are low double-digit, unlevered IRRs. We're gonna talk a little bit more about this market and how we see it evolving, but we see a very attractive space here for attractive assets to own them.
We don't have to own them for their life. There's obviously a lot of companies where we can flip those out to for cash as needed, but they are assets and a part of our business model that we will be continuing to evolve as we want to become, as a public company, much more predictable, a bit in our cash flows, as our revenues go every year. I think one of the things you've seen with us is the nature of being a young company and in a new growth space. I don't want to apologize for this, but we have lumpy cash flows and lumpy type of revenue. It's a nature of being in a new growth area.
I'm personally no stranger to it from 33 years working across both public companies, some of the largest and new startup and innovative companies that are growing fast. But I think incumbent upon us as we do our planning, to look at our business models, look at the leverage of our team today, look at how we spend our CapEx and our OpEx, and putting in place something that is gonna be a very strong business model for shareholders, and excited to share a little bit more about that with you today. And then finally, we have an R&D center that we've been building out, a customer solution center that's a part of the initial collaboration with Enel Green Power in Texas. We acquired that an interconnect from them there.
We have a research and development collaboration agreement with them that initially started with a project we're gonna turn over. Enel has a lot of global aspirations, they're in 33 countries, Enel Green Power. In addition, they wanna see a lot of our newer technologies proven out at a commercial scale. And so this isn't just about one application of gravity, but as you're gonna hear, it's about some of these new applications of gravity, for example, taking advantage of slopes that exist. And there are many, meaning in each country, there are thousands of places where instead of building a structure and that cost to build a structure like an EVX, we can leverage existing terrain.
Leverage, for example, our same technology with our composite blocks, or as you're gonna learn today, even with water, in a modular pumped hydro solution, which is what we received the award from ACWA Power for, that achieves economics that have not been achieved in long duration or projected. And that's because, we're limiting that construction cost and leveraging some of the terrain. And so a lot of those new technologies are gonna be built out in this solution center. It's underway. It's happening this year. We will have technologies shown and demonstrated within this year in some of these new things you're gonna learn about today. So very excited.
This will consume, I think, a good chunk of even some of the product in the portfolio, discussion that we're gonna have with some of the leaders, and we're gonna sprinkle in, direct customer testimonials. There is no substitute, and as much as I think about my team, as you can tell, you all will be the judge, of me in the end. However, there is no substitute to hearing directly from our customers where we build projects, turn them over, they're live and operating, and listen to them talk about, how we've executed together. Return from this trip, two things to highlight here, and I'll start in China, in the bottom right.
That was the beginning of the trip that led to the announcement of the new agreement and, no coincidence, but the full operation of the system and as witnessed by some of the government officials locally. This was an important milestone for us, not only all the milestones that were achieved the last six months as we brought that system up and going through what's a complex process in China, in a, you know, a government-mandated and controlled environment, even at each province level, in achieving what we did in terms of showing that operation. A lot of discussion on, "Hey, how is gravity doing? How's the first system coming? Is everything gonna work as planned?" CNBC was there, CNBC Asia. They did a 30-minute video.
We're translating it for you. One of the key outputs of that is the performance above expectations. We're gonna be sharing more of that, as our local partner puts that data together, so you'll be seeing some more updates on that. Very exciting, very exciting, also, the extension of the agreement. The other trip we had was in Riyadh, and I was accompanied by Bill Gross, who's a cofounder of Energy Vault, also the founder of Idealab. Really interesting to be a part of that meeting, that it was called a global meeting looking at collaboration, development, and energy. And the energy topics we all know, not only renewables, but getting into the equity of energy and energy development.
And as well, the fundamental question coming out of those sessions that had a breakout group, that's advanced energy solutions. There's multiple CEOs from across the world, a part of that, both new technology and existing. So I've been a part of that for about 18 months, and we signed a new collaboration agreement with the World Economic Forum, as you see there. The main question coming out of there, fundamental, with all the growth that's coming, and even well above the projections, I'm gonna share some data, how are we gonna meet that demand for energy? And do we have this pending energy crisis coming? It got a lot of dialogue.
Interesting, nuclear has come, you know, strong back into an SMR, strong back into this discussion, and this coexistence that's gonna be, what I believe will be for a long time, especially with some of the new technologies that make even fossil fuel more efficient and less GHG emitting. We're gonna need all the power we can get. Absolutely, renewables and storage will play a key component of that, but it, it really is massive. And if you, if you look at some of the data out here, and this is just... I'll start with on the left-hand side. What you're looking at in 2023 is about under $1 trillion of investments that have been made, versus by 2030 . So that's not a 2050 number, that is a 2030 growth of the investment that would be required.
It's, I think, $4-$5 trillion. So we would be on track for 2050 net carbon neutral. So this is definitely a WEF, a World Economic Forum type of topic, because it puts things front and center on what are countries doing, to try to increase that spending? It is a large gap, I think, in what we see today. But the other thing is the, the more, I think, impressive in a way, is this chart on the right-hand side, which, which we're looking at, is just, in two years and what was forecasted in 2022 versus the light blue, what was forecasted in 2023. So in just one year, the forecasts have massively ramped in terms of what that worldwide energy storage demand outlook in gigawatt hours is gonna be. And that's just in one year.
And what is not a surprise, I know, to all of you, of why is that happening? This isn't only about this part on the left here, this demand growth, and what's happening with electric vehicles and electrification, but think about the last 3-6 months, what's been so topical. So this is about now generative AI and just pure processing, hyperscalers, Bitcoin. But with all of that productivity that AI is intended to enable, that is gonna suck a lot of power. And a lot of people are now thinking about how are we gonna meet that demand. A lot of that, with the wind and solar build-out, you see their supply variability, that will create more intermittency and therefore a higher demand.
I know this is no surprise to anybody here, storage will continue to be a strong imperative for that. And as you look at this with that same chart on the left, this breaks it out a little bit by segment. You know, we typically, and as a company, and I think just as an industry, it's hard to go out more than, you know, 3, 5, 8 years, just because things change so much. If you go back to when we founded the company, if I go back to that, 2018, 2017, we had a view of the world then that thought long duration would be here and be even half of the market of new deployments right now. And it's actually still developing. Still developing.
We uniquely are monetizing our long duration technology through licensing. No one else is. And doing that in a very highly profitable way that will bring future royalties with volume when it comes, and it will come. But this gives you a sense, just by technology, the types of numbers that are gonna be spent. We're very focused in this next, you know, 2, 4, 6 years that drives our technologies that we're bringing to market today for that future. And even with hydrogen, the development of hydrogen, we don't believe it's any silver bullet out there, I think, for the world, but it will have a place in some key applications.
As the microgrid backup that we developed, it was the only way to sustainably back up a city of 5,000 residents, turn off the diesel gen that they have to roll in there every year during the fire season. So, the numbers are all there. I know we see them, but it is... When you step back and look at just in the last 12 months, what's been developed, it's pretty staggering. And it has and continues to, I would say, adapt my perspective and our country's perspective on things that we may accelerate a bit more to deal with it. And if you start with the regions of the world where those opportunities are, 90% are in 5 countries. So I wanna simplify this a bit for investors.
This is part of unlocking the vault and opening up a bit how we look at the world. All of this, of course, information will be public and, and online here, but this will give you some of the data that's behind what we're doing. Why are we an energy solutions provider? Why are we unique in that? We are the only energy storage provider in the world that's providing short, long, and these new ultra-long-duration solutions. Clearly, it has to prove out with investors if they believe that will be valuable. Obviously, that's not reflected in the stock price today. But as we focus on it, just to get into the data a bit, these countries represent where we have a lot of focus.
I would not rule out, and especially from what I've learned the last three months, India is doing a lot of things with some of the biggest industrial customers in the world that are based out of India, are looking at big initiatives that are looking at 24/7 renewable. And if you think about 24/7 renewable for industrial, think about what I mentioned about this generative AI and more data centers and that need, because that is absolutely a 24/7 need, that today cannot be met in a renewable way for 24/7. That's economic. That's economic. So I think very exciting there. I, I would add that South Africa is also a very interesting and developing market.
It won't have the numbers yet, just like India doesn't today, but suffice to say, the things that do get done there, and I'd say in particular India, when they're done, they will be large. They will be large. Nothing will be done small, as those things come and catch up. So focused on those high-growth technologies and focused here in the highest growth geographies, we have not only infrastructure over the world, but a lot of our initial customer deployments are in these same spaces. As I said, I think, I think Southern Africa and and Africa as a continent in developing as typical, like they did in telecommunications, skipping generations of tech and jumping right to wireless, I think, they're gonna skip some earlier generations of tech and go right to the more sufficient storage coupled with renewables.
As we move on then, and I think as we're developing out in the regions, just to remind everyone, a bit on what helps inform our perspectives as a company is our strategic advisory board. That's made up of the people that have invested in the company along the way. That's not only our founding investor, Idealab, which is the longest-running technology incubator in the U.S. arguably the most prominent for sure. They're looking at technologies 5- 10 years out. That's interesting. CEMEX, one of the top material companies, material science is fundamental to what we do. SoftBank, known to everyone in terms of the largest VC side. Aramco, the largest energy company in the world. We spent the whole week there. The WEF was two days, but my entire executive team was there for meetings with Aramco.
There are many tentacles to Aramco. They have tremendous global aspirations. They're an investor in us, and we will be playing a role in supporting them and helping them achieve that strategy. And then moving forward, the mining sector has a lot of decarbonization to do, hence investments from BHP, largest mining player, Korea Zinc, as I mentioned, the largest non-ferrous group, and then CNTY, which is environmental waste remediation in China. These things inform us, and Enel Green Power, as you know, 33 countries based in Italy, another important player there. We do a lot of collaboration with them. All of this is an asset that we carry that helps inform where we're putting in our R&D and to make sure it's customer-focused and customer-centric.
So if you look at this, the aspect in our, you know, our, our Chief Commercial Officer, Marco Terruzzin, talks about this all the time, which is we don't approach the customers and just try to shove our products down their throat. We listen, we understand what their problems are, and we bring the technology to market to help solve it. It's fundamental. From calls with customers in Australia, with new customers, from the meetings with Saudi Aramco to the customers in the US, the feedback on this strategy is very positive. It is very unique, and that's what's leading to some of these massive deals. I mean, entering a continent like Australia with 2.6 GWh as you enter, you know, that doesn't happen by accident.
And that's why we're very excited about what that future is gonna hold. From a long-duration perspective in what we're doing, and I've talked about these things, we've booked business, we've monetized, received cash on royalties at 95% gross margins. I think no question, globally, we're bringing things to market in long duration faster than anyone else, with multiple technologies that is live in 2024. No one else can say that. That will inform us and help us learn, as you do in new tech, to help optimize, optimize for economics, learn from customers, continue to build out. Going to the short-duration market, you're gonna hear from Akshay Ladwa. I know this was a surprise a few years ago or even a year ago to investors when we started announcing battery projects.
We built and invested in a few years before a software platform to give us flexibility to manage the coexistence of generation tech. By the way, that's not just renewable, that's also, fossil fuel-based, various storage technologies, not just our own, and manage that in a way that also enables new applications around optimization of charging and discharging, asset management. That is why we're getting selected. As I said, it starts with the experience of the team to do it. We've done that well in the initial projects, been a big part of the revenue number, and even all positive unit economics. I know that was something that, as we started to announce those things, a lot of questions, "Hey, are you buying those projects or bidding them low because you want revenue?" Or, "How are you gonna operate?
You have a new software system. How are you gonna turn that over well? Aren't you gonna get exposed to liquidated damages?" The numbers speak for themselves. I've covered them. As I said, that starts with the people, most of whom are not in this room, that are from Energy Vault and bring that experience. Strategically, then to begin to bring it home here and summarize before we turn it over and take a break. Largest market and growth regions, that's what we're focused on addressing from a market perspective, and we're gonna be sharing more about that portfolio today, as I mentioned.
This theme of becoming more predictable in terms of our cash flows and therefore how we project our revenue, as I said, we've had two years, we're in our third year, still young in an emerging growth area. Obviously, that is a high bar as a public company, and but something we do not take lightly, hence our management of cash, the fact that we have no debt, but also looking at and really getting perspectives on where are the profit pools in this ecosystem of energy storage? So we've done a lot of work here in looking at where those profit pools come from and how we look at more recurring revenue streams. The license and royalty model will be a big part of that. We're gonna be sharing numbers, but the numbers are not small.
The bookings are not only $100 million in the licenses alone, of which $60 million or so we've recognized. The cash payments are over 10 years. Okay, we're gonna share... Michael will be sharing more about that. But the royalty potential, very conservatively, is at $200 million-plus over this same next 8-10 year period. So excited as these things get deployed out, you've seen the numbers in terms of the demand requirement. That's gonna be very exciting. And then we're very focused as, hopefully, you understand and see on the profit potential of this portfolio and how it evolves. And you're gonna see that in what we're gonna be guiding on gross margins.
Not only what we achieved in the first two years, we had a little higher hardware content, hence the single-digit gross margin in 2023 alone. But as you're gonna see, as you saw in our first quarter, 26% on pure battery projects, so no licensing revenue in there. And as we're gonna guide 2024 and 2025, you'll see it, they are double-digit unit economics, which again, at this stage as a company, I think is meeting our expectation, we'll do better as we build this company. Just a few minutes on our business model here. We've talked about our licensing and how that's been playing. You see some of the numbers there.
We've been building and turning over projects that carries an EPC component, which tends to have about a 10% type of margin, 5%-10%, depending on how the project goes, 'cause you're responsible for another supply chain. We will continue to do that, potentially more on what's called an EEQ or an engineered equipment basis, where we may not do the EPC, but provide the integrated solution. That's something we're looking at at every project. As you've seen in our numbers, they've always been positive unit economics. It will continue, and it will increase, as you're gonna see in our projections. But there's also another segment that you're gonna learn more about today in the own and operate. These are things where we have existing projects today on our balance sheet.
We believe there's gonna be more opportunity for that. We believe there's gonna be more volatility in pricing in the market. The severe weather events are not gonna stop. I think they're gonna continue and potentially accelerate, which is unfortunate. We need to really focus on cooling down the planet. So we're gonna continue to see things that we haven't seen before, and I think this demand for energy, the variability, the volatility in those market and for the pricing plays well into how we're positioned, especially with the strategic partners that I mentioned, and the investors, and what some of their aspirations are. In terms of how that manifests itself across the portfolio, we've got our product portfolio on the left side there, in the different business models.
No surprise, gravity in our software, we can and will continue to license that, so you can expect more from us there. The build and transfer we can do across everything, it just depends on the region of the world. We didn't go set up shop in a big way in China, for obvious reasons. South Africa, certain regions of the world, there's no reason for us to go spend that, that money and cash and tie up cash sometimes in those countries. The license model works, but we can also build in certain developing places, and from an own and operate, can really do that anywhere across our technologies. Obviously, we own the software, and can do the asset management. We have bid optimization. Actually, Logan's gonna talk a little bit more about this.
So all the tools we need to operate, operate efficiently, and really achieve differentiated results in that market, we have them and have developed them in-house. Going forward, and I'll wrap up here in the next few minutes. Gravity, we've talked about, continuing licensing. It's operating now. We have a lot of new applications, a lot of which we will be building out, taking advantage of topology or taking advantage of new designs and structures. That's not only gonna be higher profit, higher revenue, but that introduces new addressable markets in the building sector that probably people weren't thinking about, you know, us applying Gravity to, so that's exciting. You know, the market today is conventional battery. 95% of everything is getting deployed globally. Again, we're gonna be doing more and longer duration going forward, this 24/7 need.
It is becoming more prominent with the terawatt growth, but we will continue to build on this core power. You're gonna see a testimonial there. That's an investment we made, if you recall, in a domestic provider for domestic content for lithium-ion batteries. We have very special advantages with that investment that the CEO himself, Lindsay Gorrill, is gonna be sharing with you on a video today. In green hydrogen and these microgrids, we see a lot of opportunities to replicate what we're doing in Calistoga for Pacific Gas and Electric. Craig Horne, who's here today, will be sharing more about that with you.
Then this, the own and operate model, which I think will continue to become a bigger part of our portfolio, given the amount of capital that's interested in facilitating and financing these, and financing these in an attractive way, and how those economics and IRRs work. Those projects, just to give you a little preview, owning those projects come with somewhere around 70% EBITDA streams through the life, with an assumed type of project financing model. So, attractive, where we're gonna do it, and I think helpful as we evolve the company. So I'll finish here. Like we started with data, I'm giving you a little preview of what Michael Beer is gonna be covering of what the next two years are gonna look like.
So from what we see today, and we also, Michael's gonna be sharing a little more simplified way, we talk about our sales funnel in terms of what's contracted, what's actually booked, so what's in our backlog, and then what's that near term, 12-24 month, either project awards and short listings or advanced short listings. So we've simplified that by one phase of the funnel as far as what we report publicly. I think that will be more clear and more near term. Obviously, the numbers are large anyway, but really pulling that a little closer, in terms of the timeframe of converting awards, for example, to bookings, is something we're trying to improve upon as we build the company.
But if you look at this next two years, we're looking at a range of $500 million-$700 million of revenue. There are—you know, the reason that range is a little wide, you can imagine, is, as I've shared, there are some large projects that we work on. We don't try to be everything to everyone and all customers. We focus on the largest opportunities in the largest regions. It's just. It's worth it, and always with customers that aren't one-trick ponies. They're customers that have a portfolio of things that they're gonna be doing over the next ten-plus years. It's about building those relationships, delivering, and delivering with quality, so there's the confidence for them to want to do more with you.
That's why we focused on the large ones, and hence, over 60% of that, that's in this near-term awards and, and short listings for conversion. Over 60% of that today, as we look at 2025, are with existing customers or with, strategic investors, for example. So that's a high level of confidence that gives us in putting these numbers out, and forecasting gross margins of 15%-20% in that period. Reaffirming what I said last quarter, so adjusted EBITDA positive in 2025. And so I think that's a, something that I, I hope gives a lot of confidence, given what we're looking at and some of the things we're gonna talk about in the, in the portfolio today. Okay, that completes my section.
I wanna call up and introduce, Akshay Ladwa here, and I'll turn this over to you, Akshay. Akshay joined the company in 2021. I already mentioned some of his background. He has a, a background even before he joined Greensmith in, I think, 2011. You joined Greensmith?
That's correct.
Okay. Here, I'm gonna pass the baton here to you, but-
Sure.
It's been great to work with Akshay. He's been the architect behind our software that got bought-- got brought to market very quickly. That's enabled, not only our battery portfolio, but our ability to do these hybrid architectures for customers. Interestingly, of the 100 projects that he did when he was at Greensmith, 100% safety record. So that's key and, and part and parcel to how we built the company and attribute to that experience set that I mentioned. So I'll turn it over to you. Thank you.
Thanks, Rob. Good morning, everybody. My name is Akshay Ladwa. I run and manage the Energy Vault solutions at Energy Vault. Here's a quick recap of the last two years. Started at the end of 2021. We immediately got into action, developed our software suite of products, then we expanded ourselves into the lithium-ion battery energy storage space. And finally, the team that you will see as I talk about the different solutions we offer, short, long, and ultra long, and finally, the software. It's focused around hybrids. As we walk through these different type of assets that needs to be orchestrated, the underlying theme is being able to have a hybrid power plant. All of that is enabled by our software suite of products, which we will look at a little bit later on today.
As quoted in the BNEF, the world needs a lot of energy storage. The numbers are big, and the suite of products that we offer here-
Thursday, 25th, April 2024, marked a significant milestone in Nevada's energy landscape with the official ribbon-cutting ceremony of the Reid Gardner Battery Energy Storage System. The event celebrated the transformation of one of Nevada's former coal sites into a standalone battery facility, storing up to 220 MW of power generated from renewable sources. The project, which was completed in a record four months, is a testament to what can be achieved with strong leadership and a commitment to sustainable energy practices.
This site really represents an incredible illustration of the energy transition that's happening in the U.S. Think back to 1965, and on this site sat a brand-new coal-fired power plant. It was 550MW , and it was the power to start to grow Las Vegas. Here we are today, no smokestacks up in the air, and instead behind us is a battery. It really reflects the ability that exists today to capture this fantastic solar energy that exists here in Nevada and use it when our customers need it most.
NV Energy is the state's regulated utility, so we are the largest energy provider in Nevada. Our strategy is to continue to grow our solar and storage. Less reliance on market purchases, primarily from California, but other states as well, and to achieve renewable goals. So we're trying to be 50% renewable by 2030. 6 months to a year would be a reasonable timeframe for a project like this. We broke ground in August and finished in December. four months, really, to build a project like this is just incredible, and I think that's a testament to the partnership between NV Energy and Energy Vault and just the talented people involved all around on this.
Our challenge, right from the outset, was to figure out how to do more with less. Working with our vendors, both in the supply side and on the construction side, to ensure that everything that, you know, needed to come together at the right time, like, could come together.
We were able to work collaboratively with our partners and the customer to actually go online a couple of days ahead of schedule, towards the end of last year, which really served the customer and the utility and what they were trying to achieve out of this project. It also is a testament to the flexibility of the business model that Energy Vault has, in terms of picking the right ecosystem that makes sense for the end customer, and we continue to employ that method, listening to the customer first and understanding how we devise the right solution to serve their need and their purpose.
Energy Vault proved themselves on this project. It's the first project we did of this size. I see Energy Vault doing projects for us in the future.
There is more battery storage development in our future, and it will become-
a critical part of our grid. There aren't a lot of utilities in the country that can say, "Over the course of 2024, our rates are going down." It's projects like this that allow us to capture that sun and use it at times they need it the most, to be able to deliver that critical energy to our customers. So again, I wanna thank everybody for pulling this project off. The NV Energy team just did a remarkable job, and again, our partners at ECI and Energy Vault, thank you, our partners at the IBEW, couldn't have happened without you. An honor to have you here, an honor to show off what, something that we're very proud of, that's gonna be a tremendous benefit for our customers for decades to come.
This is in recognition of the opening of the Reid Gardner Battery Energy Storage System. I commend you for your unwavering commitment to building energy solutions that support Nevada's residents and green energy initiatives. May this new facility inspire further energy innovation. Congratulations.
That was a really nice video for our 400 MWh project in Nevada. Out of the +100 projects I've been part of, I think this one is probably in the top five. It takes a lot of dedication and a really talented team to be able to execute a project of this scale in the really short amount of time. I remember spending my turning 40 on the site. I brought my family over for Thanksgiving, and we had a lunch event on site, and also Christmas night is a very important night. That's the evening of Christmas. We ran full capacity, 220 MW. As we get into the short-duration battery storage systems, the products that we are building here at Energy Vault are anchored around three separate fundamentals.
The first one is we do not believe in having a very prescriptive, well-defined and a constrained product. We'd rather believe in having a platform, allowing our customers, giving them the flexibility, because every... each of these projects is very unique. Every customer is trying to solve for different constraints. The second one is the economics. Economics is at the heart, and it's right in the center of how these projects pencil out. Spending my time back at, before Energy Vault, I was over at BrightNight, which is a large IPP and a project developer. With the understanding of how the projects need to be penciled out, so they can actually get to reality, economics is right in the middle.
Finally, as we just saw the video of being able to deliver the projects, execution is super important. The lithium-ion battery storage project at Energy Vault is called B-Vault. The B-Vault comes in two separate output options. We have the DC and the AC output option. It gives the flexibility for our customers, not only with regards to the selection of the supply chain and equipment, but also different contracting mechanisms. We can offer them, just as Rob mentioned, either an EEQ or an EPC as a full wrap. But also, as we've seen in the last two years, there is significant amount of new entrants into the market. The battery suppliers are now going vertically integrated, which means they're not only manufacturing cells and packs, but they're also starting to manufacture these 20-foot battery enclosures.
Some of our customers we work with, we find they have MSAs with such suppliers, where they'd like to use that, and NV Energy is a real good example of that. Finally, looking at our portfolio, we often come across projects where the customer has constraints around land or around permitting, so the standard off-the-shelf available equipment is not able to fit the site, fit the need of the customer, and Wellhead is a real good example of that. 2023 was a big execution year for us. We delivered, designed, built, engineered, delivered these three projects. As you look across the chart here, we've got the first picture for Wellhead, which is 68 megawatts in CAISO. Second one for NV Energy, 220 megawatts in Nevada, regulated utility. The last one in ERCOT, 100 MW 200MWh
Different equipment. Different states, different equipment, different application. The only thing that is able to tie them together is the integration expertise from Energy Vault. The underlying integration and engineering expertise, which is how do we integrate this variety of different technology into the application that the customer is trying to solve for, and the execution capability? All of that is enabled by our VaultOS software platform, which we have a section on later on today. The B-VAULT battery energy storage product is built around the DC as well as the AC output options. We have a supply chain that we have established partnerships with in Asia. Again, we're not very prescriptive with the battery that gets integrated, but rather we have a suite of different options that our customers can choose from based on the needs of the project....
The speed at which this product was built, designed, built, certified. It is fully certified for UL 9540, as well as all the NFPA safety requirements. And we built our first project in ERCOT using the exact product. The speed at which this was able to come together was possible because of the expertise of our team. We're on to the second generation of our product. Between the first generation and the second one, we've improved energy density by over 35%. And with that improvement, we were also able to improve the cost, drop the cost of integration, excluding the batteries, by about 25%. Four main pillars as we designed and built the product. Flexibility. Flexibility around the architecture, flexibility around the supply chain. Second one is availability.
As we look at these more severe weather events, energy storage system monetizes the maximum revenue around such events. The price and the volatility in the, in the electricity market is higher during such events. So the product that we've designed is able to function at negative 40 degrees Celsius all the way to 45 degrees Celsius without taking any derate. It's able to function in higher seismic areas, wind gust. So the product is available to the customer, and most importantly, which I will talk about, this is not a me-too product, but there is a unique feature, which is the AC architecture. On the supply chain flexibility, we saw the, the three projects from last year. First one is using NMC batteries from Samsung. The second one is using the BYD cubes, which is LFP, large format LFP, and finally, the last one is using LFP from REPT.
We have different batteries that can be easily integrated into the B-Vault platform product. Further, we find customers that have already made interconnection application. Like I was in Australia last week, we are working with ACEN, that has logged in a particular inverter into the interconnection application. Such customers will require a solution that can work with that very specific power electronics. For them, we have the DC Vault option, which allows, again, integration of different type of batteries into that. Further, to increase our energy density, we are developing a stacking solution, and this will instantly double the amount of energy density, which is possible into the projects. What's unique about our B-Vault is the AC Vault architecture.
If you look at the way most of the lithium-ion battery storage is being built today, is mostly around two separate architectures. You have a DC vault architecture, which is you have a central storage inverter between three and five MW. Behind those inverters, you have multiple different enclosures, which is building up your AC cluster, and you keep duplicating that as you want to build a larger project. Then you have products such as the Tesla Megapack and Sungrow PowerTitan, where it's still the same architecture, where the battery is connected with the inverter. You have a string of battery connected with one single inverter. In both of these architectures, you will notice the power and energy is always coupled, which means if I would like to add additional inverter to get more power, I always have to have additional batteries.
Should we lose an inverter, we also lose the energy behind it. And to overcome this issue, what the industry does today is they add additional inverters. They're not able to optimize the CapEx. If I go sign up for a project with 98%-99% availability, with such architecture, there is a need to add additional inverters, additional batteries, the cost of the project goes up. The architecture that we have developed at Energy Vault, we have decoupled power and energy. We've broken the relation between them, the coupling between the power and the energy. What happens in our architecture is all of the batteries are always connected with all inverters. We use modular inverters. We don't use string inverters or the central storage in our AC vault. We use modular inverters.
With the modular inverters, all inverters always connected with all batteries, so if we lose an inverter, the battery is still available. If you lose a battery, the inverter is still available. This allows us, by default, to have a product, to have a project with a higher availability, because should we lose an inverter, we only lose a couple 100 kW. This allows us to also be very optimized with the way we can size our projects. We don't have to always move in increments of multiple megawatts. We can move in smaller chunks, which means the cost of the project is, is, is much more optimized. Furthermore, as we look at augmentation, as we've now starting to see in California, projects moving from four hours, there's six hours, eight hours, augmentation is very easy.
To do the augmentation-... We can simply move these inverters into additional newer battery enclosures. Because they are decoupled, we can mix batteries as well. You can bring a different type of technologies because they're not coupled together. Supply chain is a big element of the battery energy storage industry. The optionality that we like to bring to our customers, we have the strategic partnerships with manufacturing of the lithium-ion batteries over in Asia, both China as well as outside of China. And finally, the contracting structure. This is an important one, BYOB, which is bring your own battery. And again, the NV Energy, I think, is a really good example of this.
We are looking at customers which have a particular MSA they are trying to bring to the table, but they're looking for integration partners, somebody who understands how to design and build the energy storage system using that particular battery. This is a contracting mechanism, also quite popular from the solar side, where the developers themselves provide with the solar modules, but they're looking for an EPC to do the full wrap. There's a lot of momentum behind IRA, and which is important to us, and we would like to have our customers access to domestic content, and with that, we made a strategic decision to invest into KORE Power. This is very important to us, and let's hear from KORE Power.
Down the road in Buckeye, KORE Power is making lithium-ion batteries. It's a $1.2 billion investment. It's gonna create thousands of good manufacturing jobs, 90% of which don't require a college degree, and yet you get a good wage.
My name is Lindsay Gorrill. I'm the Founder and CEO of KORE Power. I was heavily involved in the supply chain of lithium batteries for a number of years. How do I bring all the knowledge I have on lithium-ion cells to United States? Mother Nature provides energy when it wants to. Energy storage is a thing that'll finally make green energy 24/7. So you've got all this money being spent on, say, solar in California, but people are seeing their energy costs go up, and that's a problem. What storage brings a community is reliability, but also should be economics. One of the main reasons why you want to build batteries in the United States and sell to the United States is the supply chain from the upstream, which is from mineral to chemical, and on the downstream, to companies like Energy Vault.
With domestic manufacturing, there's no issue with the Suez Canal being shut down or something like that, or backed up containers. We can move a product to a job site in North America in two days. We bought about 215 acres of land in Buckeye, Arizona. That plant will be up and running with cell production in the early part of 2026. We're building something today that we're going to look back five years from now and say, "Holy cow, look what we did," and I want everybody to be part of that. We want to make sure we're tied to a company that we believe in because they're using our product. Energy Vault has not only entered into a major offtake agreement with KORE, but also made a significant early-stage investment in KORE.
What we want to do is we want to support Energy Vault the best way we can. Number one, we're going to build a high-quality product with a very good price in North America, supported by the Infrastructure Act and the IRA. So what IRA gives you is it gives a company like KORE, basically a tax credit on production. Then on top of that, the products that we produce that we are going to ship and make for Energy Vault, they can take a tax credit, be it 30%-50%. On top of that, we can work with Energy Vault on developing products for them. Because we produce the cells, the modules, and the energy storage box, we can build anything we want.
So if we see something that Energy Vault is doing, that we can help them do it better and they can win, we want to do that. We know that we can produce a product that's going to make Energy Vault successful, and Energy Vault has a platform that will help us be successful. The combination of KORE and Energy Vault allows us to go after almost every type of storage market. Be able to do everything from cells to solutions, to development, and that kind of stuff, it becomes a combination that's unprecedented.
The job is not done until the electrons pass across the meter, and our customers realize the acceptance of the asset into the market. I think that's why execution is very important to us. We talked about the product. We can build a great product, but until the system is into the market, that's when the customer starts to realize the economic benefit. We've built a great team around execution. As I said, my personal experience is over 100 projects, but everything we built here with the team behind us, the software, the hardware, everything was built in the last 12 months. The first project that we turned on in Wellhead, which was our first instance of our EMS, was commissioned in less than two weeks.
It was one of the fastest commissioning that we had seen in the CAISO region.... In 2023, where we delivered the projects, the gross margins were between 5% and 10%. As we look at 2024 and 2025, we believe we will be in the double-digit margin. And how do we get there? Is by first, the most important, is the supply chain. Being able to have access to domestic content, being able to have the strategic MSAs. The second one is the, is the unique product architecture, the one I mentioned about our B-Vault, which allows us to be very optimized with our system sizing, being able to go and execute projects which are much more cost competitive. Finally, it's about the projects that we are looking at. We're not looking at cookie cutter style projects.
We're looking at portfolios which the customer has a problem that they're trying to solve for. To be able to solve those issues, being able to listen to the customer, work around the constraints they have, that requires us to be creative, bring out solutions which naturally given higher margins. To summarize our battery strategy: number one, not be prescriptive and confined with a standard product, but rather have a platform which enables our customers to have the degrees of freedom and the flexibility to choose, pick and choose solutions which work for them. The second one is, focus on the economics, focus on the problem that the customer is trying to solve for, and work around a solution that enables that. Finally, it's the execution. With that, we'll take the next few minutes for questions.
Thank you. We've got time for a couple of questions from the audience. If there are no questions, we'll move on.
Great. No problem.
Thank you, Akshay. Okay, I'd like to welcome on stage for our fireside chat back Robert Piconi, Bill Baker, who is the consulting partner, SOM, and Dr. José Andrade from Energy Vault.
Great. Well, great to be back up here, and this is actually one of the most exciting things that I've been a part of, and to be able to talk about here today and announce it here today. I have Bill Baker up here with me, from SOM, who's really needs no introduction from a global perspective and the things he's done. You can read there above, of some of the superstructures Bill has designed and architected, all still standing and all still doing well, by all accounts.
Just amazing, I think, because of the things that we're taking on in gravity and the types of structures that, you know, the 150 meter structure in China getting built for our first system, but actually really opening our eyes to the art of the possible, what can be done in superstructures. As you all are probably aware, to make gravity work, higher is better. It's better for economics, it's better for energy density. And you look at some of these structures and think about these designs and how does that withstand the elements? How does that withstand wind, hurricanes, things like this in these zones? So very excited on that. And also Dr.
José Andrade here, who's been working with Energy Vault from the very beginning with Idealab. Dr. Andrade's very well known in the areas of civil and mechanical engineering, the chair at Caltech in Pasadena there in Southern California. Also in their seismic studies, which I think Caltech probably one of the best in the world, given California and generally looking at how to make our structures more safe. So very excited to have both of you here. And maybe, Bill, I'll start with you, and you know, we've gotten to know each other here a little bit, and I know actually through meeting José and being a part of some forums with him, got you interested here in Energy Vault.
But would love to maybe just a little bit of introduction of what you've been doing with SOM and then sort of the why behind and the interest in working with Energy Vault. Well, you know, I've been with SOM since 1981, so over 40 years. And SOM's uniquely a unique architectural engineering firm, 'cause we have both architects and engineers inside the same firm. And we've been doing tall buildings ever since, even before I became... We did in the 1960s, we did the world's tallest building built in the 1960s. We built the tallest buildings built during the decade of the 1970s. We had the tallest building that was built in the decade of the 1980s. And then, of course, in 2010, we had the Burj Khalifa go up. And so, you know, and Burj Khalifa is over a half mile tall.
And so, we have this, this integration of architecture and engineering where, where we can do tall, but we're also in the middle of an energy crisis, you know, excuse me, an environmental crisis. And in my world of architecture and engineering, we know that 40% of the carbon in the world comes from our buildings, either through the construction or the operations. So the hottest topic in architecture is how do you deal from how do you build in a sustainable way? There's a huge urbanization going on. You know, in 2010, half the, for the first time, half the people in the world lived in cities.
And we're on our way, going from, you know, 8 billion people in the world to, you're going to be up to 10 billion people in the world in the not too distant future. And so, all this stuff has to get built, and there's two kinds of carbon that we worry very much about, which is operational carbon, you know, the carbon it takes to run the buildings, and embodied carbon, the carbon it takes to build the buildings.
Mm-hmm.
You know, I met Andrea, I met José at Caltech, you know, at some lectures there, and he got me involved, and we got very, very, very excited about the technology that Energy Vault was creating, 'cause we saw it as a huge opportunity to address both of those issues. You know, I tell you, all the young architects and engineers, they all want to work on this project. And all my partners at Skidmore are all over this thing. We're looking for ways to do this, to bring this into the built environment, both as either individual batteries, just standalone batteries, and higher is better, okay? I'm holding this up. This has potential energy.
I've stored energy by, say, my-- I'm a solar... I've pulled it up on the ground. I've stored energy. If I store it twice as high, twice the energy. If I go x10 as high, x10 the energy. So height makes a big difference. Makes a big difference in the energy that we can store and the efficiency. And so, you know, that's where we're all going and excited about.
Great! Well, thanks for sharing that. José, maybe I can ask you, you've been involved in Energy Vault really since the beginning.
Mm-hmm.
When we met and as we chose to create a company and looking at gravity, initially, as we looked at the long-duration storage market, the thesis behind, as renewables become a greater part of the grid, that introduces more intermittency, and therefore, as that percentage goes up, the need for long-duration storage. But talk a little bit about your journey with Energy Vault, and then come back to how you met Bill and why that's, let's say, interesting-
Right.
exciting for you
Right
... in that, in this combination, let's say.
Right. Yeah. So I'll be happy to do that. So, yes, you said, Rob, I've been with Energy Vault since 2017, and, and the concept really captivated me, 'cause back at that time, we were looking at EV1, right? This idea of moving these masses up and stacking them up to create potential energy, the kind of energy that Bill just described. Right, and yes, height is your friend. And so I've been interested in seismic studies of complex systems, and this was a very complex, discontinuous problem that happened to have the potential for energy storage. So I fell in love with the project right off the bat, met Rob, met Andrea Pedretti, and just started to simulate and model the systems, right, to try and understand their, the mechanics, their behavior.
And in that path, in that journey, EVX came along, and the challenge there for that product was to optimize construction, create new materials that we could deploy faster, cheaper, better for customers, right? And we did tremendous work there and tremendous innovation that we're very proud of, and we see the results in China. And, but EVX is a 150 meter tall structure, and it has some degree of ability to store energy. But if you could go taller and, you know, when you look around here in Manhattan, you have plenty of inspiration, right? That there's plenty of tall structures. You start to think that there is something that you can do beyond an EVX, beyond 150 meters.
You could reach much higher altitude, and you could kill two birds with one stone by bringing storage where demand is, because the bulk of the demand, as Bill said, as we migrate to cities, is coming from cities. And so that is the journey, and when we started to think about going taller and becoming more effective and efficient, I knew Bill from 10 years ago. He had come to Caltech to give a lecture, and we hit it off, and so the first person I called when we thought about going taller was Bill Baker, you know, the father of the tallest building in the world.
Yeah.
Here we are.
Yeah, it's exciting. I think in this collaboration, what I've seen, and you have a firm, Skidmore, Owings, and Bill Baker himself have built structures, as you said, since the 1960s, the tallest structures in the world. And the integration of a technology that we've developed, combined with that practicality of what it takes to build and permit these structures, where the economics get crazy when you get to the, you know, 300, 400, 500 meter. And Bill, coming back to you, just on a question, we've designed, for example, a structure of 1,000 meters, 1 kilometer tall, for certain parts of the world, and looked at different integrations of both our block technology and a modular pumped hydro using water technology.
Talk to me a bit about carbon payback?
Well, it-
And how you've been first, traditionally in these structures, like the Burj Khalifa, but was there even one? And then as you look at our block technology and then maybe the hydro type of technology in that 1-kilometer structure, to talk a little bit about how carbon payback works.
Well, well, well, what's... In the world of architecture and engineering, we need to build these things, but we feel bad because we're creating a carbon problem in the process. 'Cause there is no carbon payback on an office building or a residential skyscraper.
Yeah.
You have to spend carbon to build them. So we have this deficit that we have to deal with. Here's this opportunity to do this in such a very tall structure. It's a structure that you build locally. It will never catch on fire. It'll you can be dense in a downtown location that will last for a long time. There are 100-year-old skyscrapers in this town. You know, the Woolworth Building, just down the street here, is over 100 years old. The Empire State Building soon is gonna be 100 years old. These structures, if you maintain them, last essentially forever. So we're looking at these...
We're working with José, where we're looking at these towers. You know, we can get up to a kilometer, a tower, store way over a gigawatt hour of energy, and the carbon payback is between two and four years. Think about that. You can do such a massive structure, but the carbon that you're offsetting will pay for it, you know, and-
Yeah
and the structure itself, it's actually kind of around two years. Just, you know, that, and this is the work. We have a sustainable engineering group in the office, and so they ran the calcs on there. You know, how much embodied carbon is in the concrete and the rebar, and there's some little bit of steel, but not much. And so then, what is the, and then how. Then you every day, you can fully charge and fully discharge this battery, you know. And so how many cycles do you do? 'Cause, you know, right now, my understanding, this is not my world, it's your world, batteries are generally used as a transition for the duck curve or whatever that is, you know.
But at night, all the energy is fossil fuel, or most of it is fossil fuel. And if we're really gonna go sustainable and where people live, you know, you on renewable energy, you got to store enough to carry you through the night. You know, and this is... If you assume that there's, like, 30 kWh per household in the U.S. okay? And you have, and say, half of it's during the daytime, you get from solar and another half from a battery. You know, a GWh battery could take 60,000-70,000 households off of fossil fuel, which is huge.
Yeah.
You know, you can do whole cities-
Yeah
If one were strategic about this.
Yeah. Yeah, the potential's amazing and very excited about making that a reality. One last question for you. A lot of people to the general public, the general eye, and probably a lot of people in the room, when they think about a building 1,000 meters tall-
Mm-hmm.
-the Burj Khalifa is 820. I know you said we can go to 1500, and you uniquely can say that, Bill. But in a 1000-meter building, what... I mean, people think about generally, like, wind and these things, especially at that heights and the structure, one of the ones that we've been working on actually is a cylinder-
Mm-hmm
cylindrical shape. How does that work? Why is that the best shape, for example, at that height? And what's. Explain just a little bit for the layperson.
Yeah.
How can you build it that tall, and how can you support whether it's our hydro or modular pumped hydro water solution, it's interesting, or even the blocks? How does that work?
Well, I mean, it's a very stable shape. The, and what’s quite interesting about this whole technology, yes, you have a lot of weight, very high in the air, so that's what you're trying to do. You're trying to put a lot of weight very high in the air. And, and but in the process of that, it helps you proportion the structure that is very, very stable. And the advantage of a cylinder is that it's really robust and stiff, and we're actually seeing that there's very, very little, and in some cases, no premium for wind load or minor seismic, because of the structure you need to hold up the weight if it's properly configured and easily built.
I mean, one of the reasons that the Burj Khalifa got built is 'cause we designed it for how it was gonna be built. And the construction technology that we're looking at with José, totally conventional, very fast, easily done anywhere in the world. You know, that it can be built quickly and efficiently. And there's almost like a moral obligation to do this, because if you could start, you know, what... In a few years, we could build one of these things and take those people off the fossil fuel grid, it would be tremendous. And if we don't, the sooner we do it... The sooner we can start having people completely off-
Yeah.
on renewable energy.
Yeah. Well, look, moving from moral obligation or moral imperative, let's say, to mandate, and just to put this in perspective for investors, so what does it mean? First of all, we have a segment of the market in terms of the building of superstructures in dense locations where there's a lot of energy, man. So New York's a great example. To share a stat with you that I learned yesterday by visiting the Skidmore office. Every month, up to 2060, which is longer than-- I mean, it doesn't make sense going past that, in the world, we're gonna build what is the equivalent of New York City every month in structures.
So you think about doing that across the world and that massive build, and as of now, people thinking about that traditionally, you heard Bill talk about it's not only carbon footprint when you use a building, it's carbon footprint just in what you build-
Mm-hmm.
-in the structure itself. Moving from moral imperative to mandate here, given what's happening in the world with the heating up of the planet and things, it, it's clear to me that there are gonna be changes. Countries have already, for example, in energy storage, China's done it. They mandated 20% at power for every renewable asset that gets built. I envision a world where there will be changes in permitting and policy relative to ensuring there's integration of more, sustainable, aspects of the building itself, integration of either how buildings are powered, how they're using, and there's technologies, using software to make, for example, HVAC and the systems operate more efficiently-
Mm-hmm.
through using AI, but in the building materials itself. And, for example, carbon sequestration in those building materials and absorbing-
Mm-hmm.
-carbon, that we're involved with a lot of research with that. So it's a, from our perspective as a company, we feel the imperative as we're building things with Gravity, as you build these out, and even in all of our energy solutions we're building, 'cause everything needs a foundation, it really behooves us to ensure it's done sustainably. But we believe from an investment thesis perspective, this is gonna be a requirement. As is our culture, we're getting in front of this. We believe we bring a lot of technology and have a lot of ability to leverage, how we think about leveraging material science and structural and civil engineering, just like with our Gravity system that came together with those two things, plus AI software, to create an energy storage breakthrough.
I think it's gonna be the same here, and very excited about the partnership. Adam, Scott, a lot of the partners that I know couldn't be here. They're at a partner meeting upstate, but very excited about building that together.
Yeah, and we see this change in architecture, because if you're gonna build a building that's both a building for occupants and it's gonna be a battery, you know, you want them both to go tall. And with this huge urbanization, this Manhattan every month, you know, I think it's gonna have a big change in the energy world, but also a big change in architecture.
Well, thank you, Bill and José. And everyone will be seeing an announcement about our partnership. It is exclusive, so meaning it is something we're gonna do together for the world. You've seen the footprint of the buildings, Jakarta. In China, I know I had the list of 15 of them, that I looked at before, going there, but, literally every region of the world, and excited, given that coexistence we're gonna have in, in innovating together there. So thank you, Bill and José. Thank you.
Thank you.
Thanks.
I think we have a video we're gonna play here.
Thank you.
Yeah.
We actually-
Before the Gravity.
Okay.
I think it should be up.
Great! Okay, with that and that glimpse of the future there, let me call up Marco Terruzzin, our Chief Product and Commercial Officer, who will join us after the 10-minute break, I see.
Yeah, we're just gonna go for a 10 minute break. We'll keep to 10 minutes, so if you all can be back in the room, please, that'd be great. Thank you very much.
We're doing a Q&A now here. We're good. No Q&A here, right? Okay. Okay, cool. Okay. We'll take a little break, everyone.
The mission is to promote the legacy of my father, George H.W. Bush, who, throughout his professional career, interacted a lot with China and Chinese people. So the purpose of forming the foundation, with my father's blessing, was to create environments where we can bring Chinese and Americans together, and through better understanding and mutual respect, you know, there'd be future collaborations. As the challenges to sustaining life on Earth for humans grows, that we need to put aside the kind of geopolitical differences and find ways to collaborate. And so he was a big believer in bringing people together, finding common ground, and working together to solve big problems. Dealing with climate change, trying to reduce carbon emissions, trying to capture carbon, trying to figure out ways to be greener and better to the economy, has to be a global effort.
Our partner, CNTY, has subsequently invested, like, $120 million building a 100 MW power plant that's in Rudong, in Jiangsu Province. This is the first commercial scale project in the gravity category of what Energy Vault does. And it's gonna be really helpful to the world to see that gravity is an alternative to lithium, and there are so many advantages. But it's being tested and will be commissioned shortly, and I'm very excited about that. It's been a very complicated process from an American perspective. I give the team a lot of credit for being flexible and adjusting to the kind of cultural and legal nuances that take place.
To get regulatory permission to connect to the grid, there are all kinds of hoops, apparently, to jump through, and our partner's been very active and diligent about, you know, doing all the right things to get it done. You know, the provincial governments, the city governments, the town, the township governments, like Rudong, they compete to be greener than the other guys. And so the idea that they're gonna be commissioning a 100 MWh power plant in Rudong or in Jiangsu Province is a matter of great pride to the local leadership at all levels of the local leadership. It already has had a very positive impact on the local community and all the way up to the provincial leadership.
But even before commissioning the first one, the team has so much confidence that they've started another project in another part of China. It's already one story out of the ground, and it's gonna rise up to be another Energy Vault. Then there are four or five already lined up and signed up to go after these. China's gonna be a big market for Energy Vault. One of the exciting things, by the way, about the CNTY relationship, is that now that they have the experience to execute in providing the supply chain, where Energy Vault has projects pop up outside of China, there's gonna be a collaboration with CNTY providing these, these supplies to those projects. So when Energy Vault selected CNTY as one of the first...
I think it will be the first commercial scale application of gravity, it was the perfect marriage of high tech and practical implementation. The United States is a leading innovator in all kinds of technologies. The Chinese are a leading doer of stuff. They know how to make things. You know, they know how to develop the supply chain connectivity to the manufacturing. They know the logistics. They're very good at engineering things to make them work. As a guy that, like my father, cares deeply about building closer relations, more trusting relations with China, I'm hopeful that this Energy Vault project shows that we can have business-to-business interaction and engagement on an issue that is critical, that of climate, and we can work together to move the needle on that issue.
Please welcome on stage, Marco Terruzzin, our Chief Commercial and Product Officer.
Good morning. My name is Marco Terruzzin, the Chief Commercial and Product Officer at Energy Vault. First of all, I want to say thank you to the 180 people that are working at Energy Vault with a lot of passion to do something relatively straightforward: listen very carefully to what a customer wants, what are their needs, and converting these in a viable, economically attractive, and environmentally sustainable solution. Our business strategy, when we come to the go-to market of our solutions, is based on two fundamental pillars, something that is kind of an imperative for us. Number one, having a very good understanding of what are the market needs.
We want to make sure that we invest our most scarce resources, most important resources, that essentially is time and financial resources, on the solutions that really are accepted and are needed by the market, in the short term, in the medium term, and in the long term. The transition to a world with a low carbon intensity of our economy require practicality in the short term, and vision to make sure that we are investing resources today in something that will be accepted economically, financially, and environmentally a few years from now. The second paramount point, principle that we have to guide our business strategy, is to make sure that we adopt a solution approach.
That we don't put ourselves in a corner where we have a limited number of tools to address a large service available market, because that will give us access to large project, and it will improve also the profitability of our solution. If differently, we focus just on one solution, on one product, we will inevitably, in a large market like the energy market, and a subset of that, of the energy storage market, in a fight where we have just to compete on price. With these two fundamental principles, we have been able to drive very, very, very interesting result when we come to gravity energy storage. First, we have been able to accelerate the adoption of this technology. We have a presence in four continents. We have been able to deploy the technology.
We have been able to establish a commercial business model that has been accepted and duplicated across multiple continents. Second point, we have been very profitable in this effort, because as a public company, we have to make sure that what we do is financially attractive for investor. And because if it's financially attractive for investor, we will have a leverage to elaborate more and expand our business. The third element, that was the result of this approach, based on understanding deeply the need of the customer and having a solution approach, was the result that we are able to improve constantly the unit economics. If we use a, If we refer, for example, the first part of the introduction of our solution, the short term, the short duration, presented by Akshay, it's obvious, it's evident that lithium ion battery price have come down. Why?
Because there has been a efficiency, economy of scale on the material, on the design of the system. We have to do the same also for gravity. We have to work on the design. We have to work on the leverage of the fundamental unit economics of gravity, that help to reduce the unit cost and increase the attractiveness from an economic and financial point of view. Why gravity is so attractive from a utility perspective? The companies that can rate base this solution, and that can install this asset for a period of 30 or 40 years. First of all, because gravity has been the backbone of the power industry for almost 100 years to store electricity.
There was nothing else than Pumped Hydro, essentially, to help non-flexible asset to store, like a nuclear power plant, coal power plant, and to a certain extent, also combined cycle gas turbine, to provide flexibility, to provide regulation to frequency, and allow the load always to be in balance with the generation. So the technology, the concept, is proven and is solid, and is very, very well understood, in particular, by the utility sector. Second things, the gravity energy storage technology is attractive because it doesn't dissipate, it doesn't lose a lot of energy when you go through an entire cycle. The Round-Trip Efficiency is almost at par with the best available technology, lithium ion. We are above 80%.
When you are a utility, when you are a customer, and you have to make a decision on which technology you want to have in your system for the next 50 years, if you have a system that loses 50% of that energy that you use to charge, think x2 . That can be a solution that maybe is just a bridge in the short term, but round trip efficiency is very important in the overall picture of the total cost of ownership for a customer. It's highly sustainable, because it's safe. You do not have a environmental hazard that are embedded in the technology by itself. It's a technology that enable a circular economy.
There is advantage also from a supply chain perspective, and for sure, elaborates and, unleash domestic content, that is very important, in particular, in this economic moment, for a different region of the world to guarantee jobs and guarantee GDP locally. There was an evolution, clearly, in the design, as José Andrade, Rob, also Bill Baker were they were mentioning. We started with the initial interpretation of gravity, using a design that was quite advanced, but was not ideal from a market acceptance point of view. The energy and power, they were not completely independent. So we started to evolve in our interpretation of the technology, going from the initial tower, the EV1, to the EVx.
And now we are introducing our other design, that are in line with the market expectation, using different storage medium, not only solid, but also liquid. Because when you unleash the height of the system, you don't need any more double density represented by the solid masses, but you can use water. And if you use water, everything becomes easier, because you can use a traditional pump turbine, used for 100 years in every pumped hydro station. And that has created an opportunity for us to elaborate on multiple designs. And here, in this graph, you can see basically in two dimension on one side, the ability to elaborate on liquid, water, because it's simple, it's very intuitive, and the industry, both customer and supplier, understand how to elaborate and provide equipment to work with water.
On the other side is taking advantage of geographic conformation, hills, that do not require the construction of a building. And that helps us and the market with the economics of this solution. Considering this from an economic perspective, that means that we have a two dimension-two dimension to play with. Number one, how gravity fit regional and national development plan. The fact that we have been able to start from China was a challenge from one point of view, but also a significant win. Because we have been able to introduce a technology and get this technology adopted by the National Development and Reform Commission in China, as a strategic technology for the transition, in a market where nobody has doubted that unit economics are very important.
Being able to be present in China, and currently having 3.7 GWh under construction, is a testament that the technology makes economic sense. There is a first dimension, represented by the need of the country in terms of job creation, localization of the technology, and the supply chain. The other element is that we have to continue evolve the technology to improve the attractiveness of the unit economics. In the same fashion as other technology, like a lithium-ion, they have to continuously operate on the reduction of the cost of cathode and anode. They have to continue to work on the reduction of cost of balance of plant. And this is what we have been doing, introducing this new design. Round-trip efficiency.
I've already said that, that is extremely important, and having a round-trip efficiency above 80% across the entire spectrum of the solution that we have already introduced in the market with EVx, and the new solution with a hybrid utilization in an urban center, or eventually using also water, it's essential to be commercially attractive. Another element that is important from a go-to-market is, of course, the levelized cost of storage. And when we consider solution for a duration of 6 hours, 8 hours, the example of the Calistoga energy storage project that we are developing, and it will be operating by the summer of this year, 48 hours of duration, are the evidence that the market is transitioning there. It's true that the entire industry was expecting a transition, a faster transition.
6-7 years ago, there was a discussion about a long-duration energy storage, how much long-duration energy storage would have been deployed by this time? The good news is that energy storage has become so important for the industry, that just the two hours and four hours have been adopted at a much larger scale than expected. And when long-duration energy storage will come, it will come at an even larger volume than what is expected today or was expected a few years ago. So the delay in the deployment of a long-duration energy storage is not necessarily a negative thing. I think it is a positive thing, because it has helped the industry to familiarize with the need and the deployment of energy storage solution, in a way that is opening up the transition to longer duration energy storage.
We have solutions, both for the short, the extra long, and the long duration, specifically with Gravity, that are economically attractive. Presence. We have been able, 180 people, two years as a public company, we have a footprint from the United States to China, from Australia to Europe, with ongoing construction activities and active commercial engagement. We have been very strategic in our go-to-market, by every segment of the geographies, making sure that we were every time profitable. We are building here in the United States, Gravity, as you will see with a very nice video just a few minutes from now. We have invested in Texas with-...
A Solution Excellence Center, we are developing new design and we are testing the product-market fit of solution that will be deployed a few months from now, a few years from now in the market. But at the same time, we wanted to make sure that we, we were and we are profitable in our deployment and engagement with customers through license. This is the reason why we have, we have started with a country like China, where we have not only the revenues because of license, but we have also the prospect revenues coming from the royalties due to the installation and implementation of these gravity energy storage system.
The expansion that was announced today by Rob in South Africa is another testament of the appetite that utilities and large energy users have for gravity energy storage system, because that is a technology that doesn't have a storage medium degradation, doesn't have a self-discharge, and is an asset that can be rate-based. We are also investing here in the United States directly to make sure that we are technologically advanced, that we are not falling behind in terms of implementation and technical solution, the innovative design that can be deployed across the globe. Now I want to finalize this short part related to gravity with a video describing what we have been doing in Snyder, Texas, with our solution excellence center. In short, gravity has been our beginning.
We have been able to build a company, we have been able to attract financial investment, and we have been able to attract a commercial interest and engaging with customer, because we have always proposed a solution approach, starting with gravity and a multiple design. We engage with customer with, primarily with gravity, with a license. We are looking for a region of the world where there is a strong need for infrastructural energy storage asset. And the way that we engage with the customer is to being able to sign a license agreement that are bringing revenues in the short term and royalties over a period of five, 10, even 20 years.
So the opportunity that we are going to pursue, in addition to the—what we have already signed in China and South Africa, is in other countries, where with an extended portfolio of solution, we can engage in a similar, highly profitable business model. Going back to the beginning, it's paramount for the Energy Vault, and I think that I'm in a very lucky position, working with a team of 180 people that have established as a culture, the approach of listening very carefully to what are the customer need, what are the market need, as a principle number one. Principle number two, not fall in the trap to think that just one product, one solution, is the, is the answer to the entire transition of problem. It's a very complicated moment. We were talking about AI, for example.
The need for additional load here in the United States is creating a threat to the transition that until now has seen very large quantity of PV, wind, and renewable energy coming to the grid. If we are not able to drive additional, reliable, sustainable, and economically attractive energy storage solution, we will see decision going backward, installing gas power plant. So it's imperative that we continue to invest in the development of solutions that are economically attractive to provide a short duration, but even more importantly, long-duration energy storage. We have to be instrumental to the industry to avoid decisions that are going backward. We have to continue to go forward with the adoption of renewable energy.
This has led us, these two principles, to something that I think is unique in the industry, because as a company that I strongly believe in the necessity of long-duration energy storage, we have been one of the few companies, probably the only company, that has been able to accelerate the deployment of long-duration energy storage, not only in China, but also outside China. With expanded partnership in South Africa, we have been able to be strongly profitable in what we are doing to make sure that the investors see the path to a higher than average profitability for the company and the ultimate dedication to improve the unit economics of our solutions. Thank you.
Thank you, Marco. We are running behind, but we're happy to take any couple Q&As. Oh, have one over here.
Hey, David Rolf, Needham Research. One question about the reusability of the structures. Say, if and when somebody wanted, you know, these were decommissioned or, you know, wanted to be used for another purpose, what does that look like in terms of environmental impact? Reuse, ease of reuse, or does that have to be taken down before it can be, something else put in its place?
We discussed about the carbon payback. Having the possibility to install structure with a payback, carbon payback in the range of 2-4 years is extremely attractive, and that are putting ourself immediately on the positive side of the equation. When we are talking about the construction of this building, you probably notice that we have a solution that are using buildings and solution that are using Mother Nature, slopes. Specifically, those two design are called the EVy and the EV0. So the decommissioning is a problem that we have already solved with a couple of design of our systems. Regarding the EVx, those structure are modular, and in the same fashion as they are put together, they can be decommissioned, and we are using solution and material that are recyclable. That is the objective.
When we are able to leverage on the height, we do not have to use too much mass, and that will open up a significant element of the market. So that is recyclability, localization, and a better and more attractive unit economics.
Thank you. Okay.
Thank-
Thank you, Marco. Thank you very much. I'd now like to welcome on stage Dr. Craig Horne.
Further developments on the wildfires in California as local fire services continue to battle the blaze, now spanning multiple counties.
Gas and power shutoffs today, leaving many local communities in the dark. Residents are advised to prepare accordingly and have an evacuation plan in place.
Local and state governments are now asking what more can be done to prepare for future wildfires to protect these local communities.
We're a 5,000 person town at the top of Napa Valley. Down Valley, it's more of a shopping, foodie scene, and up here, we're really about health, wellness, and green initiatives.
This town has everything it needs to be a small, successful community, great restaurants, great hikes, but something like not having power on a regular basis will shut down a community like that and make people jump ship. For the business, it's extremely awkward because I lose business straight away, and then my inventory, that is a lot of refrigerated and frozen inventory, becomes vulnerable. If the power goes out for six hours, I have to throw out all my food. I can't even ring in an order because it's all cloud-based now and internet. I was driving back and forth to Santa Rosa, getting dry ice twice a day. Prepped food only lasts three days, and that's how long the PSPS usually was. If we have a PSPS, a public safety power shutoff event, it affects our businesses immediately.
So we need a reliable source of power that will bring the grid back online for businesses and residents. You hear the wind, and you get nervous. You hear a siren, and you get nervous. Every time there was any kind of a storm, we would lose power. Even if we weren't evacuated, even if there wasn't a fire, we would lose power. We didn't really live a normal life. These communities could be dark for as many as five days. I myself have lived in a community that has undergone a multi-day PSPS event, and the novelty wears off pretty quickly. The Calistoga project represents Energy Vault's first foray into the ultra-long duration energy storage segment.
The foundational level of this is a battery energy storage system, providing what's called Black Start, which is boosting the town from when it's taken down, when the power line is de-energized, and brings the town back alive. So to supplement that and keep the power going, we are installing an array of fuel cell units from one of our partners, Plug Power.
The fuel cells will provide the base power for the town. Fuel cells need a reactant. In this case, we're bringing in hydrogen. It combines with oxygen and releases water, as well as electricity. It's a very clean way to generate power, and it's a way that actually will put water back into the community.
Prior to this Energy Vault project going in, we had diesel generators going on that were really loud. We're slowly and surely going more and more green, and this just fit right in with that narrative.
Previous system, the diesel system, was not available. It was only available during the fire season, but now, unfortunately, the fire season, realistically, is any time of year. So very happy to finally get it in place.
You know, we're not gonna need to bring in diesel fuel, things like that, for these generators. But it also helps immediately get the power back on so our businesses can thrive. So they're not waiting with the lights out with customers in the store, the doors locked. They didn't come in and just try to jam a project in. They really communicated with the chamber, with the planning commission, with city council members, with the community. Really, really good partners and really good communication throughout.
I really appreciated all of the effort that Energy Vault did in presenting the plan to the city and explaining everything in detail and showing us what it was gonna look like, and trying to make it look like something normal instead of gigantic generators that were not very attractive. It's not so much the aesthetics for me as it is, you know, the consideration, and I think sometimes companies forget that.
Great. Well, I'm really excited to be here today to talk to you about our hydrogen strategy. I'm Dr. Craig Horne. I'm Vice President, Advanced Energy Solutions here at Energy Vault. I've been here about two years now, and I've had the pleasure to work at, on the Calistoga project, which is the underpinning of our hydrogen strategy. I've been in the industry for way too many years than I care to remember, but got my start over 35 years ago now, in developing fuel cell products early on, back in the late 1980s. I then went to graduate school, learned about lithium-ion technology right after that, right after that first commercialization of lithium-ion batteries.
And then about 15 years ago, got involved in grid storage and been working all throughout the different sides of the industry, from technology and product development to then solutions using those products, going into the ground for turnkey projects at RES Americas and Swinerton Renewable Energy, two of the largest EPCs in the renewable space at the time, in the late 2010s. And then a couple of years in the developer IPP side of the business before coming over here. So really with the hydrogen activity, we're really taking all these different facets of the industry and combining it into one. And that's shown here in our strategy itself: two simple steps, and that is to first take a catalyst project, which you just heard about, Calistoga, and establish a beachhead.
That gives us an understanding of how to navigate into the hydrogen space, which is growing. I'll talk about that in a minute. That allow us to then broaden our reach and then reach our goal of maximizing our participation in the two main sub-segments of hydrogen. That is the production of clean hydrogen and its consumption. So, you know, hydrogen, it's, you know, been in the news last couple of years, and really, the growth of it is tremendous. The growth projections will be over north of $1 trillion by the end of this decade. You know, it's key to decarbonization, and that's coming in both of those segments.
In the production, the transition from dirty methods like steam, methanol, reformation, to clean methods like electrolyzers to apply electricity to create hydrogen from water. And then on the consumption side, where we're going from traditional uses of hydrogen and oil and gas, fertilizers and other industrial processes, to new applications that are in line with decarbonization, like steelmaking, vehicle fueling, and of course, power. And that's what we're here to talk about today. Let's see. Transition zero. So as I mentioned, our first step in the strategy is to have a catalyst project, and that is Calistoga, which you heard about. This is gonna be the world's first operational, utility-scale, battery, green hydrogen fuel cell microgrid, and we're really excited about that.
It's an asset, as Rob mentioned before, that we're not only building, but we're gonna own and operate. And it's playing into the hydrogen consumption side of the overall industry, and particularly the power sub-segment, where we're storing and converting hydrogen into power for use when it's needed, in a clean and efficient way. So it's not only a first-of-a-kind type project, but it's fulfilling first-of-a-kind customer requirements. So our customer here, Pacific Gas and Electric, wanted to have a solution for these PSPS events, where a city needed to be online... You know, couldn't be taken offline for several days, which would be the consequence of de-energizing the transmission line, bringing power to it. So the solution for the up to now has been to bring an array of diesel gen sets.
They come in at the beginning of fire season in the early summer, and occupy the dog park. That's the community dog park that's there in the city. And they sit there, and they have to run every so often. They're loud, they produce emissions, and, you know, the folks don't like it. And when the time comes that the transmission line is de-energized, they're not 100% reliable in terms of what's called Black Start for the city, 'cause when you de-energize the line, PG&E has to shut off the power to the community.
They have to switch over the breaker to where the, the diesel gen set array is, and now that has to black start that community, bring it back online, and it's, a bit problematic with that kind of equipment. So PG&E wanted a better solution for this, but not only from its overall functional standpoint, they wanted something that was clean and was gonna be sustainable. And so that's where these first-of-the-kind customer requirements really came from. The other thing is Calistoga is at the top of Napa Valley. There's not a lot of space available there, so, the space available is less than an acre. And for the two-day duration, they needed 48 hours, the storage requirement or the energy requirement is right around 300 MWh.
That's about the same energy capacity as the Stanton project you saw, but the available site was only about 2/3 of the site that was available for Stanton, and Akshay told you earlier about how that site itself was constrained from a energy storage project standpoint. So these first-of-a-kind requirements really meant a solution that was complex, challenging, but Energy Vault rose to the occasion and produced a novel fuel cell battery hybrid solution. In order to minimize the... or maximize the energy density, we proposed using liquid hydrogen rather than gaseous hydrogen. It's about 8 times more dense, so you get a much better energy density, and it allowed us to meet the requirement of 300 MWh, roughly, on this space.
We had to work with the community to on the permitting, 'cause as the owner and operator, we had to do the project development aspect of this, working with Calistoga to get the lease to the site, and go through different consequences studies and HAZOP, HazID with PG&E to get the system permitted and going forward. So the team has done a tremendous job tackling this challenge, and we've been moving forward with it. Let's go on here. Advance, yeah. And so one of the other underpinnings of the operation of the system and rising up and meeting these challenges is our software solution, and my colleague, Akshay, will tell you more about this to come.
But basically, the foundation of this is the functional orchestration of the different elements that we have there at the Calistoga project, and there's four of them. We have the battery energy storage system, which is providing that black start, grid-forming capability for the town, 'cause it needs a real shock when you're bringing a community as several megawatts up back online. And then also during the as the system's running and the town's loads are fluctuating, the batteries are there to provide a shock absorber and absorb changes in the load, and so the system can respond. The second element is the fuel cells. They're there for base load, so they're providing the sustained power levels back behind the battery system.
Those fuel cells need a reactant supply, and that's coming from the liquid hydrogen, not only the storage tank, which you saw is that, that big, large, 120 foot-long structure, but also the distribution of that. So liquid hydrogen, you can't put that directly into the fuel cells. You need to actually heat that up to put it into, from liquid to gaseous form. And so we have a, an array to do that, and we had to design that for 48 hour duration. And then the last thing is the microgrid itself. So the control of the microgrid, how these three different main elements there function and interact with the city load and react to dynamic changes in there. So that's the, the functional orchestration that underpins.
On top of that then, is the lifetime operational management of the system itself, with our Vault Manager, Vault Bidder, and the LTSA offerings. The system next year should be connected, interconnected into the CAISO grid, and therefore, it'll be able to participate in the market and start getting market revenues from the energy market using the battery front end of this system. That helps bring in additional revenues on top of the tolling agreement we have with PG&E during for the PSPS events. Another part of meeting the challenges is to have a robust supply chain and leverage the experience and capabilities of other people. So two of our main partners on this are Plug Power with their fuel cell units.
So at Calistoga, we're using some of the first megawatt scale fuel cell units that Plug Power's produced. Now, these are new products, but they're based on decades-old technology and material handling for fuel cell stacks and subsystems that they've used. Those are integrated in a novel way into these GS 1540 1.3MW rated fuel cells. We have six of those there, providing the base power for the town. On the hydrogen storage side, we're working with Chart Industries, and the tank you see there and on the video was fabricated here in the Midwestern United States from Chart. They've long supplied the aerospace industry and other industrial processes, oil and gas, with hydrogen storage and distribution equipment.
So we're leveraging the experiences from them in a novel way for the power energy storage project. And so bringing it together, we've really come up with critical learnings in four of the main functional areas that it takes for a project like this. And all those are coming together and providing us with a repeatable blueprint and benefits. Now, this blueprint is very powerful. It's allowing us. The amount of things that we've learned through execution of this project are allowing us to understand how to design these kinds of systems better and faster, and putting us miles ahead of our competitors. It also gives us the understanding of how we can get maximum profitability out of these kinds of projects, not only for ourselves, but more importantly, for our customers.
As Marco just said, you know, listening to customers is key here at Energy Vault. Really, it provides us a technical foundation to have flexible solutions that we have, kind of, that we can provide to the industry. We've seen great success with these flexible solutions in the battery energy storage space, and now we're bringing that same kind of mindset here to hydrogen. And so how does this all translate then to follow-on business and the bigger picture?
Well, the things that we're doing in Calistoga here really provide that understanding to participate in both sides of the market, both in the production, where you need supply of clean, reliable, and available power 24/7 for the production of clean hydrogen, and then on the consumption side, where, storage of hydrogen and its dispatch is critical to a number of these emerging, market segments. More specifically, in hydrogen production, the capabilities that we've established, not only in our hydrogen work, at Calistoga, but in battery energy storage, is directly applicable to, integration of electrolyzers at renewable plants. So that's one of the ways that, green hydrogen is, is gonna be produced here going forward. And so this work is, gives us immediate value add, for customers working on those projects.
Now, that's a stepping stone to broadening out in the production sub-segment, to providing even greater level of service with all the energization for these kinds of facilities going forward, and which would really allow us to combine different things, even beyond batteries and fuel cells, for minimizing LCOE for those facilities. On the consumption side, with Calistoga, we're already providing, you know, power for microgrids, right? That whole sector. It's not only for communities undergoing PSPS events, but large industrial users. We talked to folks in oil and gas that have wells that can't get online, can't be connected to the grid in, you know, for six or seven years, and they need a solution today.
Fleet charging facilities, large loads, hyperscale data centers, all these places are directly applicable to what we're doing at Calistoga, storing, converting hydrogen for use into power. So to sum it up, I hope you've seen how with the way that we're gonna get into the clean hydrogen industry here, is to start with our beachhead project here in Calistoga. That really gives us the ability to understand what it takes to put these in the ground and how to do it profitably. We're laser focused on that project itself. But even with that laser focus, the inquiries have started to come in as more people have taken note of this project and seen the applicability.
We've been engaging with customers and taking that input and looking into incorporating that into how we offer solutions going forward. You know, if you look across the West alone, about every country, or every state rather, is in the midst of employing line de-energization for its wildlife mitigation programs, and that represents over 20% of the U.S. population. So there's a we think there's a really strong market just for what we're doing with Calistoga itself. We see roughly about a $600 million opportunity here in the U.S. and abroad, because these line de-energization strategies are also being looked at in Canada, the Mediterranean, and Australia. So wherever you see wildfires, it's part of the strategy.
So from that then, we think we'll have a firm foothold then to participate in both sides of the hydrogen market going forward. Happy to answer any questions now. Thank you.
Thank you, Craig. We've got time for maybe one question. We are running behind, but we've allowed plenty of time at the end for Q&A. Okay.
Okay.
Thank you very much. I'd like to welcome back on stage Akshay Ladwa, who's gonna talk about our software services.
Thank you, Laurence. Wellhead is a privately held owner, developer, operator of energy-generating facilities in California. We've been around 40 years, and currently, we own and operate roughly 600 MW in California. The Stanton project is a 68.8 MW battery energy storage facility. That particular project provides resiliency to that local area in Stanton, as well as overall grid reliability to the larger system. Energy Vault collaborated with us closely to basically come up with a custom technology solution for that project, that at the time, no other vendor was able to do under the time commitments that we had. We were able to complete a successful charge, 68.8 charge to the system only one day after the final battery was loaded. I've seen other projects take days or even weeks.
to get through that, that first charge or discharge of the system after the, the system is mechanically and electrically complete. So Energy Vault's readiness with the VaultOS was key in keeping us on schedule. You know, we're bringing on a lot of solar, a lot of wind. All of that variable generation needs to be optimized. I wanted to ensure that we had the maximum operational flexibility, so that we could get the most revenue out of the plant. But at the same time, it's so important that we understand exactly how the machine is operating. Are we stressing the battery from day to day? Those analytics are just extremely important to ensure that you can maximize revenue and minimize the life cycle cost of the battery through its life.
We're proving every day that the product that EV has given us is superior to the other products that we have. It's going to operate the way it's predicted to operate, and I know what the costs are going to be, and that makes my job, not just doable, I have that opportunity to really excel.
Wellhead was the first deployment of the VaultOS. Because of the size of the project, and given how tight the site was and the custom solutions that we had to design, we had to install the batteries on site. From the time we installed the last battery, to the time we cleared the seven tests, which are required to participate into CAISO, it was about two weeks. And that was our first deployment of our VaultOS platform. The reason it all came together so quickly was, one, obviously the experienced team, but because of the way the VaultOS platform is built. As I talk about the software-based solutions here, we, we carry the same mindset. There is no cookie-cutter project. Even two projects in CAISO, they are slightly different with the, with the customers trying to solve the application. Economics is the focus.
We make sure we understand completely what the problem the customer is trying to solve for, what makes the project economics work, and that's what gets into algorithms, which eventually are programmed into the into our Vault Bidder, which manages the dispatch for the VaultOS. And finally, once the project has been executed in operation, we continue to manage the SLAs, which is the software license agreements, and LTSAs, and that is possible using our software platform as the backbone. As we go through the energy transition, I believe two, two things are very clear. The first one, we need a lot more storage, and it's not just battery energy storage, it's all kinds of storage. As we just looked at here, we, we talked about the short duration, which will provide the reliability, regulation with ancillary services.
We need long duration, so we can shift the energy as more variable renewable energy hits the grid. And finally, we also need ultra long duration with microgrid, which, which, which we are doing with our Calistoga project. The second element is... First one is we need a lot more storage, but the second one, there's not a single technology which will help us through that transition. It's going to be multiple different technologies. What that means is, now we are entering the world of hybrid power plants. We have to become very good at understanding, designing, engineering, building, but most importantly, operating these assets, operating these hybrid power plants, and that's the fundamentals on which we have built the VaultOS platform, along with all the other applications which get plugged into the VaultOS. On the bottom, you can see we have technologies, different type of resources.
Generation, could be wind, solar, hydro, gas, any type of generation paired with any type of storage. All of these are programmed into their operational constraints into the VaultOS platform. It's a technology neutral, technology agnostic platform. Overlaying this is the architecture of the VaultOS, and what gets up on the top is the different applications that different sites, different customers are trying to solve for. As we looked at the slides I presented in the battery section, we had three separate projects, different hardware, different markets, different duration, but the VaultOS was the same common platform, which was operating this. Agnostic to the technology, generation, or the storage, agnostic to the application, so the VaultOS, as we have designed and built it, is not an energy storage management platform.
It's a platform to be able to manage all different types of assets, all different type of technologies, with a focus, especially around hybrid. Calistoga, one of the most complex application, is a microgrid. With the VaultOS platform, we're able to manage dispatch of hydrogen, dispatch of the batteries, but also we're essentially running the entire grid of the city of Calistoga, should we have any faults on the grid. All of that is being managed by the VaultOS platform. It's different than just being a software platform that is dispatching just batteries. Finally, optimization. Optimization is fundamental as we look at hybrid-based resources, because you have so many different technologies with different constraints. For example, we have the fuel cells. The way the fuel cells ramp up and ramp down has to be taken into account.
Should a fuel cell fail, we need to make sure we have reliability. All of that are variables which get programmed into the software platform that allows us to keep continuous optimization, but focusing on making sure that the lights of the city will stay on, that we are constantly providing the power that is necessary for the city. Optimization across different revenue streams. This is one of the fundamentals of how the lithium-ion short duration battery energy storage grew. But as we bring on different duration of technologies, and we're now looking at projects which are 400-500 MW each, we have customers that are trying to parse out different PPAs with these projects.
Although everything sits behind a common interconnect, but there could be different PPAs, which means the way you take the entire 500 MW and you operate it into the market, has to be orchestrated through a comprehensive controls platform. The VaultOS is a combination of on-prem plus cloud-based software. It's a real-time controls and monitoring platform. Like our strategy around the hardware and the other durations that we just talked about, key is flexibility. Flexible across all types of technologies, all types of applications. Scalability. It's the same platform, the same controls platform, that can be applied to a small-sized project, could be a 5 MW, or all the way up to multiple GWh size project. The next two platforms integrate seamlessly with the VaultOS, the Vault Manager and the Vault Bidder.
Vault Bidder is an optimization, algorithm-based platform, whereas we look at these assets that need to participate into the market, there's multiple different ways we can operate them. For example, let's take the example of the Wellhead project in Stanton. There's nine different markets that we can take the same asset and we can operate it into. We can go in day-ahead real time energy. We can operate it in the ancillary services. What rate do you charge? What rate do you discharge? What time do you do that? The economics of the project highly depends on the way the asset is being optimized and dispatched into the market. Vault Bidder takes into account the forecasting prices.
It takes into account multiple different inputs, such as weather, and continuously, on a five minute basis, generates the most optimum dispatch that makes the most economic sense, but making sure the asset is working within its constraints. Should we have an inverter go down, should we have a fault on the grid, immediately that's being adjusted into the amount that is possible to be dispatched, and should be then required to go and settle into the market for the shortfall, that is also being triggered by the VaultOS platform. Finally, the Vault Bidder. Each of these projects that we have deployed, we collect over 100,000 data points every second, and all of this data being collected by the VaultOS, get put onto the cloud periodically. As you do a look-back analysis on this data, there is a lot of useful information.
How did we operate the project? What is the performance of the equipment? Compare the operational data against the historical market prices. Clearly, there is a much better way to operate. Performance analytics is one of the key elements of the Vault Manager, which allows us to improve the way we dispatch and manage the assets.
As we sign our LTSA contracts, the Vault Manager takes into account the best times that is good to service the asset, making sure we have as little time as possible off from the market, where the market conditions are more favorable to taking the asset offline. Should we have a failure on the site, should there be a problem with the batteries, with one of the technologies inverters, that automatically gets logged into a tracker, an issue tracker, and immediately, there is notifications to the service personnel to see this is the issue, this is the spare parts that are available, and here are the first two steps that can be taken. And that drives the issue all the way through completion.
Energy Vault's proprietary software architecture comes together under VaultOS, controlling energy storage and generation assets in real time to ensure reliable and secure dispatch of electricity to the grid. VaultOS can handle anything, from grid-connected storage dispatch to complex control of microgrids with a mix of energy storage and generation technologies. It's already in operation at energy storage sites in the ERCOT and CAISO markets, delivering over 100 GWh of electricity to the grid to date during peak demand. VaultOS responds instantaneously to changing grid conditions, exceeding grid requirements worldwide. When the grid frequency changes, the software can deliver power to or charge from it in milliseconds and at gigawatt scale. With the ability to process millions of data points per second, VaultOS delivers unparalleled high-resolution data right down to the battery cell level, fueling our AI-driven analytics engine to generate actionable insights on maintenance and maximizing ROI.
The VaultOS platform dramatically streamlines commissioning. This efficiency allowed the B-Vault site in Stanton, California, to come online early and crucially ahead of a major Southern California heatwave. With access to so much real-time, high-resolution market and operational data, Energy Vault offers two software platforms for efficient asset management and maximizing returns. Vault Manager is a comprehensive asset management platform for optimizing cost, performance, and maximizing profitability. Vault Manager turns real-time performance data into insights that support decision-making on asset maintenance, augmentation, and expansion. Vault Manager's asset management capabilities include customizable ROI evaluation, project lifecycle analysis, and digital twins-based simulation, all accessible through an easy-to-use scoreboard interface. The operations and management portal employs modern dashboards for on-site service, equipped with a knowledge base, maintenance tickets, and self-service functionality.
Vault Manager is the ideal tool for asset managers to monitor, track, analyze, optimize, and deliver the highest possible ROI from any storage site. Vault Bidder is an advanced energy market monetization platform that maximizes asset owners' revenue with AI-driven models for dispatch optimization across energy markets. Incorporating all operating conditions, physical constraints, and contractual constraints, Vault Bidder adjusts price forecasts for more aggressive or conservative operation per customer's preferences. Vault Bidder generates optimal market-compliant bids and offers for market participation, serving a wide variety of use cases, standalone storage, hybrid power plants, and more. Vault Bidder can be easily adapted to a variety of market operators such as CAISO, ERCOT, AMO, National Grid, considering all market products, including energy and ancillary services in day-ahead and real-time markets. Any newly introduced market service can be added with simple configuration changes, accelerating new product development and speed of deployment.
Vault Bidder maximizes net value of an asset by not only maximizing the revenue streams, but also safeguarding a system's health using predefined KPIs and asset status data. VaultOS, Vault Manager, and Vault Bidder are each standalone software platforms that can seamlessly integrate with each other and with third-party applications through open APIs. Energy Vault has built the most advanced energy market monetization platform and is already maximizing returns on investment for energy asset owners. When brought together, VaultOS, Vault Bidder, and Vault Manager create the most functional energy management and trading software in the marketplace that is scalable, intuitive, and secure.
As we hand over the assets to our customers and they begin to operate them, we continue our engagement with them with our service contracts. We've signed SLAs and LTSAs, which are the long-term service agreements, to make sure the asset is online, performing. Should there be issues with either of the equipment, we're managing the asset to make sure that the warranties which are being committed by the suppliers are upheld. The VaultOS, along with the Vault Manager and the bidding platform, builds up the backbone for us to go and deploy the LTS and SLA services. The first time we go and deliver, execute the project, either as an EEQ or an EPC, there is a instance of the software platform delivered.
The next one is, as the asset continues to operate into the market for its life, we sign SLAs, which allows us to continue to have a path to recurring revenues. For all of our projects that we execute, there is a path to recurring revenues with the SLAs. On top of that, there's the LTASAs, which allow us to manage the asset, make sure it's available and online, and extended warranties, performance guarantees are all part of that wrap. To, to summarize the software strategy, flexibility allow us to integrate all types of assets, be a technology neutral and agnostic platform, focus on what matters to the customers, economics in the middle, and finally, have a path to recurring revenue through the SaaS-based model.
Thank you, Akshay. Again, any questions? Although we are, again, running out of time, but I want to bring on, Michael Beer, our new CFO, and then we'll bring back, Rob and Michael at the end for extended Q&A. Okay, welcome to stage, Michael Beer.
All right. Good afternoon. My name is Michael Beer, CFO. As Rob had mentioned, I joined the company, about a month ago, and thanks in part to a phenomenal finance and accounting team, I've been able to get up to speed very quickly. I've spent the last seven years, leading finance and at a number of companies within the technology space, whether it was in the energy transition space, energy storage, or mobility.
Prior to that, spent about 15 years on the institutional sell side, working within the legacy energy space, oil and gas, refining, and so forth, as well as global transportation infrastructure, not just here in New York, but in Asia as well, working for banks like Bear Stearns, helping to start Wolfe Research and then Citibank in Hong Kong and Singapore. Really thrilled to join such a phenomenal team. You know, obviously, with the shared vision, and what they've been able to accomplish in the last 2 years is fantastic, and I think it just sets the stage for not just our next two years, but the next 20. So really thrilled to join the team.
You would have seen last evening, we posted our first quarter results, in which we generated $7.8 million in revenue at a 26.7% gross margin. We've now delivered over 1 GWh of energy storage projects thus far. Cash OpEx of 16.7% was actually improved about 22% year-over-year, and thanks in part to cost-side measures that were initiated in the fourth quarter. Adjusted EBITDA improved 24% year-over-year to $14.4 million, a loss of $14.4 million, and we ended the period with cash of nearly $137 million, which is a reduction of about $9 million from where we stood at year-end.
But you, as I'll talk about in a moment, our restricted cash position is, has been significantly enhanced. We also talked about a number of operational updates. These have been addressed throughout the day. We had a great update earlier this week on the maiden gravity project we have in Rudong, China. We also talked about the 440 MWh project we have in Nevada, that was delivered and now energized. And we also gave an update on where we stand with the Calistoga project, which we've chosen to retain, and we'll talk more about the rationale and the economics behind that. Again, digging back into the first quarter results, the $7.8 million in revenue was down fairly materially from the fourth quarter.
That was to be expected and reflective of the seasonality that we highlighted on the last earnings call, relatively in line with where we were sort of a year ago. In terms of gross profit, $2.1 million, relatively flattish versus a year ago, but on a margin basis, about 500 basis points improved year-over-year, and significantly improved from what we had posted in the fourth quarter. Again, that's a function of really generating a far larger per percentage and proportion of higher higher margin service revenue versus more equipment-oriented type revenue. From a cash OpEx perspective, this improved 22% year-over-year and 14% year-over-year quarter-over-quarter.
And again, that's in part to some cost side initiatives that we put in place in the fourth quarter, and we'll continue to see the benefit of that as the year progresses. Net-net, the Adjusted EBITDA was down. It was a loss of negative $14.4 million. That was improved by about $1 million sequentially versus what we had posted in the fourth quarter, notwithstanding the dramatic reduction in revenue and overall gross profit. Again, a function of cost side measures, but also just the higher gross margin percentage. On a total cash basis, again, we ended the period with $137 million in cash.
That was a reduction of $9 million on an absolute basis, but what I really want folks to focus on here is the restricted cash and the change in restricted cash over the last year or so. In other words, in the first quarter, we ended the period with just $1 million of cash that was encumbered and restricted. Meanwhile, at the end of the year, that number was about $36 million, and a year ago, it was more like $84 million. So we're, you know, as we've matured, we've been able to build out phenomenal bonding capacity, and have been able to use surety-backed LCs rather than using cash to help facilitate many of the projects that we're working on and delivering in real time.
And again, that show of maturity will allow us to do more with our resources going forward. And again, that's something that we're certainly gonna dig into as the presentation continues... As far as the rest of the year, we're targeting between $50 million and $100 million in total revenue. This reflects the seasonality of many of the large projects that we're working on, but it also reflects a conscious decision that we've made to retain some assets rather than to sell or transfer those assets. That being said, we are expecting a higher gross margin than what we've generated in the past.
The 15%-25% gross margin that we're targeting for the year is relative to the 26.7% we, we generated in the first quarter, and relative to the 5% that, that we had posted in all of 2023. So that significant improvement, obviously, is a reflection of, of more favorable revenue mix and so forth, notwithstanding the, the, the lower revenue number on the top line. In terms of overall Adjusted EBITDA, we're targeting a range of between -$45 million and -$60 million. This is an improvement year-over-year relative to what we had posted in, in 2023, and again, reflects some cost side management that, that we're vigilantly implementing as we speak.
And then in terms of overall cash balance at year-end, we're targeting a range of between $75 million and $125 million, which we believe is more than enough cash on an unrestricted basis to help us facilitate projects, and again, will allow us to target unique opportunities on the own and operate side. So this is more than enough cash for us to facilitate the business for the rest of the year, and we believe actually will be in a cash-generative position in 2025. All right, in terms of the financial outlook, we have refined and updated the way in which we think about the overall commercial pipeline.
As you would have heard from my esteemed colleagues and some of the subject matter experts, we have a host of opportunities in multiple geographies across multiple product lines, really leveraging our technology, our know-how, and our ability to integrate and really deliver unique solutions around the world. Our developed pipeline today of $2.7 billion, I'm thrilled to say that over half of that, or I think that the number is about 60% of that, really comes from either existing customers or those strategic partners or investors of ours that are launching projects here in the near term. These are shortlisted and awarded projects, right?
These are those that we feel fairly confident will be converted into backlog and thus revenue here within a reasonable time frame, let's call it 24 months or so. In terms of the actual backlog today, around $225 million. We've talked earlier about the award received from ACEN in Australia. We're thrilled to actually commence production on that here in the second half of the year. Much of that revenue will show up towards the end of this year and into 2025. And again, that speaks to sort of the lumpiness and some of the timing issues associated with that type of work.
In terms of executed projects, you know, year-to-date, we've delivered nearly $500 million worth of project work, or roughly 1 GWh of projects. What I do wanna highlight is really the way in which we're defining this commercial pipeline, and we wanna try to provide additional transparency for the street, which will allow you to improve the efficiency of forecasting and so forth, and tracking our progress as we move from quarter to quarter. During Rob's presentation, we talked about focusing and dedicating resources in those markets that we think will yield the best results. That includes China, United States, Australia, and Western Europe. We invested in those markets. We've placed resources in those markets.
There's good local talent that are working with local customers and global customers, and we now have significant traction that we can speak to and leverage going forward. So you can see that we've now placed bets in each of those key markets, and it's starting to bear fruit. Furthermore, we're also leveraging a nice, diversified storage portfolio. So many of you, two, three years ago, would have known this company solely as a gravity storage company. We've obviously diversified. We have a very healthy portfolio of unique products within the B-Vault or battery storage segment, as well as H-Vault or hybrid solutions.
Our software really is an overlay across all of those different business lines, and we can now get more creative in the way in which we think about deploying and allocating resources for those unique projects that, frankly, we'd be more than happy to keep on our balance sheet. We think that that's also going to help smooth out some of the episodic peaks and troughs that would otherwise be associated with an all EPC type business, and we'll get a little bit more into that in a moment.
The purpose of this slide is really to start giving the analyst community and investors a little bit more comfort as to how they should think about each of our different business lines and the way in which we're thinking about really capital intensity, and that's what it kind of comes down to. You know, we basically have shown five different subsegments here. We will not be reporting on a segment basis going forward, but this is just a directional indication of how we think about the overall economics and the capital intensity associated with each of these different business lines, whether it's gravity, battery, hydrogen, software, or the own and operate segment. And it really comes down to the overall business model and the structure that's employed. In terms of gravity, we've opted to really focus on IP licenses and recurring royalties.
That means that we're not building these projects, and as a result, it's fairly low from a capital intensity perspective. We're not deploying a lot of capital. The dollars may be relatively small relative to, say, what you see from our battery business, but the gross margins are fairly exceptional, in excess of 90%.... On the battery side, again, this is largely EPC or EEQ business. It is low capital intensity, but you're often handling large sums of money, large projects, and the margin is a much more pedestrian, let's call it 10%-15% on average. Obviously, we have a number of listed peers in which one can look across and see some sort of market averages, and this would be relatively in line with what they report.
In terms of hydrogen, again, this is a low capital intensity type business. If these projects are managed well, you should never be underwater from a cash flow perspective, throughout the development cycle. But the H-Vault and these hybrid solutions do require a little bit more creativity. They do require a little bit more know-how, they require a little bit more ingenuity, and as a result, we're able to often receive a larger gross margin for those that we were to transfer and/or we think that we can actually retain a lot of those economics should we decide to own and operate those assets ourselves.
In terms of software and services, much less capital intensity, and as a result, you know, far better sort of margin profile, albeit those dollars for us are relatively small. It's really the connective tissue that sort of ties it all together. There can also be some rev rec issues around the timing with which those SaaS services or softwares are delivered, or rather, the performance obligation is recorded. In terms of own and operate, these assets, the ones that we've identified, whether it's Calistoga with PG&E and the tolling agreement associated with that, whether it's our Cross Shields project in Texas, you know, the margin profile that one can generally expect would be on the order of 70%-80%.
Again, this is a higher capital intensity type decision. We're using our balance sheet. Initially, that may be in the form of equity, but very quickly, that equity capital would be recycled vis-a-vis a project finance structure. Furthermore, as a result of the IRA, we think we can really monetize a lot of these tax credits, and make the economics all that much more interesting and worthwhile from our perspective. In addition to some of the tolling opportunities, there's also a lot we can do around some merchant market opportunities. So this is just to kind of give you, the analysts and investors, really a little bit more fidelity and a little bit more confidence of how you should be thinking about these different business units.
Obviously, you can look at the blended total that we've put down below. That will change quarter to quarter, year to year, depending on mix, but it'll give you some guideposts as you think about our business. Again, on a blended total basis, you can see that 15%-20% sort of objective. That will be obviously largely weighted towards that B-Vault segment because the dollars are just, quite frankly, much larger as a percent of the total. When we think about gravity, you know, we've often talked about really the licenses. There are upwards of $200 million or more in recurring royalties that we anticipate over the next 10 years.
Those numbers could be substantially larger, depending on how additional licenses are added over time or additional facilities are built over time. There's a variable component to that, and so I've separated that out. We wanna make sure that we acknowledge that there is significant value associated with those recurring royalties, but it's going to be spread over a period of time, and it's variable, and some of those variables are, frankly, not in our control. It's a function of how the asset owner chooses to deploy that asset, operate that asset, and and satisfy market demand for energy in those specific markets.
To date, we've sold licenses that cover 19 countries, bookings of $100 million, of which $61 million of revenue has actually been recorded, and the gross profit on that has been historically in excess of 90%, and I don't expect that to change. From the technicals, we heard from Marco and team, you know, this is a product that has a round-trip efficiency in excess of 80%. We've had multiple technology generations and continuing to push the envelope in terms of what's possible, different operating domains, different structures, different ways in which we can deliver this unique and novel technology to the market.
Then overall cost reduction, we believe from a levelized cost of storage perspective, this makes a lot of sense, and again, it's depending on the operating domain, what is the duration of storage that we're trying to satisfy, and so forth. All told, again, $100 million of bookings as it relates to licenses and over $200 million, we believe, capable from a recurring royalty perspective over the next 10 years. In terms of what does that mean for 2025? So in addition to providing 2024 guidance, we're also providing 2025 guidance, part and parcel, because we have very large projects that will likely go from the fourth quarter of this year and overlap into 2025.
While 2024's revenue is envisioned to be sort of $50-$100 million, part and parcel because we're retaining the, the ownership of some of those assets, 2025 should be a, a much more meaningful $450-$600 million. And again, that's a function of number of contracts that we've been awarded already, that have been booked, and, and those that we have line of sight and anticipate will convert into a booking year imminently. In terms of the gross margin profile, as a function of the overall dollars involved and the weighting towards those battery projects, I would expect this to be in the 15%-20% type range.
We are expecting to inflect positively from an Adjusted EBITDA perspective on the year, and we expect to end the year in excess of $100 million of cash, so somewhere between $100 and $150 million, which again, we anticipate to be more than sufficient cash to facilitate the business and to allow us to make some really informed, educated, and opportunistic investments into some unique assets and opportunities. And so just to recap, the point that, that Rob had made, as we think about this sort of, let's call it, midpoint within our, within our two-year journey as a public company, and now looking out for the next two years, you know, the first two years as a public company, we generated $487 million in revenue, with an average gross margin of 16%.
Over the next two years, based on guidance, we expect to generate between $500 million and $700 million in revenue at a forecasted gross margin, on a blended basis, gross margin of between 15% and 20%. We expect to inflect positively from an adjusted EBITDA perspective. And again, our confidence around these figures is a function of having over 60% of that $2.7 billion developed pipeline from existing customers, where we delivered projects and those from strategic partners and investors. Lastly, I want to leave you with really a deep dive into the cash position, because I think, and rightly so, Wall Street has been focusing on the cash position, not just of Energy Vault, but all companies that are sort of within this energy transition-type landscape.
This is a company that has maintained a unrestricted cash balance over the last five quarters of between $74.2 million and $135.8 million. So that is unrestricted cash that was not encumbered, was not restricted and tied up in project-related work. Importantly, you'll see that that restricted cash has been declining every single quarter. So it went from $83 million a year ago to about $1 million in the most recent quarter. That's a function of the maturity of the organization. That's a function of us building out about $1 billion in bonding capacity, and that's also allowing us to really enhance and leverage our use of surety-backed letters of credit rather than using cash-backed letters of credit.
So that maturation and the way in which we think about facilitating project work has really freed up cash to allow, to allow us to do a lot of other sort of creative things, or, or make more opportunistic bets. As a result, we believe that band of $74 million-$137 million of unrestricted cash is something where we can comfortably manage the business, and that's the range with which we expect to stay in over the next 18 months, or really for the 2024 and 2025 year-end guidance. So just want to kind of give you a sense, this is where we've been for the last year and a half and where we expect to basically be for the next year and a half.
So it's an area that we feel comfortable with, and we'll continue to manage our cash resources, obviously, very vigilantly. We've already put in place cost side measures, but just giving you a sense that this is something that we take very seriously, that we're managing, and that we believe that we're sufficiently resourced to facilitate the business going forward, notwithstanding a very large increase in the overall portfolio of opportunities. We are not anticipating taking on any corporate debt at this stage, nor are we anticipating any dilutive financing events. That being said, as we move into the own and operate space, we will very opportunistically go out to market for project finance, look to monetize tax credits, and things of that nature. But again, that would manifest itself in the form of corporate-related debt.
Okay, with that-
Thank you, Michael. I'd like to invite Rob Piconi on the stage and with Michael, and they'll be happy to take some questions from the audience. Question over here.
Hi, everyone, and, thanks for taking my question. So I, I have two just to start here. So when we look at, your reported stated backlog in terms of revenue, I think, as of exiting the first quarter, it was like $136 million, and now it's $225 million with the addition of, the Australia project. I was just curious, like, what kind of visibility you have on converting that to revenue in the next twelve months? Because I think exiting the first quarter was, like, 3%, and just helping just bridge the guidance for $50 million-$100 million in revenue in 2024.
Yeah. So, as you would have seen, we announced the ACEN project today, and without disclosing the specific size of that project, you know, you can probably kind of back into the general order of magnitude. Now, that being said, previously, we would have defined backlog and excluded all things associated with sort of future licenses and some other sort of long-term service agreements. We've now decided to change the definition ever so modestly to include that, and it's a little bit more holistic. And so you can see in the slides that have just been published, we've now redefined what is included in that. But the ACEN deal, and we've given some details around the timing of that, it should commence construction here in the second half of 2024.
Some of that revenue will be recorded in 2024, you know, towards the end of 2024, but largely in 2025. We do have other projects that are in varying stages of being completed, where there will be some revenue associated with those projects, and other projects where we have a line of sight to commence-
Mm-hmm.
construction and believe that some portion of that would be recorded before year-end 2024, hence the $50-$100 million type revenue range. You know, we have tried to be conservative and make sure that these are achievable figures.
Yeah. I would just add to that, the other pieces of the bridge there, in addition to project timing, just to remind, we're choosing to keep some things on our balance sheet. So-
in the magnitude of anywhere from $75 million-$150 million of things we could have monetized into revenue this year, so that you would add to then some of the project timing. We obviously announced last quarter and reiterated this quarter a very large project for entry in Australia that moved about 6 months. So we were planning initially to have some of that rev rec this year, and that's moved a little bit into next year, but as announced with a strategic partner. So it's not an if, it's just a when on that one. So that impacted our rev rec this year, but as you see, moves very strongly into 2025.
Got it. And then just one clarification question for me. I know just to point out that your execution on the B-Vault side has been, you know, exceptional with the couple of projects you had commissioned recently. But the $2.7 billion in a development pipeline, is that primarily battery? Is that all battery, or is that just the breakdown of that backlog and going into next year?
Yeah, I don't think we're breaking it down by segment that we start getting into the segment reporting territory, but it is going to be largely associated with batteries, just the way EPC revenue and dollars would flow through.
Yeah. We also announced last quarter, and to reiterate on the gravity side, there's a... We mentioned a Washington State gravity project that's multi-GWh. So that's a gravity. That would, as of right now, not be included because the timing we see of that project, so not included in the numbers here. Announced the utility, it's a public utility, allowed us to announce and call that out. So, so do we have other things in the approach we're taking on the funnels, as Michael's pointed out, to be very streamlined in, in near term. But, we see tremendous opportunity with gravity now with some of these new applications, and a lot of those could pop in and get pulled up.
What's interesting about gravity is, you know, it's not a new concept, it's proven, and these new applications can turn very quickly with groups that, as I mentioned in my talk, the projects are large. There's nothing sub 500 MWh, and most of them are north of 1 GWh. So, anyway.
I appreciate the color. I can pass it on.
Thank you. Any more? One here.
You talked about the improvement in profitability year on year being driven a lot by the licensing layering in. Could you talk about, or could you, separate that out between, you know, that dynamic and improvement in the actual - in the base business, the non-licensing piece, and what the trajectory of that improvement looks like?
Sure. So, in the first quarter, there was the prospect to potentially record the GESSOL South African license revenue. We did not record that, so the $7.8 million in the first quarter excluded any sort of license-related revenue associated with that GESSOL license. We do expect to record that later this year. So that would obviously improve the economics there. The point of showing the slide that really broke down the five sort of different business lines and what would be the directional margin structure is it allows you to sort of see if we were just doing battery EPC work, you would expect us to have, you know, margins that would be in line with some of our listed peers that are obviously very oriented towards that.
The uplift on the overall blended margin is a function of adding in and layering in, whether it's own and operate projects, whether it's license or royalty streams, and whether it's, you know, long-term service agreements and things of that nature.
Thank you.
Thank you. Any more? Okay, well, look, thank you very much. We will be following up with calls after this and typical analyst calls. We do have a nice lunch outside, so hope you're hungry, and thank you very much for joining us, and thank you very much for all the presenters, and sharing what we look forward to for the rest of 2024. Thank you very much.
Thank you, everyone.