Stem: grid-scale battery breakthrough?

Stem Inc. went public via SPAC in April-2021, in a combination with Star Peak Energy Transition Corp, valued at $1.35bn.  Its offering is concentrated on software to manage and optimize grid-scale batteries, which can lower energy bills by 10-30% and uplift IRRs. Revenues are targeted to grow at a c50% CAGR.

Stem’s patents are visibly focused on software (>80%) rather than hardware (c20%). What surprised us about the patents is that they are mostly focused on smoothing short-term, second-by-second, minute-by-minute volatility caused by increasing renewables deployment (70%). Not moving excess renewable power over longer timeframes.

Stem scored well on our usual patent framework. We found the high-level problem statements and proposed solutions in its patents to be compelling and innovative. But it is also inherently harder to assess the fine details of optimization software with patent analysis.

Specific challenges, solutions and back-up is outlined in the data-file.

Array Technologies: solar tracking breakthrough?

Array Technologies IPO-ed in October-2020, listing on NASDAQ. It manufactures solar tracking systems, supporting 25% of US solar modules installed to date, and 22GW of projects globally. Its systems can uplift solar generation by 5-25%.

Array cites seven advantages of their solar tracker systems in its presentation materials, and we found clear, specific, intelligible patents, back-stopping six of these seven areas. The patent library looks concentrated, focused and may confer a moat.

This data-file screens Array Technologies’ patents, using our usual framework.

Carbios: plastic recycling breakthrough?

Carbios is a French company, founded in 2011 and listed on Euronext, Growth Paris, with €430M market cap (Jun-21) and c40 employees. It has developed an enyzmatic process to recycle 90% of PET within 10-hours, which has been described in Nature.

“This highly efficient, optimized enzyme outperforms all PET hydrolases reported so far”. This has attracted partnerships with Nestle and PepsiCo. In November-2020, Carbios produced the first clear bottles containing 100% recycled PTA from textile waste, without downcycling, at lab scale.

The first full-scale plant will produce 40kTpa, costing €100M to construct, starting up in 2025, and saving 48kTpa of CO2. We believe economics could be extremely exciting, compared to conventional plastics and ethane cracking.

There are four challenges, based on our review, outlined in the data-file, and hard to de-risk from our analysis of Carbios’s patents. These challenges may therefore be worth exploring  with the company.

Climeworks: direct air capture breakthrough?

Climeworks is a private, Swiss company, founded in 2009, commercializing a direct air capture technology, to pull CO2 out of the atmosphere. It has raised $125M by early-2021.

Its first CO2 removals facility is also running and a second is under construction. Current CO2 removal costs are likely above $1,000/ton. It uses a dry process with much lower water intensity than, say, Carbon Engineering.

The main innovation visible in Climeworks’ patents is a DAC plant with optimized air flow, passing CO2 through layers of fabric housing CO2-adsorbing materials. This is an important breakthrough to avoid steep pressure drops (and their resultant energy penalties) in DAC.

Based on reviewing Climeworks’ patents, we were unable to de-risk sub-$200/ton CO2 costs, which is the base case in our economic models.  

Danimer: bio-plastics breakthrough?

Danimer Scientific is a producer of polyhydroxyalkanoates (PHA), a biodegradable plastic feedstock, sold under the brand-name Nodax, derived from the bacterial metabolism of vegetable oils (e.g. canola oil).

There are still commercial challenges and uncertainties preventing a full de-risking of PHA bio-plastics. They include slow processing (especially long crystallization times), lower tensile strength, higher brittleness and 4-5x higher costs than conventional plastics (screen here).

Nevertheless Danimer scores a solid 3.5/5 on our technology framework. Our review of its recent patents shows specific and reasonably intelligible innovations, which are especially focused upon improved processing, high-quality copolymers and boosting demand for PHA products.

Our conclusions and underlying details are laid out in the data-file.

Nio: EV-charging breakthrough?

Nio is a listed, electric vehicle manufacturer, headquartered in Shanghai, founded in 2014, that IPO-ed in New York in 2018. It has partnerships with CATL and Sinopec.

The company opened its first battery swap station in Shenzhen, in 2018, which has since expanded to 200 battery-swap stations. The 2-millionth battery swap was completed in March-2021.

The Power Swap station 2.0 is scheduled to be rolled out in mid-2021, lowering the swap time to under three minutes, and carrying 13 battery packs.

We have reviewed ten of the company’s patents. We conclude it has a genuine moat in swappable batteries, which could only have been built up by an auto-maker that controls the vehicle and battery designs, as well as the battery swapping stations.

LanzaTech: biofuels breakthrough?

LanzaTech aspires to “take waste carbon emissions and convert them” into sustainable fuels (and bio-plastics) with a >70% CO2 reduction.

It has produced small volumes in China since 2017, partnered with Shell and BA, and is now progressing larger projects: a €150M exhaust-gas capture for AccelorMittal’s Ghent steel plant, and a 10MGal/year aviation fuel facility in Georgia.

We have assessed its patents but concluded we cannot yet de-risk the CO2-to-fuels pathway in our energy transition models. This short note outlines how we believe its technology works, and what hurdles could helpfully be cleared.

Origin Materials: bio-plastics breakthrough?

Origin Materials went public via SPAC in February-2021, as it was acquired by Artius Acquisition Inc at a valuation of $1.8bn. $200M is also secured from Danone, Nestle and PepsiCo, building on a packaging material (PET) partnership that goes back to 2016.

Its ambition is to use wood residues to create carbon-negative plastics, cost-competitively with petroleum products and capture a “$1trn market opportunity”.

Our patent analysis shows Origin has visibly been focused on 5-chloro-methyl furfural as a building block.  For example, CMF can be reduced to MF (loss of chlorine), further reduced to DMF (loss of OH) and then combined with ethylene to yield pX.

Hundreds of potential catalysts, solvents and conditions are suggested for each reaction in the patents.  This data-file outlines our understanding of Origin’s innovations and the key challenges for commerciality.

Enovix: battery breakthrough?

Enovix has developed a 3D silicon lithium-ion battery, which is 5-years ahead of the broader industry, with 2x higher energy density, around 900Wh/liter.

Specifically, silicon has up to 10x higher energy density than graphite as an anode material, but it is prone to swelling 300-400% when charging/discharging, and Enovix’s solution aims to overcome this issue.

The company went public via SPAC in February-2021, acquired by Rodgers Silicon Valley, with an implied post-deal valuation of $1.12bn.

This data-file assesses 10 Enovix patents from 2019-20, using our methodology for evaluating early-stage technology breakthroughs. Thus we have scored the specificity and intelligibility of Enovix’s core technology. Our conclusion are laid out in the data-file.

StoreDot: battery breakthrough?

StoreDot is developing “extreme fast-charging” batteries for electric vehicles, using a proprietary range of nanomaterial additives. It claims its prototype cells can charge 5-6x faster than conventional lithium ion.  The company is based in Israel, has raised over $130M, and secured backing from BP, Daimler and Samsung.

This data-file assesses 10 StoreDot patents from 2019-20, using our methodology for evaluating early-stage technology breakthroughs. Thus we have scored the specificity and intelligibility of StoreDot’s core technology. Our conclusion are laid out in the data-file.