NEWSROOM

EnergyBank dives deep into energy storage problem

EnergyBank co-founders Tim Hawkey (left) and Jordan Hooper (right)

24 February 2022

EnergyBank is an energy storage technology company founded by University of Auckland alumnus Tim Hawkey. Their technology, which envisions moving multi-thousand-tonne blocks of iron-ore the size of buildings back and forth between the ocean floor and surface, is a sustainable, economic, and scalable solution to accelerating decarbonisation. 

Entrepreneurial beginnings

Tim, who studied mechanical engineering, had no experience with innovation and entrepreneurship until he happened to stumble upon Velocity, the University’s entrepreneurship development programme run with the support of the Business School’s Centre for Innovation and Entrepreneurship. “I wasn’t really interested in building my own company, all I wanted was to build rockets,” he says. “But I ended up going through the Velocity programme anyway which turned out to be a really valuable learning experience. The most important thing it taught me was the Lean Canvas framework which completely changed my view of the world of business. I was kind of a cynical, twenty-something student who thought everything taught in business schools was about exploitatively maximising profits. So, when I realised that it was more about solving real, hard problems, I had found my calling.”

Building EnergyBank

With his newfound passion for entrepreneurship, Tim moved to San Francisco immediately after graduating because “I thought that was what entrepreneurs were meant to do.” Living out of the back of a truck and showering at the local YMCA, Tim viewed the experience as a rite of passage for a young entrepreneur – looking for a problem that really resonated with him. “One day in 2017, I saw a Y Combinator blog post by an investor listing problems to which he was looking to fund solutions, and one of them was the energy storage problem. And just like that – it clicked. I was like ‘oh, this is the one for me’. So I got to work.”

Originally from New Plymouth, Tim grew up in the electricity system with a dad who built and managed power stations and helped develop today’s wholesale energy markets. He says, “I spent a lot of time in power stations all around the country, and it was a frequent topic of conversation at dinner tables (much to my mum’s annoyance).” So, in 2019, he returned to New Zealand to work on EnergyBank full time – researching the market, iterating on technology concepts, and beginning to develop relationships with investors and potential customers.

“Building a great team is the biggest challenge with the biggest reward,” says Tim, so his first task was to recruit a group of driven, like-minded people to join him on his venture. At a party, he met co-founder Jordan Hooper, who had been recently laid off from a job in the oil and gas industry due to the pandemic. The second co-founder Rhys Foster, who had 20 years of experience working in energy storage companies in the US and was a pioneer of grid-connected lithium-ion batteries, was sceptical about Tim’s idea at first. But he came on board after doing some of his own mathematics and concluding that the technology had real potential. 

The technology

EnergyBank stores energy using gravitational potential – suspending large masses (blocks of iron-ore about 50 metres in diameter and 2 metres thick) below a fixed “spar buoy” platform (about the size of the PwC Tower) in very deep water and incrementally lifting them up to the surface and lowering them back down over vertical distances of four to eight kilometres. The mechanics of this in some ways resemble a cuckoo clock. When there is an excess supply of renewable energy and prices are low, EnergyBank will soak up that energy by converting it with an electric motor/generator into mechanical energy, lifting those blocks up. When they wish to release the energy, the whole system runs in reverse. The weight of the blocks rotates the motor/generator and puts electricity back into the grid. 

There are multiple parameters that needed to be considered when developing energy storage solutions:

• Market – what does the market actually need, when would we begin to see rapidly diminishing returns from additional storage?
• Scalability – how easy is it to build enough of this before you run out of resources, including appropriate geographic sites? Is it scalable to the size of the problem?
• Sustainability – what are the short and long term environmental effects of the solution?
• Risk – how dangerous is it?
• Lifetime cost of storage – how much does it cost per unit of capacity for energy you can store?
• Efficiency – how much of the energy that you put in can you get out?
• Responsiveness – how quickly can you turn it on and off?

“In terms of scalability, 60% of the world’s surface area is more than four kilometres underwater,” says Tim. “The deepest parts of the ocean are often quite close to major cities because subduction trenches are what forms the continents. This means that our solution is incredibly scalable to the size of the problem, we’re not going to run out of space to build these things. And they don’t actually take up much space, being a vertically oriented mechanism.

“Biofouling is a big thing for us. Traditionally, companies might ask themselves ‘how do we prevent things from growing on our machines?’ We prefer to ask ourselves, ‘how do we make sure our machines are going to be okay with things growing on them?’ We’re not going to try to fight nature, we’ll just go with it. People will also be unable to fish wherever our parks are, so we’re essentially creating marine reserves.

“Finally, in terms of risk and danger – if one of our units fail, we drop a big block of iron-ore onto the ocean floor. Nobody will notice except perhaps our investors.”

New Zealand vision

One of the problems the team at EnergyBank wish to address is that of huge energy inequities in New Zealand. Tim explains, “Communities like Northland and Eastland have the most expensive power in the country, they have the least access to the grid, and they are the communities that are least able to afford it. They are literally running diesel generators at night because they don’t have enough transmission infrastructure. 

“Tairāwhiti has amazing combined wind and solar resources, so one of our visions involves building a power line north through Gisborne and further connecting it to the rest of the country. If there is a third arm to the grid out there, you would see these really high-value jobs being attracted to the area. And once they’re producing a bunch of wind and solar, they’re going to need some storage which is where our EnergyBanks come in. The geography is pretty perfect for us, and that’d be all you need for a 100% decarbonised electricity system in New Zealand.

“In essence, that vision hopes to turn that region from an energy importing region where the money is flowing out to a high-value energy-exporting region, allowing much broader economic development for the community.”

Advice on raising funds

In October 2021, EnergyBank raised $2.7 million in an oversubscribed seed round led by Icehouse Ventures. Tim’s advice for entrepreneurs looking to raise money is to firstly, figure out if it is right for them. Then if it is, learn to pitch and take the time to build strong relationships in the entrepreneurial ecosystem.

“If you’re wondering whether your company needs funding, read Zero to One by Peter Thiel. It does a great job of outlining what all the different VC investment frameworks are, and if your business isn’t a natural fit for that, you may be better off sourcing funding from elsewhere. But if you do decide that it is most appropriate to seek out VC funding, the three best things you can do is validate your market, learn to pitch effectively and build relationships. 

“Pitching to VCs is a bit like dating. If you’re not getting what you need, go and work on your business and self improve before coming back. There are two routes you can go – there’s the ‘love at first sight’ route, and the ‘long term relationship’ route, and I would recommend you be working on both. ‘Love at first sight’ pitching is really important for pitching to overseas investors, with whom you wouldn’t have had the chance to build a relationship. This is when you need a really strong pitch and slide deck to make a lasting impression because often you only get one shot. While you’re doing that, network with the ecosystem and connect with people without asking for money. Go to innovation and entrepreneurship events and don’t be afraid to reach out to interesting people on LinkedIn.”

Advice on being an entrepreneur

“Take my advice with a grain of salt, I am yet to deliver returns, but be delusionally ambitious, and don’t be afraid of big problems,” says Tim. “Ambition is a good thing. That’s how you get into really novel territory and avoid commoditised competition. Be thinking 10-15 years ahead of the curve. Taking rockets as an example, the time to be getting into building rocket companies was in the mid-2000s. Everyone would’ve been saying ‘you’re crazy’, and that’s how you knew you were doing something original.”