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Electricity can be expensive. However, building owners’ costs could be reduced via a solution being developed by a Portland startup.

Energy Storage Systems Inc. (ESS) is refining a new, nontoxic battery that it says can reduce the cost of energy storage by as much as 90 percent. Company officials believe the technology could help businesses like fast-food restaurants, warehouse businesses and grocery stores hedge against rising energy prices.

Craig Evans, ESS’ CEO, said traditional batteries can cost as much as $1,000 per kilowatt-hour because they rely on expensive elements like vanadium, chromium, bromine and zinc. ESS’ technology costs just a fraction as much because it stems from iron and table salt.

“Our costs for our system is on the order of $300 per kilowatt-hour, for like five hours of storage,” said Craig Evans, the CEO of ESS. “So that’s where the cost advantage of our technology comes into play. We can help business owners … with energy storage, where it becomes cost-prohibitive otherwise.”

ESS is developing a redox flow battery, which is fueled by an electrolyte solution stored in tanks. As the solution is pumped through an electrochemical cell, it converts chemical energy into electricity. Because the electrolyte solution is iron- and salt-based, it’s not only cheap, but also entirely nontoxic and recyclable.

ESS recently received a $2.1 million grant from the U.S. Energy Department’s Advanced Research Projects Agency-Energy (ARPA-E) to further develop the technology. Oregon BEST helped the company meet matching fund requirements for the grant. ESS also is one of three finalists competing for more than $250,000 in funding from Angel Oregon.

In addition, ESS is working with Portland State University faculty and students to develop strategies for entering the marketplace. Bill Jones, a faculty member at PSU‘s School of Business Administration, said that market is huge.

“I can’t tell you exactly the size of it, but the research we did in California (shows) it’s a sizable industry,” Jones said. “It’s very, very large in the fast-food industry and any place that uses perishables as well as refrigeration.”

ESS is focusing on California because of hefty time-of-use tariffs that make electricity much more expensive during daytime than nighttime. ESS’ battery would allow businesses to take energy from the power grid at night when it’s cheap, and then use it during the day. The system also could be used in conjunction with solar panels for charging.

Citing a study by the Sandia National Laboratories, ESS reports the potential for the sale and installation of energy storage systems to address time-of-use and demand-shift needs is expected to top $7.5 billion over the next 10 years in California alone. Oregon doesn’t have a time-of-use tariff, but that could change, and Evans is looking for local demonstration opportunities.

“You have a very large market availability – a multibillion-dollar availability – but so far the technologies haven’t been cost-effective enough to address it,” said Ken Vaughn, the director of Oregon BEST’s commercialization programs, adding that the payback for buying one of ESS’ batteries could be as little as one to three years.

Evans also believes private energy storage systems will become increasingly important as states adopt higher renewable energy requirements. Oregon, for instance, will require its three largest utilities to produce 25 percent of their energy from renewable sources – such as wind and solar ones – by 2025. Evans said energy storage systems can help balance out the power grid when the sun isn’t shining.

One challenge, however, is that ESS’ batteries are big and heavy. A 10-kilowatt battery fits snugly in a 10-foot-long shipping container.

ESS’ battery, however, is easily scalable. The company is deploying a 10-kilowatt system capable of storing 60 kilowatt-hours of energy. Next year it’ll ramp up to a 50-kilowatt system, followed by a 250-kilowatt system.

Jones said ESS isn’t the only company working on energy storage, but he does think it has a competitive edge.

“I think theirs is a great energy storage system solution, and there is a market for that,” he said. “Their competition in certain areas are using much more environmentally unfriendly chemicals … I think that’s one of the big things we have (going for us).”

Plus, ESS’ battery can be charged repeatedly without wearing out. Evans said he already has more orders for the battery than he can fill, especially from businesses in countries with strict energy use restrictions.

“It’s good to know that when we are there, the customer will be available,” he said.