Competition Is Heating Up In The US Energy Storage Space

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Tesla is moving ahead with plans to manufacture its forthcoming Megapack 3 utility-scale batteries in Texas, but an energy storage startup from Massachusetts called Form Energy may have gotten the drop on the iconic US automaker. Form revved up its new iron-air battery factory in West Virginia last year, and it has just nailed down a biggest-of-its-kind, 300-megawatt, 100-hour energy storage deal with Xcel Energy and Google.

The Long Duration Energy Storage Difference

Form works in the up-and-coming space of long duration energy storage, a challenging endeavor that seeks to out-do the familiar lithium-ion battery formula on cost, safety, and supply chain security as well as hours of duration.

Since the early 2000s, lithium-ion has been the workhorse of the energy storage world. Its discharge duration, typically 2-4 hours, continues to fulfill routine grid balancing tasks and pull duty in case of temporary outages. However, a grid saturated with wind and solar power requires energy storage systems that can continue generating electricity at scale for at least half a day, and ideally much longer. Advanced lithium-ion battery arrays can last about 6-8 hours or so, but supply chain complications and costs are limiting factors. And, although fire risk is low, it is a danger that can raise community opposition, limiting site selection opportunities.

To put some perspective on the challenges involved in engineering a utility-scale long duration energy storage system, consider that a century-old technology, pumped hydropower, still accounts for about 95% of utility-scale storage in the US.

What Is This Form Energy Of Which You Speak?

Megapack 3 is the latest iteration of Tesla’s utility/commercial/industrial scale Megapack batteries. The company’s next-generation batteries reportedly deploy the safety-enhanced LFP (lithium-ion-phosphate) formula, but the Megapack 3 has a long way to go beat Form Energy’s iron-air battery on duration.

Form launched in 2017 and it surfaced on the media radar back in 2021, when it described its rechargeable iron-air battery as “capable of delivering electricity for 100 hours at system costs competitive with conventional power plants and at less than 1/10th the cost of lithium-ion.”

“This battery can be used continuously over a multi-day period and will enable a reliable, secure, and fully renewable electric grid year-round,” Form added.

By 2023, Form was developing plans to convert the site of a former steel mill in Weirton, West Virginia, to produce its iron-air battery, taking advantage of state incentives and access to key river and ground transportation opportunities.

Form has been attracting a series of A-list private sector investors along the way, and the US Department of Energy has also chipped in. Back in September of 2024, the agency provided an award negotiation of up to $150 million to support the company’s new “Form Factory 1” in Weirton, including workforce training for approximately 600 positions as well as factory setup.

The company earned another seal of approval in September of 2025, when it made the finalist list in the “Fix Our Planet” category of the prestigious, global Earthshot Prize, joining a scant few US innovators to be tapped since the competition launched in 2020.

Practically at the same time, US President Donald Trump threw a wet blanket over Form Factory 1, and those 600 new jobs, when he canceled 321 clean energy awards around the country. The hits were concentrated in Democratic-dominated states. However, Trump-loyal West Virginia was caught in the crossfire, on account of Form’s connection to the Xcel project in Minnesota.

The Minnesota Connection

“The U.S. Department of Energy announced the cancellation of billions of dollars in funding for projects in several states, including Minnesota,” radio station KNSI reported on October 3, 2025.

“One of the 12 clean energy projects here was a $70 million grant for an experimental long-duration battery system in Becker,” KNSI elaborated. “Xcel Energy is in the process of shutting down the coal-fired Sherburne County Generating Station and transitioning to solar power with the largest solar project in the Upper Midwest. That includes an iron-air long-duration battery capable of holding up to 1,000 megawatt-hours of capacity—equivalent to the average daily energy use of between 30,000 and 40,000 homes in Minnesota.”

Whelp, that was then. Yesterday, Xcel announced that it is moving ahead with plans to deploy a Form iron-air battery in its energy plan for a new Google data center in Pine Island Minnesota.

The plan involves shepherding 1.9 gigawatts of renewable energy into the grid to power the new data center without raising costs for existing ratepayers.

That thing about not raising costs remains to be seen. Nevertheless, the plan includes the cost of grid improvements, plus 1,400 new megawatts of wind and 200 megawatts of solar along with Form’s 300 megawatt energy storage system.

“This 100-hour battery system will store energy during periods of high production and low demand and dispatch it to the grid during times of high demand, providing firm capacity and strengthening grid reliability when it is needed most, even over multiple days,” Xcel explains.

How Does It Work?

Renewable energy fans, don’t break out the pom-poms just yet. Xcel still has to file its plan with the Minnesota Public Utilities Commission, which has approval authority over the hookup with Google.

Meanwhile, let’s take a closer look at that iron-air energy storage system. The technology is fairly simple to describe: literally, it’s rust. Iron pellets in the battery modules rust when exposed to a stream of air, releasing energy. Recharging the battery is a matter of applying electricity — ideally, from renewable resources — causing the rust to return to its metallic form.

Chemical & Engineering News provided more detail in a profile of Form Energy last year (break added for readability):

“To charge the battery, electricity converts iron hydroxide at the anode into metallic iron, releasing hydroxide ions. The hydroxide ions migrate to the air cathode on the other side of the battery where they form water and oxygen. The oxygen bubbles out of the battery.

“During discharge, the process is reversed. Pumping oxygen into the water-based electrolyte generates hydroxide ions. At the anode, the hydroxide ions react with iron to form iron hydroxide, and electrons flow out of the battery.”

The devil is in the details, of course. Energy storage researchers have been tinkering around the edges of iron-air batteries since the 1960s when NASA first took a poke at it. For the record, Form Energy was co-founded by CEO Mateo Jaramillo, who is credited with launching Tesla’s stationary energy storage business after joining the company in 2009 as Director of Powertrain Business Development.

In addition to the Minnesota project, Form has energy storage partnerships in the pipline in New York, Maine, Virginia, Georgia, Colorado, and California.

Photo: The US energy storage startup Form Energy is challenging Tesla’s new Megapack 3 rollout with a new 100-hour iron-air battery (cropped, courtesy of Form Energy).