Introduction to Redwood Energy

Nestled between two massive buildings in the Nevada desert hills, a vast array of 805 retired electric vehicle (EV) batteries lies neatly arranged, each one shrouded in unassuming white tarps, blending into the surroundings. This inconspicuous setup belies its significance as the largest microgrid in North America, powering a 2,000 GPU modular data center for AI infrastructure company Crusoe, and marking Redwood Materials co-founder and CEO JB Straubel’s next major endeavor.

A casual observer might overlook the fact that this site represents a groundbreaking energy storage initiative, one that underscores the pioneering spirit of Straubel, formerly of Tesla. The obscured batteries, not yet ready for recycling, store energy harnessed from an adjacent solar array. This system, capable of generating 12 MW of power with a 63 MWh capacity, channels energy to a modular data center constructed by Crusoe, a company renowned for its extensive data center campus in Abilene, Texas.

Launch of Redwood Energy

Redwood Materials has officially announced the launch of its energy storage business, dubbed Redwood Energy, during an event at its Sparks, Nevada facility. This new venture leverages the thousands of EV batteries collected through its battery recycling operations to provide clean power to companies, commencing with AI data centers. The partnership with Crusoe marks the beginning of this initiative, utilizing the stockpiled batteries that are not yet ready for recycling, with over 1 gigawatt-hour worth in inventory and an anticipated additional 4 gigawatt-hours in the coming months.

Expansion and Growth

Redwood Materials has been on an aggressive expansion path, having secured $2 billion in private funding. Founded in 2017 by Straubel to create a circular supply chain, the company started by recycling scrap from battery cell production and consumer electronics, extracting materials like cobalt, nickel, and lithium to supply back to customers such as Panasonic. Beyond recycling, Redwood has ventured into cathode production, generating $200 million in revenue in 2024, primarily from the sale of battery materials.

Its footprint has grown significantly, with deals locked in with major players like Toyota, Panasonic, and GM, and the construction of a new factory in South Carolina. Redwood’s acquisition in Europe further underscores its expansion push. The company’s next step, Redwood Energy, marks a significant foray into energy storage, utilizing retired EV batteries that can be powered by solar, wind, or tied to the grid, offering a flexible and economically viable solution for companies.

Economic and Environmental Impact

Colin Campbell, CTO of Redwood, emphasized that the adoption of this technology is not solely driven by environmental considerations but also by its economic viability. “There’s no green intent required here,” he noted, highlighting that the choice to use repurposed batteries for energy storage is both cost-effective and carbon-free.

Experts like Jessica Dunn from the Union of Concerned Scientists applaud this development, seeing it as a demonstration of the economic potential of the waste hierarchy and a significant step towards addressing the need for grid-scale energy storage. Dunn also noted that this move by Redwood could be both a business opportunity and a necessity, given the impending wave of retired EV batteries and the potential for other companies to capitalize on this market if Redwood does not.

Future Prospects

Redwood Materials aims to deploy 20 gigawatt-hours of grid-scale storage by 2028, positioning itself to become the largest repurposer of used EV battery packs. This ambitious goal is part of the company’s broader strategy to expand its operations, including the development of its facilities in Nevada and South Carolina, where it plans to remanufacture critical battery components.

Straubel reflects on Redwood’s early start in the battery recycling and materials supply chain, acknowledging that the company began its operations ahead of the curve. However, this head start has allowed Redwood to establish itself as a leader in the field, poised to capitalize on the growing demand for sustainable energy storage solutions as the world transitions towards electric vehicles and renewable energy sources.