Green Tech

BOSTON--While hundreds of other companies are trying to make a better battery, start-up SustainX Energy Solutions is trying to find better ways to compress and store air to help utilities take full advantage of intermittent sources of energy like wind.

Dax Kepshire, president of SustainX, sketched out the company's technology and product plans here Thursday at the Fifth Annual Conference on Clean Energy. SustainX was spun out of Dartmouth College last year and received $4 million in funding from Polaris Venture Partners and Rockport Capital in August of this year. It now has 10 employees.

There are already a few compressed-air facilities in the world where off-peak electricity is used to pump air underground for storage. During peak-demand times, the air is released and pushed through a turbine to make electricity.

It's a method that's getting more attention now as a way to store several hours worth of wind power, for example.

The primary difference with SustainX's approach is that it doesn't need an underground salt dome or limestone cavern to store the compressed air. Instead, it proposes storing the compressed air in off-the-shelf tanks. Its technical goal in two years is to cram 4 megawatt-hours worth of stored energy in a 40-foot long container, said Kepshire. The tank-filled container would be able to deliver 1 megawatt of power.

In the near term, it plans to build a 100 kilowatt hour pilot system to test the efficiency and then to validate the larger model in 2011, Kepshire said.

Its technology is also very different from the existing compressed-air storage facilities. With traditional compressed-air energy storage, a machine called a compressor compacts air and pumps it underground. To make electricity, the air is released and run through special turbines and a generator to make electricity.

SustainX is designing a system that uses a hydraulic piston to compress air. When the air is released, it moves a hydraulic motor which is attached to a generator to make electricity, Kepshire explained.

The key to making the overall system is to reduce the energy loss that happens in the compression and decompression of air, he said. He expects the first pilot system to be about 50 percent efficient but the full system to be more around 70 percent efficient overall.

Compressed air energy storage has a lot of potential because it's relatively inexpensive and because utilities can store many hours worth of electricity. Pacific Gas & Electric is investigating locations for compressd-air storage capable of delivering 300 megawatts of electricity for 10 hours, or 3,000 megawatt-hours. By contrast, utility-scale battery storage systems in use now deliver 1 or 2 megawatts for a few hours.

SustainX doesn't have any customers yet, but Kepshire said the company is targeting utilities looking to use more renewable energy. The company's technology, if it proves efficient enough, can be scaled to stored many hours of energy and deliver large amounts of power, he said.

Updated on November 13 at 1:11 p.m. PT to clarify and correct technical details.

Big levitated spinning disks will provide electricity to the grid in a project set to begin next month.

Flywheel energy storage company Beacon Power on Tuesday said it plans to begin construction of a 20-megawatt storage facility in Stephentown, N.Y. Provided on a continuous basis, twenty megawatts could power thousands of homes. But flywheels are used only for providing power for short periods.

Rather have many hours of stored energy on standby, the flywheels will store and dispatch bursts of electricity for what's called frequency regulation in the utility industry. Because of fluctuations in power demand, power generators need to deliver power to the grid to maintain a steady signal frequency. Beacon Power's flywheels are designed to provide one megawatt of power for 15 minutes.

With flywheels, electrical energy is converted into mechanical energy and stored by the spinning disks. By absorbing electricity and dispatching it for quick bursts of a few minutes, utilities can maintain the frequenc with a system that uses no fossil fuel and responds quickly, according to Beacon Power.

The project will help the utility better use renewable energy that supplies electricity intermittently to the grid, according to the New York State Public Service Commission.

The installation in upstate New York will be the first large-scale use of Beacon Power's technology, according to the company. The Tyngsboro, Mass.-based company secured a Department of Energy loan guarantee in July for $43 million to partially finance the project.

Until now, Beacon Power has operated two smaller 1-megawatt facilities, where 10 flywheels are placed in a shipping container-size structure. The wheels themselves are made of carbon fiber composites, rather than metal, and spin at 16,000 revolutions per minute. To reduce friction, the mechanical components are stored in a vacuum and levitated with a permanent magnet, according to the company.

Another idea that has been pursued by Google for frequency regulation is using networks of electric-vehicle batteries. Rather than dispatch stored energy from batteries, plugged-in cars could have the charge rate throttled back, which a grid management system could use to maintain frequency.

Judged by media buzz and venture capital dollars, lithium ion batteries are the name of the game in the emerging field of storage for electric vehicles and the power grid. But there is a cadre of companies pursuing ultracapacitors that can work hand in hand with batteries.

South Korea-based Neescap on Tuesday said that it has raised $9 million in bridge financing to expand production of its ultracapacitors for the transportation, power industry, and consumer electronics markets.

In the U.S., early-stage companies designing the materials and electrolytes for ultracapacitors include Graphene Energy, EnerG2, and Ioxus. Much hyped EEStor, backed by venture capital firm Kleiner Perkins Caufield & Byers, has signed a supply deal with electric vehicle company Zenn, although its products are still not commercially available.

Compared to batteries, ultracapacitors can't store a lot of energy, so they wouldn't typically be used alone to run plug-in electric vehicles. On the other hand, ultracapacitors are "power dense," which means that they can discharge the energy they do have quickly. Conversely, they can be recharged quickly--in seconds or minutes, and with almost no degradation in performance over time, say backers.

Ultracapacitors are already used in consumer electronics such as digital cameras to help provide a burst of power for flashes, which extends overall run time, said Chad Hall, the chief operating officer of Oneonta, N.Y.-based Ioxus, on Tuesday. The technical challenge for ultracapacitor companies in the coming years is to build storage devices that can operate in high-voltage applications, he said.

Ioxus, which means "power" in Greek, was spun off from its parent company three years ago to pursue energy storage in electric transportation, renewable energy storage, and backup power. Rather than replace batteries, the company expects that its ultracapacitors, which it began manufacturing earlier this year, will complement them. "It all comes down to hybridization. We've got hybrid cars, so you need to hybridize energy storage," he said.

One of the first markets the company is pursuing is fork lifts. An ultracapacitor could be used for the jolts of power needed to lift heavy things, which would give a longer life to fork lifts' lead acid batteries, said Hall. Other promising uses include maintaining the stability of grid frequency, he said.

"Ultracapacitors enable battery technology, or fuel cells, or solar and wind. They become the bridge you need for most of those applications to go forward. It's gotten to the point technology-wise so that you can do that," he said.

Another advantage is that Ioxus ultracapacitors don't use hazardous materials. But getting the price low enough for these applications remains a barrier, he said.

Breakthroughs ahead?
Joel Schindall, a professor of electrical engineering and computer science at Massachusetts Institute of Technology, predicts that ultracapacitors will make a jump in energy storage capacity in the years ahead.

Right now, ultracapacitors discharge 10 times faster than batteries but only store about 5 percent of the energy as comparably sized batteries, Schindall said last Wednesday at the EmTech emerging technology conference.

"It's still useful in applications when you charge and discharge frequently, such as regenerative braking, but it's not a replacement for batteries at a large scale," he said.

For the past five years, Schindall has been leading research on ways to replace activated carbon--the porous material in ultracapacitors that stores electric charge--with a "shag carpet" of carbon nanotubes on a conducting substrate. The company FastCap Systems was formed earlier this year to commercialize the technology.

Schindall projects that ultracapacitors eventually will be able to store as much as 25 percent of the energy of batteries, a jump he said would be "disruptive." Right now, nanostructures developed by MIT researchers can hold twice as much energy as activated carbon. In the coming months, his team expects to show it can hold five times the energy as activated carbon, he said.

Lithium ion battery maker A123 Systems had a rousing debut on the public stock market on Thursday, giving some good news to legions of energy investors and entrepreneurs.

The Watertown, Mass.-based company, which was spun out of the Massachusetts Institute of Technology, saw its share prices rise over 50 percent from its offering price to close at over $20.

Through the initial public offering, the company is expected to raise over $400 million, Reuters reported. It had initially hoped to net $250 million but adjusted its offering price to raise more.

A123 Systems' IPO has been closely watched in the green tech community because it is one of only a few energy-related companies started this decade to go public. It currently supplies batteries for power tools and has built large, megawatt-scale batteries for utilities.

It's also eyeing the automotive sector, a potentially much larger market. A123 Systems received a $249.1 million grant from the Department of Energy to build a lithium ion battery packs factory in Michigan as part of a $2.4 billion investment in the plug-in electric car supply chain.

A123 Systems' IPO was the second most successful of the year, Reuters reported. A123 initially filed to go public in August of 2008.

Although it was a strong IPO, some energy storage experts say that lithium ion batteries, which will be used in a number of upcoming plug-in electric vehicles, need to come down in costs significantly for electric cars to be more mainstream.

Despite all the talk about needed breakthroughs in batteries, Pacific Gas & Electric is pursuing a less high-tech approach to store wind power: underground compressed air.

The utility on Wednesday said that it is seeking $25 million in smart-grid stimulus funds to build an underground compressed-air storage facility that would be able to deliver as much electricity as a medium-size power plant for about 10 hours.

PG&E said the project is part of its smart-grid initiative and would take about five years to develop and build but, in a company blog post, didn't offer any other details on the proposal.

With compressed-air energy storage (CAES), air is compressed and then pumped in natural underground reservoirs. The air is released later and converted into electricity.

There are currently two compressed-air energy storage facilities in operation--one in Alabama and one in Germany--but the technique has been getting more attention because it is a relatively cheap approach to storage.

Utilities are starting to use flywheels to smooth out fluctuations on the grid or truck-size batteries to provide backup power for a couple of hours for a single substation.

CAES is well-suited to an intermittent source of energy like wind because a large amount of energy can be stored for many hours. PG&E's proposal calls for storing 300 megawatts worth of power for 10 hours, while most utility storage batteries being tested are 1 or 2 megawatts for shorter periods.

PG&E said that it plans to use wind turbines to compress the air during off-peak times and then draw from the reservoir during peak times. Shifting the energy from off-peak to peak times, such as the middle of the day, makes it more valuable as utilities pay more for energy at peak times. A wind farm in Iowa has been working on CAES storage for a few years to take advantage of peak pricing for wind.

PG&E quoted a Princeton University study on CAES that concluded that "CAES appears to have many of the characteristics necessary to transform wind into a mainstay of global electricity generation."

Industry executives say that the most cost-effective utility storage is pumped hydro, where water is pumped uphill and released at peak times to make electricity.

This technique, which has been around for decades, is tough to beat on cost. But like compressed-air storage, it requires that utilities find the suitable geography.

Updated at 12:45 p.m. PT to clarify the capacity and energy storage of the facility.

California start-up Deeya Energy said on Tuesday it raised $30 million to build "redox flow batteries" which it says will be a competitively priced way to replace diesel generators and store wind and solar energy.

Deeya Energy is one of many start-ups targeting large-scale storage systems which can act as back-up power for commercial applications, such as telecommunications towers, or electricity grid storage.

The company's basic technology was first developed in the 1970s as part of a NASA research program. A flow battery uses electrolyte solutions of reactive chemicals that flow between two tanks to deliver an electrical current.

One advantage of flow batteries is that they can charge relatively quickly. Deeya Energy says its first product, called the Energy Storage Platform 24K, can store four hours worth of electricity to cell towers and takes only three hours to recharge.

Another advantage is that the material used in the flow battery is not toxic and can be recycled. Deeya Energy says its storage units will be far cleaner than diesel generators or lead-acid batteries.

Deeya Energy's series C round brought in new investor venture capital firm Technology Partners. The company has raised $53 million since it was founded in 2004. Initial investors BlueRun Ventures, Draper Fisher Jurvetson, Element Partners and New Enterprise Associates participated in the latest round.

The money will allow the company to build a few thousand of its 2-kilowatt cell phone tower back-up batteries it is marketing to the Indian telecommunications market, Deeya Energy CEO Isak Bencuya told Greentech Media.

The product is designed to last 20 years. The electrolytes need to be replaced every five years.

In the next year or two, the company intends to make 1-megawatt size flow batteries for power grid applications, such as storing energy from wind and solar farms.

Energy storage has become one of the hottest areas in clean-tech investing with entrepreneurs developing a wide range of different technologies.

One of the biggest challenges is finding ways to make storage cheaper than existing alternatives. In the large-scale energy storage business, the incumbent technology is often lead-acid batteries or, for grid storage applications, pumped hydro, where water is pumped uphill and released at off-peak times to generate electricity.

CAMBRIDGE, Mass.--Utility company American Electric Power (AEP) plans this year to place equipment in residential areas capable of storing a few hours of electricity, one of the first tests of distributed storage on the power grid.

Ali Nourai, AEP's manager of distributed energy resources, calls the storage program a potential "game changer" for the utility industry. Nourai spoke during a panel on grid energy storage at the MIT Energy Conference here Saturday.

"The key for distributed energy is not because it's cheaper. The key is national security--we don't have a huge storage (device) that can be blown up," Nourai said.

The storage units would be the size of a relatively small "backyard transformer," each wired to provide enough electricity for four to six houses, he said. Together, those storage units could provide back-up power to neighborhoods during outages and potentially for other applications, Nourai said.

"Aggregated, hundreds of these units controlled (by AEP)...effectively do the same as one big storage unit," he said. "It's closer to the load, and it has the potential to (create) competition on price."

AEP is one of the few electric utilities in the U.S. that has already deployed storage on the electricity grid, which is very expensive. The utility, which operates in Midwestern and Southern states, started three years ago with a one megawatt sodium sulfur battery. It now has six megawatts worth of storage in three locations using this technology, Nourai said.

In these cases, AEP can do "peak shaving" in which it draws on the stored electricity during peak times, such as the middle of hot summer day when air conditioning loads are high. Because the stored energy supplies electricity to the grid, the utility doesn't need to pay for electricity at high peak-time rates.

Although this has proved to be a viable application, speakers on the energy storage panel said that the high cost of batteries and other storage technologies makes it difficult for utilities to justify investments in the technology.

Because of the high cost, energy storage devices need to be used for a number of applications to generate sufficient revenue, the speakers said. For example, a large battery could provide back-up power, do peak shaving, and be used to stabilize dips in grid signal frequency.

"At the end of the day, it's going to be cost that drives acceptance of storage on the grid," said Gary Colello, CEO of Premium Power, which makes a zinc bromide fuel cell that provides short-term storage to utilities in the U.S. and Canada.

Another problem is that current utility regulations are structured around utilities making investments in power generation. "Without a fairly radical rethink of utility regulations, to get the mass movement of energy storage beyond a handful of utilities--it's not going to happen," said Matthew Nordan, the president of consulting firm Lux Research.

AEP's Nourai said the regulators need to be educated on the different values that energy storage can provide. Some of those are economic, like providing back-up power, whereas others are societal benefits because they help the environment. For example, storage makes bringing renewable energy sources onto the grid more feasible.

Wind, solar forcing the issue
The growing interest in renewable energy, in fact, is what prompted AEP to explore energy storage in the first place, said Nourai.

"Our business was being threatened by something that everybody loves--renewable power," he said, noting that the amount of solar power from its customers grew from kilowatts to megawatts over the past five years. "We love it, too, but we have no control over it. (Customers with solar) could turn off megawatts of power or not maintain it."

Wind and solar energy are also variable, meaning they can't deliver electricity as reliably as a fossil fuel power plant. Energy storage, through batteries or compressed air storage, is one way to deal with that variability.

To deal with the projected increase of renewable energy, utilities need a "buffer" in the form of storage so that it can control the flow of electricity onto the grid in a managed way, Nourai said.

Although the basic technology for energy storage hasn't changed in decades, interest has peaked substantially in the last few years. Nourai said that five years ago, only engineers went to energy storage conferences; now half of the attendees are venture capitalists and politicians. The energy storage session at the MIT Energy Conference was standing-room only.

For its distributed storage plans, AEP said that just four hours of back-up power could address 90 percent of the outages the utility has to deal with. "When (storage) is closer to the customer, it's more reliable," Nourai said.

A New Jersey company said on Tuesday it will invest $20 million over three years to develop an underground compressed-air storage system for wind turbines and other power sources, a sign of growing confidence in the technology.

Energy Storage and Power is a joint ventured formed by energy developer PSEG Global and Michael Nakhamkin, who designed the only compressed air-storage facility in the U.S.

With Compressed Air Energy Storage (CAES), air is pumped into underground formations, such as depleted natural gas wells or salt caverns, using a natural gas-powered machine. The pressured air is released later to drive a turbine to make electricity.

The system allows for several hours or even days of stored energy, which allows power producers to deliver electricity during peak hours when the demand for electricity--and price--is highest.

The two CAES plants in operation right now--one in McIntosh, Ala., and the other in Huntorf, Germany--use several hours of storage to generate electricity during the middle of the day.

Energy Storage and Power said that it intends to develop equipment for storing renewable power resources at a large scale. Utilities are already using more wind and solar, but energy storage means that they can be used more broadly since electricity can be "dispatched" as needed.

"We have learned a lot since building the McIntosh plant in Alabama, and I believe the time is right technically, environmentally, and economically for a large-scale deployment of Energy Storage and Power's CAES technology," Nakhamkin said in a statement.

It's not the only commercial company pursuing compressed-air storage of wind energy.

General Compression is designing a wind turbine that has a compressor built into the nacelle, the housing at the top of a wind turbine tower. The company hopes to test a machine with utilities in the next few years.

With the growing use of renewable energy on the power grid and a push toward energy efficiency, energy storage is getting serious attention from investors and utilities.

Lithium-ion battery company A123 is working with utility AES on grid-tied energy storage devices. These 1- or 2-megawatt devices can be used to stabilize the grid's frequency and store enough power for less than an hour.

One advantage of CAES technology is that it can be used for longer periods. The Iowa Stored Energy Park plans to use a natural gas compressor in conjunction with a wind farm that it expects to go online in 2011.

Updated at 12:51 p.m. PT with corrected reference to peak demand time.

Boston-area battery upstart A123 Systems on Friday said that it plans to go public and raise $175 million.

The company, which is not profitable, on Friday filed papers in which it said it intends to raise as much as $175 million, based on the registration filing fee. The money will be used to expand it manufacturing and research facilities as well as pay back about $2.5 million in debt.

A123 Systems was spun out of the Massachusetts Institute of Technology seven years ago to commercialize lithium-ion batteries for a range of applications.

The batteries, which the company says last longer and are more powerful than existing lithium-ion batteries, are already being used in power tools. In its S-1 filing, A123 Systems said it anticipates the portable power market to grow from $411 million to $1.1 billion in 2012.

The company sees more potential in the nascent markets of electric transportation and energy storage, according to the filing.

The company has developed batteries for plug-in hybrid cars and acquired Hymotion, which retrofits hybrids with bigger batteries. General Motors is testing A123 Systems batteries for use in its planned plug-in hybrid, the Chevy Volt.

Batteries for transportation now represents a $700 million business and can grow to $5 billion by 2012, the company said.

Last month, a company executive indicated for the first time publicly that A123 Systems is also pursuing energy storage on the power grid with a dedicated group.

Energy storage, where devices are used to smooth out short-term fluctuations in the power grid and store wind or solar power, is anticipated to grow from $2.4 billion last year to $3.1 billion in 2015, according to A123 Systems. It also indicated that it is working with utility AES on grid-storage projects.

The company, which will be listed under the "AONE" ticker, made $35 million last year, but it's losses mounted to $31 million last year. In the first three months of this year, it lost almost $14 million.

Bankers for the planned initial public offering will be Morgan Stanley, Goldman Sachs, Merrill Lynch, Pierce, Fenner & Smith, as well as Broadpoint Capital and Lazard Capital Markets.

A123 Systems' IPO has been expected and rumored for months.

It will be closely watched by the the clean-tech industry which has seen a huge influx of venture capital into start-ups and a number of public offerings despite a generally poor environment for stock market entrances.

The company was originally funded by a number of corporations including General Electric and the Duracell division of Procter & Gamble, as well as venture capital firms Alliance Capital, Sequoia Capital, North Bridge Venture Partners, CMEA Ventures, and FA Technology Ventures.

Updated at 8:40 a.m. PDT with more financial details from S-1 filing.