ENERGY & ENVIRONMENT
By DIANE CARDWELL OCT. 25, 2015
When David Vieau left the battery maker A123 in 2013 after it went bankrupt despite having received about $147 million in government money, he didn’t go looking to start another energy storage business.
But three years later, he is at it again, as chief executive of Vionx Energy. This time, though, he is pursuing a different strategy.
Instead of using “the go-it-alone model” of developing, building and distributing batteries, as he said he did at A123 while chief executive, Vionx is taking a leaner approach. It focuses on engineering, marketing, sales and service, and leaving the rest to well-established partners like United Technologies, Siemens and 3M.
Mr. Vieau says that Vionx can survive in a way that A123, which went through almost $900 million in the five years before its bankruptcy, could not. “Vionx would burn, let’s say, in a year what an A123 from a cash perspective might burn in a month,” he said. “It’s a pretty substantial difference in the overall cash requirement for bringing the business forward.”
Vionx is only the latest iteration of a rapidly evolving industry that is seeking to help businesses better manage their energy use.
Despite decades of public and private research and investment, the storage industry has struggled to take off, though there are signs that may be changing.
As energy policies, technologies and markets shift to encourage the growth of renewable power plants, rooftop solar and decentralized systems like microgrids, storage is gaining more investment and interest while regulators are moving to require its inclusion in renewable energy developments and wholesale electricity markets.
Whether to smooth out variations in the output from wind and solar farms, feed power to the grid at times of peak demand or store it for use when renewable plants or the grid go down, utilities, islands and big institutions like the military are experimenting with different battery systems and chemistries. Those include lithium ion, like those made by A123 (revived under Chinese ownership), and vanadium flow, from Vionx and a handful of competitors.
Battery storage systems are still expensive — running more than $500 per kilowatt-hour installed, a price that government agencies estimate must fall to roughly $100 to $150 to spur widespread adoption. But they already make financial sense for certain customers in expensive markets like New York and California, as well as for utilities in states with high concentrations of wind and solar, said Paul Albertus, a program director who focuses on energy storage at the Advanced Research Projects Agency-Energy. That agency, part of the Energy Department, helped finance Vionx’s vanadium technology development at United Technologies in 2009.
“Our goal is to basically create promising technical options that we hope — over time, with additional investment either from the government or from private sources — to allow us to continue driving down that cost curve and get closer to those numbers,” Mr. Albertus said.
Already, customers are showing interest in the Vionx batteries, which can run for as many as 10 hours. The Army, for instance, is installing a system at Fort Devens in Massachusetts as part of a larger program aimed at helping bases become more energy efficient, self-sufficient and secure, said Melanie Johnson, an electrical engineer overseeing the project for the Engineer Research and Development Center, Construction Engineering Research Laboratory in Champaign, Ill.
“Our installations in the Army use a lot of commercial power, and therefore it costs a lot,” Ms. Johnson said. “So we do what we can to reduce those costs, whether it’s through improving building efficiency or installing state-of-the-art technology like large energy storage systems” as well as renewable generation.
The batteries, for which new manufacturing plants are less expensive to build and operate than for lithium ion, are roughly the size of a ship cargo container and are particularly well suited to grid-scale applications, in part because they can last at full storage capacity for 20 years, Mr. Vieau said.
That is longer than competing technologies, which makes them more cost-effective over their useful life. Mr. Vieau expressed confidence that his company — which, under an earlier name, Premium Power, had unsuccessfully pursued a battery system using zinc bromine — had finally hit upon a winning formula but emphasized that it is best suited to a large utility or commercial and industrial applications rather than, for instance, vehicle or home use.
Ed White, vice president of the new energy solutions division of National Grid, echoed that sentiment. National Grid is planning to work with Vionx in battery installations early next year at a high school with a wind turbine and at a solar farm the utility owns in Massachusetts. The company is also testing lithium ion technology at another solar farm and plans to compare and contrast the results to better understand the relative merits and challenges for different uses under different conditions.
“You don’t use a car battery to power your remote control or your cellphone,” he said. “Same thing in the utility industry: We’re going to need to have different solutions for different applications.”