Aquion Energy's Disruptive Battery Tech Picks Up $15M Loan

Aquion Energy’s Disruptive Battery Tech Picks Up $15M Loan

The battery consists of an anode made of activated carbon, a cathode made from sodium and magnesium oxide, and a water-based electrolyte.

Eric Wesoff June 20, 2012

Eric Wesoff

Editor-at-Large
Greentech Media

Eric Wesoff is Editor-at-Large at Greentech Media. Prior to joining GTM, Eric Wesoff founded Sage Marketing Partners in 2000 to provide sales and marketing-consulting services to venture-capital firms and their portfolio companies in the alternative energy and telecommunications sectors. Mr. Wesoff has become a well-known, respected authority and speaker in these fields.

His expertise covers solar power, fuel cells, biofuels and advanced batteries. His strengths are in market research and analysis, business development and due diligence for investors. He frequently consults for energy startups and Silicon Valley's premier venture capitalists.

While the market for viable energy storage is dependent on regulatory and financial market structures as well as technology, it would be helpfule to have a disruptive, cheap, and safe electrochemical storage technology -- one that had superior performance and management characteristics compared to the predominant lithium-ion materials system.

Aquion believes it has that technology, and the startup just picked up a $15 million loan facility from Horizon Technology Finance Corporation and Silicon Valley Bank to build its business.

Aquion's battery consists of an anode made of activated carbon, a cathode made from sodium and magnesium oxide, and a water-based electrolyte. The firm wants to build a factory with a capacity of 500 megawatt-hours' worth of batteries a year in 2013 and 2014. The plan is to build it in the U.S. in 2015, with the goal of replicating that factory in other parts of the world.

Aquion's batteries are for utility-scale applications and look to provide two to six hours of storage. The batteries can endure 5,000+ charging cycles with an 85 percent (DC) efficiency. Kleiner Perkins and Foundation Capital are investors with $20 million injected into the company in a financing round in 2011. The battery is based on the research of Carnegie Mellon University Professor Jay Whitacre.

As we've reported, when it comes to storage, "It's not a technical problem. Utilities are rational actors trying to run a system at the right cost. [...] It comes down to cost," said Steve Berberich, the CEO of California's Independent System Operator, concluding, "It's good stuff, but it's expensive and we have to find business cases."

So, Aquion and the many new battery firms have to hone their technology, but just as importantly, they have to hone their value proposition.

Other new utility-scale energy storage companies include the Khosla-funded compressed air firm LightSail Energy and the flow battery firms Primus Power and EnerVault. Another energy storage firm, Stem, is looking into the enterprise sector with a "cloud-based energy optimization solution that reduces peak electrical usage, lowers electrical bills, and eliminates the need for new generation facilities." That looks like an example of finding a business case rather than a savior technology.