Viewing posts tagged "A123 Systems"

A123 Systems Expands in Japan

Tokyo correspondent Hayashi Sakawa points out that A123 systems has entered into an alliance with IHI, a large equipment maker, to collaborate on products for the transportation, industrial and marine markets.

IHI is one of those huge companies you've never heard of. It is 155 years old and works with Toyota, Mitsubishi and others. The reference to the marine market is interesting. Ports seem poised for a green overhaul, according to Julian Gresser of Manatt, Phelps. (Gresser has also taught international law at Harvard.) For one thing, they are dirty. Most of the equipment runs on diesel fuel. For another, they are often located near research universities and large industrial hubs, making them ideal incubators for new technologies.

"Eighty percent of every major industry depends on ports yet there is not a single mention of ports in the energy bill," he told us earlier this year. Some companies, such as Vycon, have begun to market cranes with regenerative power production to reduce fuel consumption. Others have proposed plates that can absorb kinetic energy from passing trucks. Travis Bradford also tells me that green shipping is growing.

A123 and IHI could find quite a lot of opportunities in marine.

A123 Watch: A Little Down, But So Is Everyone

A123 Systems – see full rigamole here – has dropped a bit from its close above $20 yesterday, but it's hovering around $19.20. At one point it was near $21. The entire market is down. 

It will be weeks until we see whether the IPO signals a trend toward more IPOs or whether the rise was largely the result of the bong hit of unrealizable expectations. At an event in Silicon Valley last night, several VCs said that they hoped the company would do well.

A123 Upped Both Price and Shares in Final IPO, Trading Tomorrow

It was definitely a good day for battery-maker A123 Systems.

Early in the day the company raised its anticipated share price hours before the public offering and then bested itself in the offering in the afternoon. A123 eventually sold 28.1 million shares for $13.50 each to raise $380 million. Earlier, it had anticipated selling 25.7 million shares for between $10 and $11.50 each. Earlier, the stock price was between $8 and $9.50.

Trading should be interesting tomorrow. Optimists say that this could be a wellspring for future clean IPOs. Skeptics note that the company has never made money. The company mostly makes batteries for power tools but has branched into some experiments in smart grid. It will make batteries for the automotive market – for Chrysler.

Vinod Khosla: A123, EEStor Not So Hot, My Investments Good

Vinod Khosla, the man behind Khosla Ventures, is listing his turn-offs again.

The "What Vinod Doesn't Like" piece is pretty much a standard, recurring phenomenon in green. A few years ago, he argued with Hermann Scheer from the German Parliament, about photovoltaic panels. At other times, he's championed ethanol and criticized other approaches. 

In Grist this week, Khosla criticizes battery maker A123 Systems, which makes lithium ion batteries, and EEStor, an ultracapacitor maker.

A123, he points out, lost out to LG Chem in the contract for the Chevy Volt:

"I think the traditional approach to lithium ion battery making, such as A123, is going to be competing in an overheated, nearly-commoditized market and will probably not (I guess never say never!) get down the cost curve in the next 5 years... A number of incremental improvements are underway, but they will at best offer a 2X improvement in price performance."

Like other lithium-ion battery makers, A123 will also be hampered by the fact that these batteries have flammable electrolytes, which forces companies to insert expensive safety measures, and won't live up to performance claims. It's a legit argument in many ways. To make its battery safer, A123 uses a lithium-phosphate chemistry, which can't hold as much energy as the more volative lithium cobalt or lithium-nickel manganese. One of the reasons General Motors went with LG Chem was the chemistry issue. Nonetheless, Chrysler has signed a deal with A123.

As for EEStor, the ultracap maker, the Vinod says:

"If EESTOR-like approaches work (I am somewhat skeptical of this particular company, though I believe new science similar to that proposed in its patents is possible), then so much the better. But there is very little visibility today on these radical approaches. I would say these are in the domain of a hope and a prayer."

To be honest, that's the opinion of a lot of people. EEStor has drawn various critics. Even people I've spoken to who've toured their labs have come away mystified.

China, India, get real, black swans, etc. etc.

So what does he like? Seeo, which makes solid electrolytes, and Sakti3, which makes a solid-state battery. The firm has investments in both.

Giving Distributed Grid Storage the Brains to Do the Job

Putting lots of batteries in people's backyards to manage the storage needs of the electricity grid may seem like a no-brainer.

But according to Sunil Cherian, CEO of Spirae, it's all about brains – brains on the grid, that is.

That's because thousands of batteries serving backup power purposes will have to be integrated in a way that keeps them from being more disruptive than helpful, Cherian said Thursday at the Smart Grid Innovation Symposium sponsored by Innovation Center Denmark in Menlo Park, Calif.

Cherian has experience with the conundrum, given that Spirae's business is in integrating distributed energy generation and storage projects, including a Department of Energy funded project called FortZED (for Fort Collins, Co. Zero Energy District) and another with Danish transmission system operator Energinet.dk.

"When you add ore and more of these distributed resources into the distribution network, you're changing the operating model" of the grid, he said. "As penetration increase, you really have to worry about how do you manage the system in such a way that these things don't interact with one another."

Take one of the first purposes to which such a storage network could be applied, and which utility experts at Thursday's symposium said was likely to be one of the first that makes commercial sense – frequency regulation (see GE Gives its Energy Storage Outline).

That's the job of keeping grid electricity flowing at a constant 60 hertz, or cycles per second. Such frequency regulation takes up as much as 1 percent of North America's power production, today almost entirely provided by fossil fuel-fired power plants kept running to respond to infrequent signals from grid operators – not the most efficient way to do it.

Flywheel maker Beacon Power Corp. (NSDQ: BCON) is doing projects with utility American Electric Power and grid operator ISO New England to provide those services (see Green Light post).

American Electric Power is discussing the potential for distributed storage to fit some of those needs, Cherian noted (see Utility to Try Backyard Storage).

While AEP hasn't specified what kind of storage devices it's looking at, several observers at Thursday's conference suggested depleted electric vehicle batteries – too worn down to stay in cars, but with enough oomph for grid storage – could be one solution.

Lithium-ion automotive battery maker A123 Systems is looking at the potential for such a shift, working in partnership with investor General Electric to develop grid storage systems for utilities (see A123 Batteries to Help Stabilize Electric Grid).

The trick with frequency regulation, however, is that it needs to be dispatchable in less than a second, Cherian said.

Now, that requirement in itself doesn't necessarily need communications systems with equal speed and reliability to serve the purpose, he noted. Storage devices could be designed to sense frequency fluctuations and respond accordingly.

The problem with that, of course, is that if all of them respond automatically at once, that will lead to a fluctuation in the opposite direction – thus making the problem worse, not better.

"That is the big problem that I don't think is fully appreciated today," he said.

Designing a workable distributed frequency regulation system will likely require a lot of clever combinations of communications, along with onboard controls that incorporate information about how many other batteries are on the grid, statistical models for how they will likely respond, and other hard-to-calculate variables, he said.

The same questions are sure to arise as more and more rooftop solar and other distributed generation systems come online, or as electric and plug-in hybrid vehicles present new demands – and new opportunities – for utilities and grid operators, he said.