Aquion Energy's Disruptive Battery Tech Picks Up $35M in VC

Aquion Energy’s Disruptive Battery Tech Picks Up $35M in VC

$35M for a battery with an anode made of activated carbon, a cathode made from sodium and magnesium oxide, and a water-based electrolyte

Eric Wesoff April 02, 2013

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 helpful to have a disruptive, cheap, and safe electrochemical storage solution -- one that has 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 $35 million venture capital round led by Bright Capital along with Bill Gates, Gentry Venture Partners, Kleiner Perkins Caufield & Byers, Foundation Capital, and Advanced Technology Ventures.

That adds to a $15M loan facility closed last year and $20 million in funding from 2011.

Aquion's Aqueous Hybrid Ion 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. 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."

Christian Beekhuis, the CEO of a new lead-acid battery startup Gridtential, said that as far as the utility-scale grid storage market is concerned, "People are guessing. The market doesn't exist yet because there is no low-cost, high-performance market product. We see that market as nascent and pretty far in the future."

Aquion is looking to address both small and utility-scale stationary energy storage applications. The startup looks to deliver pre-production units to early customers in 2013 and to begin high-volume manufacturing at the end of the year.

So, Aquion and the many new battery firms have to hone their technology, but just as importantly, they have to hone their value proposition. Despite the large sums raised by Aquion -- it's still early days.

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.