This August brought the collapse of two emblematic energy storage firms.
In the U.S., lead-carbon battery maker Axion Power International filed for Chapter 7 bankruptcy. In the U.K., grid-scale storage system developer Camborne Energy Storage went into administration.
Both firms ran aground after failing to secure cash to fund operations. Axion, of New Castle, Pennsylvania, had $6.6 million in debts and only around $47,000 in assets, according to local press reports.
The company was a veteran of the energy storage industry, having been founded in 2003. As reported in GTM back in 2009, Axion aimed to give lithium-ion a run for its money with an advanced lead-acid battery equipped with carbon electrodes.
The electrode technology, from a Russian company that had been developing it for superconductors, was supposed to give the battery a lifespan three to four times longer than batteries using traditional lead negative electrodes.
Axion invested about $50 million in adopting it for use in batteries and secured a supply deal with big battery maker Exide Technologies. After having been listed on the over-the-counter bulletin board in 2003, in 2014 the company graduated to Nasdaq.
It struggled, though, and was delisted a year and a half later after its stock spent a month trading below $1. Attempts to commercialize the technology ran into difficulties, too.
In March last year, Axion filed an 8-K form with the U.S. Securities and Exchange Commission, warning shareholders of significant financial hardship after a dozen attempts to get the lead-carbon battery to market.
The company’s production line had not made a battery since 2016, it later emerged. Desperately seeking a way out, Axion pivoted away from manufacturing and toward research and development with a business model based on technology licensing.
Even that didn’t work, though. A 10-K SEC form filed in July revealed that Axion was operating with a skeleton staff of four and pinning all its hopes on a single commercial agreement, with a Chinese company called Fengfan Co. Ltd.
From 2015 through 2018, the filing said, “Axion initiated over 30 separate efforts to identify shareholder-enhancing transactions. Except for Fengfan’s interest in partnering with the company, all other efforts have failed.”
And Fengfan had consistently dragged its feet over committing to Axion. By the end of July, Axion had no other option than to wind down.
In the U.K., meanwhile, Camborne Energy Storage had already succumbed to a similar plight. Camborne, incorporated in 2015, went down in energy storage history as the first company in the U.K. to install a Tesla Powerpack battery system, at a PV plant in Somerset in southwest England.
According to an administrator’s proposal published in August, Camborne developed a strong pipeline of projects but failed to secure the cash it needed develop them.
When it called in the administrators, at the end of June, the company owed more than £2 million (USD $2.6 million) against assets of around £218,000 ($281,000).
Daniel Finn-Foley, senior energy storage analyst at Wood Mackenzie Power & Renewables, said Camborne’s demise was likely not a problem with energy storage investment appetite.
“I get the impression that investment and acquisition of storage players is still going strong,” he said.
However, the current dynamics of Britain’s energy storage market may have had a role.
Camborne had looked to become an early leader in battery projects after coming late to the U.K.’s solar market, said Rory McCarthy, a U.K. energy storage analyst at Wood Mackenzie Power & Renewables.
“Like a lot of players with solar experience, they are skilled at acquiring grid and planning for potential sites,” he said. “As we know too well, this is expensive and risky business as the numbers add up.”
Having a pipeline of potential sites for development would be of little value without long-term frequency response contracts in place, as these would be needed for Camborne to get a final investment decision, he said.
But there is a glut of developed energy storage sites in the U.K. right now.
Wood Mackenzie Power & Renewables figures show around 2.5 gigawatts of capacity with planning already approved, whereas the frequency response market so far only amounts to around 800 megawatts.
“Because of this abundant supply of potential projects in the market, there will likely be other players exiting before other viable revenue streams materialize,” McCarthy warned.