By Mara Lemos Stein
Of DOW JONES CLEAN TECHNOLOGY INSIGHT
The U.S. Department of Energy is funding the development of
advanced lithium-ion battery technology for energy-storage
applications after showering hundreds of millions of dollars on
providers of the same technology for use in electric vehicles.
Some companies, including A123 Systems Inc. (AONE) and Ener1
Inc. (HEV), have been on the receiving end of cost-sharing grants
of both DOE programs. Under the $620 million awards for smart-grid
demonstration and energy storage projects announced last month,
these companies and other lithium-ion battery technology developers
will work with utilities to deploy batteries at a utility scale to
manage peak demand and smooth power fluctuations from renewable
sources such as wind and solar.
Lithium-ion technology, widely used in cellular telephones and
laptop computers, has yet to be proven as a storage of energy at
larger scale. But utilities are investing alongside the government
because they see potential in lithium-ion batteries' high power
density and energy density. Energy density is a ratio of the amount
of energy stored compared to battery weight, and power density is a
ratio of the amount of power delivered compared to a battery's
weight.
"The higher energy and power density, speed and accuracy of
response to control signals, capability for rapid dynamic
oscillation between charge/discharge, full access to
charge/discharge range, and long calendar and cycle life make the
imagined benefits of grid scale energy storage real," said Southern
California Edison Co. in its project proposal, which Clean
Technology Insight reviewed.
The DOE granted SCE, a unit of Edison International (EIX), $25
million toward a $53.5 million project that will use A123 Systems'
batteries to improve grid performance and integrate its Tehachapi
Wind Energy project in California into the electric supply. The
project will design and build an eight-megawatt/four-hour
lithium-ion battery system and smart inverter, and connect it to a
SCE substation.
A123 Systems is also a partner in a DTE Energy Co. (DTE) project
that received $5 million from the DOE to test the ability to
integrate secondary-use electric vehicle batteries in a
community-energy storage demonstration using solar power. Community
energy storage consists of multiple small battery-based energy
storage units connected to the utility transformers and controlled
from a common remote control.
"A123 will be building a manufacturing plant in our service
area, so they were natural partners for us," said Scott Simons, a
spokesman for DTE Energy, in an interview with Clean Technology
Insight.
DTE's project will cost an estimated $10.9 million and will
install 20 community energy storage units of 25 kilowatt/two-hour
each into a system that is integrated into the utility's
500-kilowatt capacity solar array at the Hydrogen Technology Park
in Southfield, Mich., said Simons.
In early August, A123 Systems was awarded $249 million under the
DOE's advanced battery and components manufacturing program to
build its first large-scale manufacturing plant in the U.S. The
company sealed its agreement with the state of Michigan last week
to receive tax credits of up to $100 million over a four-year
period to build its facility in the state.
Ener1, for its part, is supplying its lithium-ion batteries to a
$177.6 million project managed by the Battelle Memorial Institute,
Pacific Northwest division, which was awarded nearly $89 million
for five 1-MW power systems that will be used by Portland General
Electric (POR) in a project to demonstrate and integrate new
smart-grid technology, including storage.
Like A123, Ener1's primary market is the electric vehicle, but
it won't shy away from supplying the utility-scale market.
"Utility-scale energy storage is a breakthrough market for
Ener1," said Rachel Carroll, vice president of communications at
Ener1, in an email. "The batteries that will be used in this
project are exactly the same chemistry as the batteries Ener1
develops for plug-in hybrids. There is a natural synergy."
Ener1 also secured a $118.5 million cost-sharing grant under the
DOE's funding program for advanced-battery technologies, which
awarded $2.4 billion from the stimulus legislation money to 48
projects in August. Its battery subsidiary, EnerDel, is the
supplier of Fisker Automotive Inc., a venture capital-backed
start-up making plug-in hybrid electric vehicles. EnerDel is also
supplying batteries to Norway's Think Global AS, which makes small,
fully-electric vehicles, and for Volvo Car Corp.'s all-electric C30
city vehicle. Volvo Car Corp. is a unit of Ford Motor Co (F).
Another lithium-ion battery maker that benefited from the latest
round of DOE grants is Seeo Inc., which is backed by Khosla
Ventures. The start-up got half of the $12.4 million project cost
to develop and deploy a 25-kilowatt-hour prototype system of
batteries that use nanostructured polymer electrolytes instead of
the more commonly used gel form or liquid electrolytes. Seeo didn't
respond to an email seeking comment.
There could be more opportunities for lithium-ion manufacturers
to join with utilities on DOE-funded projects. Duke Energy (DUK),
for instance, hasn't yet selected the battery providers for its
Notrees Wind storage project, which was granted $21.8 million from
the DOE.
Duke spokesman Greg Efthimiou said in an email that the utility
intends to employ multiple battery types to store wind-generated
energy at the Texas-based wind farm, which calls for about 20 MW of
storage capacity.
-By Mara Lemos Stein, Dow Jones Clean Technology Insight;
212-416-2017; mara.lemos-stein@dowjones.com