Summary:

Aquion Energy has one overriding goal: to change the way the world uses energy. The idea is to build modular, sodium- and water-based energy storage devices that can provide a slew of services for a cleaner power grid at relatively low cost.

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Aquion Energy has one overriding goal for its battery business: to change the way the world uses energy. The company is using basic materials (sodium and water) that are widely available (and edible!) to build modular batteries that can provide a slew of services for a cleaner power grid at a relatively low cost.

In the long run, Aquion executives believe these bulk storage devices will help solar and wind power give expensive natural gas “peaker” plants a run for their money as the go-to choice for meeting electricity needs during periods of highest demand.

Matt Rogers, former senior adviser to Secretary of Energy Steven Chu, in 2009 called Aquion’s solution “ingenious,” and said the technology (which the Department of Energy has supported with a $5 million stimulus grant) could potentially store huge amounts of energy at one-tenth the cost of the alternatives. High profile venture capital firm Kleiner Perkins Caulfield & Byers has also backed the company.

In the Beginning

Founded in 2007, Aquion is at an early phase that’s both exciting and uncertain. Yet the Pittsburgh, Penn.-based startup has global ambitions. Previously called 44 Tech Inc., Aquion dropped the numeric moniker last year when it learned 44 is “the number of least luck in China,” said founder and chief technology officer Jay Whitacre. “44 Tech,” he said, was “the equivalent of double-death battery.”

The current mash-up of “aqueous” and “ion” (Aquion) may be more appropriate for a startup working with some of the most benign materials in the battery business. According to business development chief Ted Wiley, Aquion’s battery is made from widely available precursor materials that are very easy to work with. “It’s literally edible—every single material in the battery.”

Whitacre developed the basic science for Aquion’s devices at Carnegie Mellon University. The battery pairs a carbon anode with a sodium-based cathode. Water-based electrolytes shuttle ions between the two electrodes during charging and discharging, as opposed to solvent-based electrolytes.

When Whitacre arrived at CMU as a new professor, less than four years ago, he “wanted to do something different.” With assistance from students, he set out to identify materials that could be “massively used” and “incredibly scalable.” He focused on stationary applications, where–unlike mobile applications such as vehicles, electronics –lower energy density can be an acceptable trade-off for lower costs and longer life. Whitacre sought to “fail fast,” tossing out any materials or designs that “from a manufacturing stand point were not going to float.”

Whitacre began talking with David Wells of Kleiner Perkins in late 2007. “I was working in the lab, and told him I would get back to him when I had a ‘hit,’” said Whitacre. The hit ended up arriving in spring 2008, and soon Wells and Kleiner Perkins partner Bill Joy were interested enough in the technology to sponsor an incubator at Carnegie Mellon for Whitacre to develop it. With Wells and Joy, Whitacre began spinning a venture off-campus for commercializing aqueous sodium-ion technology a year later.

In late March, Kleiner chairman Ray Lane described the startup as “one of our most promising venture investments, transitioning from an early-stage technology development organization into a full-fledged product company.”

Taking the Heat (and Cold)

Importantly, Aquion says its battery can withstand a wide range of temperatures without losing storage capacity. That means the devices could be installed alongside a solar installation, for example, without sapping energy for air conditioning to keep the batteries cool. According to Wiley, Aquion has not observed any capacity fade during a year of testing with its sodium-ion cells in temperatures ranging from -10 degrees Celsius to 60 degrees Celsius.

Prototypes in the company’s lab and in the hands of third-party testers have shown more than 5,000 deep cycles with very little capacity fade, Wiley said. “As long as it’s maintained, it does not degrade.”

In fact, the only “natural limit” to the battery’s life, he added, “is if it’s sealed improperly.” Using hermetic sealing, the company expects its battery to last as long as 20-30 years. When cycling rates are slow enough (ideally charging and discharging over 8-20 hours), Whitacre said Aquion is seeing upwards of 90 percent efficiency in the lab.

Hurdles Ahead

Aquion would not be the first battery developer touting an energy storage breakthrough to encounter delays en route to commercialization. Wiley believes the startup faces the same challenge of “every science innovation company.” It has a novel chemistry and “no history,” and it’s targeting markets that are “slow-moving and resistant to technology change,” he said.

In addition, just selling into a utility-scale energy project can take as long as three years, said Wiley. For a venture-backed startup, being that far out from a major deal can be daunting (although Whitacre notes revenue in the near term could come from sales for smaller installations, like residential solar).

However, Aquion at this point seems to be moving with impressive speed. As of Monday, the company has grown to 35 employees, and it expects to employ more than twice that number by this time next year. Aquion plans to have products (built on a pilot line) in customers’ hands for evaluation this summer, and it aims to launch commercial products during the first quarter of 2012.

Money for Manufacturing

Aquion hopes to break ground on a 500 megawatt-hour manufacturing facility during the second quarter of 2012, and bring this facility online in 2013. That will depend on financing, of course.

To pay for the project, which will cost an estimated $75 million to $80 million, Aquion plans to seek public and private investment. Wiley said Aquion could be a good fit for the Department of Energy loan guarantee program, but “there’s no more money left.” If Congress funds the program again, he said, Aquion would apply for a loan guarantee.

In the meantime, Aquion hopes to close a $25 million to $30 million round of private capital this summer to kick-start the project.

Image courtesy of Suicine, Nanosolar and SolFocus.

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