Ultracapacitors, energy storage devices that can deliver quick bursts of intense power and withstand more charge and discharge cycles than batteries, could provide a twofer — disrupt the vehicle market and revolutionize the power grid. That’s the basic pitch from developers of next-gen ultracapacitors (most audibly from stealthy and controversial startup EEStor). But, like most new ventures in the green car and clean power markets: easier said than done.
Ultracapacitor technology is less established and the costs are higher than batteries, and much of the opportunity lies in niche markets, far from the mainstream. But according to executives from ultracapacitor maker Ioxus and EnerG2, which is working on advanced materials for ultracaps and other energy storage devices, there are a few keys to surviving the nascent market. First, batteries are your friends — don’t compete with them, enhance them. Second, get creative to bring costs down quickly. Third, embrace the niche.
As Ioxus Chief Operating Officer Chad Hall explained to me, “Ultracapacitors are not looking to replace batteries in the acceleration or main storage of a car – they are merely there to enhance the battery, make it last longer, and reduce the warranty issues related to replacing large batteries.” (See the graphic above for an illustration of how ultracaps can fit into a hybrid vehicle system.) Used in conjunction with batteries, ultracaps could also help make vehicle-to-grid technology more feasible, allowing electric cars to provide on-demand energy for the power grid without cutting battery life short. Hall put it simply:
“Ultracapacitors are a power component. Batteries are an energy component. Marry to two technologies together, and you have a solution that works well.”
Ultracaps’ position as an enhancement to batteries and other forms of energy storage means entrepreneurs working with this technology have to pay particularly close attention to the larger energy storage market. Hall says there’s also a certain amount of education that an entrepreneur has to do to show automotive companies and battery companies how an ultracapacitor can enhance a battery and their bottom line for upcoming vehicles.
The Pricing Problem
It might be obvious, but given ultracapacitors are more expensive than batteries, the cost for vehicle applications needs to come down from the price points that have been competitive in other applications. Asked how the company’s strategy has changed over the years, since it spun out from 45-year-old parent company Custom Electronics (focused on military, medical and industrial applications for ultracapacitors and “pseudo-ultracapacitors”) in 2006, Ioxus VP of Marketing Michael Tentnowski said it “hasn’t changed a lot except for maybe some of the pricing,” mainly through lower-cost materials and manufacturing processes. He said those changes have largely been spurred by the automotive opportunity.
Companies like advanced materials startups EnerG2, which recently snagged a $21.3 million grant from the Department of Energy (one of only two awarded to startups in the first round of the highly competitive battery grant program) could help bring down the cost of ultracaps. Ioxus has been testing some of its nano-structured materials, which Chief Operating Officer and co-founder Chris Wheaton told us this week, could also be used for other energy storage devices, including hydrogen energy storage.
Higher production volumes and standardardization of plug-in vehicles and their components will help reduce costs down the road. But when prices aren’t dropping fast enough, entrepreneurs have to be flexible and be able to customize the technology. Customer specifications are changing quickly, said Tentnowski, so a company might strive to hit a requested price point, and then “all of a sudden the price has just dropped again.”
Love Thy Niche
While companies are waiting to supply ultrcaps to the power grid and vehicles, they shouldn’t be afraid to pursue more niche markets. In that respect ultracap companies have to remember the history of the energy storage industry and their place in it. “Batteries have been used as a standalone energy storage component for over a hundred years in cars,” said Hall. The bottom line is ultracap players are working with a less established technology, and niche markets are more willing to take a risk on the tech, or see an edge that an ultracapacitor’s unique characteristics can provide.
Graphics courtesy of Ioxus and NREL