Batteries

Much of the buzz in the energy storage sector is focused on DOE administered subsidy programs and what they will mean for investors in smaller public companies. The buzz began when Title XVII of the Energy Policy Act of 2005 ("EPACT") authorized $2 billion in loan guarantees for innovative energy technologies. It ramped up rapidly when the Energy Independence and Security Act of 2007 authorized another $2.5 billion in loan guarantees under the Advanced Technology Vehicles Manufacturing ("ATVM") program. It reached a crescendo when the American Recovery and Reinvestment Act of 2009 ("ARRA") authorized $7 billion in smart grid,...

John Petersen After devoting several months to articles on arcane technical and economic issues that normal investors should not have to endure, I declared a cease fire last week and advised readers that I was done with technology and planned to focus on more interesting topics like the future of the energy storage sector and making money from energy storage investments. I've spent enough time discussing trees. Now I want to evaluate the forest and show investors how to position their portfolios for the coming of cleantech, the sixth industrial revolution. I hope old friends and new...

David Hannum was right! There's a sucker born every minute and they're all waiting with bated breath for the low-cost plug-in electric vehicles that are coming soon to a dealership near you; if they're not quietly cancelled first. It's the most insidiously appealing idea of our age: replace those nasty gasoline burning engines with cheap batteries that recharge in minutes and save a fortune on fuel while you "See the USA in Your Chevrolet." It's so appealing in fact that it ranks right up there with free lunch. P.T. Barnum would have been proud. ...

In it's March 30, 2009 summary determination that GM had failed to propose a viable bankruptcy alternative, the President's auto industry task force said:"GM is at least one generation behind Toyota on advanced, "green" powertrain development. In an attempt to leapfrog Toyota, GM has devoted significant resources to the Chevy Volt. While the Volt holds promise, it is currently projected to be much more expensive than its gasoline-fueled peers and will likely need substantial reductions in manufacturing cost in order to become commercially viable." This extraordinary conclusion has been public for weeks but I've not seen it...

In mid-February President Obama signed the American Recovery and Reinvestment Act of 2009 (ARRA), a massive spending bill that spawned gigabytes of analysis and comment from bloggers like me. Unlike many, I've tried to stay politically agnostic and focus solely on the economic impact of ARRA on companies that manufacture batteries and other energy storage devices. From that limited perspective, everything is wonderful! The principal energy storage appropriations included in the ARRA were: $4,500,000,000 for grants for “Electricity Delivery and Energy Reliability” including activities to modernize the electric grid, include demand response equipment, enhance security...

Yesterday Axion Power International (AXWP.OB) announced the signing of a memorandum of understanding with Exide Technologies (XIDE) following fourteen months of negotiation and technical investigation. This alliance could prove to be a sea-change event for the domestic battery industry. Copies of the press release and an archived version of the subsequent investor conference call are available on Axion's website. As a former chairman of Axion's board of directors and a very substantial Axion stockholder, I've been waiting for an agreement like this for a very long time. I'm delighted to see confirmation from Exide that my faith in...

On April 1st CNET News published a story about a previously secret technology that Google (GOOG) has patented and implemented system-wide. The technology, which Ben Jai of Google reportedly described as their "Manhattan Project," builds a 12-volt battery into each server to provide backup power. The point that fascinates me is Google's choice of small format valve regulated lead-acid batteries to keep its servers running. When an ultra-sophisticated company like Google picks cheap over cool for a mission critical function, I think it speaks volumes about the future direction of the energy storage industry. Stephen Shankland of...

On April 6th, Chrysler LLC announced the creation of a strategic alliance whereby A123 Systems, Inc. will become a primary battery supplier for Chrysler's planned line of plug-in electric vehicles. This is a huge step toward rebuilding America's domestic battery manufacturing infrastructure and both companies should be congratulated. The next steps I see in my murky crystal ball are finalization of A123's pending IPO coupled with an announcement that A123's $1.8 billion loan request under the DOE's Advanced Technology Vehicle Manufacturing Program has been approved. If the foundation has been properly laid, it will all come together very quickly....

This May will mark the nine-year anniversary of "Costs of Lithium-Ion Batteries for Vehicles," a seminal study from the DOE and Argonne National Laboratory that sent America lurching down a path toward an HEV, PHEV and EV future based on Li-ion batteries. Since nine years is a respectable length of time in most industries, I thought it might be interesting to review the prevailing expectations in May of 2000, consider the cost reductions achieved over the last nine years and question whether the market frenzy over Li-ion battery companies is even close to rational. Regular readers know that I'm...

Last November, Merrill Lynch released "The Sixth Revolution: The Coming of Cleantech," a thematic report from strategist Steven Milunovich that heralded cleantech as a new investment theme and forecast a coming age of plenty. A few days later venture capital icon Vinod Khosla warned a Palo Alto audience “500 million people on earth enjoy a lifestyle that 9 billion people will want in 2050.” The differences between these two informed viewpoints are more than a little stark, but they highlight a frightening truth about cleantech: for the first time in human history the fundamental drivers of a technological revolution...

Since November of last year, I’ve argued that cheap will beat cool when it comes to the commercialization of battery chemistries. As details on the design and construction of the Chevy Volt battery pack emerge and are publicized on sites like Green Car Congress and Popular Science, it’s clear that cheap Li-ion chemistry has already beaten cool Li-ion chemistry and many of the concerns I’ve expressed about using Li-ion batteries in cars have been considered and resolved by thoughtful automotive design engineers. It bodes well for the introduction of PHEVs as long as the tax incentives remain in place,...

As a lawyer, I’ve had the privilege of working with some of the finest scientific minds in the world. They all started with brilliant concepts and impressive laboratory results, but a substantial majority failed to create a viable business. After countless clients that started well and ended up mired in a swamp, I’ve come to understand that technology is a two-edged sword. On the leading edge, developers of low cost technologies can build fortunes. On the bleeding edge, developers that can’t control their costs and manufacture competitive products often morph into the financial equivalent of a black hole....

I woke up this morning with a dreadful case of writer’s block and feared that I might have to take a week or two off while awaiting the end of the current SEC reporting cycle. Mercifully, one of my readers sent an e-mail message that asked some pointed questions about lead-carbon battery technologies and the relative strengths and weaknesses of the principal lead-carbon battery developers. So instead of dashing off a quick reply, I thought it might be interesting to share both the message and a detailed response. Besides, it seems like a great way to kill two...

It’s official! Cleantech, the sixth industrial revolution, has arrived on time and in the midst of extraordinary crisis. Like every good revolution, blood is flowing in the streets; the guillotine is en route to Wall Street and the mob is so busy plotting retribution for the excesses of the past that most have no time to consider the future. But as yesterday’s dynasties decay, crumble and fall, a new generation of visionaries is already building on the wreckage of the past. These are indeed troubled times that bear an eerie resemblance to the opening sentence from A Tale of...

For several months I’ve been writing about manufactured energy storage devices and the companies that develop and manufacture them. My basic theme has been that these devices are fundamental enabling technologies for cleantech, the sixth industrial revolution. I’ve repeatedly said that profound economic changes were rapidly evolving and that energy storage would be a major investment theme for decades to come, but even my unbridled optimism could not keep pace with the realities. While most investors have been focusing on obvious problems like bad mortgages, tight credit and recessions, immense changes in the energy sector have gone almost...

On Friday, the House of Representatives and Senate passed H.R. 1, the American Recovery and Reinvestment Act of 2009 and sent the bill to President Obama for his signature. The impact on companies that manufacture advanced batteries and other energy storage devices will be staggering. The principal energy storage appropriations include: $2,000,000,000 for grants to manufacturers of advanced battery systems and vehicle batteries that are produced in the United States, including advanced lithium ion batteries, hybrid electrical systems, component manufacturers, and software designers;  $4,500,000,000 for grants for “Electricity Delivery and Energy Reliability” including activities to modernize the electric...