Grid energy storage has become rapidly commoditised, leaving Alevo with its ambitions of being a vertically-integrated player, struggling to commercialise its alternative battery technology.

 

On 18 August 2017, Alevo USA and Alevo Manufacturing, filed for chapter 11 in the United States Bankruptcy Court for the Middle District of North Carolina, citing significant production challenges and insufficient revenue to continue operations.

Despite best efforts, the firm could not tap additional funding in time to allow operations to continue.

Peter Heintzelman, Alevo’s chief financial officer, said: “This decision was driven by the formidable challenges of bringing a new technology into commercial production.”

Alevo promised a safer and more robust lithium-based battery technology all round, capable of longer operational lifetimes, using a lithium-iron-phosphate and graphite chemistry with an inorganic electrolyte to create a non-flammable cell.

To commercialise its battery technology in the utility-scale storage market the company also developed and operated its own energy storage plants, in partnership with utilities.

Alevo had plans to develop and operate utility-scale energy storage systems using its batteries and controls but ran out of capital.

Its subsidiary Alevo Analytics designed software controls for its energy storage systems to interface with grids and provide several functions and services, such as frequency response, spinning reserve and black start capability.

The company claimed that its technology is the only 100% depth of discharge lithium battery on the market, able to tolerate extreme temperature changes with little impact on lifetime. Alevo bought what was a Philip Morris cigarette factory in Concord, North Carolina to convert into a plant for making its Grid Bank energy storage systems.

Claiming the longest operational lifetime has diminished as a unique selling point. Batteries are commodities. Lithium ion batteries are getting cheaper, as invest in production capacities to supply two markets – electric mobility and energy storage. Lithium ion is proven, a market advantage that promising new technologies lack.

 

Consolidation

 

The past 18 months has seen a spate of acquisitions of energy storage integrators, which focus on bringing the components together – the batteries with the power conversion – and wrapping it all in proprietary software to create intelligent grid assets.

Younicos, Greensmith 1Energy Systems, renamed Doosan Gridtech, have all been swallowed up by multinational suppliers of conventional and clean power generation plant equipment. In the case of Belectric in Germany, the buyer is a utility.

All were going after utility-scale energy storage opportunities, spanning markets with robust energy systems to those with under-invested grids, suggesting a tough market to survive in as a vertically start-up, especially one trying to bring to market a new battery.

Leclanché in Switzerland has implemented a different approach. It makes advanced lithium ion batteries and energy storage systems that use these batteries.

Utility-scale storage is one of several markets Leclanché’s batteries are suited to, where its investment partner Swiss Green Energy Management buys the assets where Leclanché is the supplier of its turn battery energy storage systems. To spread the risk, other markets Leclanché is targeting include mass transportation as well as behind-the-meter energy storage applications in various regional markets.

To scale up battery manufacturing, Leclanché partnered with Chinese lithium ion battery producer Narada Power in 2016, which has a licensing deal to use Leclanché’s high cycling and fast charging lithium titanate (LTO) in China, Hong Kong and Taiwan in exchange for a strategic investment in Leclanché, which will help the Swiss firm reach low-cost, scale production of its advanced battery technologies.