Energy storage technologies – notorious for falling into the infamous financing “valley of death” – are set to get a stronger bridge across the abyss from lab to market in California.
CalCharge, a consortium based in San Francisco’s Bay Area, launched May 29.
The partnership between Lawrence Berkeley National Laboratory and the California Clean Energy Fund (CalCEF), which was first reported on by Breaking Energy in March, aims to combine academic talent at UC Berkeley and Stanford with venture funding and engineering expertise in Silicon Valley.
CalCharge has identified around 30 energy storage startups in San Francisco’s Bay Area which lack the critical ecosystems that have helped other technologies to reach commercial scale.
“We wanted to partner with the lab to bridge that divide between the market and these world-class scientific resources,” said Paul Frankel, managing director of CalCEF Innovations. “We will bring market relevance to the work that’s going on at the lab to help accelerate their productisation and commercialisation.
“We do innovation really well here in the Bay Area and Silicon Valley. When you have a combination of all of the things that have made Silicon Valley so successful – education, finance, risk tolerance, progressive policy and engineering talent – and focus on a market opportunity like clean energy then good things are going to happen.
“The market for energy storage has clearly signalled that this is an opportunity whose time will come and we want to accelerate that time.”
CalCEF also aims to replicate the success of the Energy Efficiency Center at UC Davis, which it launched with a $1 million grant in 2006, and helped shift investor focus from traditional clean technologies such as solar.
Despite the high capital costs and the long-term horizons to exits, energy storage companies have raised $630.5 million in the past 12 months, according to the Cleantech Group’s i3 figures. Energy storage investments in California grew 13 fold between 2010 and 2011, taking 11% of the total VC investment in clean technology for the state.
“Where venture capitalists put their money is a leading indicator of where the market may be going,” said Frankel. “The discipline investors use to evaluate opportunities is based on as much reality as they can quantify and qualify. They are seeing real markets with real customers and profitable business models and differentiated technology with real world applications.”
CalCharge will focus on three market segments in energy storage – grid, transportation and consumer electronics – and its finance and market development expertise will complement the policy work of the California Energy Storage Alliance.
Initially, the emphasis will be on consumer electronics as markets for the other segments develop, said Frankel.
“In the nearest term, innovations in energy storage in the form of battery storage to the consumer electronics markets will yield opportunities in the clean energy economy. But we’ve got to give a place for these young companies to sell their wares in the near term, otherwise they’re going to die on the vine.”
The market for energy storage technologies in grid applications is highly limited at the moment but would be an “aspirational market” for young companies, he said. Starting with consumer electronics would allow companies generate a revenue stream to enable them to develop applications for other markets, such as electric vehicles.
“Customer needs in terms of volume are in consumer electronics and secondarily in EVs. But in transportation you have an infrastructure question – you’re not just building a widget you’re building infrastructure into which widgets plug into.
“We see a trend worldwide in electric transportation and that market is developing nicely, [so] technology innovation will diffuse into the market place extremely quickly. – Frankel
“The general product performance requirements of consumer electronics and EV companies are more or less congruent. As these complementary opportunities develop, these young companies will hopefully not just be surviving but thriving and be able to apply their technologies to these adjacent market segments.”
California has dominated battery patent registrations with 258 filings between 2008 and 2010, according to a report from Next 10, non-partisan policy researchers based San Francisco. In the past two years, LBNL has earned a reputation for the development of batteries for transportation and grid storage, said Venkat Srinivasan, head of Berkeley Lab’s energy storage research program.
For coverage of energy storage from Breaking Energy, read more here.
Srinivasan said the collective brainpower would help overcome some of the barriers to commercialisation in electro-chemical technologies.
“You’re not trying to move electrons, but ions. We need the batteries to have a reasonable lifespan and not go up in flames. So any change in chemistry is hard. The evolution of these technologies tends to be very slow and you need the critical mass of people to cut across the whole supply chain. That exists in the Bay Area and we can help accelerate innovation.
CalCharge launched at the Silicon Valley Energy Storage Symposium in Mountain View, California.