Energy storage startup and flow battery developer Primus Power just announced the first close of a $20 million Round C led by South Africa’s Anglo American Platinum, along with existing investors. Previous investors include DBL Investors, I2BF Global Ventures, Chrysalix Energy Venture Capital, and KPCB. Founded in 2009, Primus has logged $35 million in total venture capital, along with significant funding over the years from DOE, ARPA-E, and the CEC.
Primus builds flow batteries, an energy storage technology that recirculates an electrolyte through electrochemical cells. Flow batteries promise long cycle lives and duration, although they suffer in comparison to lithium-ion batteries in terms of round-trip efficiency. (Zinc-air battery firm Eos and aqueous electrolyte battery startup Aquion Energy claim efficiencies of 75 percent and 85 percent, respectively.)
The 35-employee Primus was founded in 2009 and joins an array of flow battery companies including EnerVault, Redflow (Australia), Cellstrom (EU), ZBB, American Vanadium, EnStorage (Israel), Prudent Energy, Premium Power and Imergy (formerly Deeya). Primus' multi-megawatt-hour flow battery technology is based on a zinc-halogen system with zinc plating and deplating.
We spoke with CEO Tom Stepien, who claimed, "2014 is our year," adding, "We will ship to the Puget Sound Energy project in Seattle and to Miramar in San Diego. Those go out in the next twelve months. A year from now, we'll have data on how the units work at scale on the grid."
Primus is going to deploy two 280-kilowatt storage systems to study the impact of grid-scale flow batteries in Puget Sound Energy's electrical distribution network. Installation of a storage system on Bainbridge Island could defer the need to build a substation for at least nine years, according to the CEO.
The Miramar project is part of Raytheon’s Integrated Defense Systems, providing an energy storage system for a microgrid at the Marine Corps Air Station (MCAS) in Miramar, California. Stepien said that 20 percent of the backup diesel gen-sets at Miramar did not start on the day of the San Diego blackout of 2011. When a military site like MCAS loses power, "Planes are grounded and training missions are canceled. You can't even open the gates," Stepien told GTM in a previous interview.
The CEO said that "energy security and surety are paramount in the mind of the DOD."
The firm's technology is "a multi-hour battery, and that lends itself to energy applications," said Stepien, adding, "The flow battery has the ability to shave peak load and lower demand charges" as well as to provide backup or frequency regulation. He said that Primus will go after utility, commercial and microgrid markets.
New investor Anglo American Platinum is a supplier of the catalyst material which Primus uses in its systems' electrode -- a small but crucial piece of the bill of materials. That makes the new investor a strategic choice, as well as a gateway to applications on the African continent.
Forecasts for the energy storage market are disparate, optimistic, and mostly guesswork. Pike Research says the market will be $35 billion in 2020; Piper Jaffray says $200 billion by 2020. David Hawkins of CAISO has been quoted as saying, "I can't see how it's possible to get to 33 percent [renewable power penetration] without significant energy storage resources on the grid."
Current regulatory trends favor energy storage -- whether it be FERC's storage orders or California's massive 1.3-gigawatt mandate, as well as recent energy storage explorations from investor-owned utility Southern California Edison and municipal utility IID. Long-duration storage, as specified in some solicitations, favors flow batteries.
Primus competes against other flow batteries but also vies for business with battery technology, the leader in these early days with a huge head start. AES has already shipped more than 100 megawatts of lithium-ion-battery-based grid-scale storage. A123 is also building a fleet of storage resources.
Utilities are going to need to see commercial flow battery projects on the ground, working reliably and cheaply over time, in order to overcome the industry's aversion to risk. Capex and opex pricing claims for flow batteries at this stage of the game are less than meaningful, given the volumes involved and the device-years logged. Flow battery technology has advanced in the last decade, but real headwinds remain for entrepreneurs in this market.
Energy storage is still a shiny sector for VC investors: energy storage companies Aquion ($55 million) and Amprius ($30 million) also received funding this month.
Despite the seemingly obvious role for energy storage on the grid, the technology has proven challenging to deploy commercially -- it usually competes with low-cost natural gas peaker plants. Furthermore, the business model in energy storage is fuzzy, with utilities and vendors still coming to grips with the true value proposition for storage on the grid and grid edge. Recently failed energy storage startups Xtreme Power and Demand Energy attest to the market challenges in this new, growing, but low-forward-visibility industry.
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Greentech Media has long covered the energy storage market, which includes technologies such as:
- Batteries (Li-ion, NiMh, Zinc Air, NaS, etc.)
- Flow batteries
- Flywheels
- Phase-change materials
- Ammonia
- Thermal storage as heat or ice
- Hydrogen systems
- Compressed air energy storage (CAES)
- Pumped hydro
- Mass-shifting
- Superconducting magnetic energy storage (SMES)
- Ultracapacitors
- Using off-peak wind energy to synthesize fuels such as gasoline and diesel from CO2 and water
Here's a list of the utility-scale energy storage programs funded by ARRA.