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Xtreme Power's energy storage technology was originally developed at Ford Motor for use in automobiles, but was shelved there. Xtreme picked up where the Ford engineers left off and has developed what is in essence a large-scale battery that can store energy from renewable sources like wind –which usually blows most at night when electricity needs are lowest. The intermittent nature of wind and solar power creates challenges for electric grid operators; these storage units can smooth the delivery of the energy to the grid.

Dozens of other companies, including lithium-ion battery company A123 Systems, are going after the same target.

But Umesh Padval, a partner with Bessemer Ventures, which invested in the new financing round, said that Xtreme is further along than some competitors, and that its technology is safer and less costly than A123's. Padval describes the capital-efficient technology as based on lead and other chemistries. "There are no liquids. It's very safe. And they've had a pilot project going in Hawaii since last October," he added.

Besides Bessemer, investors in Xtreme include the venture arms of Fluor Corp. and Dow Chemical, and previous investor SAIL Venture Partners.

Last fall as part of the federal stimulus package, the Department of Energy awarded grants to a number of energy storage companies including Seeo of Berkeley, Calif. (backed by Khosla Ventures and other investors) and Premium Power of North Reading, Mass.

Padval describes the market for utility-scale storage as one of "trillion dollar demand but very little deployment." Stay tuned for the rollout.

Source: http://blogs.forbes.com/velocity/2010/07/27/energy-storage-player-xtreme-power-pulls-in-29-million/

On the cutting edge of a potential solution is Hawaii, where state officials want 70 percent of energy needs to be met by renewable sources like the wind, sun or biomass by 2030. A major problem is that it is impossible for generators on the islands to export surpluses to neighboring companies or to import power when the wind towers are becalmed.

On Maui, for example, wind generating capacity over all will soon be equal to one-fourth of the island’s peak demand. But peak wind and peak demand times do not coincide, raising questions about how Hawaii can reach its 70 percent goal. For now, the best option seems to be storage batteries.

In New York and California, companies are exploring electrical storage that is big enough to allow for “arbitrage,” or buying power at a low price, such as in the middle of the night, and selling it hours later at a higher price. In the Midwest, a utility is demonstrating storage technology that can go from charge to discharge and back several times a minute, or even within a second, bracing the grid against the vicissitudes of wind and sun and transmission failure. And in Texas, companies are looking at ways of stabilizing voltage through battery storage in places served by just one transmission line.

Renewable goals can be met, many in the industry insist. But if the energy source is intermittent, “you can’t do that without batteries of some sort,” said Peter Rosegg, a spokesman for the Hawaiian Electric Company.

His company has agreed to buy electricity from a wind farm on the northern shore of Oahu, where the Boston-based power company First Wind has just broken ground.

The spot is one of Hawaii’s best wind sites, Mr. Rosegg said, but the supply is gusty and erratic. What is more, it is at the farthest point on the island from the company’s main load center, Honolulu, and does not even lie on its high-voltage transmission backbone.

So the 30-megawatt wind farm, which will have enough power to run about 30 Super Wal-Marts, will have Xtreme Power of Austin, Tex., install a 15-megawatt battery.

Computers will work to keep the battery exactly half-charged most hours of the day, said Carlos J. Coe, Xtreme Power’s chief executive. If the wind suddenly gets stronger or falls off, the batteries will smooth out the flow so that the grid sees only a more gradual increase or decrease, no more than one megawatt per minute at some hours of the day.

The Hawaii installation is designed to succeed at a crucial but obscure function: frequency regulation. The alternating-current power system has to run at a strict 60 cycles per second, and the battery system can give and take power on a micro scale, changing directions from charge to discharge or vice versa within that 60th of a second, to keep the pace steady.

The battery system can also be used for arbitrage, storing energy at times when prices are low and delivering it when prices are high. It can hold 10 megawatt-hours, which is as much energy as a 30-megawatt wind farm will produce in 20 minutes if it is running at full capacity. That is not much time, but it is huge in terms of storage capacity.

Neither First Wind nor Xtreme Power would say what the project cost, but publicly disclosed figures put the project in the range of $130 million, with about $10 million for the battery. The Energy Department has provided a $117 million loan guarantee.

Across the country, it is proving hard to predict the cost and the value of power storage to consumers. The electricity stored in off-peak hours could be quite low in cost, and prices at peak hours could be quite high. If the reliance on renewable energy reduces the need to burn coal and natural gas, that would yield an additional advantage.

Mr. Coe estimated the battery system’s round-trip efficiency — that is, the amount of electricity the batteries could deliver per megawatt-hour stored in them — at over 90 percent. If that figure is borne out, it would be a significant advance from the largest form of energy storage now in general use, pumped hydropower, whose efficiency is put at 70 to 85 percent.

At a pumped hydro plant, off-peak electricity is used to pump water from a reservoir at a low elevation to one at a higher one. At hours of peak demand the water flows back down through a turbine, creating electricity.

Electric companies are using other strategies for storage and frequency regulation. In Stephentown, N.Y., near Albany, a Massachusetts company, Beacon Power, is building a bank of 200 one-ton flywheels that will store energy from the grid on a moment-to-moment basis to keep the alternating current system at a strict 60 cycles.

Atop each flywheel is a device that can be a motor at one moment and a generator the next, either taking energy and storing it in the flywheel or vice versa. The Energy Department provided a $43 million loan guarantee to assist in the $69 million project.

The Energy Department is also supporting storage projects that rely on compressed air. Surplus electricity is used to pump air into an underground cavity; when the electricity is needed, the air is injected into a gas turbine generator. In effect, it acts as a turbocharger that runs on wind energy captured the previous night, instead of natural gas burned at a peak hour.

The department is contributing to two projects explored by PSEG Global, an affiliate of Public Service Electric and Gas, based in New Jersey. It plans to provide $30 million of the $125 million estimated price of a 150-megawatt project envisaged in upstate New York, perhaps at an abandoned salt mine, and $25 million toward a $350 million, 300-megawatt project to be built in Northern California.

Both will be used to store power made in off-peak periods and deliver it in peak times, when prices are higher, said Paul H. Rosengren, a spokesman for P.S.E.G.

In Presidio, Tex., American Electric Power and MidAmerican Energy Holdings have just completed a four-megawatt battery system that is not tied to any particular wind farm but is intended to improve reliability in the town, served by only one major transmission line. American Electric Power already has smaller batteries working in Ohio and Indiana to provide more stability in its distribution systems there.

Source: http://www.nytimes.com/2010/07/28/business/energy-environment/28storage.html?src=me

The new money, he said, will be used for technology development, the expansion of production of existing products and as working capital for large-scale power management projects, such as a recently announced power grid system in Hawaii to store and regulate power from wind turbines.

Among the major investors in this round of venture funding are Bessemer Venture Partners; Dow Chemical Co., through its venture capital group, Fluor Corp.; and previous investor SAIL Venture Partners. Other investors include POSCO and SkyLake Incuvest and Co.

"Some of these companies we've been talking to for more than a one-year period," Coe said. "For companies to invest in you, it's not a snapshot decision. They have to know about you, watch you operate over a period of time."

Coe said that during its capital campaign, Xtreme Power wasn't looking only for funding, but also for companies that could be "strategic investors."

"Strategic investors, to us, would be large industrial companies that have resources and insight to help us expand and grow the company to the next level," Coe said. "For the marketplaces that we're in, these are companies that are interested in technologies that have a relatively long life to them."

As part of the new investments, Umesh Padval of Bessemer Venture Partners and Walter Schindler of SAIL Venture Partners joined Xtreme's board of directors.

Padval said that after tracking Xtreme Power's progress for 18 to 24 months, his firm decided to invest in the company because it had "a mature technology, a practical technology, with a good cost structure."

"We also liked the fact that they had some date on their deployment (for the project in Hawaii.) That combination of mature technology and deployment gives you confidence in a company," Padval said.

Padval said Bessemer Venture Partners would be involved in helping Xtreme Power grow.

"We are not passive investors," he said. "We do investments only ... in companies where we are going to play an active role."

Coe said a small percentage of the newly raised $29.5 million would go toward work at the company's in-the-works manufacturing plant in Michigan. In August 2009, Xtreme Power announced plans for the plant — which will make large-scale power-storage systems — at a former Ford Motor Co. complex in Wixom, Mich., northwest of Detroit. The decision to locate the plant there was aided by an incentive package from the State of Michigan estimated to be worth more than $200 million.

At the time, Michigan officials said Xtreme Power might hire as many as 2,500 workers between late 2011 and 2014. Coe said it was too early to say whether that number would be reached — he said the state's estimate was "at the upper bounds" of what Xtreme Power could eventually expect at the site — but said his company expects to have at least 500 employees working at the Michigan site by the end of 2012.

Xtreme Power, which was founded in 2004, has about 160 employees between its headquarters in Kyle and a facility in Oklahoma. Coe said he expects the company will have about 200 employees by the end of this year, and Xtreme Power recently leased 5,000 square feet of office space on Congress Avenue in Austin for its sales and marketing team.

Xtreme Power received a $2 million grant from the Texas Emerging Technology Fund in 2007, and Coe said there are no plans for his company to move its headquarters out of state.

"The State of Texas was one of our big investors. ... They were one of our great partners for us early on," he said. "And our commitment to the State of Texas is large; we expect to grow up and be a large company, and that ... part of its center of assets is going to be here in Austin."

Source: http://www.statesman.com/business/technology/xtreme-power-gets-29-5-million-boost-825082.html

The technology behind Xtreme Power was originally developed in the 1990s for use in hybrid and electric cars. It's a dry cell battery that uses a "non exotic metals" such as lithium or nickel, said Coe, who declined to be more specific about what's inside the batteries.

The battery chemistry is well-suited for utility-size storage because it can store large amounts of energy and deliver large amounts of power, he said.

One of its battery systems is being installed in Hawaii to maintain a steady flow of electricity from a wind farm. In that case, the batteries will be capable of delivering 30 megawatts of power and have 10 megawatt-hours of storage."The advantage of the system with renewable energy is that it addresses one of the key issues, which is variability," said Coe.

In addition to building storage to make solar and wind power more steady, the company is also going after the market for "grid services." Right now, grid operators have natural gas plants standing by to ensure that there's a balance between supply and demand and that there's also steady frequency and voltage.

Coe said that a storage system costs about the same as a natural gas plant but that the operation is much cheaper. But current utility regulations are not designed for storage, making it difficult to sell large-scale storage.

Cost of storage is another barrier. There are a host of technologies competing, including batteries and compressed air stored underground, but the cheapest is pumped hydro, in which water is pumped uphill at night and released during times of high demand during the day.

Source: http://news.cnet.com/8301-11128_3-20011751-54.html