I have been following the energy storage area for some time, having led a fuel cell start-up, helped commercialize portable technologies, and worked on thermal storage.

Recently I attended a Berkeley-Stanford Cleantech Conference on “Energy Storage: Enhancing the Value of Renewables”. The organizers put together a great event, although I would have liked to see more on competing technologies and real details on policy issues.  I can’t cover all the interesting conversation in this short post. Here is a short summary . . .  

The potential market looks attractive. Eric Wesoff of Green Tech Media presented a market estimate at $600 billion. Ed Cazalet of MegaWatt Storage Farms believes that California will need an additional 4GW of storage to meet demands of the 33% RPS in 2020. Nick Hodson of McKinsey said utilities would use storage if it was cheap enough, citing the example of Switzerland and Austria who have 11% and 17% storage capacity respectively, using pumped hydro.

The key words there are “cheap enough”. Haresh Kamath of EPRI drove that point home, saying the big three issues with existing technologies are cost, cost and cost. Although Ed Cazalet of MegaWatt Storage Farms believes that $/W comparisons on a “name plate” basis can be misleading because the fast response and peaking capacity of batteries meant that their real capacity could be double their name plate.

On the other hand, grid scale energy storage also competes with demand response and energy efficiency, which can be extremely cost effective, further underlining the importance of low cost.

As in much of cleantech, policy trumps technology (as pointed out by Eric). A key issue is the structural lack of ownership of the problems that storage will solve. Moreover, Ed pointed out, if utilities are allowed to include storage in their rate base that may skew the market against independent storage providers. The good news is that storage is now on the policy agenda and some US stimulus funds are on the way.

So where to invest? Marianne Wu of MDV was frustrated by limited research at grid scale, the small number of companies, and the small pool of talent which understands the technology and the market requirements and has experience in cost down and scaling.

Bottom Line: Personally I would advocate a back to basics approach on product-marketing and product management. Understand the customer requirements throughout the life cycle, match the technology to the most attractive market, and build for low cost. Talk to the operations people not the just the R&D department. The thought leaders can often help solidify and define customer requirements in a nascent market. Design for usability, manufacturability and cost from the start.

Foot note: GE just announced they are going to make NaS batteries at a new plant in Niskayuna, NY.

In recent weeks I have been to several events purporting to help greentech entrepreneurs access stimulus funds, i.e. the funds from the American Recovery and Reinvestment Act (ARRA). To give you an idea of scale of the stimulus, ARRA is twice the size of both the Federal Highways program and the Apollo program.

Well . . . on Monday I finally went to an event, entitled Demystifying the Stimulus Package, where the speakers actually knew what they were talking about. 

Congratulations to CalCEF for organizing a great event with knowledgeable and well researched presentations and panels. There are some reviews of the CalCEF event at Greentech Media here and here. 

I was interested to learn about the timetable. There is considerable pressure to start stimulating the economy and creating jobs quickly.  Most of the funds are to be spent over the next 2-3 years, but many programs extend beyond 2011.  According to Matt Rogers, the man at the DoE responsible for shovelling the money out the door, the timetable for obligating the money is: 

• Memorial Day (25 May) - 10% obligated
• Labor Day (7 Sep) - 50% obligated
• 30 Sep - 70% obligated

He also said that the first block of ARPA-E bids are due mid June with additional rounds in Q4 2009 and Q2 2010.

Meanwhile in California, the CEC is responsible for doling out much of the Federal money allocated to California. Martha Krebs of the CEC said solicitations were unlikely until August 2009.

Back in 2006 we sucessfully bid for $11 million in DoE funds for Zenergy/SC Power, after several attempts. I was also involved in previous PIER and DoE bids at Zenergy, Flextronics and my fuel cell company. We had some experienced partners and learned from our mistakes.

My advice?  

• Is government money is the right thing for you?
  • Do you have finance to meet the cost share?
  • Do you have the band-width to manage the project?
  • Can you handle the administration?
  • Will the 2-3 year program fit your R&D or product development cycle? 
• Build long-term relationships with DoE program staff.
• Take the opportunity to shape the programs before the FOA is issued.
• Partner with credible organisations.
• Understand the rules around foreign participation, but don't assume it can't be done.
• Address the selection criteria.
• Differentiate your bid.
• Don't leave it until the last moment.

 Bottom Line: Start early and pick your partners (including those consultants and attorneys) carefully.

Here is a nice interview with Jeremy Liew of Lightspeed Ventures featured in TechNation Australia.

Jeremy's direct style shines through.  My favourite quotes:

What are some of the most common mistakes you see aussie start-ups making?

Not thinking big enough. Focusing on technology instead of customer problems. Not looking for a global perspective in employees, leadership and investors early enough.

What do you think is stopping Australia from becoming a leading global tech-hub?

Market Size. Aussie companies need to look to global markets, and that means relocating closer to customers, so there is a limited runway that a company can have while based in Australia.

What advice would give an Aussie startup considering making the move to the US now?

The time to move to the US (or anywhere that is close to your markets) is when you’re ready to talk to customers. No need to move before that. But you must do it once you’re talking to customers. Otherwise, it is just too hard to stay top of mind as a startup.

What is the one bit of advice you would give a startup founder?

You can change your team, you can change your technology, but you can’t change your market.

Bottom Line: It won't take you long to read, but you will learn a lot.

Bottom Line: In assessing a CPV technology you need to consider both the target applications and the completeness of their design concept for that application - does the team have the expertise to make it work? 

I don't often post news items, in fact I don't often post :-).  However, this is pretty interesting.  The Sydney Morning Herald reports that Worley Parsons, Australia's largest engineeering company, is planning to build 34 250 MW solar power stations.  You can read about it here.

It will be interesting to find out which technology they will use. The article says they would use "technology employed in the United States over the past 20 years" and build the plants by 2020.  Strictly interpreted, that limits the candidates to existing power tower and trough technologies.  It would not include home-town boy Ausra, who announced seperate discussions with Australian governments.

Bottom Line: US based solar thermal companies will be looking overseas to avoid the desert land grab in the US.  Look for more innovative technologies from Australia and other Asia-Pacific countries coming to the US for capital.