Alevo: Swimming Against the Current

From a renovated cigarette factory in Concord, North Carolina, Swiss-based battery maker Alevo tries to bring renewable energy to the masses.

In a presidential race defined by personal insults, accusations, and circus-like theatrics, there is at least one issue on which the candidates agree; the need for energy reform.  Both candidates, despite differences in how to achieve the goal, acknowledge the importance of a drastic change in energy policy in order to produce cleaner energy at lower cost.1,2 And with good reason as the burning of fossil fuels has accelerated the rate of climate change which has been linked to extreme weather events, the salinization of cropland from rising sea levels, and human health risks. 3,4 Among the quest to reverse or slow the effects of climate change, renewable energy has been seen as the white knight. Yet renewable energy has its limits and has not proven the silver bullet that many had hoped. However, where others see a challenge, clever companies see an opportunity.

At least that’s what Alevo, an electrical grid storage company believes.  Alevo’s aim is to store and deploy renewable energy on a mass scale, lowering the cost per KWhr and mitigating one of renewable energy’s worst traits: inconsistency.  A big issue with renewable energy is that it is fickle. Even in Wyoming the wind doesn’t blow all the time and Arizona sees a cloudy day once in a while.  Thus, the supply of renewable energy is irregular and often insufficient to meet peak demand. This mismatch of supply and demand is known as the power-gap and is precisely what Alevo is trying to solve.

Alevo produces massive grid storage batteries, which can store up to 2MWhr.5 To put that into perspective, the average home uses about 11,000 KWhr per year.6 These massive batteries allow a consumer such as a municipality, an island, or a datacenter to smooth peak demand times and source energy from cheaper sources during off-peak times.  Improving technology has allowed significant advancement in the battery space. Alevo’s edge partly lies in the battery technology itself with the patent of a Lithium-battery construction infused with an inorganic electrolyte.  This electrolyte allows the production of a safer battery that can stand up to higher cycles, the number of times it can be charged and discharged.7 The opportunity is thought to have enormous market potential by providing substantial cost savings in a commodity market.  South Africa alone was modeled to save over $1B in annual energy costs.8

Opportunity, however, breeds competition.  Tesla, a techy car manufacturer, has already voiced its intentions of moving into the grid storage space with the construction of a $5 billion battery factory in Sparks, NV, expected to be in operation this year.9 JB Straubel, Tesla’s chief technology officer, believes passionately in the idea of batteries, not only to fuel his cars, but also to bring renewable energy into the reach of everyday people.10 “The potential is huge”, says Mr Straubel, “the economics in many cases have already crossed a threshold to where battery packs can effectively store renewables on a very big scale.”11  In fact, Tesla has already begun to move into the energy storage space in conjunction with another of the Elon Musk’s start-ups, Solar City.  As of 2014, over 1,000 households in California have a battery pack installed along with solar panels installed by Solar City.12

To meet increasing demand as well as ward off competition, Alevo has invested in supercomputing technology to allow for better forecasting and more robust demand management. The new capability has allowed Alevo to better model cost drivers on an electrical grid to pinpoint areas in need of improvement. The analysis has proved so insightful that Alevo has begun selling the supercomputer capacity to non-competitors.13 In fact, when the supercomputer is fully built out, it will join the list of the 25 most powerful computers in the world. 14 The likes shared with the National Super Computer Center in Guangzhou China or NASA’s Pleiades computer.15

The investments have paid off thus far, with Alevo continuing to differentiate itself as a leader in the grid storage space.  However, competition and fluctuating energy prices pose a constant threat.  The move into supercomputing was a deft one, but the company will continue to need to diversify away from simple storage solutions in order to hedge against possible falls in fossil fuel prices.  The move into supercomputing will give them a treasure trove of data.  They should leverage this data to not only improve their battery offerings, but also provide data consulting services to energy users.  The more data they have, the more self-reinforcing the cycle becomes.  If successful, Alevo may prove viable an important step towards mass use of cheaper, cleaner energy.

 

Word count: 765

 

 

 

Endnotes

1 “Climate Change,” Hillary Clinton Campaign website

https://www.hillaryclinton.com/issues/climate/ , accessed October 2016.

 

2 “An America First Energy Plan,” Donald Trump Campaign website

https://www.donaldjtrump.com/policies/energy/ , accessed October 2016.

 

3 U.S. Global Climate Change Research Program, “Climate Change Impacts in the United States,” Thomas R. Karl, Jerry M. Melillo, and Thomas C. Peterson (eds.), 2014, p.9., http://downloads.globalchange.gov/usimpacts/pdfs/climate-impacts-report.pdf , accessed November 2016

 

4 “The Reality, Risks and Response to Climate Change,” The AAAS Climate Science Panel, 2014, pp 4,

http://whatweknow.aaas.org/wp-content/uploads/2014/07/whatweknow_website.pdf , accessed November 2016

 

5 “The Alevo Gridbank,” Alevo Company website

http://alevo.com/gridbank/what-is-a-gridbank/ , accessed October 2016.

 

6 “How Much Electricity does an American home use,” U.S. Energy Information Administration website

https://www.eia.gov/tools/faqs/faq.cfm?id=97&t=3 ,accessed November 2016.

 

7 “The Alevo Gridbank,” Alevo Company website

http://alevo.com/gridbank/what-is-a-gridbank/ , accessed October 2016.

 

8 “Alevo, The Other Energy Storage Gigafactory, Begins to Stir,” Forbes

http://www.forbes.com/sites/peterdetwiler/2016/05/10/alevo-the-other-energy-storage-giga-factory-begins-to-stir , accessed October 2016.

 

9 “Tesla Gigafactory,” Tesla Company website

https://www.tesla.com/gigafactory , accessed November 2016.

 

10 “Tesla’s Electric Man,” The Economist

http://www.economist.com/news/technology-quarterly/21635332-jb-straubel-charged-more-electrifying-californian-carmaker-he , accessed October 2016.

11 IBID

 

12 IBID

 

13 “Alevo, The Other Energy Storage Gigafactory, Begins to Stir,” Forbes

http://www.forbes.com/sites/peterdetwiler/2016/05/10/alevo-the-other-energy-storage-giga-factory-begins-to-stir , accessed October 2016.

 

14 IBID

 

15“Top 500 List,” Supercomputer website

https://www.top500.org/list/2015/11/ , accessed October 2016.

 

 

Previous:

UPS – How 3PLs are Confronting Climate Change

Next:

“Tesla and the Electric Vehicle Revolution”

3 thoughts on “Alevo: Swimming Against the Current

  1. Alevo’s batteries are definitely a game-changer for renewable energy. It’s interesting you mention South Africa since Eskom, the national utility has recently been facing some difficulty meeting demand. ‘Load shedding’, the term used for planned rolling blackouts, has been used to maintain the integrity of the grid in periods of high demand. The utility, once lauded for having some of the lowest electricity pricing in the world, has also had to increase tariffs. Overall, this has had a real impact on the economy through increased operating costs for businesses and interrupted operations in the mining and manufacturing industries. To your point on commodities, South Africa supplies 85% of the world’s platinum and mining companies have estimated that hundreds of thousands of ounces of platinum production will be lost until the electricity crisis passes. In the midst of this, the government has set targets for increased use of renewable energy so there is significant pressure on Eskom to not only address electricity shortages, but do so in a sustainable manner. This is a move away from their current practices which rely primarily on coal-fired stations so wind and solar options are currently being explored. Alevo’s batteries clearly have a role to play in addressing this conundrum and I hope to see such innovative solutions being harnessed to truly change the energy landscape as we know it today.

  2. Thank you for your article, Charles!

    It is really exciting to see that there is a new technology to store energy. As you mention, efficient storing is the missing key element to diffuse renewable energies. One question that remains for me… Will the solution be, on net effect, better for the environment? I am worried about the damage to the environment done from extracting lithium, necessary to build the batteries, and when disposing the batteries after their intended life cycle.

    85% of Lithium world reserves are located in the salt lakes in Chile, Bolivia and Argentina (1). These salt lakes are unique and, as the only water sources in the most arid desert in the world, they host wild life specimens that can’t be found anywhere else. Lithium extraction is already generating environmental damage, and thus species count has steadily decreased. Considering lithium’s current high prices, with a potential of even higher prices if demand grows due to batteries required to store renewable energy, will developing economies privilege the environment over their economic and social growth?

    In addition to lithium extraction environmental damage, I don’t know how many years it takes for a disposed lithium battery to decompose. Thus, I wonder whether the net effect for the planet is positive…

    Sources
    (1) https://www.veoverde.com/2012/10/explotacion-del-litio-salares-y-ecosistemas-en-peligro/

  3. Charles Johnson, I’m really glad you brought this topic of, as I’m sure you are aware, it is a “go-to” critique of renewable energy advocates by fossil-fuel based energy advocates. I think it is a fascinating problem with multiple potential solutions and I wanted to suggest one other.
    I as well as others believe that a cheaper and more environmentally friendly solution may be a combination of nuclear power as well as pumped-storage hydroelectricity. Pumped-storage hydroelectricity can be thought of as one giant battery, where a power source (such as a nuclear power plant) can store power by pumping water up a hydroelectric power source, namely a dam (i.e. using the power generated from the nuclear plant to move water from the bottom of the dam into a storage above the dam.) The benefits of this are obvious, even a small nuclear power plant can continuously pump water while the renewable energy infrastructure (such as solar or wind) is used as a source of power, and when the renewable energy source is out of commission due to inclement weather, you now have a combination of power from the nuclear power plant as well as a dam.

    (Diagram of Pumped-Storage here: http://www.hydro.org/wp-content/uploads/2010/12/Pumpstor_racoon_mtn.jpg)

    While it is not commonly known, pumped-storage hydroelectricity is not a new concept and actually has been in use in the U.S. since the 1920s. Today, there are 40 pumped-storage projects operating in the U.S., which can handle up to 2% of the U.S. electricity supply system[1].

    Nuclear energy, while often feared by the public, is a relatively clean source of energy. While there have been unfortunate accidents in the past, on a per watt basis, it is much safer than coal or natural gas. The reason why we believe that nuclear energy is so dangerous is that deaths caused by nuclear energy are caused by highly visible accidents. In fact, there have only been 3 nuclear accidents in history (Fukushima, Three Mile Island, and Chernobyl). By comparison, every year thousands of people die in coal mines but do not receive press coverage. Three Mile Island was quickly contained, Fukushima has caused no deaths, and Chernobyl is the only nuclear accident that have been linked to deaths, and itself only caused 31 deaths [2].

    As we move towards more renewable energy, we should cut through popular perception and look at the facts on what the dangers are with each source of power. Even without nuclear power, pumped-storage hydroelectricity clearly is a valuable source of power storage that can avoid the environmental damage of lithium mining as noted above.

    1. http://energystorage.org/energy-storage/technologies/pumped-hydroelectric-storage
    2. http://www.world-nuclear.org/information-library/safety-and-security/safety-of-plants/safety-of-nuclear-power-reactors.aspx

Leave a comment