Indy Power sees big potential in grid power storage

First, he formed a company to build electric cars, using off-the-shelf parts.

Then, Steve Tolen realized nobody made a power control system that could accommodate the mix of battery types necessary to make such a car affordable.

Tolen

So his handful of engineers, who’d worked at places such as General Motors, Thomson and Lockheed’s Skunk Works, invented their own control system. That system appears to have big potential—but not in electric cars. Three-year-old Indy Power Systems’ first big sale is outside the sizzling, electric car segment.

The Noblesville firm has landed a contract with Melink Corp. to supply a 50-kilowatt grid energy storage and peak-shaving system at the company’s Cincinnati headquarters.

The system will charge storage batteries when grid power is cheapest and tap the power for several hours during peak periods, when electric rates are higher.

It can also store power generated by renewable sources, such as solar panels.

Although neither firm is disclosing the value of the deal struck this month, it’s Indy Power Systems’ first big contract and could define its growth down the road.

It’s also a significant endorsement of sorts for Indy Power, given that Melink produces solar panels and provides building commissioning and energy consulting services to companies nationwide.

Melink’s solar-panel-adorned headquarters already was ranked the 33rd “greenest” building in the world and is one of only 24 existing LEED “platinum” buildings.

Whether Melink could open more doors by using Indy Power’s systems for its own clients, “it’s too early to say,” Tolen said.

The founder of the former Symphony Bank (now Merchants Bank) said Indy Power is in talks with several other potential customers.

While numerous and much larger companies worldwide are focusing on the potential of grid storage systems using advanced battery types, Tolen’s team is focused on low-cost lead-acid batteries.

And they’re using used batteries, at that, primarily because they cost about 80 percent less per kilowatt hour than new batteries.

“We’re the lowest-cost energy storage in the market,” Tolen said.

Brain of the battery bunch

What might sound like a Third World solution to peak shaving is actually made possible by a sophisticated device—the black box Indy Power engineers created called the Multi-Flex.

Essentially a sophisticated computer, it detects and manages the rates of drain and recharging of different battery types. Tolen envisioned a hybrid car that used both nickel metal hydride batteries and cheap old lead acid cells.

The control unit could primarily tap the nickel metal hydride batteries during quick acceleration, given their ability to throw off larger bursts of power than older lead acid batteries.

The newer batteries can also more quickly accept large amounts of electricity during recharging.

Indy Power’s control technology won national recognition, including in MIT Technology Review. It was named one of the Top 100 Stories of 2009 by Discover magazine.

But mixing battery types never caught on in the automotive industry.

Automakers partnered with a battery supplier for their hybrid cars and have stuck with one battery type for each vehicle model.

“My mistake was, I thought the automobile industry would beat a path to our door,” concedes Tolen, 56. “That was a huge mistake on my part thinking logic and science would prevail.”

The Multi-Flex control technology appears to have more potential in the electric power world, however.

The system Indy Power is setting up for Melink consists mostly of used lead acid batteries—about 650 of them on 30 pallets. The remaining 10 percent are nickel metal hydride or lithium ion batteries.

The latter are included for their ability to deliver quick surges of power. The Multi-Flex unit not only switches between those and lead acid batteries, but also decides which of the lead acid batteries to tap at a given moment.

Each used lead acid battery has its own “sweet spot,” Tolen said. At any given moment, one might be able to handle, say, a 20-amp discharge, with another capable of 30 amps.

“We’ll be able to manage those separately. That’s been the missing link,” he said.

Managed properly, the technology can extend the useful life of a used battery by a year or more before it needs to be carted off to the recycler.

Indy Power is touting its control technology as flexible enough to allow a client to plug in other types of used batteries later—such as the numerous, nickel metal hydride batteries coming out of the maturing fleet of hybrid cars on the market. That involves little more than a software upgrade.

The brains behind the control technology for the energy storage application include Drew Hintz, who used to develop software for consumer electronics maker Thomson and was a contractor to Lockheed Skunk Works.

Among those on Indy Power’s board is Bill Wylam, who, while at GM’s former Delco Remy division, developed the propulsion system for the automaker’s EV1 electric car. Also on the board is Bob Galyen, who was lead battery pack designer for the EV1’s prototype predecessor, the Impact.

Tolen pointed to some estimates that the electric propulsion market could be $2 billion a year, but the grid sector has a much larger $35 billion potential.

“The grid,” he added, “is our focus.”

Utility market hottest

Indy Power isn’t alone in focusing on the grid.

New York-based Ener1, parent of locally based hybrid car battery maker EnerDel, sees a potentially bigger market in battery packs for power grids. Barclays Capital analyst Vishal Shah said earlier this year that Ener1 expects demand for battery packs for grid applications could hit 200,000 packs per year by 2016.

By contrast, EnerDel’s current capacity for making electric car batteries at its existing plant in Indiana is 11,000 packs, according to the analyst.

Ener1 previously cited estimates from Deutsche Bank that the market for lithium ion batteries for vehicles could reach $66 billion by 2020. But the global market for batteries used to store electricity on utility power grids could be $600 billion over 10 years, according to a Piper Jaffray Report.

Among several projects, Ener1 is providing batteries for a 5-megawatt peak load management project being built by Portland General Electric in Oregon.

Closer to home, Indianapolis Power & Light in 2008 tapped Reno, Nev.-based Altairnano for lithium titanate batteries made at Altairnano’s Anderson factory.

Tolen sees potential applications for commercial buildings, such as Melink’s headquarters, and later for home use as a way to relieve demand for power during peak power use periods. Such loads could become more intense in the years ahead as motorists charge electric cars at home.•