In virtually every industry sector, whether it’s next-generation automobiles, smartphones or electricity generation, there is a common challenge: finding efficient, effective and low-cost ways to store and deliver energy. EnerG2 Technologies, a small Seattle startup with big ambitions, has developed a process for custom-designing carbon materials that could help battery makers take on many of those challenges.
The technology’s potential was regarded as significant enough to attract a $21.3 million grant from the U.S. Department of Energy to help pay for a new factory in Oregon. EnerG2 has also attracted more than $17 million from venture capitalists, including OVP Venture Partners of Kirkland/Portland and Firelake Capital Management of Palo Alto. In addition, the state of Washington provided a $1.8 million grant and loan package.
“We’re going to help create a new industry that will then supply the automotive industry and suppliers to the automotive industry,” says Chris Wheaton, the firm’s 40-year-old COO and CFO. Founded in 2003, privately held EnerG2 has 30 employees at its Seattle headquarters and 10 full-time people at its 74,000-square-foot plant in Albany, Oregon. Wheaton has lofty goals. “Hopefully, someday we’ll be as well known as some of the Amazons, Microsofts and other technology companies that have changed the world,” he says. “That’s our aspiration.”
Wheaton co-founded EnerG2 with CEO Eric “Rick” Luebbe. Luebbe says the new carbon material is being tested by battery makers who see a large market for new-generation batteries to be used in new generations of microhybrid cars automakers will release in growing numbers in coming years.
These cars can reduce fuel consumption by up to 10 percent simply by having the engines turned off every time the car idles. The on-again, off-again nature of these engines requires them to draw repeatedly from the batteries, quickly degrading them. EnerG2 produces a carbon material which, when used to traditional lead-acid batteries, causes them to last longer in this kind of severe duty cycles while also storing three times as much energy.
So what is this amazing carbon technology? Basically, it starts with the creation of a resin polymer with high elemental carbon content. The material then goes through a freeze-dry process that removes the moisture, leaving a porous carbon skeleton that vastly increases the surface area in the carbon, which is the storage medium for the energy in the devices. “We think the active carbon is behaving like a capacitor inside the battery, storing its own electric charge in addition to the chemical energy delivered by the battery,” says Luebbe.
Why build the plant in Albany, Oregon? EnerG2 is depending on the proximity of its partner, Albany-based Oregon Freeze Dry, which sells freeze-dried products, including meals for the military and materials for pharmaceutical companies. There is also a large base of workers knowledgeable about the manufacturing process, particularly the freeze drying process used to expose the skeleton of the carbon, says COO Wheaton.
EnerG2 expects to see strong demand for its products from battery makers around the world. Some of its first overseas orders could come from the European Union, where aggressive government efforts to reduce carbon dioxide emissions have led to the more rapid development and use of microhybrid vehicles. “Their approach is tighter, so that’s been more of a drive to improve vehicle efficiency, more of a push from the government,” says Luebbe. The company’s carbon technology can also be used to improve the performance of lithium ion batteries used in Prius-style hybrids and electric cars, but that market could take longer to develop.
EnerG2 grew out of technology that was developed by the University of Washington. Luebbe, 46, and Wheaton, 40, both attended Stanford Business School and met in Seattle at an alumni function. Although they were both in the information technology field, they wanted to do something in the area of renewable energy. At the University of Washington, they found Aaron Feaver, now the firm’s chief technology officer, who was working on the carbon technology as a way to improve gas storage. Tanks filled with the carbon material can store gas at a higher density because molecules in the gas adhere to the surface area of the carbon’s skeletal structure. The challenge of developing a national storage and distribution infrastructure for gas is such a challenge, however, the company ultimately chose to focus first on electrochemical energy storages such as car batteries.
Assistance in their effort came from Rick LeFaivre, a former partner at OVP Venture Partners, who encountered the three founders in 2006. “I liked the founding team and their technology,” says LeFaivre. “The team was trying to raise money to build a prototype manufacturing plant, but I told them that they first had to prove that the technology would scale—we see a lot of university lab prototypes that test out well, but ultimately don’t scale in a cost effective manner.” When they proved the technology was scalable, OVP led the financing in 2008 that got the company launched.
Wheaton sees a point soon when the Albany plant will employ as many people as the Seattle office. And the research arm in Seattle will grow, too. He thinks the company will eventually employ several hundred.
Additional reporting by Dennis Law.