If successful, the Energy Institute's technology would "put the U.S. on a path towards creating a smarter grid with low-cost batteries that are capable of storing enough electricity to power homes, cars and cities," says an ARPA-E description of the project.
The Energy Institute is also developing another battery technology that would use zinc and manganese dioxide. Banerjee calls it the "second generation" of its nickel-zinc technology that would be cheaper and even longer-lasting. The institute plans to launch a basement-level demonstration of the new technology within a year.
In the meantime, Urban Electric Power is set to start raising private investment this summer. McFarland, the institute consultant, says it is already looking for manufacturers in New York and across the country and the world that could mass-produce the zinc-nickel batteries. It aims to lock in supply contracts with at least five customers before formally launching the company.
Beyond the Renewables Industry
McFarland says they are looking beyond the renewables industry for potential clients, because inconsistent policy supports for clean energy in the United States make it challenging to assess demand for its batteries.
"I wouldn't want that to be my only customer."
So Urban Electric Power will also target owners of large industrial buildings that consume huge amounts of power during the daytime, when demand for electricity is at its peak and most expensive. Utilities charge these industrial customers a hefty fee, known as a demand charge, to offset costs that utilities incur to supply massive bursts of energy.
Those charges account for as much as half of a company's monthly utility bills, McFarland says. By hooking the nickel-zinc batteries to a building's electricity system, the batteries can pull power from the grid during off-peak hours and deliver it back to the building when demand picks up. Factories that get peak power from batteries—and not the utility—would slash their monthly demand charge.
"Demand-charge reduction is a developing market," McFarland says. "It doesn't really entirely exist today, but there's increasing motivation to make use of it" as companies seek to save energy and money.
The Energy Institute joins a rising number of energy storage ventures hoping to capitalize on the need for more reliable renewable electricity and more efficient fossil fuel systems. In the past 12 months, storage technologies have raised $630.5 million in investments, according to Cleantech Group, a market research firm.
While it's "relatively easy" to attract investment for early-stage technologies like the Energy Institute's demonstration project, however, it is much harder to secure funds for manufacturing, says Haresh Kamath, program manager for energy storage research at the nonprofit Electric Power Research Institute.
"Many investors ... would rather put their money into something that doesn't require quite so much capital," such as prototypes, Kamath says. "It's very hard to get the capital that [startups] need to commercialize."