Alevo targets growth through acquisitions and factory ramp-up

News Analysis

Alevo has hit the ground running since it emerged from stealth mode in October 2014, with a 700MWh per year production line already under its belt that is due to come online in July this year.

Alevo is using batteries to target the market for frequency regulation, spinning reserve, energy firming and ramp control – mechanisms that all help to offset the intermittency of renewables.

Aside from addressing intermittency, these mechanisms make any type of generation more efficient by replacing outmoded forms of grid stabilisation.

‘[Generators] were focused on keeping the lights on, but not in most efficient way,’ said Jeff Gates, Alevo’s vice president of operations. ‘With storage, you can make generation run more efficiently.’

On Tuesday February 17, 2015 the company announced it had struck an operational agreement with energy services firm Customized Energy Solutions (CES) to provide GridBank frequency regulation services to the wholesale market in the US.

Energy storage and frequency regulation services are sold alongside electricity on the day-ahead wholesale markets in the US.

‘Our end-use customers will be utilities that own and operate generation,’ Gates said. ‘We’re actively looking to talk to anyone who owns and operates generation project using any fuel. We will also own and operate own projects.

‘Our projects with CES will involve owning 200MW of frequency regulation services. We will be paid by the existing market mechanism.’

Gates said Alevo will generate further growth over the coming years through consolidation and ramping up capacity to capture the burgeoning market for energy storage.

Gates, who was previously managing director in Duke Energy’s commercial transmission business, predicts the market for energy storage will potentially reach hundreds of thousands of gigawatts within several years.

Alevo set up a battery factory in North Carolina last year that will have the capacity to produce over 16GWh of energy storage capacity when it reaches its full target.

‘We will put in the second line next year, then another the year beyond that to ramp up to full capacity of eight lines,’ Gates said. ‘The amount of storage we can produce is so much bigger than what any other battery manufacturer can do.’

Alevo is also keen to continue to invest in technology after spending a decade in stealth mode, during which it invested in research and development and acquired analytics capacity (through Alevo Analytics).

Its lithium-ion batteries use an inorganic electrolyte manufactured in Switzerland that is extremely safe, with a lifecycle efficiency of 45,000 in tests.

‘We are always on the hunt for acquisitions of good technology,’ Gates said. ‘We have an active M&A department.’

Gates estimates that the company’s investment in the supply chain to date has been approximately $1bn, free of tax incentives.

The company expects that its owners – who include chairman and CEO Jostein Eikeland and a group of private institutional investors – will continue to fund further acquisitions and growth.

This article originally appeared on www.cleanenergypipeline.com a clean energy news service operated by VB Research, a sister publication to The Engineer. The reporter, Jessica Mills Davies, can be reached at jessica.millsdavies@vbresearch.com. 

A former cigarette factory in Concord, North Carolina, is being transformed into the home of one of the world’s first bulk producers of grid-connected batteries. Click here to read more.