Published in: 2011 - A Review of Cleantech Equity Deals, January 2012Solyndra may have been the most high profile US DoE loan guarantee-backed company to go under during 2011 (see Solar Deals of the Year) but the energy storage sector also suffered the bankruptcy of grid-scale flywheel system storage firm Beacon Power. The company, which was formerly listed on NASDAQ and which secured a US$43 million loan guarantee for the development of a 20MW project in New York in 2009, filed for bankruptcy in November. Beacon had reportedly drawn down US$39 million of the loan – and had also received further loans and grants from the DoE for additional projects.
Another US energy storage sector casualty was Ener1, forced to delist from NASDAQ in November and subsequently, in early 2011, to file for bankruptcy. Ener1, which manufactures lithium-ion batteries through its EnerDel subsidiary, had bought a 48% stake in EnerDel customer Think Global – the Norwegian EV manufacturer which filed for bankruptcy in June. The Think bankruptcy resulted in losses of US$60 million at Ener1, which had raised US$25 million in a fundraising round led by Goldman Sachs earlier in 2011. The company has a number of joint ventures for energy storage in China (with the State Grid) and in Russia (with the Russian Federal Grid). EnerDel is also a recipient of US DoE grant funding.
The energy storage sector saw a host of deals for VC stage funding in the US$10–US$40 million range. Recipients of this type of funding included Leyden Energy, Powergetics, Contour Energy Systems, General Compression, Aquion Energy and Prudent Energy. At least three companies raising VC funds at this level were also beneficiaries of DoE grant funding – including SustainX (compressed air energy storage [CAES] technology), Primus Power (flow batteries) and Xtreme (grid-scale storage).
Larger VC stage deals included Nexeon in the UK and Boston Power in the US with the latter demonstrating that DoE funding is not critical in this sector. Having failed to secure DoE money, Boston Power proceeded to obtain funding from both the Chinese Government (grants, loans etc.) Chinese venture investors (equity) – and to switch its focus from the US to the Chinese market. The largest fundraising was by A123Systems which, in addition to institutional fundraising in both equity and convertible notes, also secured equity investment from IHI of Japan. There was little M&A activity during 2011 in the energy storage space, but one deal did come on the radar – the acquisition of EnergyCS by CODA Automotive.