Battery to Take On Diesel and Natural Gas

Battery building: Aquion Energy recently announced plans to retrofit this factory—which used to make Sony televisions—to make large batteries for use with solar power plants.

RIDC Westmoreland

Energy

Aquion Energy says its batteries could make the power grid unnecessary in some countries.

• By Kevin Bullis

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Aquion Energy, a company that's making low-cost batteries for large-scale electricity storage, has selected a site for its first factory and says it's lined up the financing it needs to build it.

The company hopes its novel battery technology could allow some of the world's 1.4 billion people without electricity to get power without having to hook up to the grid.

The site for Aquion's factory is a sprawling former Sony television factory near Pittsburgh. The initial production capacity will be "hundreds" of megawatt-hours of batteries per year—the company doesn't want to be specific yet. It also isn't saying how much funding it's raised or where the money comes from, except to mention that some of it comes from the state of Pennsylvania and none from the federal government.

The first applications are expected to be in countries like India, where hundreds of millions of people in communities outside major cities don't have a connection to the electrical grid or any other reliable source of electricity. Most of these communities use diesel generators for power, but high prices for oil and low prices for solar panels are making it cheaper to install solar in some cases.

To store power generated during the day for use at night, these communities need battery systems that can handle anything from tens of kilowatt-hours to a few megawatt-hours, says Scott Pearson, Aquion's CEO. Such a system could make long-distance transmission lines unnecessary, in much the same way that cell-phone towers have allowed such communities access to cellular service before they had land lines.

Eventually Aquion plans to sell stacks of batteries in countries that have electrical grids. They could provide power during times of peak demand and make up for fluctuations in power that big wind farms and solar power plants contribute to the grid. Those applications require tens to hundreds of gigawatt-hours' worth of storage, so to supply them, Aquion needs to increase its manufacturing capacity. Competing with natural-gas power plants—especially in the United States, where natural gas is so cheap—will mean waiting until economies of scale bring costs down.

The company has said that it initially hopes to make batteries for under $300 per kilowatt-hour, far cheaper than conventional lithium-ion batteries. Lead-acid batteries can be cheaper than Aquion's, but they last only two or three years. Aquion's batteries, which can be recharged 5,000 times, could last for over a decade in situations in which they're charged once a day (the company has tested the batteries for a couple of years so far).

Jay Whitacre, a Carnegie Mellon University professor of materials science and engineering who developed Aquion's technology and founded the company, says the cost will need to drop to less than $200 per kilowatt-hour for grid-connected applications. Reaching this price, and production capacity on the scale of gigawatt-hours, "will take a long time," he says. "But you have to start somewhere."

Whitacre developed the batteries with low cost and durability in mind from the start. In searching for potential electrode materials, he limited himself to cheap, abundant elements, settling on sodium and manganese. He also picked a water-based electrolyte that's safer and cheaper than the organic ones used in lithium-ion batteries. In turn, this allowed him to use cheap manufacturing equipment to make them. To keep costs down, the company is making the batteries with equipment that's normally used to make food or aspirin. Construction on the factory in Pennsylvania will begin immediately, and the first stage is expected to be finished next year.

The current battery technology of choice for electric buses is lithium-ion, the price of which has dropped in nearly 40 percent since 2010, and is projected to drop another 50 percent by 2020 or 2025. A lithium-ion battery provides enough energy to operate a bus for about 150 miles (in most conditions) before needing to be recharged. For hilly cities or cities where air conditioning must be used a lot, that range is significantly reduced. Charging can be done in a few different ways: slowly overnight (which causes the least wear to the battery and other components), by using an overhead charging system, or by using a system that is embedded under the pavement. The latter two methods are much quicker than the first method, but tend to degrade the bus components more quickly.

"Some papers proposing new battery materials look great until you read the fine print about how they're made," Whitacre says. "We focused on manufacturing from the beginning."

Alta Devices: Finding a Solar Solution

Looking to enter a highly ­competitive solar market, Alta Devices hopes to use a combination of technological advances and manufacturing savvy to succeed where many others have crashed and burned.

• By David Rotman

Suited up: CEO Christopher Norris holds a gallium arsenide wafer used in making Alta’s solar cells. Behind him is a custom-designed reactor used to grow thin layers of the semiconductor. Credit: Gabriela Hasbun

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Alta Devices is a small but well-funded startup located in the same nondescript Silicon Valley office building that once served as the headquarters for Solyndra, the infamous solar company that went bankrupt last year after burning through hundreds of millions of dollars in public and venture investments. Whether the location has bad karma is still not clear, jokes Alta's CEO, Christopher Norris. But Norris, a former semiconductor-industry executive and venture capitalist, does know that the fate of his company will hinge on its ability to navigate the risky and expensive process of scaling up its novel technology, which he believes could produce power at a price competitive with fossil-fuel plants and far more cheaply than today's solar modules.
On a table in Alta's conference room, Norris lays out samples of the company's solar cells, flexible black patches encapsulated in clear plastic. They look unremarkable, but that's because the key ingredient is all but invisible: microscopically thin sheets of gallium arsenide. The semiconductor is so good at absorbing sunlight and turning it into electricity that one of Alta's devices, containing an active layer of gallium arsenide only a couple of micrometers thick, recently set a record for photovoltaic efficiency. But gallium arsenide is also extremely expensive to use in solar cells, and thin films of it tend to be fragile and difficult to fabricate. In fact, Alta's innovations lie not in choosing the material—the semiconductor has been used in solar cells on satellites and spacecraft for decades—but in figuring out how to turn it into solar modules cheap enough to be practical for most applications.
The company, which was founded in 2007, is based on the work of two of the world's leading academic researchers in photonic materials. One of them, Eli Yablonovitch, now a professor of electrical engineering at the University of California, Berkeley, developed and patented a technique for creating ultrathin films of gallium arsenide in the 1980s, when he worked at Bell Communications Research. The other, Harry Atwater, a professor of applied physics and materials science at Caltech, is a pioneer in the use of microstructures and nanostructures to improve materials' ability to trap light and convert it into electricity. Andy ­Rappaport, a venture capitalist at August Capital, teamed up with the two scientists to found Alta, recruiting fellow Silicon Valley veteran Bill Joy as an investor and, with the other cofounders, building a management team that included Norris. The goal: to make highly efficient solar cells, and to make them more cheaply than those based on existing silicon technology.
It is at this point that many solar startups have gone wrong, rushing to scale up an innovative technology before understanding its economics and engineering challenges. Instead, Alta spent its first several years in stealth mode, quietly attempting to figure out, as Norris puts it, whether its process for making gallium arsenide solar cells was more than a "science experiment" and could serve as a viable basis for manufacturing.

Flexible power: Alta’s solar cells can be made into bendable sheets. In this sample, a series of solar cells are encapsulated in a roofing material. Credit: Gabriela Hasbun

Remnants of the science experiment are still visible in the modest lab at the back of Alta's offices. Small ceramic pots sit on electric hot plates—relics of the company's early efforts to optimize ­Yablonovitch's technique of "epitaxial liftoff," which uses acids to precisely separate thin films of gallium arsenide from the wafers on which they are grown. Elsewhere in the lab the equipment gets progressively larger and more sophisticated, reflecting the scaling up of the process. Near a viewing window that allows potential investors to peer into the lab without donning clean-room coverings is one of the jewels of the company's development efforts: a long piece of equipment in which batches of samples are processed to create the thin-film solar cells. It's convincing evidence that the early work with pots and hot plates can be transformed into an automated process capable of the yields necessary for real-world manufacturing.
SOLAR LIFTOFF
When Bill Joy, a cofounder of Sun Microsystems and now a leading Silicon Valley venture capitalist, first saw the business plan for what became Alta Devices, he and his colleagues at Kleiner Perkins Caufield & Byers were already looking for high-efficiency thin-film solar technology. Joy keeps a running list—currently about 12 to 15 items long—of desirable technologies that he believes he has "a reasonable chance of finding." Solar cells that are highly efficient in converting sunlight and that can be made cheaply in flexible sheets could provide ways to dramatically lower the overall costs of solar power. Gallium arsenide technology was a natural choice for efficiency, but Alta's economics were what really interested the investors. "Their core competency was how to make it manufacturable," says Joy, who joined Rappaport as an investor within a few months.
Gallium arsenide is a nearly ideal solar material, for a number of reasons. Not only does it absorb far more sunlight than silicon—thin films of it capture as many photons as silicon 100 times thicker—but it's less sensitive to heat than silicon solar cells, whose performance dramatically declines above 25 °C. And gallium arsenide is better than silicon in retaining its electricity-producing abilities in conditions of relatively low light, such as early in the morning or late in the afternoon.
Key to reducing its manufacturing costs is the technique that Yablonovitch helped figure out decades ago. The semiconductor can be grown epitaxially: when thin layers are chemically deposited on a substrate of single-crystal gallium arsenide, each adopts the same single-crystal structure. Yablonovitch found that if a layer of aluminum arsenide is sandwiched between the layers, this can be selectively eaten away with an acid, and the gallium arsenide above can be peeled off. It was an elegant and simple way to create thin films of the material. But the process was also problematic: the single-crystal films easily crack and become worthless. In adapting Yablonovitch's fabrication method, Alta researchers have found ways to create rugged films that aren't prone to cracking. And not only do the thin films use little of the semiconductor material, but the valuable gallium arsenide substrate can be reused multiple times, helping to make the process affordable.
Research by Alta's founding scientists has also led to techniques for increasing the performance of the solar cells. Photovoltaics work because the photons they absorb boost the energy levels of electrons in the semiconductor, freeing them up to flow to metal contacts and create a current. But the roaming electrons can be wasted in various ways, such as in heat. In gallium arsenide, however, the freed electrons frequently recombine with positively charged "holes" to re-create photons and start the process over again. Work done by ­Yablonovitch and Atwater to explain this process has helped Alta design cells to take advantage of this "photon recycling," providing many chances to recapture photons and turn them into electricity.

Thus Alta's efficiency record: its cells have converted 28.3 percent of sunlight into electricity, whereas the highest efficiency for a silicon solar cell is 25 percent, and commonly used thin-film solar materials don't exceed 20 percent. Yablonovitch suggests that Alta has a good chance of eventually breaking 30 percent efficiency and nearing the theoretical limit of 33.4 percent for cells of its type.
The high efficiency, combined with gallium arsenide's ability to perform at relatively high temperatures and in low light, means that the cells can produce two or three times more energy over a year than conventional silicon ones, says Norris. And that, of course, translates directly into lower prices for solar power. Norris says a "not unreasonable expectation" is that the gallium arsenide technology could yield a "levelized cost of energy" (a commonly used industry metric that includes the lifetime costs of building and operating a power plant) of seven cents per kilowatt-hour. At such a price, says Norris, solar would be competitive with fossil fuels, including natural gas; new gas plants generate electricity for around 10 cents per kilowatt-hour. And it would trounce today's solar power, which Norris says costs around 20 cents per kilowatt-hour to generate.
Such numbers are tantalizing. But Norris is quick to bring up another: it costs roughly $1 billion to build a manufacturing facility capable of producing enough solar modules to generate a gigawatt of power, which is roughly the output of several medium-sized power plants. "I don't see any scenario where we would do this on our own," he says.
GHOST OF SOLYNDRA
Silicon Valley has been infatuated with clean tech since the mid-2000s, but it has yet to figure out something crucial: who will supply all the money necessary to scale up energy technologies and build factories to manufacture them? Venture investors might be skilled at picking technologies, but few of them have the deep pockets or the patience required to compete in a capital-intensive business such as the manufacturing of solar modules. The collapse of Solyndra, which built a $733 million factory in Fremont, California, is just the most recent reminder of what can go wrong.
Alta's lead investor Andy Rappaport says he usually stays away from investments in clean tech, including photovoltaics. Many investors in solar, he suggests, have bet that a startup could lower the marginal costs of manufacturing and thus "capture some market share." That's "a recipe for failure," he says, because "you need to spend hundreds of millions to build a factory before you know if you have anything of value." The strategy is especially risky now, because photovoltaics are becoming an increasingly competitive commodity business and prices continue to plummet, creating a moving target for new production. But rather than trying to create value by building manufacturing capacity, Rappaport says, Alta can profit from its intellectual property: "We have said simply and consistently that we can scale capacity faster and build a much stronger company by leveraging partnerships rather than raising and spending our own capital to build factories."
Current investors in Alta include GE, Sumitomo, and Dow Chemical, which recently introduced roofing shingles that incorporate thin-film photovoltaics (see "Can We Build Tomorrow's Breakthroughs?" January/February 2012). Though these companies have invested in several rounds of funding—Alta has so far raised $120 million—eventually Norris would like to see deals, such as licensing agreements or joint ventures, in which manufacturers build capacity to produce Alta's solar cells or use the solar technology in their products. To do that, he says, Alta first needs to "retire the risk" of the production technology, demonstrating to prospective partners that the gallium arsenide solar modules can in fact be produced in an economically competitive way.
Less than a mile from its headquarters, Alta is gutting and renovating a building where Netflix used to warehouse DVDs, turning it into a $40 million pilot facility to test its equipment. Though the facility is far smaller than a commercial solar factory, it is still no small or inexpensive undertaking. Norris warily eyes the new columns required to reinforce the roof, which will need to hold heavy ventilation and emission-control equipment. But the Alta CEO becomes more buoyant as he approaches the nearly completed back section of the facility. There, in several white rooms, are the large custom-designed versions of the lab apparatus used to make the solar cells.
Whether Alta succeeds will depend chiefly on how well these manufacturing inventions perform. The cost of the pilot facility might pale next to the price tag for a commercial-scale solar factory, but it is still a critical investment for the startup. And even as Alta is busily trying to get the facility up and running by the end of the year, Norris says, it is taking a deliberate, methodical approach to the process of scaling up. That contrasts sharply with earlier solar startups that spent hundreds of millions in venture investments to build factories as fast as possible. But Alta's cautious approach should not be confused with a lack of ambition. The goal, says Norris, is to make this a "foundational, transformative technology."

David Rotman is Technology Review's editor. 

Foundation Medicine: Personalizing Cancer Drugs

Foundation Medicine is offering a test that helps oncologists choose drugs targeted to the genetic profile of a patient's tumor cells. Has personalized cancer treatment finally arrived?

• By Adrienne Burke

It's personal now: Alexis Borisy (left) and Michael Pellini lead an effort to make DNA data available to help cancer patients. Credit: Christopher Harting

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Michael Pellini fires up his computer and opens a report on a patient with a tumor of the salivary gland. The patient had surgery, but the cancer recurred. That's when a biopsy was sent to Foundation Medicine, the company that Pellini runs, for a detailed DNA study. Foundation deciphered some 200 genes with a known link to cancer and found what he calls "actionable" mutations in three of them. That is, each genetic defect is the target of anticancer drugs undergoing testing—though not for salivary tumors. Should the patient take one of them? "Without the DNA, no one would have thought to try these drugs," says Pellini. 
Starting this spring, for about $5,000, any oncologist will be able to ship a sliver of tumor in a bar-coded package to Foundation's lab. Foundation will extract the DNA, sequence scores of cancer genes, and prepare a report to steer doctors and patients toward drugs, most still in early testing, that are known to target the cellular defects caused by the DNA errors the analysis turns up. Pellini says that about 70 percent of cases studied to date have yielded information that a doctor could act on—whether by prescribing a particular drug, stopping treatment with another, or enrolling the patient in a clinical trial.
The idea of personalized medicine tailored to an individual's genes isn't new. In fact, several of the key figures behind Foundation have been pursuing the idea for over a decade, with mixed success. "There is still a lot to prove," agrees Pellini, who says that Foundation is working with several medical centers to expand the evidence that DNA information can broadly guide cancer treatment.
Foundation's business model hinges on the convergence of three recent developments: a steep drop in the cost of decoding DNA, much new data about the genetics of cancer, and a growing effort by pharmaceutical companies to develop drugs that combat the specific DNA defects that prompt cells to become cancerous. Last year, two of the 10 cancer drugs approved by the U.S. Food and Drug Administration came with a companion DNA test (previously, only one drug had required such a test). So, for instance, doctors who want to prescribe Zelboraf, Roche's treatment for advanced skin cancer, first test the patient for the BRAFV 600E mutation, which is found in about half of all cases.
About a third of the 900 cancer drugs currently in clinical trials could eventually come to market with a DNA or other molecular test attached, according to drug benefits manager Medco. Foundation thinks it makes sense to look at all relevant genes at once—what it calls a "pan-cancer" test. By accurately decoding cancer genes, Foundation says, it uncovers not only the most commonly seen mutations but also rare ones that might give doctors additional clues. "You can see how it will get very expensive, if not impossible, to test for each individual marker separately," Foundation Medicine's COO, Kevin Krenitsky, says. A more complete study "switches on all the lights in the room."
So far, most of Foundation's business is coming from five drug companies seeking genetic explanations for why their cancer drugs work spectacularly in some patients but not at all in others. The industry has recognized that drugs targeted to subsets of patients cost less to develop, can get FDA approval faster, and can be sold for higher prices than traditional medications. "Our portfolio is full of targets where we're developing tests based on the biology of disease," says Nicholas Dracopoli, vice president for oncology biomarkers at Janssen R&D, which is among the companies that send samples to Foundation. "If a pathway isn't activated, you get no clinical benefit by inhibiting it. We have to know which pathway is driving the dissemination of the disease."
Cancer is the most important testing ground for the idea of targeted drugs. Worldwide spending on cancer drugs is expected to reach $80 billion this year—more than is spent on any other type of medicine. But "the average cancer drug only works about 25 percent of the time," says Randy Scott, executive chairman of the molecular diagnostics company Genomic Health, which sells a test that examines 16 breast-cancer genes. "That means as a society we're spending $60 billion on drugs that don't work."
Analyzing tumor DNA is also important because research over the past decade or so has demonstrated that different types of tumors can have genetic features in common, making them treatable with the same drugs. Consider Herceptin, the first cancer drug approved for use with a DNA test to determine who should receive it (there is also a protein-based test). The FDA cleared it in 1998 to target breast cancers that overexpress the HER2 gene, a change that drives the cancer cells to multiply. The same mutation has been found in gastric, ovarian, and other cancers—and indeed, in 2010 the drug was approved to treat gastric cancer. "We've always seen breast cancer as breast cancer. What if a breast cancer is actually like a gastric cancer and they both have the same genetic changes?" asks Jennifer Obel, an oncologist in Chicago who has used the Foundation test.
The science underlying Foundation Medicine had its roots in a 2007 paper published by Levi Garraway and Matthew Meyerson, cancer researchers at the Broad Institute, in Cambridge, Massachusetts. They came up with a speedy way to find 238 DNA mutations then known to make cells cancerous. At the time, DNA sequencing was still too expensive for a consumer test—but, Garraway says, "we realized it would be possible to generate a high-yield set of information for a reasonable cost." He and Meyerson began talking with Broad director Eric Lander about how to get that information into the hands of oncologists.
In the 1990s, Lander had helped start Millennium Pharmaceuticals, a genomics company that had boldly promised to revolutionize oncology using similar genetic research. Ultimately, Millennium abandoned the idea—but Lander was ready to try again and began contacting former colleagues to "discuss next steps in the genomics revolution," recalls Mark Levin, who had been Millennium's CEO.

Levin had since become an investor with Third Rock Ventures. Money was no object for Third Rock, but Levin was cautious—diagnostics businesses are difficult to build and sometimes offer low returns. What followed was nearly two years of strategizing between Broad scientists and a parade of patent lawyers, oncologists, and insurance experts, which Garraway describes as being "like a customized business-school curriculum around how we're going to do diagnostics in the new era."
In 2010, Levin's firm put $18 million into the company; Google Ventures and other investors have since followed suit with $15.5 million more. Though Foundation's goals echo some of Millennium's, its investors say the technology has finally caught up. "The vision was right 10 to 15 years ago, but things took time to develop," says Alexis Borisy, a partner with Third Rock who is chairman of Foundation. "What's different now is that genomics is leading to personalized actions."
One reason for the difference is the falling cost of acquiring DNA data. Consider that last year, before his death from pancreatic cancer, Apple founder Steve Jobs paid scientists more than $100,000 to decode all the DNA of both his cancerous and his normal cells. Today, the same feat might cost half as much, and some predict that it will soon cost a few thousand dollars.
So why pay $5,000 to know the status of only about 200 genes? Foundation has several answers. First, each gene is decoded not once but hundreds of times, to yield more accurate results. The company also scours the medical literature to provide doctors with the latest information on how genetic changes influence the efficacy of specific drugs. As Krenitsky puts it, data analysis, not data generation, is now the rate-limiting factor in cancer genomics.
Although most of Foundation's customers to date are drug companies, Borisy says the company intends to build its business around serving oncologists and patients. In the United States, 1.5 million cancer cases are diagnosed annually. Borisy estimates that Foundation will process 20,000 samples this year. At $5,000 per sample, it's easy to see how such a business could reward investors. "That's ... a $100-million-a-year business," says Borisy. "But that volume is still low if this truly fulfills its potential."
Pellini says Foundation is receiving mentoring from Google in how to achieve its aim of becoming a molecular "information company." It is developing apps, longitudinal databases, and social-media tools that a patient and a doctor might use, pulling out an iPad together to drill down from the Foundation report to relevant publications and clinical trials. "It will be a new way for the world to look at molecular information in all types of settings," he says.
Several practical obstacles stand in the way of that vision. One is that some important cancer-related genes have already been patented by other companies—notably BRCA1 and BRCA2, which are owned by Myriad Genetics. These genes help repair damaged DNA, and mutations in them increase the risk of breast or ovarian cancer. Although Myriad's claim to a monopoly on testing those genes is being contested in the courts and could be overturned, Pellini agrees that patents could pose problems for a pan-cancer test like Foundation's. That's one reason Foundation itself has been racing to file patent applications as it starts to make its own discoveries. Pellini says the goal is to build a "defensive" patent position that will give the company "freedom to operate."
Another obstacle is that the idea of using DNA to guide cancer treatment puts doctors in an unfamiliar position. Physicians, as well as the FDA and insurance companies, still classify tumors and drug treatments anatomically. "We're used to calling cancers breast, colon, salivary," says oncologist Thomas Davis, of the Dartmouth-Hitchcock Medical Center, in Lebanon, New Hampshire. "That was our shorthand for what to do, based on empirical experience: 'We tried this drug in salivary [gland] cancer and it didn't work.' 'We tried this one and 20 percent of the patients responded.'"
Now the familiar taxonomy is being replaced by a molecular one. It was Davis who ordered DNA tests from several companies for the patient with the salivary-gland tumor. "I got bowled over by the amount of very precise, specific molecular information," he says. "It's wonderful, but it's a little overwhelming." The most promising lead that came out of the testing, he thinks, was evidence of overactivity by the HER2 gene—a result he says was not picked up by Foundation but was found by a different test. That DNA clue suggests to him that he could try prescribing Herceptin, the breast-cancer drug, even though evidence is limited that it works in salivary-gland cancer. "My next challenge is to get the insurance to agree to pay for these expensive therapies based on rather speculative data," he says.
Insurance companies may also be unwilling to pay $5,000 for the pan-cancer test itself, at least initially. Some already balk at paying for well-established tests, says Christopher-Paul Milne, associate director of the Tufts Center for the Study of Drug Development, who calls reimbursement "one of the biggest impediments to personalized medicine." But Milne predicts that it's just a matter of time before payers come around as the number of medications targeted to people's DNA grows. "Once you get 10 drugs that require screening, or to where practitioners wouldn't think about using a drug without screening first, the floodgates will open," he says. "Soon, in cancer, this is the way you will do medicine."
Adrienne Burke was founding editor of Genome Technology magazine and is a contributor to Forbes.com and Yahoo Small Business Advisor.