Khosla Ventures Bets on Liquid Metal Battery’s Energy Storage Tech

5/30/12Follow @xconomy

“Cost-effective, reliable, grid-scale storage is one of the holy grails in cleantech,” says Khosla Ventures partner Andrew Chung. But now, Chung thinks there may be an answer—and the path runs through Cambridge, MA, startup Liquid Metal Battery.

That’s why Chung and Menlo Park, CA-based Khosla Ventures led the $15 million Series B investment in Liquid Metal Battery, joining return investors Bill Gates and the energy company Total.

“We’ve looked at everything under the sun in the storage area, both on the mechanical side and on the chemical side,” Chung says. “This is the one on the chemical side that’s most interesting to us.”

Grid-scale storage is technology used to hold large amounts of electricity for use in the electrical grid, in cases where electricity is produced intermittently or when production exceeds consumption. Many companies have attacked the problem by scaling up the battery technology that’s used in the consumer market, says Liquid Metal Battery CEO, Phil Giudice.

But Chung says that’s like “trying to put a round peg in a square hole,” and presents problems in cost, efficiency, reliability, and safety.

Rather than trying to stack millions of lithium ion batteries together, Liquid Metal Battery is developing batteries specifically for grid-scale storage using liquid metals. “We put an enormous amount of electricity in these liquid metals, then take that out when we return it back to grid,” Giudice says.

The technology is much hairier than that, of course. The story began about five years ago in the lab of MIT professor and Liquid Metal Battery chief scientist Donald Sadoway, based around the science of aluminum smelters. (Sadoway nabbed a research grant from Chung’s former firm, Lightspeed Venture Partners.)

“It’s about efficiency, but it’s really about cost effectiveness,” says Giudice, who joined the startup as CEO in November. He previously helped take EnerNOC public and worked as the Massachusetts undersecretary of energy and commissioner of the state’s Department of Energy Resources.

The Liquid Metal Battery technology is especially cheap to manufacture, as each layer of the battery arranges itself according to its density. That allows the batteries to be built in “relatively common industrial metalworking factories,” Giudice says.

“The design of the cells is very straightforward, whereas traditional batteries require more intense engineering to arrange the different membrane layers,” he says.

Or, as Chung explains: “It’s filling canisters with a type of material, letting it settle for the different layers, and having a working battery.” He says the cheap manufacturing process was a big draw for his firm.

The technology could be used to store and bring energy from renewable sources like wind and solar to the grid, and also bring electricity to parts of the world that don’t have it. Chung says this is key for countries like India and China, “where the growth in energy demand has gone up tenfold in three decades,” and causes power outages.

Customers would be electric utilities, power producers, and even large commercial users. Giudice says putting the storage technology in the hands of the end user will allow big cities to manage energy demand and supply. Electricity is most expensive to bring in around times of peak demand like late afternoon, but the storage technology would enable users to transport electricity during slower and less expensive times, like the dead of night, for later use during peak demand hours.

The Series B funding will help Liquid Metal Battery in its pre-commercial stage, as it tests out the technology at scale and tests battery runs and charging cycles, Giudice says. The goal is to have commercial modules on the market by 2014.

He says his company chose Khosla because the firm “sees the world as needing big things to change—they’re investing in companies they think are going to have a big role to make big changes happen.”

Chung concurs. “We like to look for black swan type of opportunities that have the ability to overturn an industry,” he says.

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