Echogen Power Systems, a waste-heat recovery and energy-storage technology company, plans to spin out a one-third interest worth up to USD 20m of its medium-to-long-term energy storage business, said co-founder and CEO Philip Brennan.
Akron, Ohio-based Echogen expects to engage a financial advisor for the stake sale by the end of Q2, the executive told this news service. He said “a green investment bank with energy storage experience” from the US, Asia or Europe would be sought because of the global nature of business. Ideal investors would include private equity and venture capital firms, or industrial OEMs “used to selling project development-driven technology” such as Mitsubishi Heavy Industries, General Electric and Siemens, he explained.
There are also plans to engage a different banker for technology licensing and sale efforts related to the company’s waste-heat recovery business. Brennan said the company is engaged in active discussions with three US-based boutique investment banks, and expects to select one imminently to help license or sell Echogen waste-heat technology.
Founded in 2007, Echogen has developed several alternative energy technologies using supercritical carbon dioxide (sCO2) power cycles. Its Electro-thermal Energy Storage (ETES) technology uses a thermodynamic cycle that transforms energy between electricity and heat, using CO2 as a heat pump fluid and storage materials such as concrete and sand. It is utility scale, capable of storing wind and solar energy for “six hours to days,” he said.
“The demand for long-term energy storage is increasing exponentially,” Brennan said. “It’s the single-largest challenge in the energy mix now, with solar and wind needing long-term storage capabilities.”
Long-duration storage has relatively few players, including Highview Power, with a cryogenic liquefied air battery, and Google X spinoff Malta, which uses molten salt, this news service has reported. The storage landscape includes lithium-ion technology, however the optimal duration for that chemistry is hours, and not days, and better-suited to electric vehicle and consumer electronics batteries, Brennan said.
Besides energy storage, Echogen’s sCO2 technology can convert waste heat from factories, furnaces and engines to electricity. The technology has been licensed to Siemens Energy for the oil & gas industry. On 12 February Siemens said it would build the world's first sCO2 power plant, which will convert waste heat from a gas turbine into emissions-free power. The pilot system will be installed at a TC Energy [NYSE:TRP] natural gas compressor station in Alberta, Canada, and is expected to be commissioned in late 2022. Siemens said the device will produce enough electricity to power more than 10,000 homes, resulting in an estimated reduction in 44,000 tons per year in greenhouse gas emissions.
In 2013, GE Marine licensed the technology to provide heat-to-power conversion for use on commercial and military marine vessels.
Brennan said the timing was right for Echogen to step up efforts to license the heat-to-power technology to more industrial users. In December, Congress passed an omnibus bill that for the first time extends investment tax credits for waste-heat-to-power projects. Brennan said he expects the incentives to increase demand for Echogen technology from industrial users such as steel mills and cement plants. The cost of these upgrades can range from USD 25m-USD 100m, he said, making the tax credit a potential game-changer for widespread adoption.
Licensing deals are a key source of revenue for Echogen, which has been funded with USD 95m to date, from equity investors including mTerra Ventures and unnamed European angel investors, as well as non-dilutive funding such as grants and research and development contracts.
by Jeff Sheban