Why Has Bill Gates Invested in this Startup?

Bill Gates Sees Opportunity in Batteries and Energy Storage

Batteries are often taken for granted and the industry as whole has never been considered all that sexy. However, when you think about this industry, and its vital role in our technology-based society, you’ll realize that it’s ripe for disruption, especially when it comes to energy storage and distribution on a large scale.

You see, batteries have typically had one common factor since the time of Volta; they have mostly contained hazardous or corrosive chemicals within their casings as the reactant.

 

Simple Battery

Batteries are generally categorized into two kinds. The first are disposable batteries, the second are rechargeable. Both batteries use the reactants to discharge electricity, but only the rechargeable batteries can reverse the process – by supplying electricity to restore the depleted reactants.

Modern batteries, even industrial ones, have an inherent danger associated with them. The dangers involved include the possibility of explosion, being poisonous, and environmentally toxic. While a regular AA battery exploding shouldn’t scare anyone or be of any concern, imagine what would happen if a battery the size of a car, using the same technology as a AA, exploded. That’s a problem. And it happens.

 

Battery Hazard: Leakage

The typical dry cell battery (AA, 9 volt, the battery in watches) encapsulates three major components inside. There are two solid metals and a third which is the electrolyte. This electrolyte, depending on which chemical is used, is corrosive, and poisonous. If used for too long, the corrosive electrolyte could penetrate the outer casing and leak into the electrical device, spoiling it, or come into contact with skin (which can be disastrous).

 

Battery Hazard: Environmental

Toxicity is of grave concern when disposing batteries (particularly large ones). Batteries can contain elements such as led and cadmium, two very toxic metals. They can also contain mercury. Environmental exposure to these materials can affect ground water as well as have effects on wild life and vegetation.

Considering that a country such as the United States dumps 180,000 tons of batteries into landfills each year, environmental contamination is a serious concern, despite the general public’s lack of knowledge on the matter.

But for every problem there lies a solution only the free markets can effectively provide.

 

The Solution?

Aquion Energy  is a startup venture which has researched and developed a new version of a commercially viable battery that is equally as effective, but without any of the hazards associated with conventional batteries. The disruptive nature of this technology to the existing battery industry is apparent and is starting to turn some heads.

 

Aquion’s Technology

Aquion’s technology, Aqueous Hybrid Ion (AHI), has zero toxicity, unlike mainstream commercial batteries. It also doesn’t contain any corrosive elements and does not include any heavy metals. There are no hazards to speak of and it is safe for the environment even when disposed in standard receptacles.

Where corrosive chemicals are used as electrolytes in standard batteries, AHI uses salt water that is of neutral pH. Even a leak or spillage will not have any measurable impact on the environment.

Aside from disposal issues, or hazards, normal batteries have another disadvantage when compared to AHI. If a primary or secondary storage were short circuited, it is possible that the cell could explode in a normal battery. The explosion is usually caused by the overheating of the battery and the eventual failure (common amongst rechargeable batteries). In the AHI, that does not happen. In the event of short circuits, normal batteries also become faulty and less effective. AHI’s, on the other hand, continue to operate with minimal change in efficiency.

The basic structure of the AHI batteries cause them to be inherently efficient and they are reliable because they do not use corrosive reactions to generate electricity, like conventional batteries. As the world advances to greater environmental awareness, and consumers increase support for companies and brands that are environmentally conscious, it will begin to see the need for greater ways to store and generate electricity for everyday needs.  AHI is one of the ways that consumers and industries can generate electricity locally at lower costs, greater reliability and increased safety.

 

Projecting The Future

Between its safety of usage, its tolerance to accidental misuse and longevity, the AHI has presented itself as a viable solution to long-term energy generation and storage.

The AHI battery is one way to reduce the disasters that can ensue in the event of accidents and its environmental friendliness is something that resonates with today’s consumer and politicians.

 

The Big Picture – Not Your Typical Duracell Battery

The possibilities of the future for AHI go far beyond consumer goods. This isn’t your typical Duracell 🙂 There is the potential that this technology could be used in the electricity grid distribution structure currently aging in the US and other parts of the world. From an environmental standpoint, going beyond just battery disposal issues, environmental concerns include the replacement of huge co-gen plants and centralized coal powered plants, which by themselves are huge environmental pollutants.

Locating AHI batteries and other renewable solutions in local neighborhoods is attractive as there is no danger of accidents and setup costs are relatively low for the industry. By eliminating large centralized power generation and localizing this generation, the amount of required electricity is reduced since there is no loss in transmission to speak of. In centralized generation and distribution, the journey over great lengths means that a lower percentage of electricity actually reaches its intended destination. There is currently a lot of waste in the energy industry because of transport.

By decentralizing the electricity generating plants and fragmenting the locations to a micro level of individual housing estates (or by the neighborhood), it is possible to cut down on gargantuan grids. One of the greatest issues facing US infrastructure at the moment is the antiquated national electricity grid. It is a huge expense to replace and it is a huge burden to maintain, not to mention the increasing environmental pollution that comes from all the extra energy that needs to be generated just to feed the wastage of transmission.

In the scenario with AHI, batteries can be scaled up as need arises with no capital expense increase for infrastructure. The mobility and scalability advantages of the AHI batteries allow its use from individual homes to an entire housing neighborhood. It is cheaper to construct, requires less energy to be generated and is faster to get up and running.

 

Capitalization

Aquion Energy is based in Pennsylvania and has attracted notable investors to its cause. Among them are Microsoft Founder Bill Gates, Kleiner Perkins Caulfield & Byers as well as Advanced Technology Ventures. To date the company has raised $65 million in venture capital and is going through its pilot manufacturing stage.

image source: common.wikimedia.org

image source: common.wikimedia.org

 

 

SWOT Analysis

Strengths

  • Timing – the technology comes at a time when public awareness of energy generation, pollution and environmental impact is increasing. The public is looking for alternative sources of power generation, storage and possible disruptive technologies in eradicating wastage. Voters are putting pressure on elected officials to streamline new technologies and support private sector development. Any alternative and clean energy company will almost always have public support (a huge advantage over conventional energy companies)
  • Engineering – the technology has great environmental and safety advantages. Its design is superior to anything I’ve researched in the industry and Aquion is the first to come out with a proof of concept (as I always say “being first matters!”).
  • Strong financial backing – being well funded is an important aspect of reaching any new or old market. Aquion is well capitalized and backed by big name professional investors such as Bill Gates (the company will be able to leverage some of the names who have invested in it and that will certainly open more doors).

 

Weaknesses

  • Industry – The company is taking on an industry that is well established and full of the ‘good’ol boys’. Aquion has to endure a learning curve regarding the politics of the energy business and an industry bias towards antiquated methods of generation and storage.
  • Low Barriers To Entry – Even though they will protect the intellectual property of the design and process, the technology behind it may be easily replicated on smaller scales. The very strength of using simple and non-toxic materials allows competitors to emulate the design by minor modification.
  • High Cost Of Market Penetration – To reach critical strength, the technology needs to be able to prove to the energy industry that it is capable of being as disruptive as it seems to be. So how will it make it onto the global stage and be considered for a large project such as the restructuring of the national grid? Aquion will likely need to hire powerful lobbyists to make it to the big time. Redesigning the national grid, which is due to happen sometime soon, will provide opportunity for many new technologies such as Aquion’s. However, without rubbing shoulders with the right bureaucrats, via the help of lobbyists, it will be virtually impossible to be a part of this massive overhaul.

Opportunities

  • The United States is facing a degradation in its current power transmission infrastructure. With the advent of this safe and disruptive technology, there is an opening to help revolutionize power in America and the rest of the world.
  • Growing Population – The world’s population is growing rapidly, especially in third world countries which have geographical limitations to large scale grid deployment. This technology could bring electricity to remote regions and allow an increased rate of economic growth.
  • ‘Alternative electricity generation’ is the up and coming buzz word among an environmentally conscious population. Along with the alternative electricity generation, power storage has also captured the imagination.

Threats

  • Among all the highly capitalized energy producers in the market, it is possible that this technology gets bought and shelved just so the existing power companies remain in business (which wouldn’t necessarily be a bad thing financially for those involved in the company right now, but its mission is bigger than just making money!). If so, then the short-term gain of the buy-out will be at the expense of larger future profits.
  • Unproven technology – in the event the current proofs of concept are only viable at small scale, then the advances will be muted as they do not realize their potential to step up to the level of desired output.
  • Newer technologies are developed that antiquate this technology even before fully ramping up.

Conclusion

A staggering seven billion people now inhabit this planet. As populations continue to grow rapidly, the thing that becomes a grave necessity for each nation besides food and water, is establishing a sustainable and secure source of electricity. It is the defining capital input in the lives of many.

Aquion’s technology could liberate small land-locked towns in remote areas where the numbers will never allow power lines to be laid. With electricity will come information and following information will come freedom for these remote regions.

The ability to generate and store electricity, in my opinion, will become the catalyst for freedom and prosperity in remote locations (even more so than social media was to the most recent revolutions in the Middle East).

Aquion’s technology could allow humanity to consume energy without shooting itself in the foot. Finding sustainable and clean electricity generation and storage will be the most important step mankind will make in the coming generations, and this is why I’m so intrigued by Aquion’s disruptive technology, as is Bill Gates – evidenced by his capital investment.

While Aquion faces many challenges in the future, it has already garnered enough respect from one of the richest men in the world to invest in the company. Keep your eyes on Aquion and I’ll be following this company’s progress and relaying any developments to you; an IPO in the future seems quite likely.

Stay hungry,

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Aaron

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Like all of you entrepreneurs and investors out there, Aaron has been in the trenches. He is the founder of an influential online media and PR company. From oil wildcatters to mining prospectors, tech gurus to medical doctors, and even celebrities, Aaron has helped market and expand brand awareness for a diverse range of publicly traded companies ran by entrepreneurs from all walks of life.

  • Danger_zone

    Most of these renewables aren’t sustainable so that’s why they need government financial support. I’m sceptical

  • pointdexter

    Good article aaron although no one knows how much Gates actually bought in this company it makes fr a good headline.

    http://www.bloomberg.com/news/2013-04-02/bill-gates-invests-in-battery-maker-aquion-energy.html

  • Libsbegone

    Bill Gate invests in a lot of pet projects to. His agenda has changed and he is an ideologist now who isn’t afraid to spend money. Aquion Energy isn’t necessarily going to be economic.

  • Danger_zone

    Bill Gates seems to have an interesting choice of investments. Might not mean that much that he is investing in Aquion when he is also trtying to invest in the next generation condom

    http://www.cnn.com/2013/03/25/health/bill-gates-condom-challenge

    • Libsbegone

      LMAO…wow!

      • Danger_zone

        double lmao libsbegone 😉

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