(PORTLAND, OR) - - It was a pivot when mainly glib tech entrepreneurs running out of money were using the word — long before Covid-19 made it omnipresent in business.
Four years ago, Powin Corp., a quarter-century-old Tualatin
contract manufacturer and maker of an endless range of consumer and industrial
products, became Powin Energy Corp., a utility-scale battery energy storage
company.
It worked out well. Powin etched a place among the
industry’s leaders, catching a wave of increasing demand as utilities and other
grid players turned to big battery installations that can help make room for
more intermittent renewable energy.
Now Powin — still something of an upstart among well-heeled
competitors — is focused on extending its ride, grabbing what it can of a
domestic market expected to grow from $1.5 billion this year to $7 billion by
2025, according to the U.S. Energy Storage Association and Wood Mackenzie.
To do it, Powin has invested heavily in its technology with
a big staff buildout. And the company is bent on continuing to use its Asia
expertise to source battery cells at the best price.
“We caught lightning in a bottle and now other competitors
are moving,” Geoff Brown, Powin’s president since 2016, said. “They’re taking
our approach or finding their own ways to reach a similar pricing floor. And so
what we do is use that momentum that we had in 2018 and 2019, double down on
additional R&D, double down on additional technology investment, and double
down on improvement in our product.”
The approach
Powin wasn't starting from nothing when it dove headlong
into energy storage in 2016. By then, a vaguely focused subsidiary called Powin
Renewable Energy Resources Inc. had begun to turn heads with a patented product
that exquisitely balanced the output of the small battery cells that are the
foundation of a big energy storage system.
With it, Powin offered a holistic, less expensive approach
in a nascent sector populated by integrators.
“They would buy from someone who had built a module or from
somebody else who does a bunch of cells,” Brown said. “And then they would have
to buy an enclosure that had been built by somebody else. And then they'd have
experienced engineers writing software to bring it all together. It was all
very bespoke. There was a lot of margin stacking with that approach.”
Powin, by contrast, bought just the battery cells that are
strung together into modules that are strung together into packs that go into
shipping-container-like enclosures. Most cells are made in China, where the
former Powin Corp. had a long history of sourcing.
“We bought the battery cell, then took it all the way to the
finish, including the software and pairing that with long-term service, pairing
that with real deep technical expertise and some differentiated approaches to
building the system,” Brown said. “That allowed us, really from day one, to be
one of the lowest-cost providers.”
This wasn't penetration pricing; the company won contracts
“at profitable gross margins,” Brown said.
Growing fast
Powin had revenue in 2019 of $32 million, nearly three times
what the old Powin did in 2015, its last largely pre-energy-storage year. Sales
could triple this year and then again in 2021, Brown said.
Key Capture Energy has done three projects in Texas with
Powin totaling about 30 megawatts. Three more, much bigger — totaling 200
megawatts — are on their way next year. They're part of a Powin project
pipeline that will be 10 times as fat in 2021 as it was in 2019, Senior Vice
President Danny Lu said.
“The Powin solution, cost and value structure make them very
appealing to the energy storage industry,” Jeff Bishop, Key Capture Energy’s
CEO, said via email. Bishop called out Powin’s roots and its “great
relationships up and down the Asian and American supply chains,” and noted that
it is “aggressively filling their team with experienced folks from all over the
energy sector, bringing a diversity of experiences.”
Since March, Powin has hired 65 people in the U.S., about
two-thirds locally, Lu said. Most are engineers. It’s what’s needed to keep
pace with the industry’s heavyweights, including an AES and Siemens joint
venture called Fluence, and Tesla, which needs no elaboration except to say
Elon Musk believes that in the long run, energy storage will be just as big as
electric cars to the company.
Utility-scale storage costs fell 70 percent from 2015 to
2018, according to the U.S. Energy Information Agency, and the pressure to keep
pushing prices lower isn’t letting up.
“Over the last four years, we’ve evolved our product no less
than five full times,” Brown said. “We’ve done that because it’s a necessity. We
have to keep doing that. The perfect battery has not been built yet, and we
want to be the ones to do so.”
POWIN ENERGY
WHAT IT DOES: Manufacturers and deploys utility-scale
battery energy storage systems
EMPLOYEES: 178 total, 102 in U.S.
LEADERSHIP: Joseph Lu, CEO; Geoff Brown, president
BASED: Tualatin
2010
Powin Corp. launches a subsidiary to focus on offering
manufacturing services to the renewable energy industry.
2012
The company does an energy storage demonstration project,
using technology developed by Virgil Beaston, now its CTO, with the Bonneville
Power Administration.
2014
Investment from Chinese firm SF Suntech helps the company
commercialize its battery management system.
2016
Powin hires Geoff Brown as president and ditches the Powin
Corp. moniker to focus wholly on energy storage as Powin Energy Corp.
2017
The company completes its first major commercial project in
record time as Southern California Edison rushes to boost peaking capacity
after a natural gas storage facility leak.
2018
Powin, public since 2010, goes private as it begins to win more and more storage project contracts.
