Wellington
By guest blogger, Imogen Reed
Congratulations are due to UC's
The award , for Excellence inthe Field of Environmental Technology Research, is proof positive that New Zealand is at theforefront of exploration into new battery technology for the green car market, and the future forthe company looks bright.
The CleanEquity Conference is magnet for the world’s investors and ArcActive, buoyed up bytheir success, aim to raise enough equity over the coming year to develop a mass market for theirinnovative battery. As ArcActive’s Chief Executive, StuartMackenzie, commented: "This will be a multibillion-dollar market by 2020. Our technology has worldbeating performance and is very low cost, so we hope it wins out over other new technologies."
Igniting the Spark
The Company began its life at CanterburyUniversity; building on technology first developed over 30 years ago by Dr John Abrahamson, but hassince expanded and taken this initial research much further.
ArcActive is targeting the "stop- start" and micro hybrid vehicles which are increasing in numberin China, Europe and the United States. These cars' engines reduce or turn off in certain situationssuch as when the car is idling or coasting to a stop which saves on fuel but places huge demand ontraditional batteries which last only weeks in these vehicles.
ArcArctive’s long term aim is to fine tune the negative electrodes found in the batteries forstop/start vehicles in order that the DCA (Dynamic Charge Acceptance) can allow the battery to havea much longer charge life. (See a slightly technical explanation
McKenzie commented that: "every man and his dog" had been trying to enhance the DCA of batteriesand stated: "What we have developed is a battery which has got astonishingly good DCA and lifetimeand is no more costly than a state of the art battery." However, he felt confident that althoughother companies were also in the running to solve the DCA problem, ArcActive were in a strongposition to beat their rivals and take a chunk out of the car battery market if they could scale uptheir technology and replicate the results with international car and battery manufacturers.
Collaboration Has Been Key
The initial University of Canterburyproject received some much needed initial support via a $225,000 KiwiNet PreSeed investment fromMinistry of Science and Innovation to prove the technology worked.
McKenzie felt that thisearly support was critical in getting the project to this stage as early work identified electrodesfor batteries as a key application for the technology.
He commented: “It’s been a very collaborative effort getting to this point. We’ve receivedsome great support from KiwiNet in terms of funding and expertise from other members. This supportallowed us to move the project to a point where we could attract additional technology grants fromthe Ministry of Science and Innovation and private investor funds to get to where we aretoday.”
Raising capital in order to develop a product is a hard task in itself, but it is clear that thecompany has worked diligently to raise $5m in grants and investor capital with about $2.5m stillunspent in the bank.
Such is the faith in this product that investors in the company have grown as ArcActive continueto develop and refine their product. They now include NZVIF, ACC, Neville Jordan of MAS Technologyand Endeavour Capital fame and K1W1, while Canterbury University still has a large stake.
Greener Products for the Planet = A Billion Dollar Industry
Recentlymandated emission controls in both the EU and USA are driving the take up of electric vehicles asautomakers focus on fuel economy and protecting the environment. The race is on.
There are big bucks to be made for companies who can provide cheaper solutions to ongoing issueswithin the green car market.
It is worth noting that the market for start/stop batteries has been forecast to grow from 5million batteries per year in 2011 to 39 million per year (US$6.3B) by 2017 and nearly 100 millionper year by 2020.
In Europe 30 per cent of all new cars are expected to be stop-start by 2015 and all cars by 2020,with China and US following shortly after.
Stuart McKenzie is positive about this: “The auto industry is undergoing a quiet revolutiontowards green cars. We’ve tested the performance of our batteries using new protocols developed bythe hybrid car industry and obtained exciting results.”
From the research the company has undertaken, it has been estimated that that start/stop carsusing ArcActive lead acid batteries will have a longer life and consume 10% less fuel, compared to2-4% if using alternate technology AGM batteries, at no extra cost.
By cutting costs in this way, ArcActive are aiming to become an important component of thisemerging multibillion dollar market and with the desire to have their components being manufacturedin New Zealand, it could also be good news for the country’s economy.
What Does The Future Hold?
Stuart McKenzie is the first to admit thatthe company have a long way to go.
"If we sell one battery to a car maker we will be a very big business," an optimistic McKenziesaid, but he pointed out that one of the biggest challenges facing them would be to convince batterymakers to adopt the new technology.
There was also the added technical problem of making the batteries in volume, but the company aredetermined to find a way to solve this issue, hence the reason why they have given themselves until2015 before they fully promote the product on the market.
However, with the arrival of Westerby's Mitsubishi MiEV electric car now available on the NewZealand market, and one of eight, midway through a two-year trial to evaluate their real worldperformance, the signs look pretty positive. This compact car has been expressly targeted atgovernment and corporate fleets that travel short commuter distances.
One of the proposals put forward is that this nifty little car could be used for
As the Ministry of Science and Innovation chief executive Murray Bain so aptly put it: “Kiwisare great at coming up with good ideas, but it’s sometimes a challenge to turn those ideas intosomething valuable. ArcActive are showing the way – not only developing new technology, but doingso in such a way that industry wants to be a part of it.”