Utility battery maker looks to move into former cigarette plant

RALEIGH, N.C.—A small start-up company said it would create hundreds of jobs when it moves into a massive, former Philip Morris USA cigarette plant to build batteries that it says will help power companies save energy and work more efficiently.

North Carolina officials today are expected to hear Alevo Group representatives discuss plans to manufacture the utility-scale batteries at the factory site in Concord, where more than 2,000 were employed before it closed in 2009, State Commerce Department spokeswoman Kim Genardo said. Alevo believes that as the U.S. and other nations work to reduce emissions of gases that are contributing to climate change, its energy-saving technology will become more valuable.

Its battery has yet to bee tested or even seen by many outsiders.

But the group said it plans to hire 500 workers next year and—if sales take off—2,500 or more within three years at the plant in Concord.

Alevo is seeking no state or federal tax breaks or other subsidies to set up shop in North Carolina, Genardo and company spokesman James Kennedy said.

Alevo hopes to sell its big batteries to utilities and grid operators. Utilities and power generators now have to power fossil-fuel-powered plants up and down quickly to match electricity demand. That uses more fuel than just keeping the plants steadily churning out power at consistent levels.

The company had to work for years to develop the kinds of analytics that will anticipate when to store or release energy in a way that makes enough money for the battery service to pay off, Alevo Group CEO Jostein Eikeland said in an interview. Alevo plans to guarantee its lithium ion battery’s longevity to increase its appeal to customers.

But the company’s hopes hinge on solving a notoriously tricky technological problem: how to make a huge, powerful battery that isn’t too expensive and can take the punishment of being charged and discharged hundreds or thousands of times.

So far, no company has been able to crack that formula at an attractive price.

“There’s a quite justified skepticism about new battery claims,” said Harrison Wellford, a Washington-based energy adviser and investor who is helping Alevo to raise money. He said he believes Alevo’s new battery chemistry has addressed the weaknesses of other big batteries.

Another obstacle to its lofty manufacturing and hiring ambitions is that electricity is regulated differently in each U.S. state, and it is not clear in many cases how utilities could make money employing Alevo’s battery.

“One of our challenges is going to be to fit this disruptive technology into regulatory systems not designed to deal with it,” Wellford said.

The company has presented its battery to the U.S. Environmental Protection Agency as the agency was researching technologies that might help states reach proposed targets for lower emissions. But the EPA did not do extensive testing and declined to talk about the technology other than to say in a statement that its new emissions plan “takes into account energy saving concepts such as those Alevo will provide.”

Fahey contributed to this report from New York.