Canadian startup AlumaPower believes it has solved the problems that have held back the development of aluminium batteries.

Turning old drinks cans into a clean energy source sounds like a far-fetched idea, but new technical advances are turning an old idea — aluminium-air batteries — into a viable commercial proposition.

It is time to rethink aluminium batteries, says Ingrid Thompson, vice president of communications for AlumaPower, a Canadian startup with a patented spinning disc technology that addresses most of the problems that have up to now stopped aluminium batteries from becoming a mainstream solution.

Aluminium-air batteries have been around since the 1960s, and initially held a lot of promise. They have one of the highest energy densities of all batteries and use a power source that is cheap and abundant on every continent — no dependencies on rare metals needed here.

But aluminium-air batteries had several downsides that meant they remained a power source only for very niche applications, mainly in the military, for functions such as powering torpedoes.

Classic aluminium batteries are hard to switch on and off and can produce unwanted hydrogen as a by-product if the aluminium is not entirely pure. Producing pure aluminium, in turn, is a very energy-intensive process which negates any environmental advantages. Most difficult of all, the batteries had to be completely disassembled to recharge them. Aluminiumair batteries are so-called “primary batteries” meaning that the aluminium in them is used up in the reaction, and old aluminiumair batteries had to be entirely rebuilt to be used again.

“You have to literally unbolt it, take it all apart, disassemble, reassemble,” says Thompson.

AlumaPower’s founder and chief technology officer, Geoff Sheerin, came up with a solution for these issues by adding a mechanical component for the battery — instead of having fixed plates of aluminium bolted together in it, the aluminium disc spins.

It was, says Thompson, a “face-palm moment” for the industry.

“Chemists have spent 30 years working to get over those last hurdles using electrochemistry. But our CTO, who is not an electrochemist or engineer, but an industrial designer, didn’t come with that bias. He put in a mechanical component. It’s that spinning disc, and that bringing of a moving part into the concept of aluminium-air battery is really the simple secret sauce,” says Thompson. “It’s just one of those in plain sight, simple, elegant solutions.”

One of the best things about the spinning technology is that it allows even very low-grade aluminium to be used for the reaction.

“Because it’s spinning, the anode is being scanned very evenly. It knocks off those impurities that were causing that parasitic hydrogen reaction in a legacy system. And so, it allows you to use impure aluminium. We can take low-grade post-consumer scrap and it’s absolutely fine for our system.”

Even scrap metal from drinks cans could be used as a feedstock, or, better yet, batteries could use the scrap aluminium from the casings of decommissioned internal combustion engines. There will be many of these needing a second life as old petrol and diesel cars come to the end of their lifespans. Old internal combustion engine casings used to be melted and recast for new ones but cannot as readily be used in newer electric vehicles.

“We have this really elegant thing where our fuel will be created proportionately to the market we’re going to be selling into,” says Thompson.

The spinning function also makes the battery easier to start and stop. Stopping an old-style aluminium battery used to mean draining off all the electrolyte and getting the battery dry, something which took considerable time. A spinning aluminium anode, on the other hand, can spin dry itself rapidly, like drying salad in a spinner.

A few other startups are working on aluminium battery technology, including UK-based Metalelectrique, a business started by a retired naval officer who believes the batteries can be used to power electric vehicles. Israeli cleantech company Phinergy, which had backing from Doral Energy Tech Ventures before listing on the Tel Aviv Stock Exchange, is also developing aluminium batteries, but neither of these companies has the spinning disc concept of AlumaPower.

AlumaPower prefers to call itself a generator rather than a battery company, but it certainly represents an energy storage solution that can sit alongside and enhance other batteries. One of the first pilot products it is planning to bring to market, towards the end of 2024, is a mobile charging station for electric fleets. Thompson says AlumaPower is in talks with a last mile delivery company which is looking for additional ways to recharge its electric delivery trucks.

Pairing the aluminium-air battery with a lithium-ion battery would provide a much longer-duration charging solution than a lithium battery can provide by itself. Lithium-ion batteries discharge power to cars relatively quickly but don’t hold as much energy. The energy-dense aluminium-air battery would be used to keep the lithium battery topped up for much longer periods of time, and can provide a significant amount of waste heat like and internal combustion engine which can warm the driver and the Li-Ion batteries in cold weather.

In the same way, the AlumaPower batteries could be paired with nickel-metal hydride batteries to make power last longer in refrigerated air cargo containers.

“We can increase the time that that container can remain unplugged, going from two to seven days, which is a real gamechanger,” says Thompson.

The company is also talking to a potential customer about using the technology as a mobile power source in oil fields, as the battery poses no spark risk.

Further into the future, AlumaPower units could become mobile power sources for trucks or even electric aircraft — being many times lighter than lithium-ion batteries they may be ideal for powering flight.

The first minimum viable products are expected to be out at the end of 2024, but the startup is starting to get noticed by investors. Starbridge Venture Capital, a New York-based VC fund that has also backed Commonwealth Fusion Systems, invested in the company’s seed round in 2018. The company is just about to close a $7m series A funding round — and has set a date of 31st of October for the last potential investors to be in touch with serious expressions of interest.

There is an old joke about a parent buying their kids a set of batteries for Christmas, with a note saying: “Toys not included”. Today´s world has more of the classic problem of having gotten “toys”, such as electric vehicles (EVs) and clean energy sources, but not necessarily the batteries to power them.

That said, the economics of batteries have been kind to us. The cost of lithium-ion batteries per kWh has fallen by 97% over the past three decades, as shown on the chart, while powering a wide range of applications from mobile electronics to EVs and stationary storage facilities. There is, however, no consensus on the weight of the contributing factors for this cost decline – such as economies of scale or commodity prices. There are only some attempts to estimate the proportion of such contributing factors.

It is, therefore, hard to predict how much more the costs of lithium-ion batteries could go down in the future, if it all. With global emissions reduction goals set for the mid-century, tech and venture capital communities have become increasingly aware of the acuity of the ever-growing need for innovation in battery technologies. Battery technology has a crucial role to play, especially on a larger scale, as many of the clean energy sources are not able to produce energy continually.

Today the innovation community is working not only on improving the odds for lithium-ion batteries but on numerous alternatives like sodium-ion, lithium-sulphur, solid-state, hydrogen fuel cells, aqueous magnesium and graphene batteries.

Market size hard to determine

The world’s market for batteries was estimated to be nearly $112bn in 2021, according to data cited by Statista. It is expected to nearly quadruple up to $424bn by 2030.

The global market for grid-scale batteries, however, is hard to estimate as we are witnessing the increasing electrification of vehicles alongside a push for energy from cleaner and more sustainable sources as well as the rise of decentralised energy systems. Current market size estimates appear modest given the critical role such technologies are set to play.

A report by Markets & Markets, for example, estimates the global market for grid-scale battery tech at just $5.4bn as of 2023 but projects it to grow to more than triple to $17.4bn in the next five years, implying a compound annual growth rate of 26.4%. It is important to keep in mind that working definitions of this particular market may also vary, as battery storage systems require a fair bit of supporting infrastructure, including power conversion, thermal management, safety and control systems.

VC markets growth in recent years While the total market size may be hard to estimate, there has been a clear uptick in VC-backed deals in grid-scale battery technologies, especially between 2018 and 2022. VC rounds rose in number from 129 in 2018 to 224 in 2021 and 191 in 2022.

The rise was even more pronounced in total dollar value – from just north of $1bn in 2018 to $11.67bn in 2022. The rising interest in such technologies, which is instrumental for the decarbonisation of industries and economic activity in general, is also evident in the growing median size of deals and respective median post-money valuations, as per PitchBook’s data.

Median deal size in the grid-scale battery tech space stood at $1.3m in 2019 but had risen to $4.82m by 2023, albeit having dropped from a peak of $5.42m in 2022. Similarly, post-money valuations rose $22.8m in 2019 to $63.82m this year.

This suggests that the space, like any other in venture capital, has experienced some correction, too, though probably not as sharp as in other areas.

Corporates cautiously involved

Corporate investors have also jumped on the bandwagon but seem to have done so somewhat more cautiously than their VC peers overall. As of 2023, about one in every five deals features a corporate backer on the cap table, according to PitchBook´s data. This is up from one in ten in 2020-21 or fewer in previous years.

The majority of top investors in grid-scale battery technology over the past decade have been traditional VC firms. But corporate investors such as Eni Next, Shell Ventures and Qualcomm Ventures have also been active in this area.

Funding for every stage

Some of the technologies have also been advancing in maturity, at least as far as fundraising is concerned. While still nearly half of all deals tend to be in early-stage, seed or pre-seed stage, it is notable that the share of later-stage deals seems to have increased from about a fifth of deals to over 30% last year and even over 40% in 2023. This also indicates willingness of venture capitalists to finance at every stage a technology that is capital intensive and requires longer horizon.

As grid-scale battery tech tackles a truly global issue, its geographical extent is rather wide, too. In recent years, around half of all VC deals have taken place in the US and Canada. The proportional share of Europe has remained relatively stable, fluctuating between 25% and 30%. It is in Asia where we have seen it pick up drastically from between 10% and 15% before the pandemic to more than 25% in the postpandemic years.

There is no lack of investor interest in the VC sector for gridscale battery technologies, as the stakes are high and this is evident in the data. Corporates, which have more technical expertise than their traditional VC peers, have taken a more cautious approach but are definitely also in the game. Only the future will tell what technology will solve the crucial problem of successfully and economically storing vast amounts of energy