Seeing Green

Energy Conversion Devices Inc. has made numerous major technological breakthroughs over its 47-year history, but it seldom has made money.

David C. Smith, Correspondent

August 1, 2007

7 Min Read
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Energy Conversion Devices Inc. has made numerous major technological breakthroughs over its 47-year history, but it seldom has made money.

That soon may change as ECD, also widely known as Ovonics, shifts its strategy from focusing on basic scientific discovery to producing and marketing its proprietary products already in the hopper.

Based in Rochester Hills, MI, ECD seemingly is primed to capitalize on a series of technologies that fit neatly with a world increasingly seeking “green” solutions to a variety of challenges.

ECD already is a leader in developing solar panels for commercial and institutional customers. Its patented nickel-metal-hydride batteries, produced by licensees, are in the forefront in powering hybrid-electric vehicles and a variety of devices.

It has no plans to develop more powerful and expensive lithium-ion batteries now used commonly in smaller devices.

However, ECD has a development contract to serve as systems integrator in supplying Li-ion battery packs and related components for General Motors Corp.'s Chevrolet Volt plug-in hybrid (PHEV), targeted for introduction in 2010.

And that's not all. Preparing for the advent of vehicles powered by hydrogen, ECD has perfected on-board metal-hydride storage systems — cylindrically shaped canisters that supply hydrogen fuel for hybrids. It also has developed hydrogen fuel-dispensing stations, where motorists can “fill up” with hydrogen.

ECD has modified an '05 Toyota Prius HEV to run on hydrogen fuel, replacing gasoline. The company believes this is a viable alternative to hydrogen fuel cells, which are expensive and may not reach volume production for another 10 years.

Honda Motor Co. Ltd. already has a test fleet and plans to introduce a fuel-cell car next year; GM is looking at the 2010 timeframe. Hydrogen is prized because its only tailpipe emission is water vapor, and it would reduce dependence on oil.

ECD was founded in 1960 by Stanford Ovshinsky and his wife and close associate, Iris, who died last year. ECD's products, operating units and joint ventures honor the Ovshinskys by using the trademarked Ovonics name. The company always has been respected as an innovator but generally has escaped commercial success.

Former GM Chairman Robert Stempel joined ECD in 1993 after being forced out of GM a year earlier in a management shakeup and now serves as ECD chairman and CEO.

Stempel rose quickly in GM's engineering and management ranks, working on such milestone efforts as the front-wheel-drive Oldsmobile Toronado and GM's first catalytic converter. Ovshinsky is chief scientist and technologist. Stempel is 74 and Ovshinsky is 84, prompting ECD to embark on a succession plan. Neither man seems eager to retire.

Although it has a major stake in the future of HEVs in both civilian and military applications, ECD's biggest revenue comes via its United Solar Ovonic (USO) subsidiary, which boosted revenue during the fiscal nine months ended March 31 to nearly $67 million from $64 million a year earlier.

USO earnings, however, didn't keep pace, sliding to $3.2 million from just under $6 million in the fiscal-2006 period. ECD overall reported a net loss of $12 million during the 9-month period, clearly underscoring the need to focus on turning its technology into profit.

“When you go into production to commercialize in a big way, it takes a different set of people and different kinds of skills,” Stempel tells Ward's. “We've got some on board, and we're hiring. It's a transition period for us.”

Perhaps the brightest spot is USO's fully patented “photovoltaic” solar material that it's producing in Auburn Hills and Greenville, MI, and Tijuana, Mexico, on tooling designed by Ovshinsky.

Solar panels commonly are made from crystalline materials, which Stempel says don't capture as much energy from the sun because they only utilize one wave length compared with USO's three — blue, green and red — which means they can produce energy both earlier and later in the day when the sun is low.

Key to the product is an “active” layer of gas that is thinner than a human hair sandwiched between a protective surface and a silver reflective layer. “That's the secret to getting low costs,” Stempel says. “We don't' use as much material.”

USO's production line in Auburn Hills runs the length of a football field and operates 24 hours a day, creating additional efficiency, he says, compared with solar panels typically produced in batches.

One of USO's largest photovoltaic installations is a 1-megawatt membrane on the roof of a GM parts warehouse in Cucamonga, CA.

“They generate enough power to send some back to the grid,” he says, and the panels provide supplemental power to protect against the Los Angeles area's frequent brownouts. Stempel says USO's solar material also may come in handy in big parking lots and at shopping malls as plug-in HEVs enter the market.

ECD already has a large stake in hybrids with its NiMH batteries licensed to Sanyo Electric Co. Ltd. of Osaka, Japan. They are used in battery packs, produced in Springboro, OH, near Dayton, that power GM and Ford Motor Co. HEVs under a 50-50 joint venture with Chevron Technology Ventures LLC called Cobasys LLC.

This technology also is being tested in hybrid buses and commercial fleets (FedEx Corp., UPS Inc. and Purolator LLC, for example) and by the military, Stempel says.

Another embryonic military project involves a USO photovoltaic material generating 1,000 watts/kg to power an observation blimp equipped with cameras and digital equipment to fly at an altitude of 70,000 feet (21,336 m) in synchronous orbit. Crisscrossing F16s now perform those duties, a much more expensive method.

Cobasys' NiMH batteries power the '07 Saturn Aura sedan and Vue SUV Greenline hybrids and will be offered on the next-generation '08 Chevrolet Malibu.

Based on its performance, Cobasys was awarded a non-exclusive Li-ion development contract for the Volt. “We'd demonstrated that we had expertise in that area and — knock on wood — GM hasn't had any systems problems with our batteries,” Stempel says, noting even though GM is committed to Li-ion batteries, ECD is developing a NiMH system for the Volt as a backup.

Cobasys is integrating its system, which includes Li-ion batteries supplied by A123 Systems of Watertown, MA, for the Volt, but Stempel says much work remains.

Li-ion batteries weigh about one-third less than NiMH batteries — a major consideration in the Volt as GM is reducing weight to make room for four people — but they also cost “several times more” and can explode and cause fires under certain conditions.

GM in June awarded two other Li-ion battery development contracts to Compact Power Inc., a unit of South Korea's LG Chem, and to Germany-based Continental AG, which will use A123 batteries as well.

The Volt has 1,100 Li-ion cells. To achieve stability and provide safety, power for the Volt application “has been reduced so you never get up to the threshold. So far it's working, but we're just very careful with it,” Stempel says.

A123 supplies Li-ion batteries about the size of standard C cells, he says. “We interconnect them and make the battery (pack). Then we put on electronic controls that measure things like voltage, amperage and then temperature controls to make sure the battery temperature remains constant across the spectrum of operation and across the car's systems.”

ECD opted to pass on producing Li-ion cells because they can wind up as commodities that purchasing agents can hammer on price, Stempel says.

PHEVs should go a long way toward reducing carbon dioxide emissions from power plants, Stempel says, because most of the recharging will take place at night when demand is low. Powerplant generators continue to operate at night, wasting fuel and continuing to create emissions.

By leveling their loads as more PHEVs arrive, “that will help them stabilize their emissions at night and at the same time get these batteries recharged,” he says.

Stempel also sees a bright future for dual-mode hybrids, developed jointly by GM, DaimlerChrysler AG and BMW AG. The dual-mode's stepped gearing enables the system to deliver all of the internal combustion engine's power directly to the driving wheels.

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