U.S. Energy Storage Expansion Soared Thanks to Powin, Until the Company Faced a Collapse.
Powin, a battery storage company founded by Joseph Lu in Oregon, made headlines in 2016 when it installed 2 megawatts of batteries in a warehouse in Orange County, California. This marked the beginning of a remarkable journey for the startup, which saw it supply the first utility-scale battery in Mexico, a landmark utility-endorsed battery fleet in Arizona, and a truly mammoth system in Australia.
In the same year, Powin partnered with Tesla, AES, and a little-known firm to install storage at record speed, demonstrating its prowess in the industry. The company also secured a significant investment of $100 million from Trilantic Capital Partners and Energy Impact Partners in February 2021.
However, the company's fortunes took a turn for the worse. In 2022, Powin raised an additional $135 million, led by Singapore's sovereign wealth fund GIC. Yet, this was overshadowed by a legal dispute with its longtime supplier, CATL, over allegedly unpaid bills amounting to $44 million. The Oregon Circuit Court noted that Powin owes money to CATL and the value of the assets Powin holds in Oregon is less than the amount owed.
The incidents in Warwick, New York, further undercut Powin's reputation for safety. A Powin-supplied battery system in Warwick burst into flames after a summer storm in 2023, followed by another system in the same location releasing fumes. These incidents led the Warwick Village Board to freeze local battery development.
In response, Powin's lawyers proposed a nefarious explanation for the souring relationship with CATL, suggesting CATL's aim to compete directly with Powin in supplying complete energy storage systems. The company's CEO, Doug Hahs, who oversaw the construction of a lithium-ion battery warehouse in Orange County in 2016, was also involved in a subsequent filing where Powin's lawyers asserted that CATL was refusing to honor the contracts and trying to impose non-contracted price hikes.
Despite these challenges, Powin continued to deliver battery enclosures for 11.3 gigawatt-hours of installed systems. However, the company's financial woes became apparent when it filed for bankruptcy in June 2021, alerting the state of Oregon of mass layoffs at its Tualatin campus.
In early August, FlexGen, a storage software specialist, placed a bid to buy Powin's assets at auction. The future of Powin remains uncertain, but its rapid rise and fall serves as a cautionary tale in the rapidly evolving world of renewable energy.
Southern California's grid took a chance on lithium-ion batteries in 2016 to fill power shortage gaps, marking a significant shift towards renewable energy. As the industry continues to grow, it is essential for companies to prioritise safety and maintain strong relationships with suppliers to ensure a sustainable future.
