December 17, 2017
Most similar industries are in China, owners say; ‘we wanted to bring it home to the U.S.’
EnerBlü is coming to Kentucky, bringing with it a wave of opportunity for the economy. Though the company looked at locations across the United States, President and CEO Daniel Elliott said they chose the commonwealth because it is the “total package.”
Elliott said his company’s original plan was to bring their product to the United States.
“In this particular type of chemistry, which is a power battery, they’re primarily made in China. And I built manufacturing in China — actually larger than what we’re going to start with here,” Elliott told the Appalachian News-Express on Thursday. “Myself and one of the co-founders of the company, Michael Weber, we got together and decided that we really needed to be doing this in the United States.”
He said a major shift in energy has been taking place in the U.S. and will require the nation to either stay on top of the game or lose out.
“We’re facing a future where, if greater than 70 percent of these batteries are manufactured in China and none of them are made in the U.S., we’re going to be shifting our energy dependence from the Middle East over to China,” Elliott said. “And that just doesn’t make sense. From a national security issue, from a jobs issue; no matter how you look at it, it makes no sense.”
Elliott said he and his team looked across the United States to find a location for the facility. He said some locations they considered were Nevada, Washington, New York, Colorado, South Carolina, California and New Mexico.
Kentucky was not on the list of locations, according to Elliott. However, he said, he had a discussion with AppHarvest Founder and President Jonathan Webb — who will also be locating at the Kentucky Enterprise Industrial Park — at a conference and was told he needed to check out the commonwealth. Elliott said he was contacted by Gov. Matt Bevin shortly after and was then invited to tour some potential sites in Kentucky.
“So, we came out here and Sean Cochran (City of Pikeville’s executive economic development director) picked us up at the airport and drove us around Pikeville,” he said. “And when we drove around the corner, we saw the University of Pikeville and we saw the hospital. We looked around and said, ‘Wow, there’s a lot here.’ We just didn’t know.”
Elliott said they were almost sold on Pikeville after the first visit.
“There was just something about it. And I can’t really tell you what it is,” he said.
However, he said, there was a lot that went into the company’s decision.
“What happened is a couple of things. First of all, these people have become our friends. I’m not talking about the governor, although he’s a great man. I’m talking about the local people here in Pikeville,” said Elliott.
He said the history of Eastern Kentucky was also a factor for his team.
“This was really the energy capitol of the United States for decades. It’s the coal that came out of this region that powered the Industrial Revolution — that powered our economic growth,” he said. “So, what better story than to just put them onto new energy — to put the same people back to work? It’s energy. It’s just a different type.”
He said the available workforce in the area is unlike any other.
“We realized that the workers here are familiar with production environments. They are familiar with machinery and robotics and hydraulics and these types of things that work in the plant. They are familiar with these things. They have a high mechanical aptitude,” he said. “We found a workforce that could be readily trained and adjusted into this kind of environment.”
He said the communities within Pike and Fayette were a final selling point when deciding to relocate, because his team wanted a place to proudly call home.
“Where do we want to live? Because we’re moving 40 families: Some to Pikeville and some to Lexington,” he said. “We really considered doing everything in Pikeville, but we also needed the office in a city that has a commercial airport. And we also wanted to be close to the University of Kentucky, so we could work with them.”
He said his team was in “constant conversation” with the University of Pikeville, making plans to begin an engineering program with its students.
“It will be chemical engineering at first,” he said. “We’re going to put an incubator branch (at the industrial park) so we can partner with the university, but also encourage entrepreneurship and start stirring up some things. Because that’s where you start getting some really great stuff.”
Two other states presented “far better” economic incentives packages, according to Elliott, but Kentucky “did enough” to work them over.
“They really worked hard: Gov. Bevin, Terry Gill — but even people here on the local level have even worked harder to some extent,” said Elliott. “It didn’t come down to only incentives. It came down to the workforce, the people, the region, the quality of life. It was a total package and the total package here won.”
Elliott said his facility in South Korea is currently being broken down and all of its equipment will be shipped to Lexington.
“We have a building in Lexington that we’re working with now. We haven’t completely settled it yet, but we pretty much know where we’re going to be,” he said.
He said the equipment will be arriving in Lexington by late March or early April of next year.
“When all of that equipment arrives, we’re going to be installing that in Lexington. What we’re going to do, in the intervening time, is to start interviewing people,” he said. “We are going to hire the top candidates from Eastern Kentucky, but we are going to ask them to work in Lexington for a period of time.”
He said the company will be paying a premium to those employees to train them, install the equipment and get the Lexington facility operating.
“Then, while we’re starting to build this building (in Pikeville), those people will come back and start to train the workforce below them. They will become the supervisors and the management,” said Elliott.
He said the company’s “outer shell” will be completely constructed first, and then the interior will be installed in “phases.”
“So, we can start bringing it online and so we will not have to sit here for 21 months and then one day flip a switch,” he said. “Certainly, nothing here is going to come online before 2019, I wouldn’t think.”
He said EnerBlü has already sold double what the facility can produce at its first-phase size and will be growing in phases “for a while” once the original plan is complete. The first phase of the building, he said, will be approximately one million square feet.
He also said the company already has a verbal commitment from another California-based company — a company that produces inverters for EnerBlü — saying it will be moving its entire operation to follow EnerBlü. This company, he said, could bring more than 100 more jobs to the area.
The facility is a clean environment, according to Elliott, and will be safe for the region. He also said the company has safety procedures in place to keep things in check.
“Certainly there are chemicals, but the chemicals are all in tanks that are retained within concrete retention basins,” he said.
He said EnerBlü’s facility is planned to offer a gym, childcare facility and a restaurant for its employees.
According to Elliott, Kentucky’s local, state and federal leaders were instrumental in the company’s decision to take a chance on Pikeville, but he said he also applauds Kentucky’s decision to take a chance on EnerBlü.
“We’re grateful for you guys. We really are. We think our success is going to be built upon the good people of Eastern Kentucky,” said Elliott. “We’re really pleased to be here. The people are what made a big difference for us and we want to make a big difference for them. We’ll succeed together.”
He said success will be found by moving forward into the new era of energy. According to Elliott, EnerBlü’s eLTO is designed to charge quickly and operate on a long life cycle in extreme temperatures.
According to Elliott, there are “typically three reasons” other energy manufacturing businesses go bankrupt.
“One reason is that they’re run by scientists and not business people. They come up with this amazing battery that can charge within 10 seconds and can do these amazing things, but it costs 10 times more than anybody can actually afford to pay for it,” he said. “It’s the best battery in the world. But, commercially, it’s never going to sell.”
The second reason, according to Elliott, is that other manufacturers build facilities too small, planning to later expand, and find themselves unable to get scale.
“That’s why we’re building big in Pikeville,” said Elliott. “You have to build big. You have to get scale. You have to go all in — or forget it; you’re just never going to get there.”
He said other manufacturers also fail to control the end customer and lose control of the market.
“EnerBlü did not do that. We designed products that our battery goes into that we deliver to the customer.
He said his company looked at the largest expenditure for the U.S military during wartime and found that it was the diesel cost for ground support.
“So, if you go back and look at 2010, 85 percent of the trucks in U.S. military convoy were fuel trucks,” he said. “They were spending $5.7 billion annually just to transport diesel fuel. Not to use it; just to move it around.”
He said his company discovered that more than 3,000 U.S. military personnel have been killed during fuel resupply missions. The military was looking for ways to hybridize their equipment, according to Elliott.
“The technology for the batteries didn’t exist,” he said. “So, we came at the problem and designed the end system, then figured out the battery that needed to go in it and designed the battery.”
According to Elliott, his company’s Automated Energy Storage Unit (AESU) pairs with the existing diesel generators that are already in the military fleet.
The AESU is a bank of batteries that is militarized. He said it’s equipped to tell the generator when it needs to be recharged and is then recharged in as little as 20 minutes. Therefore, according to Elliott, the military is saving fuel.
“Instead of running these (generators) at very inefficient loads 24-hours a day, they run them at peak efficiency for 20 minutes a day,” he said.
The Marine Corps, according to Elliott, said the AESU would save a minimum of 60 percent in its diesel fuel consumption. According to Elliott, his company has now created a commercial version of the AESU, which he says can be deployed by companies like American Electric Power (AEP) to optimize their power grids.
“It doesn’t just have to hybridize a diesel. It can optimize whatever it’s plugged into; be it solar or wind generators or whatever,” he said.
Elliott discussed the Kellogg’s factory in Meta, saying the power it takes to feed all of its machinery is sometimes coming in at less than reliable waves.
“Our system can optimize and smooth the power feed so that Kentucky Power can provide 100 percent reliability all the time,” he said. “It’s not only good for the end customer, but it’s good for Kentucky Power.”
Elliott said the answer to equipping a community with solid and reliable power is to disperse battery banks throughout the grid. However, he says, utility companies have been unable to do that because of the three-year life of batteries that are currently on the market.
“Because, the way utility works is that they get paid on a rate base,” he said. “They can’t rate-base a battery that only lasts three years. Our battery is a game-changer, which is one of the reasons we are working with Kentucky Power and AEP and other utilities across the country. Our battery will last 20 or 30 years. They can now rate-base the batteries.”
He said this source of power is a new way of thinking for many, and he looks forward to helping the area embrace it.
“I hear a lot about coal. But, you know, I’ve never met anybody in my life that wanted to buy coal. But I’ve met a lot of people that want to turn the lights on when they hit the switch. And that’s what they’re really after,” he said. “This section of the country provided that. All we’re doing is to help take them into the next phase of energy.”
By Buddy Forbes
Appalachian News-Express
