Leclanché’s dual strategy for growth

The massive Leclanché battery order for Hecate Canada Storage II in Ontario is just one of the signs that its targeting of the stationary energy storage and electric vehicle markets is paying off. Photo Credit: De Lijn

The massive Leclanché battery order for Hecate Canada Storage II in Ontario is just one of the signs that its targeting of the stationary energy storage and electric vehicle markets is paying off. Photo Credit: De Lijn

By Jason Deign

The world’s oldest battery company isn’t clinging to the past. Leclanché, of Switzerland, is betting on its two newest lines of business for future growth, said Jacques Boppe, the company’s vice president of corporate development.

“Stationary storage is a growth business and transportation is a growth market,” said Boppe.

Both areas were given separate business unit status in January 2015 as part of a turnaround plan that saw Anil Srivastava, the former boss of Areva Renewables, taking the helm of the company in June 2014.

The turnaround followed financial troubles that resulted in Leclanché’s German subsidiary needing a €5m bailout from the Bruellan Corporate Governance Action Fund in 2012.

Boppe said Leclanché is expecting both business units to blossom while it continues to serve its legacy business, creating and distributing custom battery systems for specialist customers such as the Swiss Army, from a third unit.

Leclanché’s strategy is paying off

So far, there are signs Leclanché’s strategy is paying off. On the stationary front, last month the company bagged one of the biggest battery orders in the world, for Hecate Canada Storage II.

The developer is looking to deploy 13MW and 53MWh of battery storage to serve six ancillary services agreements with the Independent Electricity System Operator in Ontario.

Currently the project is still awaiting financial close, which is due in the first half of this year. Once achieved, the batteries should be installed by the end of the year.

Deltro Energy is the project manager and operator, and Greensmith is providing the management systems. “We asked Leclanché to deliver the storage systems on a turn-key basis,” said Deltro CEO David Del Mastro in a press release.

Besides Hecate, Leclanché last year also won the contract to provide batteries for a high-profile microgrid project being developed by Younicos on the island of Graciosa in the Azores.

Megawatt-scale renewable energy plus storage

The 2.8MW/3.2MWh battery win, worth €8.5m, was touted as “the world’s first megawatt-scale renewable energy plus storage system” when it was announced last April.

Significantly, one of Leclanché’s largest shareholders, the Danish investment house Recharge, is helping to finance the Graciosa project with a €3.5m convertible debt. It is not clear if this may have influenced the vendor selection.

In the meantime, however, the Swiss lithium-ion battery maker has also been building a solid pipeline of business in the transportation sector.

Last October it teamed up with bus maker Van Hool and transportation specialist Bombardier to launch what it called a ‘full-electric’ bus, which included an integrated electric drive train and charging systems as well as battery power.

And in June Leclanché was picked to provide the batteries for the world’s largest battery-operated ferry, which is due to enter service next year, in Denmark.

Acquisitions to strengthen business lines

The ferry, built by Danish shipyard Søby, will carry 4MW and 4.2MWh of battery capacity.

In the last year, Leclanché has made significant acquisitions to strengthen its stationary storage and transportation business lines.

In August, for example, it handed over a million shares and €2m in cash for the module and management system assets of industrial manufacturer ads-tec.

Shortly before, in July, it bought Trineuron, a lithium-ion battery system developer for the transportation sector, off the Belgian storage manufacturer Emrol, in a share deal.

Leclanché was forced to raise CHF6.9m (about €6.3m) in December to complete the ads-tec acquisition, but this is still a far cry from the company’s position four years ago.

Production running at full tilt

Its production facilities are now running at full tilt and “in our manufacturing plant in Germany we introduced a second chemistry,” Boppe said. “We are now able to produce two types of lithium-ion cells, for power and energy applications.”

At the end of last month, Leclanché got shareholders to sign off an increase in share capital to bolster further growth in 2016.

“The management presented to our shareholders major achievements completed in 2015 and shared very promising market outlook [sic],” said chairman Jim Atack in a press note.

This year will be all about not losing the momentum the company has achieved in 2015, Boppe told Energy Storage Report. “We’ve announced Canada,” he said. “Now it’s a matter of delivering that capacity.”

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