EnerDel, ITOCHU Announce Second Smart Grid Battery Storage Project

INDIANAPOLIS, Jan. 19 /PRNewswire-FirstCall/ -- American lithium-ion battery producer EnerDel announced today that it is partnering with the real estate arm of Japan's industrial trading giant, ITOCHU Corporation, to develop and produce the advanced battery systems for a residential smart grid energy storage project to be installed in a major apartment building near Tokyo. The system will provide a critical link between renewable energy, high-speed charging for electric cars and the local utility grid.  

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It is the second such venture between the two companies, following the announcement last month that they are teaming up with Mazda Motor Corporation on a similar system using vehicles converted to electric drive using a platform designed and built by EnerDel and its partner THINK, which will be stationed at a Family Mart convenience store.

"These are the first projects anywhere in the world to bring all the critical elements of a smart, sustainable network that connects renewable energy and transportation in the places where people live and work," said Naoki Ota, Chief Operating Officer for EnerDel. "It will also demonstrate that EnerDel's lithium-ion battery systems are equally capable, whether it is in a car or a stationary grid application. Our longstanding partnership with ITOCHU has provided the means to set another exciting industry precedent."

We are delighted to be partnering again with ITOCHU to develop this industry leading project," added Charles Gassenheimer, Chairman and CEO of EnerDel parent company, Ener1. "We are pushing hard to drive pioneering initiatives like this to develop a secondary market for automotive grade lithium-ion batteries. I believe this secondary market will be a key enabler to reducing battery costs for automotive buyers and accelerating the growth of the market for electric powered vehicles."  

Sales in the five-story building begin this month, with the first move-ins scheduled for early 2011. Going forward, ITOCHU Property Development, Ltd. aims to introduce the 'secondary use' system to twenty percent of its new apartment buildings. Secondary use implies a battery that has been redeployed from its primary application, normally an electric vehicle, with significant storage capacity remaining. The residual life in that battery can then be sold into a secondary market application, such as community or residential grid storage. Importantly, a viable battery aftermarket could lower upfront costs for automotive buyers given that the cost of the battery can be spread over its useful life. Analysts predict that over time this secondary market opportunity for lithium-ion batteries could be two to three times the size of the automotive market opportunity.

The two projects will also gather a continuous stream of long-term performance data on new, stationary battery systems in real time, showcasing system longevity and demonstrating the valuable second life on the grid once battery packs have cycled through their automotive lifecycle, where operating parameters are much more taxing.

Today's announcement underscores the significant strides EnerDel has made in the grid storage market over the last few months. In November, EnerDel was selected to supply the batteries that will power a DOE-funded smart grid energy storage project by Oregon's Portland General Electric (PGE) that will help manage peak demand and smooth the variations in power from renewable sources like wind and solar.

The announced ITOCHU and EnerDel partnered projects signify important steps forward in the growing commercial and strategic relationship between the two companies. ITOCHU is EnerDel's official sales and marketing partner in Japan, and has been a significant investor in parent company Ener1, Inc. since 2003. In July, EnerDel and ITOCHU joined with longtime EnerDel customer THINK to convert electric drive delivery trucks for Japan's postal service.

ITOCHU is a $100 billion conglomerate with deep ties to the automotive, utility and renewable energy industries. It is the largest global reseller of manufacturing equipment for lithium-ion battery production, providing EnerDel with unique access to specialized equipment and materials.

In addition to THINK and Mazda, EnerDel has active relationships underway with automakers Volvo and Nissan. Their battery packs are also being tested by the U.S. Department of Defense in a prototype hybrid Humvee.

ABOUT ENER1

Ener1 develops and manufactures compact, high performance lithium-ion batteries to power the next generation of hybrid, plug-in hybrid and pure electric vehicles. The publicly traded company (NASDAQ: HEV) is led by an experienced team of engineers and energy system experts at its EnerDel subsidiary located in Indiana. In addition to the automobile market, applications for Ener1 lithium-ion battery technology include the military, grid storage and other growing markets. Ener1 also develops commercial fuel cell products through its EnerFuel subsidiary and nanotechnology- based materials and manufacturing processes for batteries and other applications through its NanoEner subsidiary.

SAFE HARBOR STATEMENT

Certain statements made in this press release constitute forward-looking statements that are based on management's expectations, estimates, projections and assumptions. Words such as "expects," "anticipates," "plans," "believes," "scheduled," "estimates" and variations of these words and similar expressions are intended to identify forward-looking statements. Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results and trends may differ materially.

SOURCE Ener1