Prudent Energy stores up $22m in new funding

A Chinese manufacturer of large-capacity flow batteries has this week secured a third round of venture capital funding to the tune of $22m (£14.5m), as it looks to boost its US manufacturing capability and strengthen its foothold in the North American market.

Beijing-based Prudent Energy provides a form of large-scale energy storage systems, which many observers regard as a potentially game-changing component of renewable energy rollouts.

Experts predict that the development of cost-effective, large-scale batteries would remove one of the main arguments against renewable technologies, by allowing grid operators to store energy produced by wind turbines and solar panels when weather conditions are favourable for use when the power is needed.

The majority of Prudent's recent round of funding came from Northern Light Venture Capital, a Chinese VC firm with a track record in clean technology investments including new energy, storage and power batteries, energy saving, water treatment and waste disposal.

Other new investors in the oversubscribed round include Sequoia Capital China, while existing investors Draper Fisher Jurvetson and DT Capital Partners also participated.

The company signalled that the new financing will fuel Prudent's battery manufacturing operations, which relocated From Vancouver to Beijing last year, as well as drive the sales growth in the US and beyond.

Prudent chief executive Johnson Chiang said the funding would also help the company reduce the cost of its technology. "Already this year we have delivered on nearly 20 of our kW class systems at ever decreasing costs," he said. "This capital will strengthen our development activities and presence in North America and allow us to pursue a global sales strategy that will include new initiatives in both China and the US."

Flow batteries are currently used to provide backup power for essential infrastructure and Prudent's largest customers are telecommunications and utility companies.

The flow batteries were designed by a Canadian start-up, VRB Power Systems, which was acquired by Prudent in January 2009 for an undisclosed sum. The company said the technology allows customers to store energy safely at room temperature with virtually zero emissions and then release energy on demand.