NMTC Goes Nano

By: David J. Oser, Craft3 - Jul 02, 2012
Source: Reznick Group

Lighter, longer-lasting batteries are the bright shining path to energy independence. Today's lead acid batteries lack sufficient power to generate the cycles of charge and discharge hybrid vehicles require. Nor do lead acid batteries operate at a cheap enough cost per unit of energy stored for large industrial applications.

The key to improved performance, not only in lead acid batteries but in other energy storage devices such as ultracapacitors and lithium ion batteries, is the use of innovative materials.  Among the most innovative are extremely pure, precisely tailored carbon additives.  These additives can dramatically increase batteries' power, charge acceptance and cycle life.

Founded in 2003, EnerG2 is developing a patented Carbon Technology Platform to enable large-scale production of nano-scale carbon materials that surpass the limitations of the naturally occurring carbons traditionally used in energy storage applications.   In August 2009, the U.S. Department of Energy awarded the company a $21.3 million grant to construct a commercial-scale production facility.  The factory will manufacture the company's proprietary electrode carbon for use in ultracapacitors for electric drive vehicle energy storage systems.  Construction on the 74,000-square-foot project was completed early this year.

EnerG2's dilemma was how to leverage the grant into sufficient funding for its state-of-the-art manufacturing plant.  Raising the needed capital could have taken years; it might not have been raised at all.  The solution was a $32 million NMTC investment with equity provided by JPMorgan Chase.  The Bank's tax credit provided an $11 million subsidy (less fees) to EnerG2.  Minneapolis-based Community Reinvestment Fund provided an allocation of $14 million, and Craft3 provided $18 million.  

The EnerG2 factory was a disused warehouse purchased from Oregon Freeze Dry, a manufacturer of freeze-dried foods, chemicals, pharmaceuticals and biological materials. Oregon Freeze Dry, which still owns 35 acres and three other manufacturing facilities surrounding the EnerG2 building, will design and install the freeze-drying systems in the EnerG2 plant.  Its freeze-dry technology is the same as that used in EnerG2's substrate manufacturing process.  

The facility financed for EnerG2 is located in Albany, Oregon, a rural community 70 miles south of Portland.  This area is highly distressed.  Its economic base formerly relied on timber and manufacturing, both of which have declined sharply in recent decades.  When the NMTC investment was proposed, the unemployment rate for Linn County, of which Albany is the county seat, was 13.5%.  The median family income of the surrounding census tract is 67.2% of the statewide median family income.  The build-out created 94 construction-related jobs.  EnerG2 employs 35 full-time workers, including highly skilled engineering positions, office management, production-line shift leaders and production operators. 

Craft3 is a Community Development Financial Institution with offices in Oregon and Washington State.  Its mission is strengthening economic, ecological and family resilience by providing loans and assistance to entrepreneurs, nonprofits and others to benefit urban and rural communities.  To date, Craft3 has received and used $83 million of NMTC allocations.