10 Companies to Watch for out of ARPA-E

Early-stage, high-risk, government-supported and potentially game changing — those are a few things that all of the companies I’ve spoken with today have in common. I’m at the first day of the annual summit for the Department of Energy’s ARPA-E program, where startups, investors and students have gathered to hold discussions about the future of clean power, listen to well-known lawmakers and green celebrities give speeches, and often, meet with potential investors.

From batteries to grid storage to biofuels to solar and wind technology, the ARPA-E program, which was modeled after the famous DARPA program that led to the Internet, has invested some $400 million in 121 projects. While Obama has called for another $550 million for APRA-E out of his 2012 fiscal year budget, who knows if the program will get that funding after the budget standoff resides (expect to hear a lot of lamenting over budget woes from the ARPA-E speakers on Tuesday).

Another interesting thing to note is that a lot of the ARPA-E award winners are opting to stay in stealth mode. Many of the companies that have received awards aren’t here at the event and refused to provide more information to me about their projects. So, whether firms are out there making noise, or keeping their heads down, here are 10 greentech projects that sound really innovative to me. (Note, I got a little excited about the battery companies, given the lack of innovation to date in this space in the U.S.):

1. General Compression. The five-year-old company makes really efficient compressed air energy storage technology. Compressed air tech involves taking excess energy from a power plant or renewable energy and using it to run air compressors, which pump air into an underground cave where it’s stored under pressure. When the air is released, it powers a turbine, creating electricity. General Compression says its technology doesn’t need to use natural gas and also can store power at a 70-75 percent round-trip efficiency. Because the units can respond in less than 30 seconds and cycle between compression and expansion quickly, they could be used to back up wind farm power output, which is the company’s main focus. General Compression raised a $17 million Series A round of funding and $9.9 million back in 2007. Investors include US Renewables Group and Duke Energy (s duk), a utility with a lot of wind power to back up.

2. PolyPlus. Decade-old battery company PolyPlus is the poster child for a high risk, potentially game-changing ARPA-E target. The company is using the ARPA-E grant to build rechargeable lithium-air battery technology that it says can have an energy density of 800 wh/kg. The secret sauce is in encapsulating the lithium so that it’s a stable system. Developing that technology though into commercialization will take years (and already has taken years). In the meantime, the company has some earlier technologies it will get to market first. More details on this company coming in another post.

3. Transphorm. Transphorm emerged from stealth last week at Google Venture’s (s goog) headquarters, touting an energy-efficient power conversion module for power-hungry devices from servers to electric car batteries to solar panels, and an enviable $38 million in venture capital from Kleiner Perkins, Google Ventures, Foundation Capital, and Lux Capital. Founded in 2007, Transphorm uses the semiconductor material gallium nitride (as opposed to silicon), which is the same material used in LED lighting.

4. 24M. 24M, which stands for the material concentration 24 molar, was spun out of lithium-ion battery company A123 Systems (s aone) in mid-2010, and has plans to work on advanced non-traditional, lithium-ion based storage technology. 24M raised $10 million in Series A funding from Charles River Ventures and North Bridge Venture Partners, and won a $6 million grant from ARPA-E. The company has plans to work on a system for vehicles and grid storage that combine aspects of lithium-ion batteries and flow battery technology. 24M’s work is being led by Yet-Ming Chiang, a professor at MIT and founder of A123 Systems, and Chiang tells MIT Tech Review that he’s using a “semisolid” energy storage material, compared to the traditional use of solid materials. A123 said it expects to see 24M’s low-cost energy storage technology deployed toward the “latter part of decade.”

5. Pellion. The Pellion folks didn’t attend the ARPA-E summit and tell me they’re still in stealth mode. But the company did secure an investment from Vinod Khosla, and Khosla’s website describes Pellion’s goal as one day launching the world’s first commercial magnesium battery, which could be developed with better performance and cost than current lithium-ion batteries. According to the ARPA-E site, Pellion was spun out of MIT, and “will leverage high throughput computational materials design, coupled with accelerated materials synthesis and electrolyte optimization to identify new high-energy-density magnesium cathode materials and compatible electrolyte chemistries.”

6. Quantum Scape. Quantum Scape is a startup that licensed technology from Stanford University to build technology from something called an all-electron battery. The ARPA-E site describes it as “a completely new class of electrical energy storage devices for electric vehicles that has the potential to provide ultra-high energy and power densities, while enabling extremely high cycle life.” Quantum Scape is still in stealth mode.

7. Recapping. Another Khosla-backed company that is looking to stay in stealth is Recapping. According to the ARPA-E, Recapping is working with Pennsylvania State University to build a high energy density capacitor. According to filings, Recapping raised $500,000 from Khosla Ventures back in 2008. Capacitors are energy storage devices that can charge and discharge at high speeds.

8. Cree. OK, it’s not a startup, but LED chip company Cree is using an ARPA-E grant to build smart grid technology. Yep. Cree is working on an efficient transformer-less intelligent power substation that can provide consistent electrical energy from clean power and which uses its chips and power switches.

9. Foro Energy. The company is developing a thermal-chemical drilling process using lasers and fiber optic cables, which could be sold to geothermal power plant drillers. The traditional geothermal drilling tech takes time and wears out the drill quickly. The company is backed by VCs, North Bridge Venture Partners, and CMEA Capital.

10. Phononic. Phononic Devices landed a $10 million Series B round from venture capital investors Venrock and Oak Investment Partners last week for its thermoelectric devices — semiconductors that turn heat into electricity, or vice versa. Phononic is devising high-efficiency systems for both thermoelectric cooling — using electricity to remove heat — and thermoelectric generation that turns waste heat into useful power.

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