CEO Stories: From Promise to Proof

This Is Capitalism: Dr. Christina Lampe-Onnerud

RH: This is Capitalism. I’m Ray Hoffman. Of Dr. Christina Lampe-Onnerud, you might say there is electricity in her blood. Long before her reputation was established as one of the world’s foremost experts in power storage, her father Wolfgang Lampe was world renowned for building power stations and power transmission lines.

After earning her doctorate in her native Sweden, Cristina came to the U.S. and started her first company, Boston Power, in 2006. Then in 2012, she and three of her former colleagues, one of whom is her husband, started Cadenza Innovation. It’s a Connecticut- based firm which has developed a fire-proof, lithium ion battery that can be snapped together like Legos to store virtually infinite amounts of power, and cheaply so.

In 2018, this Cadenza Innovation story turned into a fast-moving one, which is why, after doing one long interview with Christina Lampe-Onnerud, I had to go back for a major update just six months later.

Anything happen since then, he says, with a wink and a smile?

CLO: [Laughs.] Yes, a lot has happened. We have gone from being a technical promise through the demonstration at Fiat Chrysler earlier this year into having initiated the program with New York State and NYPA, the New York Power Authorities, the biggest public utility in the United States, and it’s entirely clean power, coming into New York City. We are basically constructing a very much public demonstration of what the Cadenza technology can do for the United States and with the specifics of the New York grid, coming into the city.

That’s going live in the summer and the stakeholders have all started their work, so we are heads down in that program. So that’s one big win.

RH: Let’s double back about the Fiat Chrysler demonstration project…

CLO: Oh yeah.

RH: Which is really important.
CLO: Yeah, so the Fiat Chrysler demonstration that comes from the U.S. Department of Energy, who recognized the Cadenza opportunity associated with the lowest-cost, high safety, and highest energy density per volume. And Fiat Chrysler then signed up to be the champion.

The demonstration just happened in Q1, 2018, which was on the heels of an over three-year long program again with lots of testing and validation, third-party test houses, lots of component testing, validation, of course under the supervision of Fiat Chrysler to then be incorporated into a Fiat 500 E. And the test ran in Los Angeles.

RH: And the results?
CLO: Well, it worked so that’s the bottom line. We were able to demonstrate that the Cadenza cell could go in as a retrofit. We were able to demonstrate the idea that we have Lego blocks that you just stack in. We were able to demonstrate the goals that were set out very, very aggressively by DOE. And when they did so initially the industry said, “whoa, we can’t do it.” But we did meet them and that included not only the range expectation but the safety and the cost targets, which is so incredibly interesting because we are using not forward pricing, we are using supply chain as it sits today.

RH: Yeah, that’s remarkable. I want to take you through your timeline from the last six months since I was last here. As I know it from press releases and often looking at your website, because things keep changing…
CLO: Yeah [laughs], thank you.

RH: …To see what this company has been up to. Now in June you were given funding by New York State to do this clean-energy storage demonstration project in White Plains, New York. How did this all happen?
CLO: So we were invited actually almost a year and a half ago by the state of New York through their energy agency [Unintelligible] to be part of an evaluation where they looked at multiple ways to meet energy efficiency. New York State, like most of the U.S. member states, of course battles everyday how should we provide energy to our citizens.

And one of the ways is at this point, this juncture of technology, old and new, which is very obvious, where you can either continue to invest in repairs, upgrades, into the old paradigm, which is centralized power plants, and then they go through separate distribution and transmission organizations to separate a little bit of the power in the buying before it gets to deployment. In the future we see more of an organization where you have multiple types of energy generation paired with storage.

And it’s almost like the way the Internet works, or a block chain if you like, where you trade energy where it’s more efficient. And the battery and energy storage is critical for that arbitrage. Of course it comes with the added benefit that it takes down climate change threats very, very significantly, very quickly. And the conclusion of New York was to look at policy incentives or technology. And we of course were contacted in the technology category and scored very, very highly so it generated an invitation to do a demonstration.

RH: And this demonstration will power what in downtown White Plains?
CLO: Yes, it’s going to be hooked up to NYPA, so the New York Power Authority’s headquarters in White Plains. It’s going be in a public space next to a bus stop, actually, and I’m thrilled with that because it also offers public, the general public, to see what that looks like.

And if we do this all the way it will also generate streaming data where you can see peak shifting in real time. And if we are allowed to put a little bit of help interpreting that data, you will see also the peak (Unintelligible), so the downgrade of CO2, (Unintelligible), all of climate gasses actually and what the effect actually is. And then you can go and see the installation. And of course it’s very small compared to everything that we need but it’s real and it’s going to be in real time.

RH: How large will it be?
CLO: The state has basically designated a pad just outside the building. You can think of it as a container that you take to your house when you want to throw out stuff roughly. So in that container you have basically air conditioning, you have all of the handoff between the battery and the grid and of course the battery.

Funny that the battery is so compact it only takes up a fraction and actually it’s funny, you’ll enjoy this, when we got the project I said, “oh please, can we just have the battery in the open because it’s so tiny and it would inspire people to say oh I could fit this in my basement or oh I could fit this in my commercial building, whatever.” And the state employees basically said “well maybe not because it will probably be stolen.” [Laughter.] So we will have…

RH: You do have to think about those things.
CLO: I know, I know.

RH: Maybe like a thick plexiglass frame or something?
CLO: Yeah, exactly.

RH: You could have something like that.
CLO: Yeah, maybe the next generation. This one is going to be very…You can come in and visit but it’s going be open on certain hours and with people there.

RH: And this is a one-year demonstration?
CLO: It will be at least three months and since most of the testing and qualification happens prior to installation, there is an opportunity. It depends a little bit on how the wind blows, I think, but we are quite hopefully that NYPA will pick up more units very quickly and actually deploy the technology.

RH: Now you’ve received funding for projects or you’ve received funding in Massachusetts and Connecticut and now New York. What about the other 47 states?
CLO: Well with 30 people it’s not that simple [laughs] to answer even the phone. So we have enjoyed an enormous amount of support actually from the ecosystem in the battery industry and I think we serve as a demonstration that new technology is not dangerous. You can trust it. We put our careers and our lives behind it.

And I think that we will, through these demonstrations that are rather public, the Fiat Chrysler one, this one in New York, we are able to move the needle a little bit into acceptance. And the fact that the price is lower will of course lower the barrier for adoption as well. So we are interested in playing in multiple states but we are at the bottom of all we’re engineers, we want to execute, we want to make sure it’s right when it happens and we are working very, very hard to make sure every one of those are successful.

RH: And of course on the issue of new technology not being dangerous, your new technology is actually less dangerous.
CLO: Yes! In fact we have, to the success points that you raised during the six months, we have also engaged with the Department of Defense who have gone through and done what they typically do to any new technologies, which is trying to blow it up. And the standard tests that they normally see, what is in the industry referred to as thermal (Unintelligible), did not happen with the Cadenza cells. And it garnered quite a bit of interest and a lot of curiosity now. So I think that also is a wonderful way to be very proud of our country.

So the DOE, the Department of Energy found the company and qualified it and now DOD is taking over and getting really in-depth testing on the system. And the results are pretty remarkable. It’s just very cool.

They tried to force for example…they drive a nail into the battery, simulating a crash or something coming in and penetrating the battery so you have a lovely way to get a short very quickly. And our system just says “okay, that’s not good, I’m not playing anymore,” and it just shuts down itself. The battery does that. You don’t need electronics, it’s on the inside of the battery, which to me is probably our biggest contribution technically. And it basically allows for energy in a box because it’s self-contained that way.

RH: And you knew all this. I mean the DOD did not have to tell you anything that you didn’t already know because you came up with the jellyroll technology of encasing the cells and everything, right?
CLO: Yeah. I mean DOD will tell us a lot actually. All these tests, we learn from them all the time.

RH: Let me stop you right there. Is there something that you did learn that you didn’t know about your technology?
CLO: Not at the DOD test because this is the initial…What I do learn from this is how incredibly jaded the testing community is. Now it’s a fun story but they make the calls before they make the tests as a courtesy–“we’re going to blow up your cell.” And the engineer that took the call said “thank you for notifying us but I don’t think it will blow up.”

So we learned from that of course the experience prior, which is nice because it rhymes a little bit with our experience and that means we are addressing a real problem. And since we are now able to get to people who carry the data forward our hope is only that we get critical mass so that data carries forward into the markets.

RH: And you knew when you started this company in 2012 that you had a fireproof, non-flammable battery, right?
CLO: I didn’t know exactly how you would put it together, it takes time, but I was very committed to this tripod of safety, cost, and performance. And, as you know, nobody thought it was possible. And here it is and it is not just me. It’s of course all the team members and of course the partners. And now everybody who touches this technology will drive some insight to it. So we get a lot of credit for the technical innovation but ultimately maybe this is more of a business innovation that you put a safe place or a very collaborative ecosystem together where everybody is trying to get a better-performing, lower-cost solution on the table.

RH: So let’s go back to the timeline now. A month ago you were in China, in Shenzhen, announcing a battery partnership with the Shenzhen BAL Power Battery Company, introducing your super-cell battery platform into China. And you’re grinning very widely about that.
CLO: Yes. Because this is ultimately the biggest accolade you can get. We were able to get one of the top 10 lithium ion manufacturers in the world to A, acknowledge that this is a big deal and to pay money for it. So we are officially in a licensing deal with BAK, it stands for Battery King, as you know, some of your European colleagues have referred to me as the Battery Queen so of course the press had a lot of fun with that in China. [Laughs.]

RH: Battery King meets Battery Queen.
CLO: Yeah, exactly. [Laughs.] And then you know we had to kind of “yeah, yeah but it’s really a product.” But the wonderful thing with BAK is that they are already today the biggest supplier of jellyrolls in China. Very, very skilled. They have an unbelievable story of their own where they have been the underdog and they have come into multiple plays, they are on the approved list from the Chinese government and just a lot of credibility inside.

RH: And for people who haven’t heard the previous interview, can you explain the jellyroll technology?
CLO: Of course. So most of the lithium ion technology today, everything is made from a cathode separator and an anode who are basically cast together. You can think of cassette tapes, they are either just laid flat in a laminar structure or wound up in what is called a jellyroll. And that roll has…you have a lot of people who can manufacture it today and you can source that jellyroll, which is the cheapest way to put together a lithium ion battery, from multiple suppliers.

And you could basically allow lithium ion to be made locally with this Cadenza innovation where you just do final assembly. So that can be in Connecticut or Arkansas or anywhere, actually, where you are close to point of use. So that’s a major breakthrough.

And the fact that BAK was so skilled at making these cylindrical jellyrolls of course makes them less skeptical to this invention. And they themselves have had a remarkable run of going from a startup company into a major player. Their forecast…they are today No. 6 or 7 in the world. And by 2020 they are forecasted to be No. 4.

RH: Let’s go back to China for something else. The day after you announced your battery deal the company, Cadenza Innovation, was honored by the World Economic Forum as a 2018 Technology Pioneer.
CLO: In fact that’s true, Ray, and that was pretty fun. So only in China do you unveil a strategic relationship like this on a Sunday at 2 p.m, by the way, that was the signing ceremony, and the wire went live at 4 a.m. Sunday morning in the U.S., 4 p.m. in China, and on Monday we were recognized by the World Economic Forum in Tianjin, China.

RH: And it’s worth a mention that the same team that founded Cadenza in 2012 was honored by the World Economic Forum as a 2010 technology pioneer.
CLO: Yeah for a different technology. The four of us recognized last week. Actually we have been working together now for 20 years.

RH: What was that different technology?
CLO: So our previous company, Boston Power, was basically a much smaller cell that came into the portable power arena at a time where the industry had a lot of safety issues. And we were working together at Arthur D. Little at the time, which was retained by the U.S. government Consumer Safety Commission, CPSC, to be the independent advisor on how to treat these exploding batteries. And you may or may not know but in 2004 there were 20 million lithium ion cells in recall in the United States.

RH: It was a really terrible situation.
CLO: Really bad actually. And Boston Power stepped up their game. We cleaned up some of the safety idiosyncrasies, we also pioneered cleaning up some of the greenhouse gases and we were a green company before it was cool to be green, potentially. And we fueled and fast-forwarded the paradigm where the battery had to last the life of the laptop. And that is actually the paradigm today.

We also basically pioneered the paradigm of fast charging. Our battery was capable of the longest run time but also fast charging: 80 percent capacity in 30 minutes, which in 2005 was unheard of. So we knew that a little group, and we always started with 10 people and we grew it out of my house or my garage or whatever, that sort of thing, and then it becomes a player. So with a little bit of confidence and then a lot of friends…you know?

RH: And what does this award mean to you?
CLO: So the World Economic Forum Technology Pioneer Award is of course a recognition of both global industry, there is a lot of Fortune 50 influence in the forum, there are also heads of states and you basically get pulled through by some of these forces. There are a lot of entrepreneurs, I was previously a social entrepreneur recognized of course as a technology pioneer. So they all weigh in on what are the most important discoveries.

And to be one of the tech pioneers you get invited basically to share a story or a vision. So you become part of the content for the World Economic Forum agenda. And as a two-time winner I also got invited and hence accepted to become a co-chair for the future of energy. So I helped drive the discussion.

RH: Now back to what you’ve been up to over the last six months because we’re still not through with that. There was something else: Two weeks ago you were in Nice addressing the International Energy and Power Supply Conference, also known as Batteries 2018, talking about the role of energy storage in the new economy paradigm, that’s how it’s listed. Could you give me the executive summary of what you said?
CLO: Yeah. So recognizing the macro trends where we are right now. One is the rate of change. So we have more engineers and scientists alive today than in the entire history of the human race. That’s remarkable.

RH: Wow.
CLO: So if you feel that you cannot even keep up with your iPhone, you are right, because we go through what was previously called a technology shift now every 18 months. Eighteen months. So quick flashback. So the Technology Pioneer 2010, Facebook was just launched.

RH: Think about that.
CLO: Think about that. We operated in the paradigm where cell phones were something you just used for calls. My kids are barely calling each other. So it’s just remarkable. So the macro trend around change.

The second of course is climate change. So having had the privilege of working on behalf of Club de Madrid and United Nations for the COP 15 in 2009-’11 time frame, and working under Condoleezza Rice and the president of Europe in the same time frame, to try to facilitate a data-driven global agenda, we clearly failed but we established through that work, and frankly mostly based on the Stern Report early 2000, a model that says if we hit two degrees above industrialized levels, earth temperature, we have problems.

We were very clear that it was a model and that we didn’t know at the time if it was 1.5 or 2.5. The Paris Accord is all centered on 2. And we have now reached 1.5 and frankly we are seeing effects of onset. So it’s a model, it is exceptionally urgent and that’s frankly the call to action for a conference like that because a lot of the solutions providers sit there. So it’s a privilege to give a keynote, to set the tone for a conference and then of course to supply one little piece of the puzzle for the future through this Cadenza technology.

RH: Looking back at that speech what do you think you told the people in attendance that they might not have readily accepted before?
CLO: I think there is hesitation around global collaboration. I think that you have to be rather stubborn that you want to keep the door open when you get bombarded every morning with negative news on whatever. Like we are not exactly opening the joy paper in the morning. [Laughs.] There’s just crisis after crisis. And it takes a lot to remain, I think, part of the positive force for the future. Open-door global markets is a wonderful tool and we need to really work together to preserve it and frankly use it now.

RH: I’d like to take you back to the start of your first company, Boston Power, 2006. What have you learned about the nature of capitalism, the risk and reward of entrepreneurism that you might not have realized when you first became an entrepreneur?
CLO: Absolutely. I thought I was blissfully ignorant how hard it would be to raise capital. So it turned out to be not so hard because I had no fear. So I would go and approach investors and say “here is my idea” and they would say “here is our process” and I would just, not arrogantly, I just said “no. I said, I’m really sorry but we don’t have time for that process. Here is the deal, if you’re interested we would love to have your money” because the money was so readily available. And we raised money every year and I raised almost $360 million. And the company then had a chance to grow and all that stuff.

With Cadenza I am now more knowledgeable and in fact invented a new security that aligns for investors and the management team for a long play. So in the theme I am determined to at least try to stay courageous for global markets. I am trying to stay very true to doing good and doing well at the same time, and there is no artificial driver for the investor to get out.

So you cannot basically think that we are going to flip the company in two years, that’s not the intent. And if we would sell it, it would be for a remarkable opportunity but it’s not the strategy. The strategy is actually to deploy great technology into a vacuum that is huge and with that we will do a ton of good and we will make a lot of money actually in that as well.

RH: And you said the important phrase: long term.
CLO: Yeah. So it’s very difficult to do transformation within a year or two. And unfortunately most policies are four years or less, maybe two years. It’s also too short. So we have to basically commit to something that is over 10 years. And 10 years is very fast for technology shifts.

RH: And you’ve gotten investors to sign on right from the very beginning on that.
CLO: We did. And so we are backed by…so that was another maybe courageous, maybe innocent or stupid idea but it seems to be working quite nicely right now. We went to angels only. So you can’t divorce your money. It’s your money, you put it into this company, and I will be very clear, as will this management team be, to say we think you actually make 10 or 20 X your investment but it will take 10 years. If you need liquidity before 10 years it’s possible we will be able to provide it in Year 6 but it ain’t Year 1. [Laughs.]

RH: All of these developments, traveling around the world. . ..I think you were in Australia as well in the summer, besides China and besides going to the south of France, how do you have time for your first love, music?
CLO: Yeah. So I could spend all my time in music because I love it so much. But I love equally much this exciting game of trying to make a difference. So I am very lucky, the music that I dedicate almost all my time to right now sits in Silken Sounds,, a Connecticut-based, all-female a cappella chorus that does jazz and all kinds of cool music spanning from almost all audiences.

We are celebrating a 20-year anniversary this year so there will be a massive show in North Haven on December 9th with an 8-piece jazz band, 40 Silken Sounds singers, and we’re also inviting the North Haven High School girls to be on stage with us. So with that, there are a lot of leaders, so if I’m away one Tuesday when we rehearse, that’s okay. [Laughs.]

RH: So rehearsals have been going on throughout the summer?
CLO: Yes. We have very strong section leaders and the opportunity to flip the repertoire is what drives a chorus like that. So, pretty engaged membership as well, very gifted singers.

RH: So you’re approaching this group with a bit of CEO’s mindset?
CLO: Yeah, empowerment is the thing. Set the agenda and empower, absolutely.

RH: Well I’ll be there and if you need an MC I’m available that night.
CLO: Oh fantastic, we’ll take that on. [Laughter.] That’s great.

RH: All continued success, Christina.
CLO: Thank you, Ray.