The U.S. Made A Breakthrough Battery Discovery — Then Gave The Technology To China
BY LAURA SULLIVAN and COURTNEY FLATT
When a group of engineers and researchers gathered in a warehouse in Mukilteo, Wash., 10 years ago, they knew they were onto something big. They scrounged up tables and chairs, cleared out space in the parking lot for experiments and got to work.
They were building a battery — a vanadium redox flow battery — based on a design created by two dozen U.S. scientists at a government lab. The batteries were about the size of a refrigerator, held enough energy to power a house, and could be used for decades. The engineers pictured people plunking them down next to their air conditioners, attaching solar panels to them, and everyone living happily ever after off the grid.
“It was beyond promise,” said Chris Howard, one of the engineers who worked there for a U.S. company called UniEnergy. “We were seeing it functioning as designed, as expected.”
But that’s not what happened. Instead of the batteries becoming the next great American success story, the warehouse is now shuttered and empty. All the employees who worked there were laid off. And more than 5,200 miles away, a Chinese company is hard at work making the batteries in Dalian, China.
The Chinese company didn’t steal this technology. It was given to them — by the U.S. Department of Energy. First in 2017, as part of a sublicense, and later, in 2021, as part of a license transfer. An investigation by NPR and the Northwest News Network found the federal agency allowed the technology and jobs to move overseas, violating its own licensing rules while failing to intervene on behalf of U.S. workers in multiple instances.
Now, China has forged ahead, investing millions into the cutting-edge green technology that was supposed to help keep the U.S. and its economy out front.
Department of Energy officials declined NPR’s request for an interview to explain how the technology that cost U.S. taxpayers millions of dollars ended up in China. After NPR sent department officials written questions outlining the timeline of events, the federal agency terminated the license with the Chinese company, Dalian Rongke Power Co. Ltd.
“DOE takes America’s manufacturing obligations within its contracts extremely seriously,” the department said in a written statement. “If DOE determines that a contractor who owns a DOE-funded patent or downstream licensee is in violation of its U.S. manufacturing obligations, DOE will explore all legal remedies.”
Several U.S. companies have tried to get a license to make the batteries
The department is now conducting an internal review of the licensing of vanadium battery technology and whether this license — and others — have violated U.S. manufacturing requirements, the statement said.
Forever Energy, a Bellevue, Wash., based company, is one of several U.S. companies that have been trying to get a license from the Department of Energy to make the batteries. Joanne Skievaski, Forever Energy’s chief financial officer, has been trying to get hold of a license for more than a year and called the department’s decision to allow foreign manufacturing “mind boggling.”
“This is technology made from taxpayer dollars,” Skievaski said. “It was invented in a national lab. (Now) it’s deployed in China, and it’s held in China. To say it’s frustrating is an understatement.”
The idea for this vanadium redox battery began in the basement of a government lab, three hours southwest of Seattle, called Pacific Northwest National Laboratory. It was 2006, and more than two dozen scientists began to suspect that a special mix of acid and electrolyte could hold unusual amounts of energy without degrading. They turned out to be right.
It took six years and more than 15 million taxpayer dollars for the scientists to uncover what they believed was the perfect vanadium battery recipe. Others had made similar batteries with vanadium, but this mix was twice as powerful and did not appear to degrade the way cellphone batteries or even car batteries do. The researchers found the batteries capable of charging and recharging for as long as 30 years.
Gary Yang, the lead scientist on the project, said he was excited to see if he could make the batteries outside the lab. The lab encourages scientists to do just that, in an effort to bring critical new technology into the marketplace. The lab and the U.S. government still hold the patents, because U.S. taxpayers paid for the research.
In 2012, Yang applied to the Department of Energy for a license to manufacture and sell the batteries.
The agency issued the license, and Yang launched UniEnergy Technologies. He hired engineers and researchers. But he soon ran into trouble. He said he couldn’t persuade any U.S. investors to come aboard.
“I talked to almost all major investment banks; none of them (wanted to) invest in batteries,” Yang said in an interview, adding that the banks wanted a return on their investments faster than the batteries would turn a profit.
He said a fellow scientist connected him with a Chinese businessman named Yanhui Liu and a company called Dalian Rongke Power Co. Ltd., along with its parent company, and he jumped at the chance to have them invest and even help manufacture the batteries.
At first, UniEnergy Technologies did the bulk of the battery assembly in the warehouse. But over the course of the next few years, more and more of the manufacturing and assembling began to shift to Rongke Power, Chris Howard said. In 2017, Yang formalized the relationship and granted Dalian Rongke Power Co. Ltd. an official sublicense, allowing the company to make the batteries in China.
Any company can choose to manufacture in China. But in this case, the rules are pretty clear. Yang’s original license requires him to sell a certain number of batteries in the U.S., and it says those batteries must be “substantially manufactured” here.
In an interview, Yang acknowledged that he did not do that. UniEnergy Technologies sold a few batteries in the U.S., but not enough to meet its requirements. The ones it did sell, including in one instance to the U.S. Navy, were made in China. But Yang said in all those years, neither the lab nor the department questioned him or raised any issues.
Then in 2019, Howard said, UniEnergy Technologies officials gathered all the engineers in a meeting room. He said supervisors told them they would have to work in China at Rongke Power Co. for four months at a time.
“It was unclear, certainly to myself and other engineers, what the plan was,” said Howard, who now works for Forever Energy.
Yang acknowledges that he wanted his U.S. engineers to work in China. But he says it was because he thought Rongke Power could help teach them critical skills.
Yang was born in China but is a U.S. citizen and got his Ph.D. at the University of Connecticut. He said he wanted to manufacture the entire battery in the U.S., but that the U.S. does not have the supply chain he required. He said China is more advanced when it comes to manufacturing and engineering utility-scale batteries.
“In this field — manufacturing, engineering — China is ahead of the U.S.,” Yang said. “Many wouldn’t believe [it].”
He said he didn’t send the battery and his engineers abroad to help China. He said the engineers in that country were helping his UniEnergy Technologies employees and helping him get his batteries built.
But news reports at the time show the moves were helping China. The Chinese government launched several large demonstration projects and announced millions of dollars in funding for large-scale vanadium batteries.
As battery work took off in China, Yang was facing more financial trouble in the U.S. So he made a decision that would again keep the technology from staying in the U.S.
The EU has strict rules about where companies manufacture products
In 2021, Yang transferred the battery license to a European company based in the Netherlands. The company, Vanadis Power, told NPR it initially planned to continue making the batteries in China and then would set up a factory in Germany, eventually hoping to manufacture in the U.S., said Roelof Platenkamp, the company’s founding partner.
Vanadis Power needed to manufacture batteries in Europe because the European Union has strict rules about where companies manufacture products, Platenkamp said.
“I have to be a European company, certainly a non-Chinese company, in Europe,” Platenkamp said in an interview with NPR.
But the U.S. has these types of rules, too. Any transfer of a U.S. government license requires U.S. government approval so that manufacturing doesn’t move overseas. The U.S. has lost significant jobs in recent years in areas where it first forged ahead, such as solar panels, drones and telecom equipment. Still, when UniEnergy requested approval, it apparently had no trouble getting it.
On July 7, 2021, a top official at UniEnergy Technologies emailed a government manager at the lab where the battery was created. The UniEnergy official said they were making a deal with Vanadis, according to emails reviewed by NPR, and were going to transfer the license to Vanadis.
“We’re working to finalize a deal with Vanadis Power and believe they have the right blend of technical expertise,” the email from UniEnergy Technologies said. “Our transaction with Vanadis is ready to go pending your approval …”
The government manager responded that he needed confirmation before transferring the license and emailed a second employee at UniEnergy. The second employee responded an hour and a half later, and the license was transferred to Vanadis Power.
Whether the manager or anyone else at the lab or Department of Energy thought to check during that hour and a half or thereafter whether Vanadis Power was an American company, or whether it intended to manufacture in the U.S., is unclear. Vanadis’ own website said it planned to make the batteries in China.
In response, department officials said they review each transfer for compliance and said that new rules put in place last summer by the Biden administration will close loopholes and keep more manufacturing here.
But agency officials acknowledged that its reviews often rely on “good faith disclosures” by the companies, which means if companies such as UniEnergy Technologies don’t say anything, the U.S. government may never know.
That’s a problem that has plagued the department for years, according to government investigators.
In 2018, the Government Accountability Office found that the Department of Energy lacked resources to properly monitor its licenses, relied on antiquated computer systems, and didn’t have consistent policies across its labs.
In this case, it was an American company, Forever Energy, that raised concerns about the license with UniEnergy more than a year ago. Joanne Skievaski said she and others from the company repeatedly warned department officials that the UniEnergy license was not in compliance. In emails NPR has reviewed, department officials told them it was.
“How is it that the national lab did not require U.S. manufacturing?” Skievaski asked. “Not only is it a violation of the license, it’s a violation to our country.”
Now that the Department of Energy has revoked the license, Skievaski said she hopes Forever Energy will be able to acquire it or obtain a similar license. The company plans to open a factory in Louisiana next year and begin manufacturing. She bristles at the idea that U.S. engineers aren’t up to the challenge.
“That’s hogwash,” she said. “We are ready to go with this technology.”
Still, she says it will be difficult for any American company at this point to catch up. Industry trade reports currently list Dalian Rongke Power Co. Ltd. as the top manufacturer of vanadium redox flow batteries worldwide. Skievaski also worries about whether China will stop making the batteries once an American company is granted the right to start making them.
That may be unlikely. Chinese news reports say the country is about to bring online one of the largest battery farms the world has ever seen. The reports say the entire farm is made up of vanadium redux flow batteries.
This story is a partnership with NPR’s Station Investigations Team, which supports local investigative journalism, and the Northwest News Network, a collaboration of public radio stations that broadcast in Oregon and Washington state.
ARI SHAPIRO, HOST:
It’s a favorite promise of politicians – keep manufacturing jobs and technology in America. And yet the U.S. keeps losing both to other countries. NPR’s Laura Sullivan and Courtney Flatt from Public Radio’s Northwest News Network investigate one story about a cutting-edge battery and how the U.S. may have lost the next big thing to China, again.
LAURA SULLIVAN, BYLINE: Chris Howard is standing in the rain outside an empty warehouse in Mukilteo, Wash.
CHRIS HOWARD: We used to have 10 shipping containers here; there were empty containers back here; customers and clients coming for visits.
SULLIVAN: Howard used to work in this warehouse with more than a dozen other engineers and researchers for an American company called UniEnergy. Its name is still on the sign out front. What they were doing here was building a battery. Not just any battery – something called a vanadium redox flow battery. It was about the size of a refrigerator. And Howard and the rest of the employees thought it was going to change the world.
HOWARD: It was more than a job. It was a lot of blood, sweat and tears into developing a product that we were really excited about and really proud of.
SULLIVAN: Unlike batteries in cellphones or even cars, these batteries could charge and discharge energy for as long as 30 years. And this particular design seemed to hold enough energy to power a house. Researchers pictured people plunking them down next to their air conditioners, attaching solar panels to them and everyone living happily ever after off the grid.
HOWARD: It was beyond promise. We were seeing it functioning as designed, as expected.
SULLIVAN: They thought the batteries would be the next great American success story. But that’s not what happened. Today, this warehouse is shuttered and empty. All the employees who worked here were laid off. And across the world, a Chinese company is making the batteries in Dalian, China. The Chinese company didn’t steal this technology. It was given to them by the U.S. Department of Energy. An NPR investigation found the department allowed the technology and jobs to move overseas, violating its own licensing rules while failing to intervene on behalf of U.S. workers in multiple instances, according to internal department emails. Now China is forging ahead, investing millions into this cutting-edge green technology that was supposed to help keep the U.S. and its economy out front.
JOANNE SKIEVASKI: It just is mind-boggling.
SULLIVAN: Joanne Skievaski is the vice president of finance for a U.S. company called Forever Energy that has been trying to get a license from the department to make the batteries here for more than a year.
SKIEVASKI: This is technology made from taxpayer dollars. It was invented by a national lab, and it’s deployed in China, and it’s held in China. To say it’s frustrating is an understatement.
SULLIVAN: Department of Energy officials declined NPR’s request for an interview and wouldn’t explain how technology that costs U.S. taxpayers $15 million ended up in China. But after NPR sent department officials detailed questions laying out the timeline of events, officials terminated the license it gave to the Chinese company. In a statement, officials said the department, quote, “takes American manufacturing obligations extremely seriously” and is now, quote, “undertaking an internal review of the licensing of vanadium battery technology.” The story of how this happened begins where the battery was born, three hours southwest of Seattle, in the basement of a government lab called the Pacific Northwest National Laboratory where Courtney went to visit.
COURTNEY FLATT, BYLINE: Safety goggles on.
VINCE SPRENKLE: Yep.
FLATT: Vince Sprenkle works with energy storage here at the lab.
SPRENKLE: We’re going to go down into the redox flow battery lab.
FLATT: It was down here in 2006 that more than two dozen scientists began to suspect that a special mix of acid and electrolyte could hold unusual amounts of energy without degrading. It turned out to be right.
Do you feel kind of, like, on the cutting edge of learning about these batteries?
SPRENKLE: Yeah, we are. I mean, I think we’ve got one of the leading research groups in the country and probably the world in this technology.
FLATT: It’s because of this leading edge that when a success happens, the lab encourages scientists to go out and see if they can make and sell the inventions in the real world. The lab and the U.S. government still hold the patents because American taxpayers paid for the research, but the Department of Energy licenses the patents to scientists and companies willing to take a shot. In this case, it took six years and millions of taxpayer dollars to discover the perfect battery recipe.
Gary Yang was the lead scientist, and he was excited to see if he could make them. In 2012, he left the lab with the license in hand and started UniEnergy Technologies at the warehouse in Mukilteo, Wash.
GARY YANG: I left the lab, full legal process and start UniEnergy Technology in Washington state.
FLATT: He hired engineers and researchers, but then he ran into trouble. He says he couldn’t find any U.S. investors.
YANG: I talked to almost all major investment bank. None of them invest in battery.
FLATT: So he turned to a Chinese businessman and a company called Dalian Rongke Power and its parent company, which agreed to invest and even help manufacture the batteries. And so began a slow shift. First, Chris Howard said, it was just some parts; ultimately, it was the whole process.
HOWARD: Manufacturing was subsequently shifted to our sister company in China, and they would take on that role.
FLATT: In 2017, Yang and UniEnergy formalized the situation and gave Rongke Power an official sublicense, allowing the company to make the batteries.
SULLIVAN: So here’s the thing – companies can choose to manufacture in China, but in this case, Yang’s original license clearly says on Page 6 he has to sell batteries in the United States, and those batteries have to be, quote, “substantially manufactured” here. Yang acknowledges he didn’t do that. He was mostly selling batteries in China. And the batteries he did sell here were largely made in China. But he says in all those years, the department never raised any concerns or intervened. Then in 2019, Chris Howard said he and the other engineers were called to a conference room. Supervisors told them they, too, would have to go to China to work there for four months at a time at Rongke Power.
HOWARD: And that was set to be increased on the premise that there were certain government programs, Chinese government programs, that would support funding efforts. So it was unclear, certainly to myself and some of the other engineers, what the plan was.
SULLIVAN: In a statement, the department said that license monitoring is a priority and that a review of this case is underway. All of which brings us to Yang. Yang was born in China, but he is a U.S. citizen and got his Ph.D. at the University of Connecticut. He says he wanted to manufacture here, but at the time, China was doing more to encourage battery production. And he told us China could do it better.
YANG: In this field – manufacturing, engineering – China ahead of U.S.
SULLIVAN: China is ahead of the U.S.
YANG: Ahead of U.S. Many wouldn’t believe – engineering wise, ahead
SULLIVAN: He says far from helping China, the Chinese engineers were helping his U.S. employees. But you can see in several news reports at the time, it was helping China. The Chinese government launched several large demonstration projects and announced millions in funding.
FLATT: As things began to take off in China, here in the states, Yang was once again in financial trouble. So he made a decision that would again keep the technology from staying in the U.S. He transferred the license from UniEnergy to a company called Vanadis.
ROELOF PLATENKAMP: Vanadis is based in the Netherlands, and we will set up a holding company in Switzerland.
FLATT: Roelof Platenkamp is Vanadis’ founding partner. Platenkamp told NPR the company’s plan was to continue making the batteries in China and then set up a factory in Germany and eventually maybe the U.S. He says he has to manufacture in Europe because the European Union has strict rules about these things.
PLATENKAMP: I have to be a European company, or certainly a non-Chinese company, in Europe.
FLATT: But the United States has these rules, too. And any transfer of a U.S. government license needs U.S. government approval.
SULLIVAN: Which Yang apparently had no trouble getting. We looked at department emails and found that last summer, on July 7, one of the top officials at UniEnergy wrote to a government manager at the Department of Energy Lab in Washington saying they were going to make a deal with Vanadis. We believe they have the right blend of technical expertise, the official wrote. The manager wrote back that he would need confirmation. A second employee sent confirmation an hour and a half later, and the license was transferred.
Now, if anyone from the lab or the Department of Energy during that hour and a half thought to check whether Vanadis was an American company or whether it intended to manufacture in the United States is unclear. Even Vanadis’ website says it plans to make the batteries in China. Department of Energy officials told us they take all license transfers seriously and have recently closed significant loopholes. But they acknowledge their efforts rely to some extent on, quote, “good faith disclosures” by the companies, which means if companies like UniEnergy don’t say anything, the U.S. government may never know. It’s a problem government investigators found has been going on for years. In 2018, the Government Accountability Office found the department lacked resources to properly monitor its licenses, was relying on antiquated computer systems and didn’t have consistent policies across its labs.
FLATT: It was an American company, Forever Energy, that actually read the vanadium battery license and raised a red flag more than a year ago. Joanne Skievaski and others there say they repeatedly warned department officials that the UniEnergy license was not in compliance. Officials repeatedly told them it was.
SKIEVASKI: How is it that the national lab did not require U.S. manufacturing? Not only is it a violation of the license, it’s a violation to our country.
FLATT: Skievaski hopes that now that the department has revoked the license, Forever Energy will get a chance. They’re hoping to open a factory in Louisiana.
SKIEVASKI: We are ready to go with this technology.
SULLIVAN: Skievaski told us it will be hard at this point for any American company to catch up. Industry trade reports lists Dalian Rongke Power as the No. 1 manufacturer of vanadium flow batteries worldwide. And the bigger question looming over all of this is whether China will stop making the batteries once an American company is granted the right to start making them.
FLATT: That may be unlikely. Chinese news reports announced this summer that China is about to bring online one of the largest battery farms in the world, hoping to set new records for energy output. The reports say the entire battery farm is built out of vanadium redux flow batteries.
I’m Courtney Flatt.
SULLIVAN: And I’m Laura Sullivan, NPR News. Transcript provided by NPR, Copyright NPR.