Tuesday, February 8, 2011

A123 begins battery making, testing in Westborough

By Kyle Alspach

A123 Systems Inc. (Nasdaq: AONE) began operations last week at a new location in Westborough, where the company is producing trailer-sized battery systems for the electric grid, a company executive said.

The Watertown-based company, a maker of lithium-ion batteries, is using the 67,000-square-foot facility for production and testing of the grid-scale batteries, said Chris Campbell, vice president of technical marketing for A123’s Energy Solutions Group. On Monday, the company announced receiving an order from AES Corp. (NYSE:AES) for a 20-megawatt battery system, which will be used to maintain the stability of the grid in Northern Chile.

A123 refurbished the facility on Flanders Road in Westborough after signing a lease in July. The company employs 125 at the facility and expects to aggressively add staff at the location in coming years.

It’s the company’s third location in Massachusetts, along with the headquarters and a research and development facility in Hopkinton. A123 currently has 270 employees in Massachusetts and expects to double its headcount in the state within three years, Campbell said.

A123 is doing all of its production of gridscale batteries in Westborough, he said. The company has shipped 35 megawatts worth of grid batteries to date — including a 20-megawatt system for a project in Johnson City, N.Y. — which makes A123 the top supplier of gridscale batteries, the company said.

The company expects its grid battery business to continue growing steadily, with a total of 52 megawatts of grid systems slated to ship this year, Campbell said. The grid business generated $5.9 million in revenue for the company during the three months ended Sept. 30, contributing 22 percent of A123’s quarterly revenue. A123 also produces batteries for electric vehicles and smaller consumer products.

The lease for the Westborough facility runs through the end of January 2021 and has a base rent of $4.4 million, the company said previously in a regulatory filing. The lease is with Flanders 155 LLC of Westborough, and A123 has the option to extend it for five years.

In March, A123 plans to move its headquarters to a larger facility in Waltham, Campbell said. The Massachusetts expansion is supported by a $5 million forgivable loan awarded by the Massachusetts Clean Energy Center last year.