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US gov’t let China have breakthrough technology paid for by US taxpayers

Chinese President Xi Jinping. (Michel Temer/Flickr)
August 15, 2022

In the last decade, a group of U.S. government scientists developed a groundbreaking new battery technology that could power a house and run for decades. With the U.S. government’s approval, the taxpayer-funded technology was handed over last year to a Chinese company that manufactures the batteries today.

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An Aug. 3 NPR report revealed that U.S. company UniEnergy was developing a breakthrough vanadium redox flow battery based on a design developed by two dozen U.S. scientists at a government lab through U.S. taxpayer funding. The battery is reportedly the approximate size of a refrigerator, holds enough energy to power a house and can run for decades.

The battery design was first developed over six years with $15 million taxpayer funds with the support of the U.S. Department of Energy. It was licensed out to UniEnergy in 2012.

According to one UniEnergy scientist, the vanadium redox flow battery was not some deeply theoretical concept but an actual working design. “It was beyond promise,” former UniEnergy engineer Chris Howard told NPR. “We were seeing it functioning as designed, as expected.”

Instead of pushing the technology forward in the U.S., however, UniEnergy partnered with a Chinese firm, Dalian Rongke Power Co. Ltd, and got a sublicense in 2017 to share the technology with the Chinese firm.

UniEnergy had been gradually transferring battery assembly responsibilities to Dalian Rongke Power even before the sublicense.

While U.S. licensees can still set up manufacturing outside the U.S. — including in China — UniEnergy’s license to develop the vanadium redox flow battery reportedly stipulated that it must sell a certain number of batteries in the U.S. and those batteries had to be “substantially manufactured” in the U.S. They didn’t do that, however.

Howard said that by 2019, he and other UniEnergy employees were told by supervisors they’d need to work with Dalian Rongke Power in China for four months at a time. Howard, who now works for Forever Energy, told NPR, “It was unclear, certainly to myself and other engineers, what the plan was.”

UniEnergy founder Gary Yang admitted to NPR that he wanted his employees to start working in China. Yang also acknowledged that UniEnergy did not meet the license terms to manufacture and sell a certain number of the batteries within the U.S.

NPR reported that even the few vanadium redox flow batteries it did sell in the U.S. — including one to the U.S. Navy — were made in China.

In the summer of 2021, UniEnergy transferred its license entirely to a European company called Vanadis Power. The move effectively meant that while China had been working with vanadium redox flow battery technology for years, there was no longer an active U.S. license to develop the technology.

According to NPR, any such transfer of a government license like the one UniEnergy had would require U.S. government approval to ensure that manufacturing doesn’t move overseas.

When UniEnergy requested to transfer the battery technology license on July 7, 2021, a government employee first responded that he needed confirmation before transferring the license. The first government employee emailed a second government employee and an hour and a half later, the second employee approved the license transfer to Vanadis Power.

It is unclear what, if any review, took place in that hour and a half window to determine vanadium redox flow battery based on a U.S. design was not moving overseas. At any rate, Vanadis Power’s founding partner Roelof Platenkamp told NPR the company initially planned to keep battery manufacturing in China and then eventually open a factory in Germany.

Platenkamp told NPR he hoped to eventually set up a battery factory in the U.S.

Forever Energy was one U.S. company that raised issue with this apparent loss of the U.S. vanadium redox flow battery license to China and other overseas manufacturers.

“How is it that the national lab did not require U.S. manufacturing?” Forever Energy CFO Joanne Skievaski asked of the Department of Energy. “Not only is it a violation of the license, it’s a violation to our country.”

Skievaski and other Forever Energy employees repeatedly complained to the department that the UniEnergy license was no longer in compliance. According to communications NPR reviewed, department officials initially told them the UniEnergy license was compliant.

The Department of Energy declined NPR’s initial requests for comment. After NPR sent officials written questions, the department terminated the sublicense to China’s Dalian Rongke Power company.

“DOE takes America’s manufacturing obligations within its contracts extremely seriously,” the department eventually responded 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.”

The department is now conducting an internal review of the vanadium redox flow battery license.

Forever Energy is one of several U.S. companies that have tried to get a license to make the batteries. Skievaski described the department’s previous handling of the license “mind-boggling.”

This revelation about the U.S. essentially giving away technology to China comes amid heightened concerns in recent years about China stealing U.S. technology.

While China’s Dalian Rongke Power company no longer holds the U.S. Department of Energy license to make these vanadium redox flow batteries, it already has years of experience working with the design.