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Ener1 (s HEV) is going to Russia to back up the grid. The lithium ion battery maker announced a $40 million deal to supply Russia’s Federal Grid Company (FGC) with energy storage systems to back up the grid in Sochi, the Black Sea port that will host the 2014 Winter Olympics. The two will also study the feasibility of making lithium-ion battery cells and other components in Russia itself.
The Olympics will doubtless require a lot of backup power. As will Russia’s electricity market, the fourth largest, and the Russian government wants to spend $15 billion in power grid upgrades over the next two years. As part of their $40 million deal, Ener1 and FGC plan to research ways to use batteries to strengthen the grid in remote regions and integrate intermittent wind power.
Pike Research predicts grid energy storage will be a $35 billion global business by 2020 — but most of that will be in the tried and true pumped hydro energy storage. Compared to that technology which pumps water uphill with cheap power and runs it down a hill when power is needed, batteries are still too expensive for most grid storage applications. But the massive investment into lithium-ion batteries for plug-in cars should improve performance and lower costs in the coming years, and Pike predicts that lithium-ion batteries will make up $1 billion of the world’s grid storage market by 2018.
Russia’s neighbor China provides the clearest example of just how large the opportunity for developing battery expertise is for the power grid, both as an exporter and as a market. While the country plans to double its capacity for pumped hydro energy storage, it’s also planning several big battery-based grid storage projects, including a partnership with battery and electric vehicle maker Coda and China’s southern power grid. At the same time, China’s growing might in battery manufacturing includes some technologies, such as flow batteries, aimed specifically at the grid storage market.
India, meanwhile, has a pressing need for smaller-scale distributed energy storage, so much that entrepreneurs are busy deploying jury-built systems of their own, the Times of India reported last year. Portable backup power systems like those from Fenix International could serve consumer markets from India to Africa, showing just how small-scale the technology can get.
On the subject of small-scale, Ener1’s $40 million Russian deal is with FGC’s wholly-owned subsidiary Mobile GTES, described as a provider of “mobile gas turbine power stations” to back up the Moscow region’s power grid. I’m not sure how loud and smoky those mobile generators are, but I’m guessing that wherever they’re parked, the neighbors would prefer a clean, silent battery-powered system — and I’d venture that the foreigners attending the 2014 Winter Olympics might complain even more loudly than the diesel generators.
For more research on smart grid check out GigaOM Pro (subscription required):
- Smart Algorithms: The Future of the Energy Industry
- New Opportunities in the Smart Grid
- The Developer’s Guide to Home Energy Management Apps
Image courtesy of Ron Danko.