GE Reboots Its Storage Business With a Lithium

General Electric's entry into the emerging grid-scale energy storage market eight years ago has brought mixed results.

Since the acquisition of Beta R&D in 2007, the industrial giant has been developing an in-house sodium metal halide battery technology, dubbed "Durathon." GE made an initial $100 million investment in commercializing Durathon in 2009, opened a manufacturing plant that ultimately cost $170 million in 2011, and has since made a handful of sales.

Then, earlier this year, GE made major cuts to production of its sodium-ion Durathon batteries. The company reassigned 400 workers at its plant in Schenectady, New York, leaving behind a skeleton crew of 50 to keep the facility operational.

Meanwhile, natural gas has really been at the core of GE's energy strategy. A GE Ventures executive recently acknowledged that grid-scale batteries will have a difficult time competing with the combination of cheap natural gas and fast-reacting turbines.

But now the company is rebooting its battery business with a foray into downstream storage development.

GE announced this month it will supply Con Edison Development, an unregulated arm of Consolidated Edison Inc., with an 8-megawatt-hour battery energy storage system in Central Valley, California. Rather than supply one of its own Durathon batteries, GE will acquire a lithium-ion battery for the project, marking the first time GE has offered the technology.

"GE is committed to the energy storage business," said Jeff Wyatt, general manager of GE's solar and energy storage units. "Our goal is to help our customers provide flexibility across the grid by combining our expertise in plant controls, power electronics, systems engineering and fundamental battery knowledge."

GE is focused on full system performance, Wyatt wrote in an email. As part of that process, GE works with its customers to determine the right type of battery technology for each specific application.

"The addition of lithium-ion to our portfolio complements the Durathon offering," Wyatt said. "And together with our customers, we will choose the technology that allows them to best match power production with power demand in real time."

The Con Ed Development deal includes delivery of a complete energy storage system, including GE's Mark VIe controls (also used in wind, thermal, and hydropower), power electronics with GE's Brilliance MW Inverters, and a variety of battery and enclosure technologies. GE will also offer modeling expertise to anticipate battery performance and expected profitability. The entire project is backed by GE's performance guarantees.

The 8-megawatt-hour project with GE is Con Ed Development's first grid-scale battery project. The Con Ed subsidiary, which owns and operates more than 550 megawatts of renewable power across the country, has already worked with GE for years on thermal and wind projects. The combination of GE's power electronics and system integration expertise, along with its sizable balance sheet, helped to alleviate concerns over the bankability of the battery project, said Mark Noyes, senior vice president and chief operating officer of Con Edison Development, in an interview.

"[Battery technology] is no different than the solar industry less than five years ago, or the wind industry 10 years ago," Noyes said. "It needs quite a bit of innovation and cost reduction, but the only way to do that is to start, to make some investments, to use the technology and improve it. And that's really the effort GE and Con Ed Development have embarked on with this project in California."

The battery system, to be charged solely by solar power, will be designed to provide 2 megawatts of power over a four-hour period, and so it will meet California's resource adequacy requirement. The state has seen a surge in activity around energy storage since announcing that utilities must procure 1.3 gigawatts of new storage by 2024.

Con Ed Development expects to find out next month if its battery project, located in Pacific Gas & Electric territory, will qualify for the California energy storage requirement. The company plans to build the project whether or not it qualifies, said Noyes.

While the technology is still in its early days, the investor sees a promising future for grid-scale energy storage in balancing renewable resources, frequency regulation and the ability to optimize assets through demand response and other behind-the-meter applications. Both California ISO and PG&E will have access to the battery project and be able to call on it like any other generating asset.

The simple payback on the project is between six and seven years, and the battery life is 10 years, said Noyes. The site is expected to be operational in the next six to nine months.