GE Gives Its Energy Storage Outline

Everyone wants to sell technology to GE. Luckily, Kevin Skillern, who runs the VC unit inside GE's Energy Financial Services Group, explained how the behemoth breaks down the energy storage market.

The first tier belongs to devices, such as flywheels, that can store power for a few milliseconds and up to 15 seconds. These devices exist to keep equipment in power plants safe from disturbances and fluctuations.

The second tier of devices can hold power for five to 30 minutes and mostly exist to keep the grid stable. The frequency stays the same despite the load. Examples of this kind of technology would be banks of lithium-ion batteries. GE has invested in A123 Systems, which is testing out lithium-ion battery packs at utilities. "We are seeing stuff on the cusp of being economically sensible," he said.

The third class, panacea storage, could "shift power from day to night," he said. With this kind of storage, power produced by wind farms in Texas at 3:00 a.m. could be stored until the morning. The company is somewhat "bearish in the near term," he said. "The technologies are still five to 10 times too expensive."

But progress is coming. GE, after all, announced it would invest at least $100 million into a factory in New York to make sodium batteries, which can do persistent storage. GE's first sodium batteries, coming in 2010, will go into trains, but they could also be used at wind or solar farms.

As for smart grid, Skillern was quite upbeat. In the U.S., power costs around 9 cents per kilowatt hour on average. In Europe, it's around 22 cents. Some smart grid applications have the potential to bring it down, in some circumstances, to three to nine cents, he said. If an energy services company offered to handle your lights for 12 cents a kilowatt hour (nine cents for power, three cents for their fee) companies would do it.