The smart grid demonstration projects seeking Department of Energy funds just keep coming. The latest include flywheel maker Beacon Power Corp. and Arizona utility Tucson Electric Power.

Beacon said Tuesday it is asking DOE for $47 million to build two 20-megawatt energy storage plants using its flywheels. The money would come from DOE's $615 million smart grid demonstration grant program, the smaller of two programs that contain $3.9 billion to boost smart grid projects (see Green Light post).

The Tyngsboro, Mass.-based company already has landed a $43 million DOE loan guarantee to build one 20-megawatt storage plant at a projected cost of $69 million (see Beacon Power, Nordic Windpower Get $59M DOE Loan Guarantees).

Other utilities seeking DOE grants to build grid energy storage include Pacific Gas & Electric, which plans a compressed air energy storage project, and Southern California Edison, which wants battery maker A123 to build a 32-megawatt lithium-ion battery to help manage wind power (see PG&E Wants DOE Dollars for Underground Air Energy Storage and SoCal Edison Wants A123's Biggest Grid Battery Ever).

As for Tucson Electric Power, both compressed air and lithium-ion battery storage would play a part in its "Bright Tucson" smart grid plan, which also include 1.6 megawatts of solar panels and demand response systems to help its customers turn down their power use during peak demand times.

The utility wants $25 million from DOE's demonstration grant program to do the project, which will include demand response aggregator EnerNoc, home energy management technology provider Tendril and smart meter maker Itron, among other partners.

Kansas City-based construction and engineering firm Burns & McDonnell will build the compressed air energy system and "commission the development of the battery storage system," the utility stated in a press release. It did not say which battery company or companies might be tapped for the project.

The utility also named military contractor Raytheon as a partner to provide security for the project. It's a growing trend, as utilities turn to contractors like Lockheed Martin and Boeing to help them ensure that their smart grid systems will meet security requirements being developed by the federal government and industry bodies (see Green Light post).

Is the Department of Energy awarding grants on the basis of scientific merit and economic feasibility, or coziness with lawmakers?

Sources have told us that the grant process is pretty rigorous and objective. So far, nothing in the process indicates unseemliness. Still, we won't know the full answer for years. Nonetheless, the Boston Globe combed through OpenSecrets, which tracks lobbyists, and found some fun numbers.

A123 Systems received a $249 million grant from the DOE to help it expand production. OpenSecrets showed that it spent around $1 million in lobbying in the past three years.

Boston-Power did not get its request for $100 million in grant money. It spent about $50,000 in the last two years.

The two companies in many ways are similar. Both make lithium-ion batteries and have attracted tens of millions in investment from VCs and others. Both are also well-connected. A123 very visibly lost a contract to supply batteries to the far more experienced LG Chem. (The chemistry of A123's batteries isn't as energy dense as some others either.) However, it inked a deal with Chrysler. Boston-Power has put its batteries into HP notebooks and wants to get into automotive.

Still, there are differences. Namely, Boston-Power has used a lot of its money to expand factory facilities in Asia. That couldn't have gone over well. (A123 actually makes its batteries in China too, but has been talking about manufacturing in the good ol' USA for a while.) The grants were also mostly targeted at automotive battery makers, which explains why Compact Power (which works with LG Chem) and EnerDel got their grants awarded.

And my own search on the OpenSecrets database shows now sudden burst of lobbying activity by EnerDel, Pyrotek or Novolyte. Saft America, which got $95.5 million, spent $150,000 on lobbying in 2005 and $50,000 in 2009. OpenSecrets cautions that lobbying can occur through trade groups etc.

Nonetheless, lobbying likely helps familiarize a name. EnerG2, a six-year old company that raised $8.5 million last year, spent $40,000 in lobbying in 2009. It got a $21 million grant.

It's an issue worth keeping an eye on.

When President Obama announced today the recipients of the $2.4 billion grants for making electric car components and demonstrating vehicle charging technologies, Boston-Power was conspicuously absent from the list of winners.

The Westborough, Mass., startup held an event featuring Massachusetts Gov. Deval Patrick when it announced the plan in June to apply for a $100 million grant to help build a 455,000-square-foot lithium-ion battery factory nearly its headquarters. The U.S. Department of Energy administers the program.

"We are tremendously disappointed," said Christina Lampe-Onnerud, CEO of Boston-Power. "If we don't get federal funding, we will not be able to bring greentech jobs to the United States."

The company is one of dozens who sought DOE funding. One of the biggest winners is General Motors, which is getting three grants totaling $241.4 million. Johnson Controls, meanwhile, won $299.2 million for its battery factory plan.

The company, founded in 2005, develops lithium-ion batteries for consumer electronics and cars. Boston-Power's first product is a battery pack for laptop computers and won a contract with Hewlett Packard.

The battery developer has been producing its products in Taiwan through a contract with GP Batteries. Boston-Power also started shipping car batteries to customers this year, though the names won't be disclosed until product launches.

The company hasn't given up hopes of building a factory in Massachusetts. It has applied for a $100 million grant from the U.S. Department of Defense, which is likely to announce the recipients in October, Lampe-Onnerud said.

The DOD grant is part of a larger program that is commonly called "Defense Production Act Title III." The battery grant is meant to create a good-size, domestic source of lithium-ion batteries.

Because the funding is coming from the DOD, grant recipients could end up selling batteries not just in the commercial sector but also to the military and other government agencies.

Boston-Power has won a commitment from Massachusetts for up to $9 million to build the factory, but the money is contingent on the company getting federal funding, Lampe-Onnerud said.

The DOD funding could make up as much as half of the costs of setting up the factory, she said. Boston-Power would use it operating capital to make up the difference.

If the company doesn't line up the DOD funding, then it would continue to center its manufacturing in Asia, she added. The company is doubling its production capacity every six months, Lampe-Onnerud said. 

U.S. Vice President Joe Biden is visiting Detroit today and is reportedly planning to announce the first set of winners of automotive battery research grants Wednesday, reported the Detroit Free Press.

The money would come from the $2 billion set aside by the American Recovery and Reinvestment Act that was passed in February this year. A host of battery makers have since applied for a piece of it, including Boston Power, Quallion, Planar Energy Devices, Valence, General Electric and Chrysler.

Battery makers see the federal program as a lifeline for setting up research and manufacturing centers in the United States. The grants are supposed to help speed up the development of plug-in hybrid and all-electric cars.

Valence Technology (NSDQ: LVNC) on Thursday joined the ranks of battery makers seeking federal stimulus funding for a new factory in Texas.

The Austin, Texas-based maker of lithium iron magnesium phosphate batteries said it hopes to secure $225 million over three years from the Department of Energy's Electric Drive Vehicle Battery and Component Manufacturing Initiative.

Valence hopes to raise the remaining $359 million for the project through state and local taxes and other incentives. The factory could build about 660,000 battery packs per year with a storage capacity of more than a million kilowatt hours, and could be open as early as mid-2012, the company said.

Get in line. There's already a long line of companies hoping to get a piece of the $2 billion in the program for battery manufacturing grants. Those include Planar Energy Devices, General Electric, and earlier this week, Chrysler, which said it would seek $448 million from the program and another DOE stimulus program (see GE Aims at Energy Storage for Trains, Grid).

Valence is also seeking up to $608 million from another DOE stimulus program, the Advanced Technology Vehicles Manufacturing Incentive Program. That program has $25 billion available, and companies seeking funding from it include lithium-ion battery maker A123 Systems, which is seeking up to $1.8 billion, and a consortium of chemical and battery manufacturers seeking up to $1 billion for a commonly shared battery cell factory (see A123 Lands $100M in Tax Credits and Will The U.S. Move From Arab Oil Dependence to Asian Battery Dependence?)

Valence has so far taken a slightly different tack than those others, concentrating on making batteries for electric buses and commercial vehicles at first and then shifting into the car market (see Valence: Electric Buses and Trucks First, Cars Later). Founded in 1989, it has spent most of its time making batteries for computers.